REGULATOR NFORHATION DISTRIBUTION TEH (RIDS)
AOCESSION NBR;820602Q312 DOC ~ DATE: 82/05/27 NOTARIZED: NO
FACIL:50-000 Generic Docket50-220 Nine Hile-Point Nuclear Station, Unit ii Niagara Powe50-410 hine Hile Point Nuclear Station< Unit Zi Niagara HohaSTN 50"485 Sterling .Power Nucleal ProJecti Unit 1g RochesterSTN-50-517 Jamespor t Nuclear Stations Unit 2i Long Island L)STN-50 516 Jamesport Nuclear Stationi Uni,t ig Long Island, Li50-244 Robert Emmet Ginna Nuclear Plantr Unit ig Rochester G
50"322 Shoreham Nuclear Power Station< Long Island LightingAU'1H
~ NAME AUTHOR AFFILIATIONTROSTEN<L.H ~ LeBoeufi Lambi Leiby 8, HacRaeTROSTENiL.M. Niagara Mohawk Power Corp,'RBCIP ~ NAME RECIPIENT AFFILIATION
DENTONgH.Re Office of Nuclear Reactor Regulationi Director
SUBJECT: Forwards Annual Financial Repts 1981 for Niagara MohawkPower CorpiNY State Electric 8 Gas CorpiLILCOiRochester Gas8 Electric Corp 8 Central Hudson Gas 8 Elec ri Corp,
EF F alA~AL gyps, c<gDISTRIBUTION CODE: Y004S COPIE5 RECEIVED:LTR g EN L „i SIZF:.TITLE: Annual Financial Reports
NOTES:Standardized Plant.Inactive'tandardizedplant. Inactive,
Standardized plant. Inactive ~
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LEBoEUF, LAMB, LEIBY 8c, MAGRAEA PARTNCRSHIP INCLUDINO PROFCSSIONAI. CORPORATIONS
l333 NEW HAMPSHIRE AVENUEf N W.
WAs H IN GTO N J D ~ C. 20 036202 >I57 ~ 7500
47 BERKELEY SOUARELONDON WIX 508> CNOLAND
TELEPHONEIOI 493 733ITCLEX: 25955
83 CENTRAL STREETBOSTON, MA 02I09
BI7 451 I38S
TELEX> 4%0274 TELECOPICR: 202 457 7543500 KCARNS SUILDINO
I38 SOUTH MAINSALT LAKE CITY, UT 84IOI
BOI 355 BQIS
338 FAYETTEVILLESTREET MALLP.0. SOX 750
RALCIOH,NC 27802QI9 S33 9789
May 27, 1982%II PEOUOT AVENUE
SOUTHPORT>CT 08490203 259 8383
Mr. Harold R. DentonDirector of Nuclear Reactor
RegulationU. S. Nuclear Regulatory
CommissionWashington, D.C. 20555
'q fi
q( fy
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Re: Nine Mile Point Unit 2Docket No. 50-410
Dear Mr. Denton:
Pursuant to Section 50.71(b) of the Commission's regulations,I enclose a copy of the 1981 Annual Report of each of the follow-ing owners of Nine Mile Point Unit 2: ~ I.//CP
Niagara Mohawk Power CorporationNew York State Electric 6 Gas Corporation~Long Island Lighting Company ~>/0> ~~IV>p A>. ~~~~Rochester Gas and Electric Corporation < f ICentral Hudson Gas & Electric Corporation,
Sincerely yours,
LeBOEUF, LAMB, LEIBY 6 MarHAE
ByLeonard M. TrostenAttorney for Niagara Mohawk
Power Corporation
enclosures
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NAGARA M K Po>ZR CORPORATION AND SUBS .RY COMPANIES
STATEMENT OF CONSOLIDATED EARNINGS(In Thousands of Dollars)
Three MonthsEnded June 30,
Twelve MonthsEnded. June 30,
Operating revenues:ElectricGas
Operating expenses:Operation:
Fuel for electric generationElectricity purchasedGas purchasedOther operation expenses
MaintenanceDepreciation and amortizationFederal and Foreign income taxesOther taxes
Operating incomeOther income and deductionsAllowance for other funds used
during constructionFederal. income tax creditsOther items (net)
Income before interest chargesInterest charges:Interest on long-term debtOther interestAllowance for borrowed funds used
during construction
Net incomeDividends on preferred stockBalance available for common stock
Average number of shares of commonstock outstanding during the period(in thousands)
Earnings per average share ofcommon stock
114,84472,54887,94869,43529,002
36,57759 910
50i550585575
15>9746,4173,941
2 5332112 077
37>50775077
73,271~9478'~~7
85,283
40.75
19 2
$457,458129 8925557350
19 1
$439,80688 410
52 21
141,41577,82o54,43466,35828,61425,19012,51952,563
~5913~9303
11,5784,63o1 78o
1719Ble 291
31,9585 458
(5 821)31 595
55,696~8939
76,268
)0.61
19 2
$1,789 263495 8o8
2 2 5,071
552502026o,614343,9V4267,116121,880111,77589,178
228 3571 97 91
310 157
56,84222,43312,36191 301 793
139571523,701
ta;<1 0 Ol
261,77936 457
22 22
83,621
g2.69
19 1
$1,588,49341o,221
1 99 71
538,224239,170289,847240,615110,34398,32743,816
201 8811 7 2,223
23 91
41,75216,002
7,8685 22
302 113
123,73416,186
(21,662)11 25
183,85531 075
152 7 0
7">913
@.04
The aoove information is not given in connection with any saleany stock or security.
of, or offer to sell or buy
~8206020312 820527PDR ADOCK 05000220 .I', 'DR.".
NIAGARA HAWK POWER CORPORATION AND S IARY COMPANIES
CONSOLIDATED BALANCE SHEET
CAPITALIZATIONAND LIABILITIESCapitalization:
Common stockholders'quity:Cbmmon stock — 41 pa'r value; authorized125,000,000 shares; issued 86,285,742 and83,973,252 shares, respectively. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Premium on'capital stock. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Capital stock expense............................Retained earnings.....................-..........
86,286923,937(10,505)558,652
83,973895'04(10,599)488i756
June 30,1982 December 31,
(Unaudited) 1981(In Thousands of Dollars)
Cumulative pref erred stock, authorized 3,400,000shares, 4100 par value:
Non-redeemable (optionally redeemable),issued 2,100,000 shares. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Redeemable (mandatorily redeemable), issued1 f 0 76, 51 0 and 1, 099< 980 shares, respectively g
including sinking fund requirements. ~ ~ ~ ~ ~ ~ ~ - ~ ~
Cumulative preferred stock, authorized 9i600i000shares, 425 par value:
Redeemable, (mandatorily redeemable), issued5,808,000 and 5,008,000 shares, respectively,including sinking fund requirements. ~ ~ ~ ~ ~ ~ - ~ ~ ~
Chmulative preference stock, authorized 4,000,000sharesi 425 par value:
Redeemable (mandatorily reedeemable), issued1,080,000 shares, including sinking fundrequirements. ~ ~ . ~ ~ ~ ~ ~ ~ ... ~ ....................
Long<erm debt- ~ ~ ~....................,....Total capitalization. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
1,558,370
210, 000
104,400
141,050
23, 000478,450
1,704,4863i74lg306
1,457,934
210,000
108, 198
123,550
23,000464,748
1, 619,3693, 542, 051
Current liabilities:Short-term debt...-............LongWerm debt due within one year. ~ ~ ~ ~ ~ ~ ~ ~
Sinking fund requirements on redeemable preand preference stock. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ - ~ ~ ~ ~ ~ ~ ~ ~ ~
Accounts payable... ~ ....... ~ ...Payable on outstanding bank checks......-..
ICustomers deposits -. .. .. ~ .. ~ ~ ~ ~ ~ ~ ~ ~
Accrued taxesoooooooo ~ eoooooo.oo..o.woo.oo.Accrued interest. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ - ~ ~ ~ ~ ~ ~ ~ ~
Accrued vacation pay- ~ ~ . ~ ~ ~ .. ~ .............Gas supplier refunds payable to customers-.Other ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
~ ~ ~ ~ ~ ~ ~ ~
ferred
Deferred credits:Income tax refunds............ .. . ~ . -.. ~ ~ ~ ~ ~ ~ - ~
Mandated refunds to customers......................Accumulated deferred Federal income taxes. - ~ ~ ~ ~ ~ ~ ~ ~
Other's ~ o ~ ~ ~ ~ i o ~ ~ ~ ~ ~ ~ ~ ~ o i. ~ ~ ~ ~ ~ ~ ~ ~ o ~ ~ ~ ~ ~ ~ ~ ~ ~ . o ~ ~ ~ ~ ~ ~
92, 00038,433
11,401128,439
51,5384,984
45,00144g97319,395
6,79013,252
456,206
9,9438,775
157i10922,446
198i273
123, 3309,250
7,450165i 35450,3584i769
23,34336,34018,36734,0805,814
478,455
9,94316,418
112,54416,521
155,426
Commitments and Contingencies (Note 3)-..............4 395 785 4 175 932
~ ~
NZAGARA MOHAWK POWER CORPORATION AND SUBSIDIARy COMPANIES
CONSOLIDATED BALANCE SHEET
June 30,1982 December 31,
(Unaudited) 1981(Zn Thousands of Dollars)
AS SETSUtilityplant, at original cost:
Electric ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Nuclear fuel. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Gast ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Commono ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Construction work in progress.Totale ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Less-accumulated depreciationNet utilityplant...
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
and amortization. ~
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Other property and investments (Note 2) ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
$3,482,340256,812434i52276,297
936i 1835, 186, 1541,410 i 0143,776, 140
61, 076
$3i4lli098248i836420, 654
71, 198833,529
4,985,315li348,7383,636,577
42'30
Current assets:Cash'ncluding time deposits of 4240 and
4500, respectivelyo ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Accounts receivable (less-allowance fordoubtful accounts of 42,800)...............
Material and supplies, at average cost:Coal and oil for production of electricity.Others'o ~ ~ ~ ~ ~ s. ~ o ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ i ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Prepaid real estate taxes.......~-.-..Other prepayments............................
18,978
221, 499
134,69953 i24929,4606,128
464,013
8,259
195,957
149gl0251,742
2,7956, 161
414g016
Deferred debits:Unamortized debt expense.........Deferred recoverable energy costs. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Extraordinary property losses (Note 3)..Other ~ o ~ ~ ~ ~ ~ ~ ~ ~ ~ o.. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ooo ~ , ~ o ~ ~ ~ ~ o ~ ~ i ~ ~ ~
19,59037,55323, 18514,22894, 556
4 395 785
16,02950,477
16,70383,209
4 175 932
0NIAGARA MOHAN'K PONER CORPORATION
1982 internal Cash Flow projection for Nine Mile No. 1Nuclear Power Station
(Thousands of Dollars)
Net Income After TaxesLESS: Dividends Paid
Retained. Earnings
1981~Actual
$220,643162 066
~5577
1982projected)
$258,514194,906
~3~0
Adjustments:Depreciation and AmortizationDeferred Income Taxes and Investment
Tax CreditsAllowance for Funds Used During
ConstructionTotal Adjustments
139,963
195734,
. 71 890)
133,323'9,498
~94 687)~8> 4
Internal Cash Flow
Average Quarterly Cash Flow
~l46 84
$ 36,596
~16': 48'
40,436
Percentage Ownership in All OperatingNuclear Units Nine Mile No. 1 - 10%/8
Maximum Total Contingent Liability 410 000
6/28/82
~ ~ 1 4
A narrative statement indicating which capital expenditures(if any) would be curtailed to ensure that retrospective premiumsup to $ 10 million would be available for payment.
It is Niagara Mohawk's view that the curtailment of capitalexpenditures to ensure payment of possible retrospective premiumsof up to 910 million would not be a material problem as thisamount represents only about 2.4% of currently scheduled construc-tion expenditures, net of Allowance for Funds Used During Construc-tion (AFC), for the year 1982.
DATE: Au ust 4 1982
CERTIFIED:
NIAGARA MOHAWK POWER CORPORATION
w.John . PowersVice President - Treasurer
4
~ ~
0 0
—MQYICE—THE ATTACHED FILES ARE OFFICIAL RECORDS OF THEDIVISION OF DOCUMENT, CONTROL. THEY HAVE BEENCHARGED TO YOU FOR A LIMITEDTIME PERIOD ANDMUST BE RETURNED TO THE RECORDS FACILITYBRANCH 016. PLEASE DO NOT SEND DOCUMENTSCHARGED OUT THROUGH THE MAIL. REMOVALOF ANYPAGE(S) FROM DOCUMENT FOR REPRODUCTION MUSTBE REFERRED TO FILE PERSONNEL.
DEADLINERETURN DATE
RECORDS FACILITYBRANCH
Dsckstk So- KwoCOIItI'ef k EZ.Ohe~o glz
,KIMfORY009KFVFILF tmI Y
CENTRM HUDSONGas O'lectric Corporation
Qo,o o~~o o
OO0
CENTIRAL HUDSONGAS 8 ELECTRIC CORPORATION
284 SOUTH AVENUETelephone 914 452-2000
POUGHKEEPSIE, N.Y. 12601
of
ONE WALLSTREETTelephone 212 344-5680NEW YORK, N.Y. 10005
APRIL 1982TWENTY-THIRD EDITION
TABLE OF CONTENTSIntroduction .
Area Served
Growth Summary
Management & Employees
Rates
Company Securities & Markets
Construction Program
Forecast of Cash Requirements
Financing Cash Requirements .
Statement of Income
Income from Operations —Electric and Gas Departments
Summary Balance Sheet at December 31
Statement of Retained Earnings and Statement of Changes in Financial Position .
Detail of Utility Plant and Accumulated Depreciation .
Electric Revenues, Sales, and Customers .
Gas Revenues, Sales, and Customers
Electric and Gas Production Data .
Labor Data and Industrial Revenues
Capitalization and Financial Ratios
Detail of Long-term Debt, Preferred Stock, and Common Stock .
Directors, Officers, Transfer Agents, Registrar,General Counsel, and Independent Accountants .
Page
2
2
2
3
5
6
77'
9
10
11
12
13
14
15
16
17
18
19
THIS REPORT IS NOTAREPRESENTATION OR PROSPECTUS IN REGARD TO
THE COMPANY'S SECURITIES AND IS NOT FURNISHED IN CONNECTION
WITH ANY PROPOSED SALE OR OFFER TO SELL OR BUY ANY STOCK OR
SECURITIES.
DATA CONTAINED HEREIN WITH RESPECT TO ANY PARTICULAR YEAR
SHOULD BE CONSIDERED IN CONJUNCTION WITH THE NOTES AND COM-
MENTS APPEARING IN THE COMPANY'S ANNUALREPORT FOR THATYEAR
TO ITS SHAREHOLDERS.
INTRODUCTIONThis Financial and Statistical Report, includ-
ing charts and tabulations covering the ten-yearperiod 1971-1981, is designed to supplement the
Annual Report to shareholders which contains adetailed review of operations during the year1981.
AREA SERVEDLOCATION
Central Hudson serves a 2,600 square-milearea, including all or parts of eight counties, inNew York's Mid-Hudson Valley. The area ex-tends about 85 miles along the Hudson Riverand about 25 to 40 miles east and west from theriver. The southern end of the territory is about30miles north of New York Cityand the northernend is about 10 miles south of Albany. A map ofthe area is shown inside the back cover.
POPULATIONThe population of the Company's service area
is currently estimated to be 542,000. During thelast ten years the population has increasedapproximately 9%, or an average annual increaseof .9%.
UTILITYSERVICEElectric service is available throughout the
territory, while gas service is provided in andabout the cities of Poughkeepsie, Beacon,Newburgh, and Kingston and in certain outlyingand intervening territory.
ECONOMYThe Company's territory reflects a diversified
economy, including manufacturing, research,farming, governmental agencies, public andprivate institutions, resorts, and wholesale andretail trade.
The Company's largest customer is Interna-tional Business Machines Corporation, whichaccounted for nearly 11% of the Company'stotal electric revenues and about 12% of its totalgas revenues during the year 1981.
GROWTH SUMMARYGrowth over the last five and ten years in terms of earnings per share, dividends declared, electric and
gas sales, revenues, and plant is shown below:
Average AnnualGrowth Rates
1976-1981
Average AnnualGrowth Rates
1971-1981
Earnings Per Share —Common StockDividends Declared Per Share—
Common Stock
Electric Sales —Own Territory (a) ..........Electric Revenues —Own Territory (a)....Gas Sales (b) .
Gas Revenues (b)
Electric UtilityPlant (c) .
Gas UtilityPlant (c) ~...... ~.......... ~
(a) Excluding sales to other utilities.(b) Excluding sales of interruptible gas service.(c) Including construction work in progress.
7.5%
6.3
2.114.9
1.312.0
8.33.8
3.9%
4.4
1.414.6
.210.2
7.23.1
Since 1973 electric sales within the Com-pany's service territory have been affected bythe impact of higher fuel costs, increased rates,conservation efforts, and more efficient cus-tomer utilization of electricity.
As a result of national shortages of natural gassupplies and pursuant to an order of the NewYork State Public Service Commission (PSC)
issued on October 26, 1971, the Company's gastariffs precluded the sale of firm gas service tonew commercial and industrial customers.However, as a result of the increased availabilityof gas, primarily due to the passage of theNational Energy Act in 1978, the PSC has removedessentially all of such restrictions.
MANAGEMENT5 EMPLOYEESThe main office of the Company is located at
Poughkeepsie, New York, and a financial officeis located at One Wall Street, New York City.(For telephone numbers see inside front cover.)
A list of officers and members of the Board ofDirectors may be found on page 19.
The Company is an equal opportunity em-ployer which maintains an active managementdevelopment program and offers a wide range ofeducational opportunities. Included in the Com-pany's educational policy are provisions forfinancial assistance to employees for voluntary
education, training, and other self-improvementprograms. Other benefits provided by theCompany are set forth on page 16.
Union shop contracts are maintained withLocals 320 and 2218 of the International Broth-erhood of Electrical Workers (AFL-CIO). TheCompany and these employee groups havemaintained an excellent record of cooperation.
The present two-year contracts between theCompany and the I.B.E.W. Locals becameeffective July 1, 1981 and continue throughJune 30, 1983.
EMPLOYEE DATA'Numberof Em lo ees December31.1981 a
25 years or more of service ..15-24 years of service .
5-14 years of serviceLess than 5 years of service ..
Total
Total
471197464213
1,345
Officers
13
Supervisoryand
Professional161438476
364
Classified
302151378137
968
(a) Includes 113 employees at the Roseton Plant in which the Company had a 30% interest during 1981 (see page 16).
RATESGENERAL
The electric and gas retail rates of theCompany applicable to service supplied withinthe State of New York (other than contractuallyestablished rates for service to municipalitiesand governmental bodies) are regulated by thePSC. Transmission rates and rates forelectricitysold for resale in interstate commerce areregulated by the Federal Energy RegulatoryCommission.
RATE INCREASESIncreased electric and gas rates became
effective on July 18, 1981. The PSC, by orderdated July14, 1981, authorized the Company tofile revised electric and gas tariffs designed toincrease electric revenues by $ 31,690,000, or11.8% based on estimated electric sales underfiled rates for the twelve-month period endingJuly 31, 1982, and gas revenues by $2,654,000,or 5.8% based on estimated gas sales under filedrates for the same period. The total revenueincrease authorized by the PSC was approxi-mately 88% of the amount requested by the
Company in its rate increase application filed inAugust 1980.
The PSC allowed a return on common stockequity of 16.9% and an overall return on theCompany's total invested capital of 12.24% andauthorized certain accounting changes designedto improve cash flow. In its determination withrespect to the increased electric rates, the PSCdecided to defer approval of the Company'srequest for increased annual electric revenuesof $7,718,000 for the amortization and recoveryin rates over a five-year period of its investmentin the terminated Sterling Nuclear Unit No. 1,until it had reached its decision in a separateproceeding with respect to such matter. Re-garding electric sales to other utilities for resale,the PSC modified its prior treatment andprovided that net revenues (revenues lessincremental costs, principally fuel) from allsales for resale, except certain continuing firmsales imputed in deriving the base rates, beflowed through the electric fuel adjustmentclause to the Company's retail customers as acredit to fuel costs.
On November 23, 1981, the Company filed arequest with the PSC for an 11.1% increase inelectric revenues and a 5.9% increase in gasrevenues from firm customers. The new rateshave been requested to cover the estimated costof providing service for the twelve-month periodNovember 1, 1982 through October 31, 1983. Inits filing, the Company is requesting an 18.5%
return on common equity and a 13.75% returnon total invested capital. The Company's elec-tric rate increase filing includes $9.9 million forthe amortization of costs associated with theSterling Project.
Rate increases authorized by the PSC duringthe five-year period January 1, 1977 to December31, 1981 are summarized in the table below.
EffectiveDate
7/18/817/18/8111/3/7911/3/797/16/775/11/77
Service
ElectricGasElectricGasElectricGas
AmountRequested
$35,677,0003,171,000
22,992,0002,097,000
13,752,0001,669,000
AmountGranted
$31,690,000',654,000
22,043,000'*1,563,0006,993,000" *
1,669,000
% Increaseof Test Year
Revenues
11.8%5.8
11.64.85.09.7
Return on
CommonEquity
16 9%16.914.014.013.313.3
TotalInvestedCapital
12.24%12.249.939.939.219.21
'The Commission also directed the Company to include an additional $ .012 per kwhr. of fuel costs in its base rates forelectricity in order to make them more representative and to reflect more closely the total cost of serving customers, includingthe cost of fuel. This had the effect of reducing the amount of fuel adjustment charges and increasing the base rates.
"Effective November 3, 1979 the Company transferred an additional $ .015 per kwhr. of fuel costs to its rate base."'Afterreflecting the effect of the disposal of a substantial amount of unused capacity pursuant to a new agreement with Con
Edison.
FUEL ADJUSTMENT CLAUSESThe Company's tariff for electric service
includes a fuel cost adjustment clause pursuantto which all retail electric rates are adjusted toreflect changes in the average cost of fuels usedin electric generation and certain purchasedpower costs from the average of such costsincluded in base rates. Generally, there is adelay of approximately 40 days for customerswhose bills are rendered monthly and 70 daysfor customers whose bills are rendered bi-monthly between a change in fuel costs and thetime when rates charged fo customers areadjusted.
The Company's tarifffor gas service includesa gas cost adjustment clause pursuant to whichall retail gas rates are adjusted to reflect changesin the price of natural gas purchased frompipeline suppliers and certain costs of manu-factured gas from the levels of such costsincluded in base rates. Generally, there is adelay of approximately one month between achange in the cost of gas and the time whenrates charged to customers are adjusted. Inaddition, in the Company's last gas rate case thePSC imputed $2 million of net revenues frominterruptible sales and electric generation usagein the determination of base rates. Fifty percentof any amount in excess of $2 million is flowedthrough the gas cost adjustment to reduce thebills of firm gas customers and the remaining50% is available for additional depreciationaccruals.
In accordance with permission granted by thePSC, changes in electric fuel costs and gascosts are deferred in the Company's accountsuntil the month in which such changes arereflected in the electric fuel or gas cost adjust-ment, thereby permitting the Company to matchcosts and revenues.
SALES FOR RESALEThe net revenues (revenues less incremental
costs) from all sales of energy and capacity toother utilities, other than firm capacity, areexcluded from the derivation of retail rates andare credited to its retail customers via the fueladjustment clause. Such sales and revenues arevery unpredictable and subject to the influencesof many factors that are beyond the control ofthe Company; accordingly, the Company be-lieves that it is inadvisable to impute any level ofnet revenues from such sales in the derivation ofbase rates.
RATE DESIGNEffective March 15, 1978, the Company's tariff
for electric service was revised to include time-of-use rates for large commercial and industrialcustomers. Fifty-four customers take serviceunder this form of rate and some of thesecustomers have taken actions to reduce loadsduring peak periods.
By order issued in November 1979 the PSCinstituted a proceeding to consider the electricrate design of the Company and directed that
specific consideration be given to (i) allocationof revenues among service classifications; (ii)rate structure within each classification; (iii) theCompany's marginal cost study; and (iv) blockdesigns sensitive to marginal cost, seasonalrates, and time-of-day rates. It is expected that
the PSC will render a decision in this proceed-ing prior to or concurrent with a decision in theCompany's current electric rate proceeding.Any future changes in rate design could affectcustomer usage of electricity.
COMPANY SECURITIES K MARKETSDuring the ten-year period from January 1,
1972 through December 31, 1981 the Companyissued securities with proceeds of approxi-mately $ 293 millionof which $ 67.8 million wasapplied to the repayment of long-term debtwhich matured during the period. The amountof securities outstanding at December 31, 1981was113% greater than the amount outstandingat December 31, 1971. In addition, during thissame ten-year period retained earnings in-creased by about $53 million.
FIRST MORTGAGE BONDSAt December 31, 1981, the Company had
$239.5 millionprincipal amount of first mortgagebonds outstanding, of which $ 17 million hadbeen placed privately.
On August 26, 1981 the Company issued $30million principal amount of 17~/s% bonds whichmature in 1991.
The Company's first mortgage bonds arerated H6 (Middle A) by Duff and Phelps, Inc.;"A-" by Standard 8 Poor's Corporation andFitch Investors Service; and "Baa" by Moody'sInvestors Service.
Additional bonds may be issued under theMortgage Indenture for purposes other thanrefunding outstanding bonds only if net earn-ings, as defined in the Mortgage, for twelveconsecutive calendar months within the fifteencalendar months preceding the date of issueshall exceed two times the interest charges forone year on all bonds outstanding under theMortgage plus the additional bonds to be issued.For the twelve months ended December 31 ~
1981, the Company could have issued $40million of additional first 'mortgage bonds,assuming an annual interest rate of 16%.
Furthermore, any additional bonds issuedunder the Mortgage shall not in principal amountexceed 66'/3% of the net bondable value ofproperty additions as that term is defined in theMortgage. As of December 31, 1981, the amountof such net bondable value was approximately$69 million, and the amount of the additionalfirst mortgage bonds issuable with respectthereto was approximately $46 million.
UNSECURED SINKING FUND NOTES$7.7 million principal amount of 4.85% prom-
issory notes due 1995 was outstanding atDecember 31, 1981. These notes were placedprivately and have an annual sinking fundrequirement of $ 175,000.
PREFERRED STOCKAs of December 31, 1981, 490,300 shares
(4~/2% 475%, 772% 744%, and 840% series)were held by 3,414 holders. These shares aretraded over the counter. There were also out-standing at that time 60,000 shares (4.35%series) and 60,000 shares (4.96% series) both ofwhich series were placed privately. The series ofpreferred stock which were not privately, placedare rated "A-"by Standard 8 Poor's Corporationand Fitch Investors Service, ff7 (Low A) by Duffand Phelps, Inc., and "Baa" by Moody's In-vestors Service.
Under provisions of the tax laws, a portion ofthe dividends paid on the 4k% and 7.72% seriesof preferred stock is deductible for purposes ofcomputing the Company's federal income tax,and, accordingly, a corporation receiving divi-dends on these series of preferred stock willnotbe allowed the full 85% credit. All other pre-ferred stock series qualify for the 85% credit forcorporate shareholders.
The Company's Certificate of Incorporation,as amended, provided at December 31, 1981 fora total of 1,200,000 autho'rized shares of pre-ferred stock, $ 100 par value. 610,300 shares areissued and outstanding and 589,700 shares areauthorized but unissued.
COMMON STOCKThe stock has been listed on the New York
Stock Exchange since 1945 and dividends havebeen paid by the Company and its principalpredecessors for 78 years.
On August 26, 1981 the Company sold 900,000new shares of its common stock and receivedproceeds of $ 15.4 million from the offering.
As of December 31, 1981, 7,456,005 shareswere outstanding. The number of registeredholders of common stock was 25,296 at that
time, and the largest single holder of record,other than the nominee, Cede 8 Co., for TheDepository Trust Company, had less than 2% ofthe outstanding shares.
The Company's Certificate of Incorporation,as amended, provides for10,000,000authorizedshares of common stock. Accordingly, as ofDecember 31, 1981, the number of authorized
but unissued shares amounts to 2,543,995.Additional information on outstanding secu-
rities is shown on page 18.The Company has available for interested
shareholders an Automatic Dividend Reinvest-ment and Stock Purchase Plan providing for theissuance of original issue shares of stock.
CONSTRUCTION PROGRAMThe Company is engaged in a construction
program which is presently estimated to involvecash expenditures during the period 1982
Construction Expenditures':Participation in Unit No. 2
of the Nine Mile PointNuclear Station (9%).......
Conversion of DanskammerUnits 3 and 4 to coal-firing ...
Purchase of an additional 5%interest in the Roseton Plant ..
Expenditures excluding majorgenerating projects..........
Total .
through 1986 of $316.6 million.The estimates byyears are as set forth below:
$30.5 $31.0 $ 25.9 $ 27.4 $ 14.1 $ 128.9
8.7 26.9 8.9 44.5
13.4 13.4
28.0 28.1 22.0 25.1 26.6 129.8
$71.9 $59.1 $56.6 $ 79.4 $49.6 $316.6
Total1982 1983 1984 1985 1986 1982-1986
(Millionsof Dollars)
'Excluding allowance for funds used during construction (AFDC), a noncash item.
As shown in the above table, the two mostsignificant construction projects are the Com-pany's 9% participation (97 mw.) in Unit No. 2 ofthe Nine Mile Point Nuclear Station (NMP-2)and the conversion of Danskammer Units 3 and4 from oil-firing to coal-firing.
NMP-2 is being constructed by NiagaraMohawk Power Corporation in Oswego County,New York, and presently scheduled for opera-tion in 1986. The cotenants'urrent estimate ofthe cost of NMP-2 is $ 2.4 billion, excluding thecost of nuclear fuel and AFDC, of which theCompany's 9% share would be $ 216 million.With the addition of the cost of nuclear fuel,currently estimated to be $9 million,and AFDC,currently estimated to be $ 128 million, the totalcost of the Company's interest in NMP-2 iscurrently estimated to be $353 million.
Based on current fuel cost projections, theconversion of Danskammer Units 3 and 4 fromoil to coal appears to provide substantial fuelsavings for the Company's customers. In order
to finance both its continued participation inNMP-2 and the coal conversion, the Company iscurrently planning a sequential (rather thansimultaneous) conversion of the two units withthe first unit in operation on coal in September1986 and the second unit in operation on coalnot later than September 1988. Such an ap-proach will enable the Company to levelize itscash expenditures, reduce its financing require-ments in 1984-1986, and enhance its ability toraise the necessary capital. The total cash costof a sequential conversion is currently estimatedto be $ 83.8 millionwithout flue gas desulfuriza-tion (FGD) equipment and $ 193.3 million withFGD equipment. In view of the many regulatoryand environmental problems involved in coalconversion, the current plans and cost estimatesmay be changed substantially.
Estimates of construction expenditures aresubject to continuous review and adjustmentand actual construction expenditures may varyfrom such estimates.
FORECAST OF CASH REQUIREMENTSThe Company's tentative annual cash require-
ments for the years 1982-1986 based upon theabove construction program and exclusive of
funding the $ 16.5 million of short-term debtoutstanding at December 31, 1981 are shownbelow:
Construction Expenditures:Cash Expenditures (from page 6)
Total1982 1983 1984 1985 1986 1982-1986
(Millionsof Dollars)
$71.9 $59.1 $56.6 $79.4 $49.6 $316.6
Internal Funds Available:Depreciation Accruals:
Charged to Depreciation Expense ....... 17.5Charged to Other Income Accounts.......5
Total . ... ..... .............. 18.0Deferred Income Tax—net ................ 7.6Retained Earnings (a)...... 9.2AFDC (b) ............ (16.3)Sterling Amortization—net .................5Other . ... ..... ..... ~ ... ~ ~ .. .1
Totallnternal Funds . .... ........ 19.1
Balance of Construction Requirementsto be Financed ........................ 52.8
18.9 19.4 20.0.5 .7 .7
19.4 20.1 20.79;7 12.0 13.29.4 10.4 11.5
(20.1) (20.2) (22.2)2.8 3.2 3.7
.6 .7 .8
21.8 26.2 27.7
27.7 103.5.8 3.2
28.5 106.71?.5 60.012.2 52.7
(20.0) (98.8)4.3 14.5
.9 3.1
43.4 138.2
37.3 30.4 51.7 6.2 178.4
Refunding of Long-Term Debt Securities:First Mortgage Bonds .............. 6.0Promissory Notes .....................2
Total ............... 6.2
Other Cash Requirements........ 3.0
Total Cash Requirements ........... $62.0
2
2
2.5
$40.0
II
11.02 2
11.2 .2
5.4 6.1
$47.0 $58.0
2
2
3.6
17.01.0
18.0
20.6
$ 10.0 $217.0
(a) Growth in Retained Earnings for the years 1983 through 1986 is assumed to be 4% of the average common equity foreach of therespective years.
(b) Assumes an AFDC rate of 12.5% for 1982; 13.75'/8 for 1983; 12.58/8 for 1984 and 1985; and 12.08/8 for 1986. Assumes a net of taxAFDC rate for Unit No. 2 of the Nine Mile Point Plant; also assumes AFDC as a percent of income available for common stockwillbe limited to 50% for the years 1984 and 1985 and 45% for the year 1986.
FINANCING CASH REQUIREMENTSAs shown above, it is currently estimated that
44% of the cash construction expenditures forthe five-year period 1982-1986 will be providedinternally and the balance will be met frominterim short-term borrowings and the issuanceof new securities.
The issuance of new securities will be basedupon the Company's general financial policiesin regard to capitalization ratios, coverage, andpay-out ratios as well as market and othereconomic conditions existing over the nextfive years.
DOLLARS5.00
EARNINGS PER SHARE
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
.50
1971 72 73 74 75 76 77 78 79 80 81
DIVIDENDS DECLARED PER SHARE AND PAY-OUT RATIODOLLARS
2.50
2.25
2.00
1.75
PER CENT100 ~ DIVIDENDS
DECLAREDPER SHARE
80 ~ PAY-OUT70 RATIO
1.50 60
1.25
1.00
.75
.50
.25
50
40
30
20
10
Dividends declared increased from $2.20 in1980 to $2.39 in 1981. The pay-out ratio re-mained relatively constant decreasing from65% in 1980 to 64% in 1981.
The Company's dividend policy has been togenerally maintain a pay-out ratio of approxi-mately 65% but the figure has fluctuatedwidely in some years because of the variationsin yearly earnings.
1971 72 73 74 75 76 77 78 79 80 81
STATEIv)ENT OF INCOME —(Thousands of Dollars)
1981 1980 1979 1978 1977 1976 1975
Operating RevenuesElectric (1) .
Gas (2)............Total .
Operating ExpensesOperationMaintenanceDepreciationOperating TaxesFederal Income TaxDeferred Income Tax —Net .
Total ..
333,96612,45016,10829,274
8,9812,569
235,25211,13215,22024,481(2,534)8,744
92,6046,611
12,56916,0033,783
670
100,9176,794
12,85916,9754,0502,342
133,6888,098
13,27918,5604,5522,547
169,7429,818
14,83921,268
1715,794
132,5548,151
13,39318,7796,5043,387
403,348 292,295 221,632 182,768 180,724 143.937 132,240
$398,392 $ 291,999 $ 225,971 $ 186,264 $ 184,391 $ 149,884 $ 138,41448.489 35.994 28 813 24 738 23 449 20 831 19 897
444,881 327,993 254,784 211,002 207,840 170,715 158,311
Operating Income 41,533 35,698 33,152 28,234 27,116 26,778 26,071
Other Income and DeductionsAllowance for Equity Funds Used
During ConstructionFederal Income Tax —Credit....Deferred Income Tax —Credit ..Other —Net
Total .
6,1982,528
220~533)
8,413 2,173 1,1512,8994,2544,871
4,495 . 3,476 2,388 1,560 796418 933 721 628 409253 178 138 75 30
~295) ~333) ~348) ~90) ~84)
324727
717
1,075
Income before Interest Charges 49,946 40,569 37,406 31,133 29,289 27,929 27,146
Interest ChargesInterest on Mortgage Bonds ........ ~......Interest on Unsecured Long-term Debt.....Interest on Short-term Debt .............:.Other Interest .
Allowance for Borrowed Funds UsedDuring Construction .
Amortization of Premium and Expense on Debt
Total
21,0431,8154,296
652
15,0173,7784,763
305
11,3065,1953,422
262
10,750762
1,673272
10,627805
1,075793
10,4691,467
704308
8,6271,4832,570
445
(7,718) (7,287)179 95
(4,536)63
(2,640)56
(1,831)73
(1,014)68
(381)65
20,267 16,671 15,712 10,873 11,542 12,002 12,809
Net Income...........................Dividends on Preferred Stock. ~..........Income Available for Common Stock.........Dividends on Common Stock...... ~.........
29,679
4,126
25,553
16,751
23,8984,126
19,77213,308
21,694
4,126
17,568
10,961
20,260
4,126
16,134
10,531
17,747
3,626
14,121
8,966
15,927
2,866
13,061
8,382
14,337
2,866
11,471
7,737
Retained Earnings $ 8,802 $ 6,464 $ 6,607 $ 5,603 $ 5,155 $ 4,679 $ 3,734
65
1.10
Common Stock:Average Shares Outstanding (000's)........ 6,867 5,851Earnings Per Share —on Average Shares
Outstanding —Dollars........ ~..... 3.72 3.38Dividends Declared Per Share —Dollars ... 2.39 2.20Dividends Paid Per Share —Dollars........ 2.33 2.18Pay-out Ratio on Dividends Declared-
Per Cent . 64Retained Earnings Per Share —on Average
Shares Outstanding —Dollars........... 1.28
Earnings Per Share —Assuming Conversionoft)'!e Convertible Debentures —Dollars.. (3) 3.26
(1)~>See footnote (a) on page 13. (3) The 4V84h convertible debentures were paid8 (2). See footnote (a) on page 14. at maturity on June 1, 1981; therefore. at
December 31 ~ 1981 there was no effect onearnings per share.
5,373
3.272.041.99
62
1.23
3.16
5,310
3.041.961.94
64
1.06
2.93
4,873
2.901.841.80
63
1.06
2.70
4,873
2.681.721.72
64
.96
2.50
4,440
2.581.721.72
67'84
2.40
RATIO OF ELECTRIC & GAS REVENUESTO TOTAL OPERATING REVENUES
PER CENT100
90
80
~ ELECTRIC
Q Gas
70
60
50
40
30
20
10
1972 73 74 75 76 77 78 79 80 81 PER CENT20
RATIO OF OPERATING INCOMETO CORPORATE NET PLANT
18
16
14
12
10
TOTAL MAINTENANCEAND DEPRECIATIONAS PER CENT OF TOTAL REVENUE
PER CENT100
1971 72 73 74 75 76 77 78 79 80 81
'Excluding Constructon Work in Progress
90
80
70
60
50
40
30
20
10
The lower percentages for the years sub-sequent to 1973 have resulted from thesubstantially higher levels of revenues ex-perienced in those years. Revenues for thoseyears have been Impacted by the recovery ofincreased eleCtriC fuel costs and higher gascosts,
In 1 981 the Company's annual provisions fordepreciation amounted to approximately3.34% of the original cost of averago depre-cfabte properly ln service. The average rate lorthe Bectric Department amounted to 3.tftyoand for the Gas Department 3.79yo.
1971 72 73 74 75 76 77 78 79 80 81
Notes
OU
OI-K
1974
$ 114,48217 007
131,489
1973
$ 77,77813 585
91,363
1972
$71,69114 193
85,884
1971
$64,88113 788
78,669
10-Year%~7o Chen e
514237
466Dividends
Paid Nontaxable
Portion of Common Stock Dividends Nontaxablefor Federal Income Tax Purposes
82,3275,250
10,31214,529(4,098)3,087
111,407
40,8425,4719,509
12,7872,487
869
71,965
36,7684,8639,084
11,9873,454
375
66,531
20,082 19,398 19,353
34,1525,5378,058
10,7932,586
283
61,409
17,260
878125100171247808
557
141
19811980197919781977197619751974197319721971
$2.332.181.991.941.801.721.721.721.611.511.48
7(a)eo(a)
None(a)None(a)None(a)
10(a)None(a)
eo(a)25(a)45.4464.33
2,731 2,080
1,754 1,8841,040 204
~83) ~8)1,764
301
~95)1,970
972 538
~52) (925)
920 814
(a) As initiallyreported to shareholders; subject toacceptance by U.S. Treasury Department.
22,813 21,478 21,323 18,180 175
7.,9041,5003;164
191
6,9561,5161,787
150
6,7581,5331,016
130
5,4731,4801,301
158
28423
230313
(2;059)63
10,763
(2,211)60
8,258
(2,071)60
7,426
(1,142) (576)52 244
7,322 177
12,050
2,866
13,220
2,827
13,897
1,974
10,858
1,820
173
127
9,184
7,328e
$ 1,856
10,393
6,512
11,923
5,963
$ 3,881 $ 5,960
9,038
5,066
$ 3,972
183
231
122
4,230
2.171.721.72
3,923
2.651.661.61
3,881
3.071.521.51
3,423
2.641.481.48
101
41
6157
79 63 50 56
.44 .99 1.54 1.16
2.03 2.45 2.82 2.44
INCOME FROM OPERATIONS —ELECTRIC AND GAS DEPARTMENTS —(Thousands of Dollars)
ElectricOperating Revenues
1981
. $398,392
1980
$291,999
1979
$ 225,971
1978
$ 186,264
1977
$ 184,391
1976
$ 149,884
1975
$ 138,414
Operating ExpensesProduction —Operation ............ 270,631
Maintenance.......... 4,767Transmission —Operation ...... ~ .., .. 2,412
Maintenance.......... 1,020Distribution —Operation ............ 4,558
Maintenance.......... 4,643Customer —Accounts and Service ..... 5,978Sales .
Administrative & General —Operation ... 16,530Maintenance. 530
Total Operation and Maintenance..... 311,069Depreciation . 13,974Operating Taxes...... ~ . ~ .. 25,273Federal Income Tax......... 8,112Deferred Income Tax —Net............ 2,351
Total Operating Expenses............ 360,779
Operating Income ~ . .... $ 37,6t3
183,7273,9642,0201,0984,0174,3724,852
13,743553
218,34613,63321,141(2,328)8,428
259,220
$ 32,779
128,5093,1591,7731,3403,5273,6734,213
11,304602
158,10013,30518,394
(26)5,759
195,532
$ 30,439
97,4152,5431,792
9713,2603,2103,991
10,924454
124,56011,88716,1295,6583,141
161,375
$ 24,889
101,3472,6991,582
8433,0003,1723,695
9,211341
125,890~ 11,813
15,9854,4262,241
'2,5532,2471,604
5822,9172,6593,468
7,701314
94,04511,43114,5074,0352,226
66,5902,7061,600
4572,7732,2263,052
6,822257
86,48311,18613,6903,902
392
160,355 126,244 115,653
$ 24,036 $ 23,640 $ 22.761
GasOperating Revenues ... $ 46,489 $ 35,994 $ 28,813 $ 24,738 $ 23,449 $ 20,831 $ 19,897
Operating ExpensesProduction —Operation ............ 28,690
Maintenance.......... 68Transmission —Operation ............ 370
Maintenance.......... 296Distribution —Operation ............ 1,427
Maintenance.......... 1,078Customer —Accounts and Service ..... 1,052Sales . ~ 87Administrative & General —Operation ... 2,231
Maintenance. 48
Total Operation and Maintenance.. ~ .. 35,347Depreciation . 2,134Operating Taxes. 4,001Federal Income Tax 869Deferred Income Tax —Net............ 218
Total Operating Expenses............ 42,669
Operating Income . 3 3,920
22,60252
324241
1,256795761
391,911
57
28,0381,5873,340(206)316
16,76373
311214
1,148687629
1,56570
21,4601,5342,874
19735
11,77150
280192
1,074681587
1,46050
16,1451,5062,650
846246
11,78354
284224987722521
1,27843
15,8961,4662,575
126.306
9,80936
240197866710557
1,20249
13,6661,4282,468
15116
9,0723
211206894712485
1,10544
12,7321,3832,313(119278
$ 2 919 2,713 3,345 3,080 3,138 3,310
(Expressed in Per Cent)
33,076 26,100 2t,393 20,360 t7,693 t6,667
Ratio of Operating Income to Year-end Net Plant(a):Electric (includes allocation of common plant) 12.33Gas (includes allocation of common plant) .. 9.75Corporate 12.03
10.717.38
10.33
9.877.239.56
8.95(b)8.958.95(b)
8.578.208.52
8.608.538.59
8.339 058.41
Total Maintenance and Depreciation as Per Centof Total Revenue.
Ia) Net Plant excludes construction work in progress.(tf) Net Plant for 1978 excludes the 100k interest in the
s Roseton Plant purchased as of 12/31/78.
6.42 8.03 9.68 10.21 10.29 11.51 12.1
UTILITYPLANTMILLIONS OF DOLLARS75070065060055050045040035030025020015010050
~ NET UTILITYPLANT~ PLUS CONSTRUCTIONWORK IN PROGRESS
~ NET UTILITYPLANT
Net utility plant plus construction work inprogress, increased 90% during the last 10years. The average annual growth rateduring this period was 6.2%.
Gross additions to utility plant (includingconstruction work in progress) in the last 5yearsamount toabout35%of total1981 plant.The comparable figure for the last 10 years is55%.
Net utilityplant increased 64% during the ten-year period 1971-1981 and the average annualgrowth rate was 5.1%,
1971 72 73 74 75 76 77 78 79 80 81
CAP ITALIZATIONMILLION
650
600
550
500
450
400
350
300
250
200
150
100
50
S OF DOLLARS ~ CAPITALIZATIONPLUS SHORT TERMDEBT
+ CAPITALIZATION
Capitalization increased 117% during the last10 years while capitalization plus short-termdebt increased 102% during the same period.The average annual rates of growth were 7.0%and 6.4% respectively.
019 71 72 73 74 75 76 77 78 79 80 81
1974 1973 1972
1
$ 114,482 $77,778 $71,691
10-Year1971 %~hchan e
$ 64,881 514
Ratio of CorporateOperating Revenues
Electric(Per Cent)
Gas(Per Cent)
57,9701,3811,530,
3572,9012,3612,813
45,906
240
75,4639,029
12,341(2,978)2,583
20,8311,7721,359
3692,8292,2312,173
2315,391
240
37,4268,273
10,7893,030
793
17,2151,3111,136
4632,5932,0002,137
2325,057
245
32,3897,898
10,0733,875
213
$ 17,007 $ 13,585 $ 14,193
8,65423
206118927
„ 725423
1
99245
12,1141,2832,188
(1,120)504
5,63825
208101916692314
35917
41
8,8871,2361,998(543)
76
6,16125
209104804676326
49849
39
9,2421,1861,914(421)162
14,969 11,654 12,083
$ 2,038 $ 1,931 $ 2,110
96,438 60,311 54,448
$ 18,044 $ 17,467 $ 17,243
16,2282,464
960377
2,2801,8441,777
5984,360
186
31,0746,9129,0952,614
230
49,925
$ 14,956
$ 13,788
5,88514
19990
704531260128773
31
8,6151,1461,698
(28)53
11,484
$ 2,304
93151171100152236
279185
901102178210922
623
151
237
388386
86229103103305(32)18955
31086
136
311
271
70
19811980197919781977197619751974197319721971
19811980197919781977197619751974197319721971
19811980197919781977197619751974197319721971
9089898889888787858382
Ratio of CorporateOperating Income
Electric(Per Cent)
91
92928889888790908987
Operating Ratio (c)
Electric Gas
87.9 89.286.7 91.684.0 89.881.9 82.183.4 85.080.1 84.380.5 82.684.6 91.672.6 89.270.2 87.072.6 83.1
1011
11
1211
121313151718
Gas(Per Cent)
9881211
1213101011
13
Corporate
88.187.284.681.983.580.680.785.575.173.074.4
6.665.946.58
8.835.678.37
8.826.378.46
8.377.118.18
(c) The Operating Ratio. expressed as a percent-age, represents the relation of total operatingexpenses, excluding federal income taxes, tooperating revenues.
11.84 16.40 16.24 17.28
4 Change of 1,000 per cent or more.
Notes
I-K
I-«C0
Cl
cCC9
CIK
CD
I-O
~KO«CI-
fLOXO
l
OCD
~ Z
4.t
SUMMARYBALANCESHEET AT DECEMBER 31 —(Thousands of Dollars)
1981 1980ASSETS
1979 1978
UtilityPlant —page 12................... ~.......Less Accumulated Depreciation
Net UtilityPlant
Construction Work in Progress
Other Property and Investments
Current AssetsCash .
Special Deposits .....................Accounts Receivable from Customers .
Accrued Unbilled UtilityRevenues ....Federal Income Tax Carry-backOther ReceivablesMaterials and Supplies.Prepayments .
$524,517179,268
345,249
160,249
1,840
2,958252
39,1517,535
1,14826,879
4,259
82,182
$511,167165,487
345,680
123,827
1,968
3,341247
31,9475,7714,6761,878
27,2643,771
78,895
$498,282152,407
345,875
98,019
1,797
3,267165
21,4285,5473,085
84024,334
3,163
61.829
$486,»6140,813
345,303
72,546
1,787
3,282258
16,9624,547
1,59416,2283,010
45,881
$ 4I
Deferred ChargesDeferred Electric Fuel Costs ........................Deferred Gas Costs'......Deferred Environmental Research
and Development Costs .
Unamortized Debt ExpenseUnamortized Project Costs.0 ather ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0 0 ~ ~ ~ ~ ~ 0 ~ ~ ~ ~ ~
6,4101,000
3,4222,4934,4493,824
10,351623
3,0992,190
4113,661
6,711517
3,9821,756
~ 5132,573
2,550834
3,6031,555
6161,591
Total. ~ ~ ~ ~ ~ ~ ~ ~ \ ~ ~ ~ ~ ~ ~ ~
21,598
$611,»8
20,335
$570,705
16,052 10,749
$523,572 $476,266
LIABILITIES
Capitalization —page 17
Current LiabilitiesLong-term Debt Maturing within OneSinking Fund Requirements.Notes Payable to Banks .
Notes Payable (Commercial Paper) ..Accounts Payable .
Accrued TaxesAccrued Interest .
Customer DepositsDividends Declared.Other .
ear e ~ ~ ~ ~ ~ ~ ~ oo ~Y
$ 498,968
6,000175
16,50026,669
6,0735,8552,8405,6545,190
74,956
$451,444
18,000175
18,000
25,8087,1834,0222,6774,6965,775
86,336
$404,482
12,000175
45,00018,4115,7673,1482,7443,9335,262
96,440
$405,352
175
23,00012,5195,9882,5232,6983,6643,647
54,214
$ ;
l
Deferred Credits and Other Liabilities'.
Accumulated Deferred Income Tax.
Total ..
Reclassified for 1980 to conform to current presentation.
10
6,143
31.051
$ 611,118
4,223
28,702
$570,705
2,439
20,211
2,105
14,595
$523,572 $476,266
BETAIMED EABMIIMGSTHOUSANDS OF DOLLARS9,600
8,800
8,000
7,200
6,400
5,600
4,800
4,000
3,200
2,400
1,600
800
1971 72 73 74 75 76 77 78 79
DOLLARS3.60
3.30
3.00
2.70
2.40
2.10
1.80
1.50
1.20
.90
.60
.30
080 81
~ ANNUALAMOUNT
~ PER SHARE
IMTEIRMALGASH FLOW AMD CASHCOMSTRUGTlOM CHARGES
MILLIONS OF DOLLARS65
60
55
50
45
40
35
30
25
20
15
~ II
I I
1972 73 74 75 76 77 78 79 80 81
~ CASHCONSTRUCTIONCHARGES
~ INTERNALCASHFLOW"
)Ic INTERNALCASH FLOWREPRESENTS "NETFUNDS FROM INTERNALSOURCES" LESS
"DIVIDENDS"
1977 1976 1975 1974 1973 1972 1971
445,235127,049
318,186
49,337
837
$428,543116,709
311,834
36,610
851
$417,116107,211
309,905
25,782
850
$ 403,59898,444
305,154
19,673
840
$322,68490,884
231,800
79,350
867
$312,46583,805
228,660
62,788
864
$ 289,84578,807
211,038
54.350
571
3,590191
14,8244,769
1,22314,6232,646
41,866
3,031374
12,0564,308
1,81413,489
2.732
37,804
2,62086
9,8113,655
1,58911,5612,455
31,777
1,835115
11,0513,2574,521
97013,1222,542
37,413
2,164140
5,8802 373
9516,7282,567
20,803
1,712635
5,6972,114
5714,4232,370
17,522
1,799637
5,2021,898
5783,6292,311
16,054
2,029539
3,294401
3,029269
5,139 893
2,5761,642
7711,637
9,194
419,420
1,6151,472
9271,373
9,082
$396,181
6721,5241,0821,254
7,830
$376,144
1,4171,2371 ~ 170
8,963
$ 372,043
1,320264
1,072
3,549
$336,369
1,406316964
2,686
$312,520
1,245369796
2,410
$284,423
J54,706 $ 338,536 $338,299 $307,061 $ 282,407 $266,900 $229,589
8,000175
17,00010,6094,4142,6892,5433i3222.678
51,430
4,200175
20,0009,7252,9852,7202,4142,8122.777
47,808
325
3,00011,0935,1062,7292,7052,8122,757
30,527
32530,000
5,00011,740
1,5332,7552,2842,5972,326
58,560
32529,800
4,2006,2641.'3222 2722,0572,4031,958
50,601
32511,30018,0003,3752,0352,1371,8141,9841,829
42.799
32528,00011,000
3,6913,7001,5451,6521,7601,228
52,901
1,937
11,347
419,420
962
8,875
$ 396,181
755
6,563
$376,144
522
5,900
$ 372,043
548
2,813
$336,369
877
1,944
$ 312,520
364
1,569
$284,423
Notes
IXLalfQ
Ul
LalQ
$ 80,15529,679~ ~
STATEMENT OF RETAINED EARNINGS—(Thousands of Dollars)
1981
I,r
Balance January 1.Net Income
1980
$73,69123,898
1979
$67,08421,694
1978
$ 61,48120.260
109,834 97,589 88,778 61,741
Dividends Declared —cash:On Cumulative Preferred Stock ..On Common Stock ..................
4,126 4,12616,751 13,308
20,877 17,434
$88,957'80,155Pursuant to the terms of the 4.85% promissory notes, due 1995, $ 80,543 is notrestricted with respect to the declaration of dividends on common stock.
Total e ~ ~ e ~ e ~ ~ ~ ~ ~
Balance December 31
SOURCE OF FUNDS
STATEMENT OF CHANGES IN FINANCIALPOSITION—(Thousands of Dollars)
1980
4,12610,961
15,087
$73,691
1979
4,12610,531
14,657
$67,084
1978
Internal Sources:Net IncomeIncome Items not Requiring Current Outlays:
Depreciation Accruals:Charged to Depreciation Expense...........Charged to Other Income Accounts .........
Deferred Income Tax—Net.Allowance for Funds Used During Construction ..Other—Net
Net Funds from Internal Sources............
$ 29,679
16,108629
2,349(13,916)
1,973
36,822
$23,898
15,220586
8,491(11,782)
1,314
37,727
$21,694
14,839530
5,616(8,012)
355
35,022
$20,260
13,393508
3,249(5,028)
577
32,959
Available from Financing:Mortgage Bonds ~......... ~.......Convertible Debentures.Term Loan Notes........................Preferred StockCommon StockShort-term Debt
Total Funds from External Sources... ~......Total Source of Funds
30,000
15,619
45,619
$ 82,441
50,000
19,175
69,175
$ 106,902
20,000
22,000
42,000
$77,022
35,000I
10,3406,000
51,340
$84,299
APPLICATION OF FUNDSConstruction Charges:
Gross Charges for Construction.........Less Allowance for Funds Used During Construction.
DividendsRetirement of Securities and Short-term Debt:
Mortgage Bonds ........................ ~ ~ .
Convertible Debentures............ ~.... ~ .
Long-term Promissory Notes.Short-term DebtTerm Loan Notes...........................
$56,05013,916
42,134
20,877
8,000175
1,50010,000
19,675
$41,45511,782
29,673
17,434
12,000
17527,00010,000
49,175
$40,5268,012
32,514
15,087
175
15.000
15.175
$64,51 35,028
59,485]
14,657
8,000175
8,175
Net Increase (decrease) in Working Capital, other than Short-term Debt and Current Maturities of Long-term Debt... 1,166
Ohhnges in Deferred end Other Accounts —Net .......... ~1,41 ttTotal Funds Applied . $82,441
11"
6,1704,450
$ 106,902
7,7226,524
$77,022
(769)2,751
$84,299
GROSS CONSTRUCTIONCHARGES
MILLIONSOF DOLLARS65
60
55
50
Q ELECTRICPRODUCTION
S OTHER
45
40
35
30
25
20
15
10
I I v I I I
I I I I I I ~ I I I I I
I I I I I I I
I I I I
I I I I I
I I I I I
I I I I I
I I I I I
Ol total construction charges of $373.039.000In the past 10 years, $69,240,000 repre-sents the cost ol the Company's 3tP/o fnterestin the Roseton Efectric Generating Plant.$ 151.970.000 represents the investment todate in the construction ol the Sterling and theNine Mile Point No, 2 nuclear fadiities. and$8.318.000 represents the cost of steamgenerating laciiities at the Danskamrner PointElectric Generating purnt.
1972 73 74 75 76 77 78 79 80 81 NET UTILITYPLANT* PER DOLLAR OFTOTAL REVENUE
10
8
PER CEN100
RATIO OF ACCUMULATEDDEPRECIATION TO TOTAL
DEPRECIABLE PLANT1971 72 73 74 75 76 77 78 79 80 81
ExcLuotrro coNsTRucTrorr woRK Irr pRocRsss
90
80
70
60
50
40
30
20
10
1971 72 73 74 75 76 77 78 79 80 81
The Company's annual provisions fordepreciation are computed on the stralght-line method using rates based on theestimated useful lives and estimated netsalvage of properties.
Total depreciable plant Includes total utilityplant In service. exclusive of nondepreci-able items such as land. Intangibles. etc.
The decline in the ratio in 1974 reflects theaddition to depreciable property in thatyear ol the Company's 20% interest In theRoseton Plant.
1977
$56,32617,747
74,073
.1976
$ 51,64715,927
67,574
1975
$47,91314,337
62.250
1974
$46,05712,050
58,107
1973
$42,17613,220
55,396
1972
$ 36,21613,897
50,113
1971J
$32,24410,858
43,102
3,6268,966
12,592
'61,481
2,8668,382
11,248
$ 56,326
2,8667,737
10,603
$51,647
2,8667,328
10,194
$ 47,913
2,8276,512
9,339
$ 46,057
1,9745,963
7,937
$42,176
1,8205,066
6,886
$36,216
1977 1976 1975 1974 1973 1972 1971
$17,747 $ 15,927 $ 14,337 $ 12,050 $ 13,220 $ 13,897 $ 10,858
13,279265
2,472(3,391)
495
30,867
12,859243
2,312(1,810)
248
29,779
12,569240663
(705)374
27,478
10,312235
3,087(3,813)
171
22,042
9,509220869
(4,095)156
19,879
9,084198375
(3,835)284
20,003
8,058189283
(2,114)115
17,389
4,500
15,000
19,500
I $50,367
17,000
17,000
$ 46,779
20,000
8,102
28,102
$ 55,580
15,000
8,1561,000
24,156
$ 46,198
12,000
4,700
16,700
$ 36,579
20,000
11,600
31,600
$51,603
8,000
13,000
21,000
42,000
$ 59,389
$32,3433,391
28,952
12,592
$ 25,6931,810
23,883
11,248
$ 23,337705
22,632
10,603
$ 25,2543,813
21,441
10,194
$29,0384,095
24,943
9,339
$ 34,8303,835
30,995
7,937
$41,0852,114
38,971
6,886
4,3753,000
325 32532,000
325 325 3259,700
13,265
325
7,375 325 32,325 325 325 10,025 13,590
1,240208
'50.367
9,796 (9,602)1.527 ~378)
$46,779 $ 55,580
9,6494,589
$46,198
1791,793
$36,579
1,870776
$ 51.603
(753)695
$59,389
Notes
KO
V)OQ
O
COLJJC9
O
OI-z
I-I-CA
ChKcC
VlC9KKCL
4lCIW
4JI-fL
OI-K
L4I-I-M
DETAILOF UTILITYPLANT AND ACCUMULATEDDEPRECIATION—
1981 1980 1979 1978 1977
(Thousands of Dollars)
1976 1975 1974 1973 1972 197110-Year
%~7o chan e
UtilityP>lant —December 31Electric ...................... $441,945Gas .............. 55,642Common.................... 26,930
Total UtilityPlant .......... 524,517Construction Work in Progress ... 160,249
Total ............. 684,766
$416,35549,33520,426
$433,64053,55123,976
$425,81150,52021,951
498,28298,019
486,11672,546
511,167123,827
634,994 596,301 558,662
$377.75348,72618,756
445,23549,337
494,572
$ 363,94846,75617,839
428,54336,610
465,153
$235,67940,79013,376
$343,58742,85617,155
$354,39445,58517,137
$257,24240,17815,045
$265,29841,85515,531
417,11625,782
322,68479,350
403,59819,673
289,84554,350
312,46562,788
442,898 423,271 402,034 375,253 344,195
Accumulated Depreciation- December 31Electric ...................... 152,555Gas ..................... 17,788Common .................... 8 925
Total .................... 179,268
141,25116,0668,170
129,59914,816
7,992
165,487 152,407
119,90413,6937,216
140,813
107,18512,6477,217
127,049
98,67311,680
6,356
116,709
90,76910,7005,742
107,211
82,77510,3335,336
98,444
76,7169,4124,756
90,884
70,8868,6774,242
83,805
65,0449,8173,946
78,807
Net UtilityPlant —December 31 (a)ElectricGasCommon
289,39037,85418,005
292,38937,48515,806
296,21235,70413,959
296,45135,64213,210
270,56836,07911,539
265,27535,07611,483
263,62534,88511,395
260,81232,52311,819
188,58232,44310,775
186,35631,50110,803
170,63530,973
9,430
Total .. $345,249 $345,680 $345.875 $345,303 $318,186 $311,834 $309,905 $305,154 $231,800 $ 228,660 $ 211,038
8836
101
81
195
99
13581
126
127
702291
64
Ratio ofAccumulatedDepreciation
to Total Depre-ciable Plant
December 31(Per Cent)
Net UtilityPlant'erDollar of
TotalRevenue(Dollars)
1981 34.6 .781980 32.8 1.051979 31.0 1.361978 29.3 1.501977 29.0 1.531976 27.6 1.831975 26.0 1.961974 24.6 2.321973 28.4 2.541972 27.1 2.661971 27.5 2.68Excluding Construction Work in Progress.
Gross Additions to Plant During Year(a)Electric Production .............Other Electric .
GasCommon
Total
Retirements During YearElectric Production ..Other Electric .
Gas .
Common
Total
$ 4,5169,2082,2763,628
19,628
4141,923
131631
3,099
$ 8168,7553,1432.933
15,647
1351,689
111
651
2,586
$ 3,8507,8001,3522,051
15,053
4131,781
167526
2,887
401,925
145.1,163
3,273
3632,083
265213
2,924
$ 34,396(b) $ 3,2757,125 12,976
754 2,2352,828 1,130
45,103(b) 19,616
2,24310,415
1,379828
14,865
5632,274
210391
3,438
$ 2,64710,6533,390
538
17,228
232,473
683531
3,710
$ 66,62314,339
2,1291,840
84,931
1,0581,613
110210
2,991
$ 1399,5752,066
696
12,476
2061,689
156206
2,257
34122,641
1,4461,964
26,392
131,6761,769
314
3,772
$ 4,6776,431
993553
12,654
2481,412
251387
2,298
1981198019791978197719761975197419731972
Total
56,05041,45540,52664,513(b)32,34325,69323,33725,25429,03834,830
ElectricProduction
41,373-25,79928,56451,622(b)20,22714,18912,8239,662
13,49518,195
Gross Construction Charges(Thousands of Dollars)
Other
14,67715,65611,96212,89112,11611,50410,51415,59215,54316,635
Adjustments During YearElectric ProductionOther ElectricGasCommon
Total.
(3,090)8
(54)(43)
~3;179
1567(1)
~257~176
(608)(346)
5
(949)
(2)2
(230)(37)
2265
(2)22 (1,018)
~25) (6)
~1,026)
22116
(233)(4)
24327
(289)19
53(7)
(46)
10-YearTotal 373,039 235,949 137,090
Net Additions to Plant During Year(a)Electric ProductionOther ElectricGasCommon
Total
4,4295,072
735120
3,4376,0191,1851,525
57120,992
(612)1,669
1547,9021,677
486
2,91010,895
1,970917
65,56512,724
1,0011,624
33,7484,854
6091,670
2,6248,1832,729
~16)
1,4508,1041,171
702
1,0127,2932,0912,954
6967,1333,0312,025
$ 13,350 $ 12,885 $ 12,166 $ 40.881 $ 16,692 $ 11,427 $ 13.518 $ 80,914 $ 10,219 $ 22,620 $ 10,356
(a) Excluding Construction Work in Progress.(b) Gross additions include purchase of an additional 10% interest in the Roseton Plant at
original book cost of $33,620.Gross construction charges, however, reflect original book cost iess accumulated depre-ciatign. in the amount of $3.799.
Notes ELECTRICAL SALES AND REVENUES(OWN TERRITORY)
S OF KILOWATT-HOURSMILLION4,200
3,900
3,600
3,300
3,000
2,700
2,400
2,100
1,800
1,500
1,200
900
600
300
MILLIONSOF DOL560 Q SALES
REVENUES480
440
400
360
320
280
240
200160
120
80
40 PER CENT100
RATIO OF ELECTRIC RESIDENTIAL,COMMERCIAL,AND INDUSTRIALREVENUES TO TOTAL ELECTRIC
REVENUES (OWN TERRITORY)
019 71 72 73 74 75 76 77 78 79 80 8
090
80
70
60Q INDUSTRIAL
~ COMMERCIAL, 50STREET ANDAREA LIGHTING,AND OTHER 40
Q RESIDENTIAL
K.OI-
LUlLDLLIO
AVERAGE USAGEPER CUSTOMER AND
AVERAGE REVENUE PER KWH.— RESIDENTIAL
20
10
1972 73 74 75 76 77 78 79 80 81
KILOWATT-HOURS8,000
7,000
6,000
CENTS PER KILOWATT-HOUR12.0
10.5
9.0
AVERAGEUSAGE
AVERAGEREVENUE
5,000 7.5
4,000 6.0
3,000 4.5
2,000 3.0
1,000 1.5
1971 72 73 74 75 76 77 78 79 80 81
ELECTRIC REVENUES, SALES, AND CUSTOMERS
1981 1980 1979 1978. 1977 1976 1975 1974 1973 1972 197110-Year
%~~oChan e
Revenues —Thousands of DollarsResidentialCommercialIndustrial .
Street and Area Lighting ...Other .
Total —Own Territory (a) .
Other UtilitiesTotal Revenues
............... $ 110,13587,09283,892
3,8432,101
287,063111,329
............... $398,392
$ 90,26570,10963,187,
3,473.1,564
$ 65,36847,33941,561
2,7671,749
$ 57,13439,68030,429
2,6101,708
$ 72,35954,12250,545
3,0071,672
$ 65,22546,02338,571
2,8021,745
$ 56,07838,68432,153
2,3062,094
228,59863,401
158,78427,480
154+6630,025
131,56118,323
131,3157,099
181,70544,266
$ 291,999 $ 225,971 $ 186,264 $ 184,391 $ 149,884 $ 138,414
$ 43,35530,93028,376
2,0121,640
106,3138,169
$ 114,482
$ 31,00722,64317,438
1,9601,856
74,9042,874
$77,778
$28,54720,61316,347
1,9061,039
68,4523,239
$71,691
$25,93918,49815,495
1,763765
62,4602,421
$ 64,881
325371441118175
360'I
514
Sales —Millionsof Kwh.ResidentialCommercialIndustrial .
Street and Area Lighting .
Other...Total —Own Territory
Other UtilitiesTotal Sales
1,1641,0231,206
351
3,4292,093
5,522
1,1691,0061,149
351
3,3601,390
4,750
1,204984
1,19235
1
3,4161,324
4,740
1,203957
1,12635
1
3,3221,019
4,341
1,199922
1,03035
1
3,1871 ~ 104
4,291
1,203897938
361
3,075738
3,813
1,168871981
351
3,056303
3,359
1,160820
1,08935
1
3,105335
3,440
1,176856
1,21734
1
3,284280
3,564
1,,093783
1,17633
1
3,086372
3,458
1,000711
1,13531
1
2,878284
3,162
1644
613
19637
75
Customers —AverageResidentialCommercialIndustrial .
Street and Area Lighting ..Other (including other utilities)
Total Customers .
185,62323,744
7262,948
10
213,051
183,23823,380
7363,061
8
, 210,423
181,63122,966
7313,126
5
208,459
178,93422,296
7153,130
6
205,081
176,89121,553
7263,186
8
202,364
175,13021,289
7433,256
11
200,429
169,86321,352
7573,294
10
195,276
167,55921,183
7693,417
10
192,938
163,18120,436
7633,417
8
187,805
158,83319,824
7833,321
12
182,773
154,57519,237
8143,183
12
177,821
2023
(11)(7)
(17)
20
ResidentialAverage Kwh. Per CustomerAverage Revenue Per Kwh.Average Annual Bill
Maximum Hourly Load —Kw. —Winter ...............Summer..............
Annual Load Factor —on Annual Peak... ~............Revenues —Per Cent of Total Own Territory
ResidentialCommercial .
IndustrialStreet and Area Lighting .
OtherTotal —Own Territory
6,268
9.47'593.33
640,980625,980
64
393029
1
1
100
6,3797.728
$492.61
598,900640,300
64
393128
1
1
100
6,6296.01@
$398.39
633,200619,800
65
403028
1
1
100
6,7225.44c
$365.32
607,580613,580
65
41
3026
21
100
6,7795.44C
$368.73
617,460621,200
62
423025'2
1
100
6,8704.75C
$326.24
607,480534,200
61
443023
21
100
6,8794.80C
$ 330.14
584,100 =
595,360
63
432924
22
100
6,9223.74@
$ 258.75
571,500583,760
66
41
2927
21
100
7,2062.64@
$ 190.02
585,300632,200
64
423023
32
100
6,8832.614
$ 179.73
586,900565,550
65
423024
31
100
6,4682.594
$ 167.81
548,700538,300
65
413025
31
100
(3)266254
1716
(a) Revenues related to increased electric fuel costs billed pursuant to the electric fuel cost adjustment are as follows:1981 '980 1979" 1978 1977 1976 1975 1974 " 1973
$36,663 $ 16.390 $28,792 $20,322 $24,729 $ 8,055 $ 11,636 $ 33,161 $ 1,904
-Electric fuel costs roIled in to the base rates resulting from Rate Case Proceedings were 1.2C per kwh. effective December 4, 1974, 1.5C per kwh.effective November 3, 1979, and 1.2C per kwh. effective July 18, 1981.
See section on "Rates" on page 3.
~ Change of 1,000 per cent or more.
Notes
12.0 60.0
GAS SALES AND REVENUES(OWN TERRITORY)
BILLIONS OF CUBIC FEET MILLIONSOF DOLLARS65.013.0 Q SALES
REVENUES1 1.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
55.0
50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
2.0
1.0
1971 72 73 74 75 76 77 78 79 80 81
10.0
5.0RATIO OF GAS RESIDENTIAL,
COMMERCIAL, AND INDUSTRIALREVENUES TO TOTAL GAS REVENUES
PER cENT (OWN TERRITORY)100
90
Q INDUSTRIAL,INTERRUPTIBLE,AND OTHER
~ COMMERCIAL
H RESIDENTIALWITHOUTHOUSEHEATING
Q RESIDENTIALWITHHOUSEHEATING
80
70
60
50
40
30
20
10
COCL
OI-tO
OK
MUlcCtO
M
KLal0Lal
OlLI-O
QJ
1972 73 74 75 76 77 78 79 80 81
160
140
6.40AVERAGEREVENUE
5.60
120 4.80
100 4.00
80 3.20
60 2.40
40 1.60
20 .80
1971 72 73 74 75 76 77 78 79 80 81
AVERAGE USAGE PER CUSTOMER ANDAVERAGE REVENUE PER MCF. - RESIDENTIALTHOUSANDS OF CUBIC FEET DOLLARS PER THOUSAND CUBIC FEET180 7.20 ~ AVERAGE
USAGE
GAS REVENUES, SALES, AND CUSTOMERS
1981 1980 1979 1978 1977 1976 1975 1974 1973 1972 197110-Year
%~~o Chan e
Revenues —Thousands of DollarsResidential with HouseheatingResidential without Househeating.............~...
Total Residential .
Commercial .
Industrial .
Interruptible and SeasonalOther .
Total—Own Territory (a) .
Other UtilitiesTotal Revenues
Sales —Thousands of Mcf. (b)Residential with HouseheatingResidential without Househeating.................
Total Residential .
CommercialIndustrial ..Interruptible and Seasonal.Other .
Total—Own Territory.Other Utilities
Total Sales ..Customers —Average
Residential with Househeating .
Residential without Househeating.................Total Residential .
CommercialIndustrial ~
Interruptible and Seasonal ..Other (including other utilities)
Total Customers .
$ 17,3252,842
20,1679,7142,402
46,076413
$ 14,0902.408
16,4987,3181,719
35,630364
$35,994$46,489
3,213415
3,6282,071
5172,996
134
9,346134
9,480
3,002392
3,3941,776
4242,914
102
8,610142
8,752
25,20016,337
41,5373,720
14052
2
45,451
23,62016.933
40,5533,515
14051
2
44,261
11,761 9,0012,032 1,094
$ 11,6702,218
13,8886,0861,3466,839
654
28,813
$ 28,813
3,046380
3,4261,718
3822,871
109
8,506
8,506
22,56717.427
39,9943,332
13949
1
43,515
$ 11,8682,201
14,0695,8801,1693,432
188
24,738
$ 24,738
3,208385
3,5931,815
3741,733
78
7,593
7,593
22,25217,504 .
39,7563,352
13950
1
43,298
$ 11,2712,165
13,4365,4471,0213,379
166
23,449
$23,449
3,132385
3,5171,746
3391,739
60
7,401
7,401
22,10317,650
39,753-3,368
14250--
1
43,314
$ 9,8851,945
11,8304,770
9473,134
150
20,831
$ 20,831
3,243394
3,6371,838
3882,152
76
8,091
8,091
21,91917,930
39,8493,411
15550
1
43,466
$ 8,6471,800
10,4474,307
8944,079
170
19,897
$ 19,897
'2,997369
3,3661,738
3763,265
99
8,844
8,844
21,18917,693
38,8823,427
16450
1
42,524
$ 7,0881,557
8,6453,625
7353,748
254
17,007
$ 17,007
3,096396
3,4921,826
3984,798
248
10,762
10,762
20,86918,186
39,0553,439
17650
1
42,721
$ 6,3041,462
7,7663,191
6701,612
346
13,585
$ 6,8341,563
8,3973,344
7521,330
370
14,193
3,084395
3,4791,822
4032,342
422
8,468
3,314425
3,7391,859
4481,880
452
8,378
8,468 ~ 8,378
20,33218,529
38,8613,450
17545
1
42,532
20,01418,988
39,0023,426
18744
1
42,660
$ 13,585 $ 14,193
$ 6,3701,536
7,9062,872
7491,877
384
13,788
$ 13,788
3,210424
3,6341,672
4663 222
476
9,470
9,470
19,74219,484
39,2263,349
19342
1
42,811
17285
155238221527429
234
237
(2)
(—)2411
(7)(72)
(1)
28(16)
611
(27)24
100
6
Total ResidentialAverage Mcf. Per CustomerAverage Revenue Per Mcf.Average Annual BillHouseheating Saturation —Per Cent.....
Maximum Daily Send-out —Mcf..Date .
Revenues —Per Cent of Total—Own TerritoryResidential with Househeating .
Residential without Househeating..........CommercialIndustrial .
Interruptible and Seasonal.Other .
Total—Own Territory.
87.3$5.56
$485.5160.7
56,054Jan. 12
386
21
526
4
100
83.7$4.86
$406.8358.2
53,719Dec. 25
397
21
525
3
100
85.7$ 4.05
$347.2456.4
55,301Feb. 11
408
21
524
2
100
90.4$3.92
$353.8956.0
44,350Dec. 29
489
244
141
100
88.5$ 3.82
$337.9955.6
45,668Jan. 17
489
234
151
100
91.3$3.25
$296.8755.0
47,532Jan. 22
479
235
151
100
86.6$3.10
$268.6854.5
46,497Mar. 3
439
224
21
1
100
89.4$ 2.48
$ 221.3653.4
48,710Jan. 18
429
21
422
2
100
89.5$2.23
$ 199.8452.3
52,162Feb. 11
4611
235
123
100
95.9$2.25
$ 215.3051.3
50,035Feb. 16
4811
24593
100
92.6$ 2.18
$201.5450.3
45,122Feb. 1
4611
21
5143
100
(6)155141
21
24
Degree Days as Per Cent of Normal (c)Degree Days in Billing Cycle .
Degree Days in Calendar Year103100
100105
9696
107106
10299
99103
91
929696
9189
101102
9896
(a) Revenues billed under the provisions of the gas cost adjustment clause are as follows:1981 1980 1979'978 1977 1976 1975 1974 1973
$7'.872 $2.500 $8,708 $8,257 $ 8,355 $5,704 $4,729 $3,210 $914(b) Theaverage heating value of gas sold is not less than 1,000 Btu per cu. ft.(c) Normal Twenty-year Moving Average.
14
'Gas cost adjustment rolled in to the base rates resulting from Rate Case Proceedings was $ 1.50 per mcf.effective November 3, 1979.
NotesELECTRIC GENERATING CAPABILITY,
PURCHASED CAPACITY,AND ANNUALPEAKS
NDS OF KILOWATTSTHOUSA1.1901.1201,050
98091084077070063056049042035028021014070
0
Qx PURCHASEDCAPACITY AT TIMEOF PEAK INCLUDINGRESERVES
Q GENERATINGCAPA6ILITYATTIME OF PEAK
~ ANNUALPEAK
ELECTRICITY GENERATEDAND PURCHASED
5 OF KILOWATT-HOURSMILLION4,000
3,6001972 73 74 75 76 77 78 79 80 81
3,200
2,800GENERATED
2,400PURCHASED
2,000
1,600
1,200
V)
OI-V)
OKcC
M
cCMM
K
:IChcCC9
COST OF FUEL ANDPURCHASED ELECTRICITY
AS PER CENT OF ELECTRIC REVENUE
PER CENT70
65
60
55
50
45
40
35
30
25
20
15
10
1971 72 73 74 75 76 77 78 79 80 81
FUEL ANDPURCHASEDELECTRICITY
ELECTRICFUEL
PURCHASEDELECTRICITY
800
400
019 71 72 73 74 75 76 77 78 79 80 81
COST OF PURCHASED GASAS PER CENT OF GAS REVENUE
PER CENT65
60
55
50
45
40
35
30
25
20
15
10
019 71 72 73 74 75 76 77 78 79 I80 81
ELECTRIC AND GAS PRODUCTION DATA
Electric Output—Millions of Kwh.Generated —Steam .
Generated —Hydro .
Generated —Gas TurbineTotal Generated .
Purchased —for Own TerritoryPurchased —for Resale to Other Utilities ..
Total Purchased .
Pumped Storage (received from)Total Output
Pumped Storage (delivered to)Company Use, Losses, etc..
Balance Sold
1981
3,81065
5
3,880
1,72790
1,817
5,697
175
5,522
1980
3,351105
4
3,460
1,5556
1,561
38
5,05950
259
4,750
1979
3,535162
2
3,699
1,253
1,253
16-
4,96821
207
4,740
1978
3,295122
3
3,420
1,1208
1.128
6
4,5548
205
4,341
1977
3,520134
5
3,659
79857
855
4,514
223
4,291
1976
3,261156
5
3,422
492117
609
4,031
218
3,813
1975
3,189175
8
3.372
24718
265
89
3,726110257
3,359
1974
3,172160
21
3,353
37312
385
116
3,854142272
3,440
1973
3,22516842
3,435
31688
404
39
3,87856
258
3,564
1972
3,24017438
3,452
184115
299
3,751
293
3,458
1971
2,98715137
3,175
18849
237
3,412
250
3,162
r10-Year ~
%~kchan e
28(57)(86)22
81984
667
67
(30)75
Electric Peak and CapacityAnnual Peak (Own Territory)—Mw.Generating Capability at Time of Peak —Mw.
SteamHydroGas Turbine .
TotalPurchased Capacity at Time of Peak
Including Reserves —Mw..Generating Capability Plus Purchased
Capacity as Per Cent of Annual Peak.......
641.0
839.245.648.0
932.8
172.4
172
640.30
839.244.638.0
921.8
255.6
184
633.2
839.245.648.0
932.8
124.8
167
722.944.638.0
805.5
296.8
180
621.2*
706.244.638.0
788.8
211.8
161
607.5
697.045.648.0
790.6
30.7
135
710.044.638.0
792.6
109.4
151
583.8 4
487.044.638.0
569.6
150.0
123
632.2 *
497.044.638.0
579.6
85.0
105
586.9
497.046.848.0
591.8
81.5
115
548.7
495.546.850.0
592.3
58.0
119
17
69(3)(4)57
197
45
Gas Send-out —Thousands of Mcf.Purchased Natural GasManufactured or Propane Gas
TotalCompany Use —Boiler Fuel .
Other Company Use, Losses, etcBalance —Sold .
14,272'314,2754,587
208
9,480
12,6701
12,6713,412
507
8,752
11,2321
11,2332,441
286
8,506
7,9653
7,968
375
7,593
7,60314
7,617
216
7,401
8,4202
8,422
331
8,091
9,197
9,197
353
8,844
11,1911
11,192
430
10,762
8,7141
8,715
247
8,468
8,7553
8,758
380
8,378
10,572
10,572872230
9,470
35
35426(10)
19811980197919781977197619751974197319721971
Thousandsof
Dollars192,637132,47895,79770,80181,61459,58762,28149,03214,90412,66814,118
Centsper
Kwh.
5.063.952.712.152.321.831.951.55
.46
.39
.47
Steam(b)
AverageCost of
Fuel Burned(Cents per
MM/Btu) (d)475.9362.2251.2199.1217.6170.1178.0145.1
35.230.733.9
Heat Ratefor Thousands
Generation ofBtu Dollars
10,11910,21010,03510,0259,9789,931
10,0119,914
10,0009,956
10,129
8941,3881,8861,0601,240
9801,0331,189
325265267
Centsper
Kwh.
1.381221.16
.87
.93
.63
.59
.74
.19
.15
.18
Electric Production Cost(a)Hydro
Thousandsof
Dollars413313207223334.222254620699494576
Centsper
Kwh.
8.267.83
10.357.436.684.443.182.951.661.311.55
Gas Turbines Purchased(c)
Thousandsof
Dollars
76,16252,34532,84526,99118,96211,5094,8777,7776,0833,6502,910
Centsper
Kwh.
4.413.372.622.412.382.341.972.081.931.981.55
19811980197919781977197619751974197319721971
Thousandsof
Dollars
28,57922,52516,69311,69111,697
9,6988,9718,5605,5266,0265,772
CentsperMcf.
295.1243.3189.9146.8153.8115.297.576.563.468.859.5
Purchased Gas Cost e
19811980197919781977197619751974197319721971
4643403642374241151517
2018151411
947865
66615550534646482321
22
Cost of Fuel and PurchasedElectricity as Per Cent of
Electric Revenue
Fuel andElectric Purchased Purchased
Fuel Electricity Electricity
PurchasedGas Gas andFuel Fuel
PurchasedGas
19811980197919781977.197619751974197319721971
6263584750474550414242
6263584750474550414242
Cost of Purchased Gas andFuel as Per Cent of
Gas Revenue
(a) Includes cost of operation and maintenance.(b) Includes production costs related to sales to other utilities.(c) Excludes electricity purchased for resale to other utilities.(d) Fuel burned during 1979 through 1981 was a combination of fuel oil and natural gas.
Fuel burned during 1972 through 1978 was fuel oil. (Natural gas was used for ignition purposes only.)Fuel burned during 1970 and 1971 was a combination of fuel oil~ coal, and natural gas.
(e) Excludes gas purchased for boiler fuel.
+ Annual peak in 1973, 1974, 1975, 1977, 1978 and 1980 occurred in the summer.
NotesPAYROLL (INCLUDING BENEFITS) AS PER CENT OF
REVENUES, AND BENEFITS AS PER CENT OF PAYROLL(CHARGES To OPERATIONS 5 MAINTENANCE)
PER CENT100
90
80
70
60
50
40
30
20
10
1971 72 73 74 75 76 77 78 79 80 81
cCI-Ci
KOI-OAOlCfLMC9
OKcC
ILI-s
Union wage negotiations in 1981 resulted in atwo-year working agreement, which providedfor a 10% general wage increase effective July1, 1981, and 10% effective July 1, 1982togetherwith fringe benefit improvements.
Compensation of professional, supervisoryand executive personnel is geared to a salaryprogram designed to assure the Company'sability to attract and hold highly qualifiedmanagement personnel.
Benefits provided by the Company includepensions, group life insurance, hospitaliza-tion,,major medical insurance, a dental plan,and a disability retirement plan.
PAYROLL (INCLUDINGBENEFITS) AS PER CENTOF CORPORATEREVENUES~ BENEFITS AS PER CENTOF PAYROLL
LABOR DATAAND INDUSTRIALREVENUESF
LABOR DATA
Employees —Year EndClassified .
Supervisory and Professional .
Executives
Total (a) .
Employee Compensation —ThousandsPayroll Charged to Operation.and Maintenance
ElectricGas.
Payroll Charged to Construction and Other .......Roseton Payroll —Billed to Others (a) ............
Total Payroll .
1981
968364
13
1,345
$21,0433,5967,7032,591
$34,933
1980
964337
13
1,314
$ 18,9163,041
. 7,2022,289
$31,448
1979
976 .
3139
1,298
$ 17,4202,7306,6662,194
$ 29,010
1978
983303
10
1,296
$ 15,6512,5196,1522,353
$26,675
1977
995294
9
1,298
$ 14,2302,4306,3952,174
$ 25,229
1976
1,039290
9
1,338
$ 12,9632,3116,5932,459
$ 24,326
1975 .
1,092299
9
1,400
$ 12,2672,2756,1082,180
$ 22.830
1974
- 1,117304
11
1,432
$ 11,6092,2656,1451,636
$ 21,655
1973
1,158310
11
1,479
$ 11,3212,2046,0881,270
$ 20,883
1972
1,124308
10
1,442
$ 10,4272,0285,3641,083
$ 18,902
10-Year1971 %~~o Chan e
1,087 (11)312 17
9 44
1,408 (4)
$ 10,121 1081,887 91
4,510 71
427 507
$ 16,945 106
Average Weekly Wages Paid —DollarsIncluding OvertimeExcludrng Overtime.
$ 486 $ 442$ 436 $ 402
$ 411
$ 371$ 375$ 345
$ 349$ 326
$ 324 $ 293 $ 268 $ 273$ 302 $ 274 $ 248 $ 228
$ 247$ 213
$ 217 124$ 193 126
Annual Cost of Fringe Benefits Charged toOperation and Maintenance —Thousands ...... $ 4,894 $ 3,986 $ 3,565 $ 3,434 $ 2,930 $ 2,250 $ 2,000 $ 1,749 $ 1,546 $ 1,519 $ 1,307 274
Ratios for Payroll Charged to Operation and Maintenance:Payroll (Including Benefits) as Per Cent of
Corporate RevenuesBenefits as Per Cent of Payroll
6.619.9
7.918.6
9.317.7
10.218.9
9.4 10.317.6 14.7
10.513.8
11.912.6
16.511.4
16.312.2
16.910.9
INDUSTRIALREVENUES —ThousandsElectric Customers
Building ProductsChemicalsClothing .
Food Processing .
FoundriesMachine and Metal Products.......Paper and Paper ProductsPrinting and PublishingRefrigerationRubber Products .
TextilesMiscellaneous
Total.
$ 16,6161,229
1521,0132,604
50,3622,7121,909
8211,1302,1943,150
$83,892
$ 13,7261,007
145830
1,97735,924
2,1211,551
669891
1,6492,697
$63,187
$ 13,363796139605
1,62426,276
1,7341,185
564785
1,3092,165
$ 50,545
$ 10,613735136612
1,29221,001
1,5501,001
420692
1,4722,037
$41,561
$ 10,103'22
126635
1,36719,313
1,353948424688
1,4131,479
$ 38,571
$ 6,629612115566
1,29815,731
1,123779426565
1,1091,476
$30,429
$ 8,668616117527
=1,231
15,6251,152
732452498
1,1201,415
$ 32,153
$ 8,476530101424
1,13912,606
1,058611387455964
1,625
$ 28,376
$ 4,695370
79278692
7,700600340268235608
1,573
$ 17,438
$ 4,258384
65248618
7,359578324283225556
1,449
$ 16,34?
$ 4,089410
56225508
7,405529302278197509987
$ 15,495
306200171350413580413532195474331219
441
1981 RevenueFIVE LARGEST ELECTRIC CUSTOMERS (Thousands)
IBM $43,496Marquette Cement Manufacturing Corp. 4,513Alpha Portland Cement Company 3,716Lehigh Portland Cement Company 3,430VAWof America 2,171
(a) Includes the following number of employees at the Roseton Electric Generating Plant which theCompany, Consolidated Edison Company of New York, Inc., and Niagara Mohawk PowerCorporation own as tenants in common:
1981 1980 1979 1978 1977
113 109 107 107 109
1976 1976 1974 1973 1972
103 96 97 97 82
The Company had, initially, a 20'/o undivided interest in the ownership of the Plant. As of$ Q december 31. 1978 the Company has a 30% undivided interest. The Company operates the Plant
as agent for the three owners.
FIVE LARGEST GAS CUSTOMERS
IBMMajestic Weaving, Inc.Vassar CollegePowell and Minnock Brick Works, Inc.Technical Tape Corp.
1981 Revenue(Thousands)
$5,5771,197
982924768
NotesPER CENT
100
90
80
70
60
CAPITALIZATIONRATIOS
0 COMMONEQUITY
~ PREFERREDSTOCK
Q OTHER LONG-TERM DEBT
Q MORTGAGEBONDS
50
40
30 10
COVERAGE RATIOS(BE FORE INCOME TAX)
20
10
1972 73 74 75 76 77 78 79 80 81
TIMES MORTGAGEINTEREST EARNED
RATIO OF EARNINGSTO FIXED CHARGES
DOLLARS45
MARKET AND BOOKVALUE OF COMMON STOCK
TIMES INTERESTCHARGES ANDPREFERREDDIVIDENDS EARNED
019 71 72 73 74 75 76 77 78 79 80 81
40
Cil
Lxl
«C
IXI-CODClKClK
«LClDO
35
30
25
20
15
10
MARKET VALUE(RANGE)PER SHARE
MIDPOINT OFRANGE
gg BOOK VALUEPER SHARE
RATIO OF INCOMEAVAILABLEFORCOMMON STOCK TOOPERATING REVENUE
RATIO OF INCOMEAVAILABLEFORCOMMON STOCK TOAVERAGE EQUITY
1971 72 73 74 75 76 77 78 79 80 81
RATIO OF INCOMEAVAILABLEFOR COMMON STOCK:
TO OPERATING REVENUE-TO AVERAGE EQUITY
PER CENT25
20
15
10
1971 72 73 74 75 76 77 78 79 80 81
CAPITALIZATIONAND FINANCIALRATIOS
1981 '980 1979 1978 1977 1976 1975 1974 1973 197210-Year
1971 %~ochen 4
Capitalization —Thousands (a)First Mortgage Bonds .............Convertible Debentures...........Long-term Promissory Notes ......Term Loan Notes .................Unamortized Premium and
Discount on Debt —Net.........Total Long-term Debt ...........
Preferred Stock —Par Value.......
$233,500
7,550
$ 209,500 $ 159,5008,000
7,725 7,90020,000
$ 151,5008,0008,075
35,000
$ 151,5008,0008,250
$ 147,00016,0008,425
$ 147,00016,00012,800
$ 127,00016,00013,125
$ 112,00016,00013,450
$ 112,00016,00013,775
~821) ~253) 168 470 501 532 563 489 455 481
240,229 216,972'95,568 203,045 168,251 171.957 176,363 156,614 141,905 142,256
61,030 61,030 61,030 61,030 61,030 46,030 46,030 46,030 46,030 34,030
$ 92,000 15416,00014,100 (46)
320 (357)
122,420 96
34,030 79
Common Stock-Retained Earnings ................Premium on Stock ................Capital Stock Expense ............
Total Common Equity...........
49,772 38,17242,176 36,216
28 28(1,362) ~1,277)
76,371 66,031 66,031 66,031 57,928 49,77267,084 61,481 56,326 51,647 47,913 46,057
67 67 67 67 67 67~2,245) ~2,154) ~1.875) ~1,839) ~1,491) ~1,424)
95,54680,155
67~2.326
111,16588,957
67~2.480)
76,37173,691
67(2,245)
197,709 173442 147.884 141,277 125,425 120,549 115,906 104.417 94.472 90,614 73,139
191
146139
(94)
170
117Total Capitalization ............. $498,968 $451,444 $404,482 $405,352 $354,706 $338,536 $338,299 $307,061 $ 282,407 $266,900 $ 229,589
19811980197919781977197619751974197319721971
Value ofCommon
Equity(Thousandsof Dollars)
197,709173,442147,884141,277125,425120,549115,906104,41794,47290,61473,139
BookValue
Number of PerShares Share
(Thousands) (Dollars)
7,456 26.526,544 26.515,373 27.525,373 26.294,873 25.744,873 24.744,873 23.794,373 23.883,923 24.083,923 23.103,423 21.37
Book Value Per Share of CommonStock (Year End),
Capitalization Ratios —Per CentFirst Mortgage Bonds .............Other Long-term Debt ............
Total Long-term Debt ...........Preferred StockCommon Equity ..................
Total Capitalization .............
46.81.3
48.112.239.7
100.0
Coverage Ratios (before Income Tax)(c)Times Mortgage Interest Earned(d) ..Ratio of Earnings to Fixed Charges(e) .
Times Interest Charges andPreferred Dividends Earned(f) ...
2.532.38
2.00
Ratios to Net Plant —Per CentLong-term Debt and Preferred
Stock to Net Plant (b) ........ 59.60Mortgage Bonds to Net Plant (b). 46.19
46.41.7
48.113.538.4
100.0
59.2144.62
2.532'.23
1.84
39.48.9
48.315.136.6
100.0
57.8135.93
3.522.31
1.86
63.20 62.3936.26 41.22
62.56 66.25 ."'62.39 60.4042.19 43.79 .- .39.10 36.00
3.983.17
3.492.81
3.332.68
3.622.37
2.891.78
3.862.56
2.22 2.07 2.08 1.87 1.49 1.93
37.4 42.7 43.4 43.4 - 41.4 39.612.7 4.7 7.4 8.7 ~ 9.6 10.6
50.1 47.4 50.8 52.1 51.0 50.215.0 17.2 13.6 13.6 ~. 15.0 16.334.9 35.4 35.6 34.3 '4.0 33.5
100.0 100.0 100.0 100.0 100.0 100.0
42.0 40.111.3 13.2
53.3 53.312.8 14.833.9 31.9
100.0 100.0
3.982.83
4.052.62
2.27 2.08
60.49 58.9538.43 34.67
MarketValue ofCommon
Stock(Dollars)
(g)
1981 19 -161980 197/8-151979 20/4-181978 22'/8-19/41977 223/2-1 9'/81976 20'/4-1 7'/21975 187/8-1 2'7r2
1974 217/2-111973 245/3-20'/21972 26 -21%1971 27 -20'/4
(g) Price range for the yearStock Exchange.
Number ofShares
Traded onNew York
StockExchange
1,017,100801,100402,500451,400574,000498,000360,200508,300329,400644,300446,200
on the New York
Market Value Per Share of CommonStock and Shares Traded
Ratio of Income Available forCommon Stock —Per Cent
To Operating Revenue ..........To Year-end Equity .............To Average Equity ..............
5.714.014.0
6.012.712.5
6.911.912.2
7.611.411.7
6.811.311.5
7.710.811.0
7.3= 9.910.4
7.08.89.2
11.411.011.2
13.913.214.6
11.512.412.7
17,
(a) Excludes current maturities of fong-term debt.
(b) Net Plant includes construction work in progress.
(c) For the purpose of computing the coverage ratios, "Earnings- consist of net income plus IIXedcharges plus all federal income tax amounts. "Fixed Charges" consist of total interest chargesexcluding the allowance for borrowed funds used during construction. "Preferred Dividends"represent the preferred stock dividend requirement determined on a "pre-income tax basis-computed at the ratio that pre-tax income bears to net income.
(d) Times Mortgage Interest Earned represents the ratio of "Earnings" to "Interest on MortgageBonds."
(e) Ratio of Earnings to Fixed Charges represents the ratio of "Earnings" to "Fixed Charges.-
(f) Times Interest Charges and Preferred Dividends Earned represents the ratio of "Earnings"to "Fixed Charges" plus "Preferred Dividends."
Notes
DEBT SilA II UIRIITY SCHEDULEAS OF DECEMBER 31, 1981
MILLIONS OF DOLLARS30
28
26
24
22
20
18
14
12
10
95 99 2000 02 04 05 07 09 20100
1982 84 88 90 914 UNSECURED NOTES —BALANCE OF $ 5.45 MILLIONAFTER
ANNUALREQUIRED SINKING FUND PAYMENT.
DETAINOF LONG-TERM DEBT, PREFERRED STOCK. AND COMMON STOCK(Thousands where Dollars are Indicated)
1981 1980 1979 1978 1977 1976 1975
Public Proceeds RedemptionDate Maturity Offering to Price
1974 1973 1972 1971 Issued Date Price C~cm an 12/31/81
First Mortgage Bonds —December 312r/% Due1980 ...................3.3% Due 19823.2% Due 1984 . .................4/s% Due1988.
14k% Due1990 ..17/s% Due 1991 .
7/s% Due1999.9%% Due 2000 .
7%% Due2002 ...9~/.% Due 2004.
10%%- Due 2005 ...6'/4% Due 2007 .
10%% Due 2009 .
12/s% Due 2010.
$ 6,000$ 11,000$18,000$25,000$30,000$20,000$25,000$20,000$ 15,000$20,000$ 4,500$20,000$25,000
$ 6,000$ 11,000$ 18,000$25,000
$20,000$25,000$20,000$ 15,000$20,000$ 4,500$20,000$25,000
$ 12,000$ 6,000$ 11,000$ 18,000
$ 20,000$ 25,000$ 20,000$ 15,000$ 20,000$ 4,500$20,000
$ 12,000$ 6,000$ 11,000$ 18,000
$20,000$25,000$ 20,000$ 15,000$ 20,000$4,500
$ 12,000$ 6,000$ 11,000$ 18,000
$ 20,000$ 25,000$ 20,000$ 15,000$ 20,000$ 4,500
$ 12,000$ 6,000$ 11,000$ 18,000
$ 20,000$ 25,000$ 20,000$ 15,000$ 20,000
$ 12,000$ 6,000$ 11,000$ 18,000
$20,000$25,000$20,000$ 15,000$20,000
$ 12,000$ 6,000$ 11,000$ 18,000
$ 20,000$25,000$20,000$ 15,000
$ 12,000$ 6,000$ 11,000$ 18,000
$ 20,000$25,000$20,000
$ 12,000$ 6,000$ 11,000$ 18,000
$20,000$ 25,000$20,000
$ 12,000$ 6,000$ 11,000$ 18,000
$20,000$ 25,000
Dec. 1, 1950Dec. 1, 1952Oct. 1, 1954May 15, 1958Dec. 2, 1980Aug. 26, 1981
Jan. 23, 1969June10, 1970Feb. 17, 1972Apr. 24, 1974Nov. 13, 1975June 9, 1977Sept.27, 1979May 22, 1980
Dec. 1, 1980Dec. 1, 1982Oct. 1, 1984May 15, 1988Nov. 15, 1990Aug. 15, 1991
Jan. 15, 1999June 1, 2000Feb. 1, 2002Apr. 15, 2004Nov. 1, 2005June 1, 2007Sept.15, 2009May 15, 2010
(a)(a)(a)
102.172100.00
98.75100.00100.50101.763101.500101.595100.0099.556
100.00
101.12100.00 100.10100.00 100.30101.39 101.3199.25 (e)98.00 f15.8899.18
104.18'9.625
106.13100.931 106.57100.407 108.16100.515 109.70100.00 (b)98.636 109.6099.125 111.95
Other Long-term Debt —December 31Promissory Notes
5%% Due 1977................4.85% Due 1995 (c)
Convertible Debentures4%% Due 1981.5N'/o Due 1978
Term Loan Notes (a) (f) ...........$ 8,000 $ 8,000 $ 8,000
$ 10,000 $20,000 $35,000
$ 8,000$ 8,000
$7,550 $ 7,725 $ 7,900 $ 8,075 $ 8,250$ 4,050$ 8,425
$ 8,000$ 8,000
$ 4,200$ 8,600
$ 8,000$ 8,000
$ 4,350 $ 4,500$ 8,775 $ 8,950
$ 8,000 - $ 8,000$ 8,000 $ 8,000
$ 4,650 $ 4,800 Oct. 1, 1957 Oct. 1, 1977 (a) 100.00$ 9,125 $ 9,300 Dec. 21, 1965 Dec. 1, 1995 (a) 100.00 101.98
$ 8,000 $ 8,000 June 15, 1966 June 1, 1981 101.375 100.50$ 8,000 $ 8,000 Feb. 25, 1971 Feb. 1, 1978 100.00 99.00
Dec. 29, 1978
Preferred Stock —December 31
($ 100 Par Value)4~/t'/o Preferred Stock.............4%%.&referred Stock...;.........4.75% Preferred Stock.............4.35% Preferred Stock.............4.96% Preferred Stock.............7.72% Preferred Stock.............7.44% Preferred Stock.............8.40% Preferred Stock.............Number of Registered Holders
of Preferred Stock ..............
$6,690$340
$2,000$6,000$6,000
$13,000$12,000$ 15,000
3,454
$ 6,690$ 340$ 2,000$ 6,000$ 6,000$ 13,000$ 12,000$ 15,000
3,704
$ 6,690$ 340$ 2,000$ 6,000$ 6,000$ 13,000$ 12,000$ 15,00D
3,761
$ 6,690$ 340$ 2,000$ 6,000$ 6,000$ 13,000$ 12,000$ 15,000
3,853
$ 6,690$ 340$ 2,000$ 6,000$ 6,000$ 13,000$ 12,000$ 15,000
3,943
$ 6,690$ 340$ 2,000$ 6,000$ 6,000$ 13,000$ 12,000
3,918
$ 6,690$ 340$ 2,000$ 6,000$ 6,000$ 13,000$ 12,000
3,927 3,924 3,959
$ 6,690 $ 6,690$ 340 $ 340$ 2,000 $ 2,000$ 6,000 —
$ 6,000$ 6,000 $ 6,000$ 13,000 $ 13,000$ 12,000 $ 12,000
$ 6,690$ 340$ 2,000$ 6,000$ 6,000$ 13,000
$ 6,690$ 340$ 2,000$ 6,000$ 6,000$ 13,000
3,881 3,832
Oct. 1, 1936Oct. 1, 1936Apr. 1, 1949Nov. 1, 1954June 21, 1961Feb. 25, 1971Jan. 17, 1973May 24, 1977
(d) 102.50 107.00107.50 105.00 107.00103.75 100.55 106.75
(a) 100.00 102.00(a) 100.00 101.00
100.00 98.55 104.00101.22 100.323 106.80100.00 98.80 108.40
Common Stock (No Par Value)Number of Shares (Thousands)—December 31................New Shares Issued
(Thousands) .
Total Stated Value SharesOutstanding —December 31
Number of Registered Holdersof Common Stock ~... ~.........
7,456
912
6,544
1,171
5,373 5,373
500
4,873 4,873 4,873
500
4,373
450
3,923 3,923 3,423
500
25,296 24,709 24,347 24,990 23,545 23,738 23,868 22,629 20,860 20,632 19,195
$ 111,165 $95,546 $76,371 $76,371 $ 66,031 $ 66,031 $66,031 $ 57,928 $ 49,772 $49,772 $ 38,172
18
(a) Placed privately.(b) Not redeemable prior to June 1 ~ 1987.
(c) The 4.85ryrr promissory notes have an annual sinking fund requirement of $ 175.
(d) Exchanged for earlier 6'Ifr preferred stock and issued on an equal share basis plus $2.50 cash per share.(e) Not redeemable prior to November 15, 1987.
In December 1978 the Company issued term loan notes aggregating $35 million to three banks. The LoanAgreement under which these notes were issued provided that the notes should be paid in threeconsecutive annual installments commencing December 31, 1979. The Company repaid $ 15 million onDecember 31, 1979, $ 10 millionon December 31, 1980, and $ 10 millionon August 31, 1981. The interest rateon such notes was the "prime" rate in effect at the Irving Trust Company.
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NotesDIRECTORS
ERNEST E. ALTHOUSEPoughkeepsie, N.Y.Vice Chairman of the Board andVice Chairman of Committee onFinance; Member of ExecutiveCommittee and Committee onCompensation and Succession
WILLIAMP. ARNOLDNew York, N.Y.Chairman of the Board andChief Executive OfficerAssociated Dry Goods Corporation,a department store chain; Member ofCommittee on Audit
RAYMONDT. BENEDICTStamford, Ct.Lawyer, of Counsel, Cummings &Lockwood; Member of ExecutiveCommittee and Committee on Finance
JAMES R. BREED, M.D.Poughkeepsie, N.Y.SurgeonMember of Committee on Audit
MARJORIE S. BROWNMillbrook, N.Y.Homemaker, active in civic andphilanthropic work, formerly executivein retailing and promotional organizations;Member of Retirement Committee
THEODORE J. CARLSONPoughkeepsie, N.Y.Chairman of the Board and PrincipalOfficer; Chairman of ExecutiveCommittee; Member of RetirementCommittee, and Committees on Finance'nd on Compensation and Succession
ROY C. KETCHAMFishkill~ N.Y.Chairman of the Board and ChiefExecutive Officer, Ketcham Motors, Inc.;
'Chairman of the Board of The FishkillNational Bank; Chairman of Committeeon Compensation and Succession;Member of Executive Committee
JOHN E. MACK IIIPoughkeepsie, N.Y.Executive Vice President
HERBERT L. SHULTZKingston, N.Y.Special Assistant to the President, VassarCollege; Chairman of Retirement Committee;Member of Committee on Audit
JOHN WILKIEKatonah, N.Y.Chairman of Committees on Financeand on Audit; Member of Executive andRetirement Committees
H. CLIFTON WILSONPoughkeepsie, N.Y.President; Member of Executive andRetirement Committees, andCommittees on Finance and onCompensation and Succession
19
OFFICERS OF THE BOARDTHEODORE J. CARLSONChairman of the Board andPrincipal Officer andChairman of ExecutiveCommittee
JOHN WILKIEChairman of Committees onFinance and on Audit
ERNEST, E. ALTHOUSEVice Chairman of the Boardand of Committee on Finance
ROY C. KETCHAMChairman of Committee onCompensation and Succession
HERBERT L. SHULTZChairman of RetirementCommittee
OFFICERS
H. CLIFTON.WILSONPresident
JOHN E. MACK IIIExecutive Vice President
L. WALLACECROSSSenior Vice President-Financeand Accounting
CHARLES E. RIDERSenior Vice President-CorporatePlanning
CHARLES A. BOLZVice President-Engineering
WILLIAMA. KLINGVice President-Community Affairs
HENRY L. WALKERVice President-Production
JOSEPH F.FURLONGSecretary and Treasurer
JOHN F. DRAINController
PAUL J. GANCIAssistant Vice President
STEWART P. LAIDLAWAssistant Vice President
JAMES E. SMITHAssistant Vice President
WILLIAME. VANWAGENENAssistant Vice President
WALTER A. BOSSERT, JR.-Assistant Secretary andAssistant Treasurer
CHARLES P. KOVARAssistant Secretary
EMORY R. OSBORNAssistant Treasurer
TRANSFER AGENT & REGISTRARICOMMON & PREFERRED STOCK
Morgan Guaranty Trust Company of New York30 West BroadwayNew York, N.Y. 10015
GENERAL COUNSEL„Gould & WilkieOne Wall StreetNew York, N.Y. 10005
INDEPENDENT ACCOUNTANTSPrice Waterhouse153 East 53rd StreetNew York, N.Y. 10022
The map depicts the2,600 square-mile areaserved by Central Hudson,extending from 10 miles southof Albany to 30 miles northof New York City, andincluding a populationof about 542,000.
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THE ATTACHED FILES ARE OFFICIAL RECORDS OF THEDIVISION OF DOCUMENT CONTROL. THEY HAVE BEENCHARGED TO YOU FOR A LIMITED TIME PERIOD ANDMUST BE RETURNED TO THE RECORDS FACILITYBRANCH 016. PLEASE DO NOT SEND DOCUMENTSCHARGED OUT THROUGH THE MAIL. REMOVALOF ANYPAGE(S) FROM DOCUMENT FOR REPRODUCTION MUSTBE REFERRED TO FILE PERSONNEL.
DEADLINERETURN DATE
RECORDS FACILITYBRANCH
Highlights 0Letter to Shareholders 5Finance t9Rate 0Nuclear Technology@Fuel TechnologyFuel EAiciency l5Operations 99Financial Statements 9PManagement's Discussion and Analysis 88Financial and Statistical Information 9Directors and OAicers Sigg95Q@MP
bCo3$ 9$ CCM5The cover illustration depicts several areas ofcompany operations where technology andinnovation have produced beneficial results.In this report we willbe highlightingFinance, Rate, Nuclear Technology, FuelTechnology and Fuel Efficiency.
K~KMa D a ~
The company supplies electric, gas andsteam service wholly within the State ofNew York, and is engaged in the produc-tion, transmission, distribution and sale ofthese services in a nine-county area centeringaround the City of Rochester.
The company's territory, which has a
population of approximately 880,000, is welldiversified among residential, commercialand industrial consumers. In addition to theCity of Rochester, which is the third largestcity and a major industrial center in theState> it includes a large and prosperousfarming area.
—MO7ICE—THE ATTACHED FILES ARE OFFICIAL RECORDS OF THEDIVISION OF DOCUMENT CONTROL. THEY HAVE BEENCHARGED TO YOU FOR A LIMITEDTIME PERIOD ANDMUST BE RETURNED TO THE RECORDS FACILITYBRANCH 016. PLEASE DO NOT SEND DOCUMENTSCHARGED OUT THROUGH THE MAIL. REMOVALOF ANYPAGE(S) FROM DOCUMENT FOR REPRODUCTION MUSTBE REFERRED TO FILE PERSONNEL.
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RETURN DATE
RECORDS FACILITYBRANCH
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NIATORYD tlKKTFEE
IIEIMORVDOI',I<ET FILE I,'IIIV
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~ 'NYSEC
ANNUALREPORT 19Sf
ContentsHighlights of the YearLetter to StockholdersCondensed Statement of Income
General Review of the YearEarnings and DividendsDividend Reinvestment PlanRate MattersPower SupplyFuture Power SupplyTerminated Nuclear Projects1981 ConstructionFuture ConstructionFinancingResearch and DevelopmentCustomer AssistancePersonnelElectric OperationsGas Operations
Balance SheetStatement of IncomeStatement of Retained EarningsStatement of Changes in Financial PositionNotes to Financial StatementsManagement's Discussion and Analysis of Financial
Condition and Results of Operations
Financial and Operating StatisticsDirectors and OfficersService Area Map
555779
11
11
11
11
1313151515
1819192021
29
31
3637
Cover:IYith the rising cost of new powerplants, improvement and maintenanceof existing facilities becomes in-creasingly important. Shown here isnew control equipment at GoudeyStation near Binghamton, a plantwhich produces 129,000 kilowattsfrom electricity generating unitsinstalled over 30 years ago.
u''
Highlights of the Year
Gross operating revenues (thousands)
Income before, interest charges (thousands) ......Earnings available for common stock (thousands) .
Earnings per share of common stock
1981 1980 Increase Percent
$ 767,539 $ 645,314 $ 122,225 19,
$ 175,764 $ 145,886 $ 29,878 20
$ 90,265 $ 73,637 $ 16,628 23
$2.95 $2.70 $ .25 9
Allowance for funds used during constructionper share of common stock $1.07 $ 1.13 $ (.06) (5)
Dividends paid per share of common stock
Taxes per share of common stock
Electricity sales to ultimate customers (million kwh)I
'Gas sales (thousand dekatherms)
$ 1.94
$3.51
11,008
39,956
$1.82
$2.98
10,742
37,658
$ 12 7
$ .53 18
266 2
2,298 6
Cost of fuel for electric generation (thousands)
Total utility plant (thousands)
Expenditures for construction (thousands)
$ 177,592 $ 151,404 $ 26,188 17 .
$2,391,712 $2,117,241 $274,471 13
$ 265,545 $ 154,516 $111,029 72
Book value per share of common stock (average) ...
'Market value per share of common stock (year end) .
$22.01 $21.92
$ 15.00 $14.88
$ .09
$ 12 1
TWE ANNUAL MEETING of stockholders will be held at the Corporation'sGeneral Office Building on Route 13 (Dryden Road) in the Town of Dryden,N.Y. on May 14, 1982 at 11 a.m. Formal notice of the meeting, a proxy state-ment and form of proxy will be sent to stockholders in early April.
REGULATORY DOCKET.FILE COPY
To the Owners of NYSEG:
In assessing 1981, probably themost significant event forNYSEG was the successful com-pletion in October of a key rateproceeding. After eleven monthsof study, including twelve days ofpublic hearings, the PublicService Commission approved a22% increase in electric ratesand a 5% increase in gas ratesfor total added revenues of
We//s P. Allen, Jr. (left)and Charles F. Kennedy
$133 million annually, which was87% of the amount requested.This was in marked contrast withthe grossly inadequate raterelief in the two previous rate casesin 1979 and 1980 in which wereceived only about 40% of theamounts applied for.
Unfortunately, continued infla-tion and the attendant high costsof funds to finance our major
capital requirements do not allowus much respite. Looking aheadto 1983 and the need to finance ex-penditures for completion ofSomerset Generating Station andother construction makes itnecessary for us to seek anotherrise in rates. Last month wefiled for a $ 149-million, or 19%, in-crease in electric rates and a$4.9-million, or 2%, increase ingas rates. The proposed ratesare based on a 17.5% return oncommon stock equity and pro-jected operations for a calendar1983 test year. They also in-clude an increase in constructiortwork in progress in rate baseto $450 million from $200 millionpresently reflected in rates.
Somerset is a wholly-owned,625,000-kilowatt, coal-firedgenerating station which isplanned for initial service in late1984. Its construction hasbeen progressing on scheduleand, when completed, it willreduce costly electricity purchasesand contribute to a reductionin the use of oil for electric
'enerationin the state. The onlysignificant impediment todate has been the failure to obtainfederal regulatory approvalfor a railroad connection, neededto transport coal and otherraw materials to the plant, becauseof differences in public opinionas to a route for the facility. Weanticipate that the InterstateCommerce Commission will de-cide the issue sometime thisspring.
Another important regulatorydecision pending is the PublicService Commission's study of theeconomic and financial impli-cations of continuing constructionof Nine Mile Point II nucleargenerating station. The Companyis one of five utility ownersand holds an 18% interest in theplant which is about one-thirdbuilt. It is being constructedby Niagara Mohawk and isscheduled for operation in late1986. The PSC has substantiallycompleted its deliberations,indicating that completion of the
.plant is warranted. A decisionhas not yet b'een formally issued.It is possible that the decision
~will include incentive provisionsthat benefit or penalize the
. project's owners if certain costsvary from prescribed target levels.
The estimated cost of Nine MilePoint II has risen sharply since1974 when the project started.Like other nuclear plants presentlyunder construction, costs havebeen affected by inflation, highinterest rates, and revisions inregulatory requirements, some ofwhich stem from the Three MileIsland accident. Since capitalcosts of other sources of electricityhave also increased materially,the relative economic advantageof Nine Mile Point II remainslargely unchanged. Moreover, theaddition of nuclear capacity willreduce the state's dependence onimported oil.
/*
Last October's favorable ratedecision should permit someclosing of the gap, experiencedin recent years, between allowedreturn on common stock equityand the return actually earned.While we do not anticipate earningin 1982 the full 17% returngranted by the PSC last October,we do expect to come closerto earning the allowed return thanin previous years.
Rate decisions in the past yearand other developments indicatethat the regulatory climate in NewYork is improving. We were en-couraged recently to read a PSCadministrative law judge's rec-ommended decision in a thorough,two-year-long proceeding ex-ploring utility financial needs. Hisprincipal finding is that includingconstruction work in rate baseis the most effective and lowest-cost method to enable utilities tomaintain financial integrity.We heartily agree and hope thisproceeding, which is expectedto be completed in 1982, will re-sult in further improvementof regulation in New York.
To use a phrase heard quiteregularly these days in the electricutility industry, we are beginningto see light at the end of thetunnel. Barring adverse develop-rnents we expect to be ableto finance construction expendi-tures for Somerset, which peakin 1982 and 1983, then return tosomething resembling normalcyin the mid-1980s. For our stock-holders it will mean fewer issuesof new common stock whichtend to dilute earnings. For our
customers it will mean moderating .
increases in electric and gasrates. The extent of moderation willdepend on the rate of inflation.
In last year's Annual Report weincluded a readership surveycard which many stockholderscompleted and returned to us. Weappreciate the response asyour replies and comments help in
planning this report and otherstockholder communications.
We look forward to the futurewith confidence. NYSEG has afine service area, a competentmanagement team, and anemployee group that is second tonone in the utility industry.Employee dedication is amplydemonstrated during storms andother emergencies when long,tedious hours are devotedto restoring service. In addition totheir work responsibilities, manyemployees spend off-hours incommunity activities. We take thisopportunity to acknowledgeemployee contributions and thankthem for a job well done.
For the Board of Directors,
Chairman and ChiefExecutive Officer
President and ChiefOperating Officer
March 1, 1982
Condensed Statementof Income
REVENUESSales of electricitySales of gas
Total .
1981
$609,178158,361
767,539
1980thousands of Dollars)
$506,502138,812
645,314
Increase
$ 102,67619,549
122,225
EXPENSESWages and salaries of employees and contributions to
retirement and insurance plans (exclusive of$44,504,000 in 1981 and $43,046,000 in 1980charged to construction, etc.) .
;Fuel used to produce electricity:Electricity purchased and interchangedGas purchased .
Gther materials, services and researchFederal taxesState and local taxes'Depreciation
Total .
'Income available to investors
83,044177,592
7,029112,176
77,10039,04468,26449,448
613,697
153,842
73,442151,404
(2,030)100,89567,82221,60059,83847,486
520,457
124,857
9,60226,188
9,05911,281
9,278'7,444
8,426
1,962-'3,240
28,985
ALLOWANCEFOR FUNDS USEDDURING CONSTRUCTION 32,719 30,925 1,794
INVESTORS'HAREInterest on bondsInterest on notes payable and otherDividends on preferred stock .
Dividends on common stock .
Total .
RETAINED IN THE BUSINESS
67,38911,37117,53658,657
154,953
$ 31,608
59,9677,611
14,56749,091
131,236
$ 24,546
7,4223,7602,9699,566
23,717
$ 7,062
General Reviewof the Year
Earnings and DividendsOperating Income Rises 26%
Operating income was $ 145 million,an increase of $30 million, or 26%,over 1980. Revenues increased $ 122million, which includes $57 millionfrom higher electric and gas rates and$48 million from increased fueland purchased-gas costs included inbillings. Operating expenses, ex-cluding energy production costs,were up 13%, largely as a result ofinflationary rises in labor andmaterials expense.
Interest charges, including intereston short-term debt, rose $ 11 mil-lion, or 1,7%. Higher interest rates andincreased borrowing required tofinance construction were largely re-sponsible for the increase.
Allowance for funds used duringconstruction was 36% of earnings
;available for the common stock. Thisis a decline of six percentagepoints from 1980 and reflects rate in-creases which allowed constructionwork in progress in rate base.
Allowance for funds used duringconstruction represents financingcost, such as bond interest, that isallocated to major projects underconstruction. It does not constitutecash earnings.
Earnings available for the commonstock of $90 million increased 23%over 1980. On a per-share basis,earnings of $2.95 were up only9% because of a 12% increase inaverage number of shares out-standing.
The quarterly dividend rate onthe common stock was raised from47 to 50 cents effective with theAugust 15, 1981 payment. This is thefourth consecutive year the divi-dend rate has been increased. Thehigher dividend, together with a
greater number of shares outstanding,increased total common stockdividends $10 million, or 19%.
After dividends, the balance of netincome of $32 million was addedto common stock equity.
For federal income tax purposes, itis estimated that no portion of1981 dividends was a return of capital;therefore the dividend is fullytaxable as ordinary income. Similarly,the Company anticipates that noportion of 1982 dividends will beconsidered a return of capital.
Dividend Reinvestment PlanNew Tax Break ForStockholdersThe Economic Recovery Tax Act of1981 provides a tax benefit for eligiblestockholders reinvesting dividendsin qualifying utility companies suchas NYSEG. Beginning in 1982,stockholders can exclude up to $750($ 1,500 on a joint return) of re-invested dividends from their taxableincome. If the shares purchasedare sold after one year, the proceedswill be taxable at capital gainsrates which are lower than tax rateson ordinary income. There are
certain U.S. Treasury requirementsregarding retention of shares.Under present law, the tax benefitterminates at the end of 1985.
During 1981, participation inthe Dividend Reinvestment and StockPurchase Plan increased from12,000 to 14,000 stockholders. Thesestockholders, representing about20% of the total number of stock-holders, purchased over $ 13 millionin new shares by reinvestingdividends or making optional cashpurchases. This compares with$8 million in 1980.
In January 1982 stockholder par-ticipation in the plan increased from20 to 25%, probably because ofthe new tax law benefits.
The plan allows shareholders to re-invest quarterly dividends andmake monthly cash payments of upto $5,000 quarterly for purchaseof shares. Dividends reinvested pur-chase shares at 95% of the averagemarket price on the dividendpayment date. There are no servicecharges or brokerage commissions.
If you are interested in enrollingin the plan or desire further informa-tion, please write:NYSEG Shareholder Services,P. O. Box 200, Ithaca, New York14850.
1972
1973
1974
1975
1976
1977
1978
236
253~ 296
408
459532
Total Operating Revenue ~ ELECTRIC
Millions of Dollars I—I GAS and Other
1979
19801981
25 75 125175
588
645
768
p
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~ ~ sory4eawo «eas
lOs CNg~~>~ 1lsa ~
gyygg~,'4eesee
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COLOR
i Rate Matters8133-Million Rateincrease ApprovedIn October 1981 the Public ServiceCommission approved a $ 124-million,or 22%, increase in electric ratesand a,'$9-million, or 5%, increase ingas rates. The $ 133 million inhigher revenues was 87% of theamount requested and included $45million in temporary electric ratesallowed on June 1. In the two previousgeneral rate proceedings, the PSChad approved only about 40% of theamounts requested.
To improve cash flow and interestcoverage, the PSC allowed por-tions of construction work in progressto be added to rate base. Thetemporary rates were based entirelyon the addition of $275 million ofconstruction work to rate base. Thepermanent rate increase, whichwent into effect on October 25, isbased on $200 million of constructionwork,in rate base. These additionsto rate base substitute cash earningsfor the non-cash allowance for
.,funds used during construction. Fur-therrnore, they lower the in-servicecost of major projects since the
. financing costs during constructionare not added to the cost of projectsbut are paid for currently bycustomers.
The October rate decision waspredicated on an allowed 17% returnon common stock equity, basedon a test year ending October 31,1982. It did not allow revenuesto recover pre-construction expendi-tures on the abandoned NewHaven nuclear project because aseparate proceeding on that matteris pending. The Company's $ 153-
million rate request had includedabout $ 15 million for the annualrecovery over five years of these ex-penditures.
While the rate decision was asatisfactory one, the Company mustlook beyond October 1982. Theeffects of past and expected futureinflation, including high interestcosts, will continue to affect opera-tions. For this reason it was necessaryfor the Company to seek anotherincrease in rates. In February 1982 anapplication was filed with the PSCfor a $ 149-million, or 19%, increase inelectric rates and a $4.9-million,or 2%, increase in gas rates. Theelectric rate request is based on a17.5% return on common stockequity, $450 million of constructionwork in rate base and a calendar1983 test year. It also includesrevenues for recovery over ten yearsof expenditures on the abandonedNew Haven and Jamesport nuclearprojects.
Power SupplyGeneration PrimarilyCoal-FiredAll of NYSEG's steam-electricgenerating stations use coal as aprimary fuel. These plants provide98% of the Company's genera-tion with hydro-electric facilities pro-ducing the remainder.
Total power supply in 1981, ona kilowatt-hour basis, was 12.3 billion
kilowatt-hours, an increase of1% over 1980. About 88% of this wasgenerated by Company plants.The remainder was largely purchasedunder contracts with the New YorkState Power Authority and neighboringutilities.
A new peak load of 2,193,000kilowatts (kw) was set during verycold weather in mid-January 1982.The new peak exceeds the previousone, which was set a year earlier,by about 1%.
The Company's power supplycapability to serve peak loads iscurrently 2,775,000 kw. This com-prises 1,769,000 kw of Companygenerating capacity, 764,000 kw ofpurchases from the Power Authorityand 242,000 kw of firm purchasesfrom neighboring utilities.
A large part of the purchases fromthe Power Authority are from hydroprojects on the Niagara and St.Lawrence Rivers. The chairman of theAuthority has proposed a realloca-tion of this low-cost power through-out the state in 1985 and 1990,when present contracts expire. TheCompany's residential customerswould continue to benefit from thepower, but to a lesser extent thancurrently. No legislative action hasbeen taken to date on the proposal.
Despite a three-month strike of coalminers beginning in March 1981,the Company was able to maintainnormal electricity production at all itsplants except Homer City. Main-tenance work scheduled for thisfacility late in 1981 was advancedso that there was no substantialloss of planned power production forthe year.
Informing the public about energymattersis animportant facet of NYSEGactivities. Top: Youngsters visit anenergy museum at a Company office.Bottom right:Aspart ofan energyseminar,a group of teachers tours an electricitygenerating plant. Bottom left: Displaysat fairs and exhibitions help providethe public withinformation about wiseenergy use and conservation.
Electric Peak Loads 1973-1982
1973
1974
1975
1976
19771978
1979
1980
1981
1982
(Winter Capability Period)Megawatts
1724
1701
1768
1993
2070
20342118
207221702193
'i fill'i ljjlillijj„'',',I'
I )I
I
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Steel framing is erected for SomersetGenerating Station, a coal-lired
faci%'ty being built by the Company inwestern. New York. It willadd
625,000 kilowatts to electric generatingcapacity when completed in 1984.
Future Power SupplySomerset Project ProgressesGood progress was made in 1981 onthe construction of Somerset, awholly-owned, 625,000-kw, coal-firedgenerating station being built nearLake Ontario in western NewYork. Steel structure for the mainbuilding has been erected and workhas begun on facilities to bringlake cooling water to the plant. En-gineering work will be substantiallycompleted by the end of 1982.About 70% of the work, on a dollarbasis, has been contracted forwith remaining major contracts ex-pected,to be awarded by September1982. The project is scheduled for
'completion in late 1984.The plant is estimated to cost
$ 1,072 million, which includes" allowance for funds used during con-
struction. The cost includes almost$300 million for environmental protec-tion facilities including a wetlimestone scrubber to remove sulphurdioxide from exhaust gases. Atthe end of 1981, expenditures of $215million had been made on the plant.
Public hearings on a railroad tobring coal and limestone to the plantwere completed in December. Threeroutes for the railroad, varying inlength from 15 to 30 miles, have beenproposed to the U.S. InterstateCommerce Commission. Each hasbeen opposed by various environ-mental and farmland preservationgroups. The ICC is expected todecide the issue in the spring of1982.
The Company is participating withfour other New York utilities in the con-
rf
struction of a 1,084,000-kw nucleargenerating station near Oswego, N.Y.,known as Nine Mile Point II. NYSEGowns 18% of the unit, which isbeing built by Niagara Mohawk PowerCorporation and scheduled forcompletion in late 1986. Like manynuclear plants currently under con-struction, the project has experienceda steady rise in estimated con-struction cost since its start in
Construction Program602 563 368
Completed Ten Years1972-1981
$ 1,602,000,000
Forecast Three Years1982-84
$1,533,000,000
64 83 116
Millions of Dollars
162 207 184 132 171 185 298
1974. As a result, the PSC, in late1981, initiated a proceeding to reviewthe financial and cost implicationsof completing the plant. It has indi-cated that completion is war-ranted. It is possible that the PSC willset financial incentives andpenalties for the project owners re-lating to final construction costs.NYSEG's share of the project's cost,including allowance for fundsused during construction, is $712 mil-lion of which $235 million wasspent at the end of 1981,
Whenever possible, NYSEG utilizesexisting rights-of-way to buildtransmission lines. This is a new115,000-volt line to strengthen electricservicein the Oneonta area.
72 73 74 75 76 77 78 79 80 81 82 83 84
5L
erminated Nuclear ProjectsRecovery ofExpenditures Pendingn 1979 and 1980 the New York State
Board on Electric Generation Sitingnd th'e Environment turned down
proposals by NYSEG and Long IslandLighting Company to build jointly-owned nuclear generating plants atNew Haven in upstate New Yorkand at Jamesport in eastern LongIsland.
The Company is seeking PSCapproval to recover its expenditureson the projects through rates overa period of years. About $60 million($43 million after tax effect) hadbeen expended by NYSEG on James-port and $44 million ($33 millionafter tax effect) on New Haven. Mostof the outlays were for environ-mental studies and other pre-con-struction work required by law.
In September 1981 a PSC adminis-trative law judge recommendedthat recovery of the New Haven ex-penditures be approved. A PSCdecision in the matter is expectedshortly. Action on the Jamesport
'application is not expected until late1982.
projects for general improvement ofelectric and gas systems, including$43 million for minor projects, eachcosting $25,000 or less.
Future ConstructionOutlays Continue atRecord HighsOutlays for construction are plannedto continue at high levels through1984 when Somerset GeneratingStation is expected to be completed.It is estimated that constructionexpenditures in 1982 through 1984will aggregate $ 1,533 million, whichincludes $281 million of allowancefor funds used during construction.
Somerset and its related rail facilitywill require $886 million. TheCompany's share of the Nine MilePoint II project is budgeted for $300million. Other large expendituresinclude $67 million for improvementsat existing coal-fired generatingfacilities and $60 million for additionsto hydro-electric generating capacity.
The remainder of the three-yearprogram is allocated for generalreinforcement of the Company's elec-tric and gas systems.
Continuation of the 'constructionprogram is contingent upon, amongother things, receipt of adequateelectric and gas rates. If the PSC doesnot permit higher revenues tocover'increased costs, the Companymay be unable to finance theentire program.
FinancingCash Needs Amount to$374 MillionLike construction expenditures,financing requirements reached newhighs in 1981. Cash needs were$374 million which included $265 mil-lion for construction, $65 millionfor maturing securities and $44 millionfor reduction in short-term debt.
About $80 million, or 30k ofconstruction expenditures, was gen-erated internally. Sale of securitiesprovided $270 million. The remainderof the $374 million came from areduction in working capital and $ 11
million received as the Company'sshare of a settlement of nuclear fuelsupply litigation.
Sales of securities during the year
7981 ConstructionExpenditures Total Almost$300 MillionConstruction expenditures in 1981were $298 million which includes $33million of allowance for funds usedduring construction. Principal outlayswere $ 123 million for SomersetStation, $62 million for the Company'sshare of Nine Mile Point II and $ 10million for a hydro-electric projecton the Hudson River at Mechanic-ville. The remainder was spent on
Despite high mortgage rates andgenerally-reduced housing activity,construction of new dwelling unitscontinued in 1981. Residential cus-tomers added during the year included4,200 for electric service and 540 forgas. Most new residences use elec-tricity.or gas for space heating.
Industrial Electric Revenues
Stone, clay and glass productsMachinery, except electrical .
Food and kindred products .
Transportation equipmentElectrical machinery and supplies ...Fabricated metal productsPrimary metal industriesRubber and plastic products .
Chemicals and allied productsPaper and allied products .
Printing and publishingInstruments and related products ....Nonmetal mining„excluding fuels ....Wood products, except furnitureLeather and leather productsTextile mill productsPetroleum and refiningMetal miningFurniture and fixturesApparel and other textile products ...Miscellaneous industriesUnclassified (under 50 kw demand) ..
Total
Total electric revenues
1981(thousands)
$ 17,64513,57911,14910,75110,28310,1319,9548,2534,1653,4433,0483,0323,0182,0191,3211,2171,2051,098
921265
2,1452,976
$ 121.618
$609,178
Percentof total14 5%11.29.28.88.58.38.26.83.42.82.52.52.51.71.01.0
99.8.2
1.82.5
100 0'lo
PQPGQg
NYSEG personnel work closely withcustomers. Top right: A meter special-
ist tests a meter that willallow in-dustrial customers to benefit from
newly-developed time-of-use electricrates. Top left: A market service
representative discusses with cus-tomer a heat pump combined with agas furnace which provides efficientspace heating and air conditioning.
Bottom: A consumer affairs rep-resentative offers a young family
financial counseling.
included the following (dollars infTIIIIions):
JanuaryAprilAugust
DecemberDecember
Total
S 60 14'/a% bonds due 199130 15 /e% preferred stock37 cornrnon stock, 2,500,000
shares100 17sr's% bonds due 1969/9030 15% preferred stock13 dividend reinvestment plan
$270
The common shares issued inAugust were sold through under-writers to the public at $ 15.50 a share.After deduction of underwritingfees, the Company received $ 14.94 ashare.
In 1982 it is estimated that theCompany will require about $470million of external funds to financeconstruction and pay for maturingsecurities. About $85 million wasraised in January 1982 with publicsales of $50 million principal amountof 18% first mortgage bonds due2012 and 2,500,000 shares of com-mon st'ock. The stock was sold tounderwriters at $ 14.18 a share andreoffered to the public at $ 14.75
"a share.Also in January, as part of a
program to finance pollution control" facilities at Somerset Station,
the Company publicly sold $61 millionprincipal amount of tax-exempt91/4% pollution control notes dueJanuary 1, 1985 through the New YorkState Energy Research and Devel-opment Authority. The notes arebacked by a letter of credit issued bya major bank. Proceeds of thesale, along with proceeds from anissuance through the Authorityof up to $35 million of tax-exemptcommercial paper, will be usedto finance the facilities pendingpermanent financing.
Institute received $2.2 million. Itconducts research for more than 600electric utilities nationwide. TheCompany contributed $2.4 million toEmpire State Electric Energy Re-search Corporation which sponsorsresearch for the state's majorelectric utilities. Another $870,000 wasspent for the Company's share ofresearch conducted by the New YorkState Energy Research and Devel-
opmentt
Authority.About $ 1.7 million was devoted to
the Company's own researchefforts. Among projects being studiedis better utilization of the fly ashleft after burning of coal in generatingstations. Fly ash from a stationnear Binghamton is being used ex-perimentally as an ingredient inasphalt for paving parking lots andhighways. Fly ash from another plantis being sold to firms which manu-facture concrete
products.'he
Revenue Dollar-1981
79 k Electricity21% Gas
100'/o
Where it came from:
Residential 4SC
—,~
I'1Q 4
Customer AssistanceConsumer AdvisoryPanel FormedA Consumer Advisory Panel wasformed in 1981 to strengthen com-munication with customers. Nineteenpersons with varied backgrounds
Where it wont:
Fuel 22C
rum ruL~1~~{@&]
fii=:0Taxes 14C IWR
and experience were selected fromthe Company's Binghamton, Elmiraand Ithaca operating areas. Thepanel meets regularly to discuss mat-ters which concern consumers.Each member serves a one-year termwithout compensation, except forreimbursement of travel expenses.
In other efforts to assist customersand improve communications, theCompany has consumer repre-sentatives in district offices who assistcustomers who have difficultypaying for service or related prob-lems. An award-winning publication,Senior Sun, is circulated to seniorcitizens and provides information onhow to minimize utility costs,
Energy conservation continues toreceive attention. Company marketservice representatives work withresidential and business customers toidentify ways of saving energy.Almost 20,000 home energy auditshave been conducted to dateand 3,200 loans, aggregating $5.8million, have been arranged tohelp customers reduce energy con-sumption. The loans can be usedto finance such improvements as new,more efficient furnaces, insulation,storm windows and solar waterheaters.
Research and DevelopmentVariety of Projects SupportedMore than $7 million was spent on avariety of research and develop-ment projects in 1981. About three-quarters of the expenditure wasfor the Company's participation innational and state electric researchprograms. Electric Power Research
Commercial 23c
Irsrtl g piIndustrial 21C
Street Ughting 8, Other I Ic
lr 4Gas & Elecidcity purchased ISC
trl rrrInterest to Bond Holders. otc. 10c
', Other Material and Sorvices 10c Ir~sDep 'at'en se a ~~
Olvtdends-Common Stock 7cOivrdends-Preferred t 2c
Retained in the Business 4C
Electric and gas sales to businesscustomers increased in 1981. Shown
here (above) is an engineeringbuilding at Corning completed recently
by Corning Glass Works. At rightis a shopping mall near Elmira that was
enlarged during the year.
14
Suburban areas outside large citiesconstitute a large portion of the
service area. Shown here is part of anaward-winning condominium complex
north of New York City.
4r
)
PersonnelVehicle AccidentRate ImprovesEmployees driving Company vehiclesimproved their accident recordduring 1981. The accident rate was5.08 accidents per million milesdriven, which compares with 6.24 permillion miles in 1980. For electricutilities nationally, the average rate iscurrently 8.89 accidents per millionmiles driven.
Affirmative action to hire, trainand promote minority-group personsand women continued during theyear. Policies and procedureson sexual harrassment, and equalemployment opportunities for VietHarn veterans and disabled persons,weje developed and implemented.Several programs were conducted to
~ . incfease the awareness of femaleemployees to career opportunitieswithin the Company.
" Electric OperationsSales Rise 2%,Revenues Up 20%Electric sales in 1981 were up 2%while revenues increased 20% overthe previous year. The revenue in-crease reflects higher rates andfuel costs included in customer bill-ings. Percent changes by customercategory were as follows:
Kwh Sales RevenuesResidential 2% 20%Commercial 1 19Industrial 3 23Total 2% 20%
Average consumption by residentialcustomers and the number ofcustomers each increased about 1%during the year. The averageresidential rate was 6.13 cents perkilowatt-hour, which compares to5.25 cents in 1980.
~Electric operating expenses in-
creased $52 million, or 19%. A largepart of the increase, or $41 million,was due to higher production ex-penses, including the cost of fuel andpurchased electricity. The unitcost of fuel was $ 1.57 per million Btu,a 15% increase over 1980.
~nil&<il',h~1V&i
Gas OperationsIndustrial Sales Up SharplySales of gas increased 6% over 1980largely as a result of sharply-highersales to industrial customers.Revenues were up 13%, reflectingpass-through to customers of higherpurchased gas costs and increasedrates. Percent changes by customercategory were as follows:
Unit Sales RevenuesResidentialCommercial 1 8Industrial 16 26Total 6% 13%
About 1,500 residential gas spaceheating customers were added in
1981. However, the effect of the addi-tion on sales was offset by a 3%decline in average use per customer,which largely reflects greatercustomer energy conservation.Previously, in 1980, average use percustomer had declined 7%.
Operating expenses rose $ 14million, or 12%, primarily because ofan 11% increase in purchased gascost. On a unit basis, the cost ofpurchased gas was $2.82 per deka-therm which compares with $2.59in 1980.
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
45.2
48.3
83.9
97.7
100.2
106.7
122.6
131.0
136.2
157.0
Cost of Coal Used for GenerationCents per Million BTU
15
i
C
Environmental protection accountedfor many man-hours of work and
sizable expendituresin 1981. In thesephotos various tests, experiments
and analyses are conducted to assurethat environmental effects of the
Company's operations are minimized.
p
Market for Common Stock and RelatedSecurity Holder Matters
The Company's common stock is listed on the New York Stock Exchange. The number of stockholders of record
at January 20, 1982 was 71,464.
Price of Common StockNew York Stock Exchange Composite
1981
Dividends Paid1980 Per Share
High Low High Low 1981 1980
First quarter ............... $ 16 $ 137/e $ 17 $ 13'/e $ 47 $ 44
Second quarter ............ 16 14 17'/4 1 41/e .47 44
Third quarter 16'/4 14 17% 15'/4 .50 .47
Fourth quarter 157/e 14 16s/4 13e/e .50 .47
Dividend Limitations: After dividends on all outstanding preferred stock have been paid, or declared and funds set
apart for their payment, the common stock is entitled to cash dividends as may be declared by the Board of Directors
out of retained earnings accumulated since December 31, 1946. Such dividends are limited if Common Stock Equity
(39% at December 31, 1981) falls below 25% of total capitalization. Dividends on common stock cannot be paid unless
all sinking fund requirements of the preferred stock are met. The Company has not been restricted in the payment of
dividends on common stock by these provisions.
Coopers&Lybrand
certified pub!ic accountants
EEE
To the Stockholders and Board of DirectorsNew York State Electric & Gas CorporationIthaca, New York
We have examined the balance sheets of New York State Electric & Gas Corporation asof December 31, 1981 and 1980 and the related statements of income, retained earningsand changes in financial position for each of the three years in the period ended Decem-ber 31, 1981. Our examinations were made in accordance with generally accepted audit-
ing standards and, accordingly, included such tests of the accounting records and suchother auditing procedures as we considered necessary in the circumstances.
In our opinion, the financial statements referred to above present fairly the financialposition of New York State Electric & Gas Corporation at December 31, 1981 and 1980and the results of its operations and the changes in its financial position for each ofthe three years in the period ended December 31, 1981, in conformity with generallyaccepted accounting principles applied on a consistent basis.
New York, New YorkJanuary 29, 1982
Balance Sheet
ASSETSUTILITYPLANT, at original cost (Note 1)
Electric .
GasCommon .
December 31
1981 1980(Thousands of Dollars)
$ 1,550,985129,49347,539
$ 1,469,836124,85045,762
New York State Electric & Gas Corporation
Less accumulated depreciation
Net utilityplant in serviceConstruction work in progress (Notes 8-10)
OTHER INVESTMENTS (Note 3)
1,728,017490,579
1,237,438663,695
1,901,133
20,045
1,640,448452,464
1,187,984476,793
1,664,777
21,261
CURRENT ASSETSCashSpecial depositsAccounts receivableFuel, at average cost .
Materials and supplies, at average costPre payments
7,2106,197
80,41531,51726,14812,079
163,566
6,92111,12871,18729,83624,58310,712
154,367
DEFERRED CHARGESFuel costs deferred (Note 1)Other
CAPITALIZATIONAND LIABILITIESCAPITALIZATION(Notes 4-7)
Capital stock and retained earningsPreferred stock redeemable solely at the option of the Company
. Preferred stock subject Io mandatory redemption requirements
Common stock equityCommon stockCapital in excess of par valueRetained earnings .
Total common stock equityLong-term debt
Total
CURRENT LIABILITIESSecurities to be redeemed or due within one year .Notes payable-commercial paper (Note 7)Accounts payable .
Dividends payabie on preferred stock .
Pensions accrued .
Taxes accruedInterest accruedOther .
DEFERRED CREDITSAccumulated deferred investment tax credit (Note 2)Other .........
21,88621,668
43,554
$2,128,298
$ 115,500
120,575
217,499234,746270,464
722,709
813,398
1,772,182
60,73735,00079,5564,896
13,30016,57020,96029,822
260,841
33,6955,251
19,14612,430
31,576
$ 1,871,981
$ 115,500
71,313
194,732208,629238,856
642,217
777,819
1,606,849
64,7376„800
56,0983,582
13,10016,78717,85020,517
199,471
29,6212,016
ACCUMULATEDDEFERRED FEDERAL INCOME TAX (Note 2)COMMITMENTSAND CONTINGENCIES (Notes 8 and 9)
38,946
56,329
$2,128,298
The accompanying notes shown on pages 21 through 28 are an integral part of the financial statements.
31,637 =
34,024
$1,871,981
18
New York State Electric & Gas Corporation
Statement of IncomeYears Ended Oecember 31
OPERATING REVENUESElectric .
Gas .
Total
OPERATING EXPENSES-Operation —fuel (Note 1)—otherElectricity purchased and interchangedGas purchasedMaintenance .
Depreciation .
Federal income tax (Note 2)Other taxes (Note 11)
Total
OPERATING INCOMEOTHER INCOME AND DEDUCTIONS
Allowance for other funds used during construction (Notes 1 and 8)Federal income tax credit (Note 2)Other-net
INCOME BEFORE INTEREST CHARGES
INTEREST CHARGESInterest on long-term debtOther interestAllowance for borrowed funds used during construction (Notes 1 and 8)
Interest charges —net
NET INCOMEPREFERRED STOCK DIVIDENDS
, EARNINGS AVAILABLEFOR COMMON STOCK
EARNINGS PER SHARE .
AVERAGE NUMBER OF SHARES OUTSTANDING .
1981
$609,178158,361
767,539
177,592108,294
7,029112,17651,61649,44843,84472,935
622,934
144,605
21,9229,471
(234)
175,764
151,40496,877(2,030)
100,89544,12147,48628,38263,552
530,687
114,627
21,02910,496
(266)
145,886
68,7739,987
(10,797)
67,963
107,80117,536
$ 90,265
$2.9530,586,063
61,2176,361
(9,896)
57,682
88,20414,567
$ 73,637
$2.7027,311,154
1980thousands of Dollars)
$506,502138,812
645,314
1979
$477,643110,568
588,211
142,14183,226
2,'62674,54240,56943,80727,16363,362
477,436
110,775
17,4869,815
93
138,169
55,3473,289
(7.856)
50,780
87,38914,117
$ 73,272
$2.8325,886,419
Statement of Retained Earnings
Balance, beginning of yearAdd net income
Years Ended December 31
1981 1980 1979(Thousands of Dollars)
$238,856 $214,310 $ 185,479107,801 88,204 87,389
346,657 302,514 272,868
Deduct cash dividendsPreferred stock (at serial rates)
Redeemable solely at the option of the CompanySubject to mandatory redemption requirements
Common stock ($ 1.94, $1.82 and $1.72 per sharein 1981, 1980 and 1979, respectively) .
Balance, end of year
7,7109,826
58,657
76,193
$270,464
7,7106,857
49,091
63,658
$238,856
7,7106,407
44,441
58,558
$214,310
The accompanying notes shown on pages 21 through 28 are an integral part of the financial statements.
19
New York State Electric & Gas Corporation
Statement of Changes in Financial PositionYears Ended December 31
SOURCE OF FUNDSNet incomeDepreciationAmortization of deferred chargesFederal income tax deferred —netInvestment tax credit deferred —net .
Allowance for funds used during construction
Funds from operationsProceeds from sale of first mortgage bonds .
Proceeds from sale of common stockProceeds from sale of preferred stockIncrease (decrease) in commercial paper .
Proceeds from contract settlement agreementDecrease (increase) in working capital*Proceeds from sale and leaseback of service centers
Total funds available
APPLICATION OF FUNDSAdditions to utilityplant .
Dividends on preferred stockDividends on common stockSecurities to be redeemed or due within one year .
Fuel costs deferredBonds reacquired for sinking fund
«'.Decrease (increase) in notes payable .
;.Other—net .
Total funds applied
INCREASE (DECREASE) IN WORKING CAPITALCURRENT ASSETS
:Cash .
:;Special deposits.Accounts receivable
'-. FuelMaterials and suppliesPrepayments .
Total increase in current assets
CURRENT LIABILITIESSecurities to be redeemed or due within one yearAccounts payableDividends payable on preferred stock ..........Taxes accruedInterest and pensions accruedOther
1981
$ 107,80149,448
6,14621,122
4,074(32,719)
155,872160,00050,60960,00028,20011,27123,971
$489,923
$265,54517,53658,65760,737
7,316
72,5007,632
$489,923
$ 289(4,931)9,2281,6811,5651,367
9,199
(4,000)23,458
1,314(217)
3,3109,305
1980thousands of Dollars)
$ 88,20447,486
3,30212,8227,813
(30,925)
128,702
48,416
(18,700)
46,5329,300
$214,250
$ 154,51614,56749,09164,737
2,5833,603
(74,500)(347)
$214,250
$ 1,336(402)
7,630(3,478)3,759
901
9,746
47,49311,585
(102)(4,504)1,215
591
1979
$ 87,38943,807
1,713(298)
11,048(25,342)
118,31750,000
7,24320,000(9,800)
(6,439)
$ 179,321
$ 145,92814,11744,44117,2443,600
(44,215)(1,794)
$ 179,321
$ 1,035'15
9,95114,4074,5521,009
31,569
7,1569,762
4124,0401,1232,637
Total increase in current liabilities* .
Increase (decrease) in working capital* .
'Exclusive of changes in commercial paper
33,170 56,278
$ (23,971) ~ $ (46,532)
25,130
$ 6,439
The accompanying notes shown on pages 21 through 28 are an integral part of the financial statements.
20
Notes to Financial Statements
1. Significant Accounting Policiesa. Accounting records
The Company maintains its accounting records inconformity with the uniform system of accounts pre-scribed by the Federal Energy Regulatory Commission(FERC) and the Public Service Commission of theState of New York (PSC).
b. UtilityplantCost of current repairs and minor replacements ischarged to appropriate operating expense and clearingaccounts; cost of renewals and betterments, in-cluding indirect costs, is capitalized. Original cost ofutility plant retired or otherwise disposed of and thecost of removal less salvage are charged to accumulateddepreciation.
c. Allowance for funds used duringconstruction (AFDC)
AFDC, a non-cash item, is shown on the Statement'of Income as AFDC-other funds and AFDC-borrowedfunds."AFDC is defined in the regulatory system ofaccounts as the net cost, for the period of construction,'fborrowed funds used for construction purposesand a reasonable rate on other funds when so used.(See Note 8.)
The Company capitalized AFDC on a compoundbasis, net of taxes, at rates of 7.5%%d, 8%%d and 8.7%%d for1979, 1980 and 1981, respectively. The Companyis allowed revenues equal to the federal income tax ef-fect of the interest on debt portion of AFDC.
AFDC was not recorded on construction work in prog-ress (CWIP) allowed in rate base which amountedto (1) $30 million for the first five months of 1979, (2)$31.4 million for August 1980 through June 1981,(3) $275 million for July 1981 through October 1981 and(4) $200 million for the last two months of 1981.
d. RevenueRevenues from the sale of electricity and gas arerecorded on the basis of meters read.
e. Retirement plansThe Company has noncontributory retirement annuityplans which cover all officers and substantially allemployees. Annuity plan costs are based on normalcosts and amortization of the unfunded liability. Theassumed rate of return used in determining actuarialpresent values of accumulated plan benefits was 6%%d,
and benefit information in the following table was
determined on January 1 of each year. The Company'spolicy is to fund pension costs accrued.
1981 1980 1979
(Thousands of Dollars)Provision for
pension cost...... $ 13,300 $ 13,100 $ 12,600Actuarial present
value of accumu-lated plan benefits:Vested ..........Non-vested......
Net assets availablefor benefits ....... 159,000 128,100 104,000
f. Deferred fuel chargesThe Company defers certain fuel and purchased gascosts which are subsequently billed to customersthrough adjustment clauses in rates.
g. DepreciationThe annual provision for depreciation is determined usingstraight-line rates, based on average service lives,applied to the original cost, by groups of depreciableproperty in service. Depreciation accruals wereequivalent to 3.2%%d of average depreciable property for1979 through 1981.
2. Federal Income TaxesFor federal income tax purposes the Company uses thesum-of-the-years digits depreciation method, theAsset Depreciation Range System (ADR) and effectiveJanuary 1, 1981, for property additions subsequentto 1980 it adopted the Accelerated Cost Recovery Sys-tem (ACRS) pursuant to the Economic Recovery TaxAct of 1981.
Prior to 1981, investment tax credits (ITC) based onthe Revenue Act of 1973 (4%%d) were reflected currentlyin income and were shared equally between stock-holders and customers for rate-making purposes. Theadditional 6/0 ITC derived from the Tax Reduction Actof 1975 are deferred. The Company has approximately$ 14,565,000 of unused ITC at December 31, 1981.
The PSC, in its October 1981 rate decision, requiredthat the ACRS reductions in taxes and all ITC (10/o)claimed on ACRS property subsequent to the rate order,be deferred. The PSC previously required that federalincome tax reductions arising from the use of ADR besimilarly deferred. These benefits are to be returnedto income over the book life of the applicable property.
Charged tooperations:Current ........Deferred —net...AFDC imputed
income taxbenefit ........
Investmenttax credits:Deferred ......Shared........
Included in otherincome:AFDC imputed'"'income tax. benefit ..........Investment tax.-, credits —shared .
.Amortization of
., ITC deferred in." prior years .....
"fax on other
$ 6,650 $ (2,600)* $ 6,58021,122 12,822 (298)
6,836 7,485 6,203
7,944 8,835 11,7641,292 1,840 2,914
43,844 28,382 27,163
(6,836) (7,485) (6,203)
(1,292) (1,840) (2,914)
(1,204) (1,022) (717)
. income ........ ~139) ~149) 19
~9,471) ~10,496) ~9,615)Total ......... $34,373 $ 17,886 $ 17,348
* This credit amount was due principally to the taxloss related to the abandonment of nuclear projectsproposed for New Haven and Jamesport (see Note 8).
In the July 1980 rate decision, the PSC allowedrevenues equal to the federal income tax effect of pensioncosts, insurance costs and all taxes charged to CWIPfor electric facilities only. Effective with the PSC's October1981 rate decision, the additional revenues will belimited to the federal income tax effect applicableto pension and insurance costs in excess of $6 million,which represents capitalized costs applicable tominor projects. The federal income tax benefit is recordedas a reduction of CWIP.
Federal income taxes for 1979 through 1981 are asfollows:
1981 1980 1979thousands of Dollars)
Federal income tax provisions for 1979 through 1981are substantially less than the amount obtained byusing the statutory rate due to the following:
1981 1980 1979tatuto rate ........... 46.0% 46.0% 46.0%S ry
Decrease:Excess of allowable taxdepreciation andamortization over bookamounts .............
Costs capitalized onbooks, expensed forincome taxes:AFDC................Taxes, pensions and
insurance ...........Investment
tax credits............Miscellaneous .........
Actualrate ..............
(4.7) (5.7) (6.3)
(10.6) (13.4) (1 1.1)
(.7) (3 0) (4 8)
(2 0) (3 4) (4 9)~3.8 ~3.6 ~2.324.2% 16.9% 16.6%
3. Other InvestmentsThe Company has entered into long-term contracts forthe supply of coal to the Homer City Generating Station,and in that connection, has agreed to make loans(maximum aggregate amount of $23,150,000 approvedby the PSC) to the mining companies. These loans($ 16,575,000 and $ 18,275,000 at December 31, 1981and 1980, respectively) were made on first mortgagenotes maturing December 31, 1982 which currentlybear interest at one-half percent above prime. TheCompany intends to seek PSC permission to extend thematurity date of these notes. The Company sold toChemical Bank 100% participations in these notes whichhave been recorded as long-term notes payable dueApril 5, 1986. The agreement with Chemical Bankrequires the Company to repurchase the participationsunder certain conditions.
The Company has established a wholly owned sub-sidiary, the Somerset Railroad Corporation (SRC), toconstruct rail facilities to the Somerset GeneratingStation. In addition to its investment of $200,000, theCompany has guaranteed SRC borrowings of $5 millionunder a bank line of credit.
22
4. Long-term DebtFirst mortgage bonds
Series10.60%
3 '/43%%
12 '/8%8*
4 ~/e%
3 7/e%
17 5/8%*
17 ~/8%"
14 '/z%*4 6/8%
Oct. 1, 1982May 1, 1984
Sept. 1, 1985Dec. 1, 1986May 1, 1987Feb. 1, 1988Mar. 1, 1989Mar. 1, 1990Jan. 1, 1991May 1, 1991
$ 50,00020,00015,00050,00025,00025,00050,00050,00060,00025,000
(Thousands of Dollars):
Due Amount8 ~/e%
5 6/e%
6 '/4%6 '/2%7 ~/8%
9 35%9 3/8%
9 3/e%7 '/4%6 '/8%8%%
June 1 ~1996
Jan. 1, 1997Sept. 1, 1997Sept. 1, 1998Nov. 1, 2001July 1, 2003Mar. 1, 2005Jan. 1, 2006
June 1, 2006Dec. 1, 2006Nov. 1, 2007
$ 50,00025,00025,00030,00050,00050,00075,00071,39712,00025,75060,000
Series Due Amount
Total first mortgage bondsNotes payable to banks due January 31, 1985 (Note 7)Participations in mining companies'otes (Note 3)Unamortized premium on debt .
Less debt due within one year—included in current liabilities
Total
$844-,1472,000
16,575676
863,39850,000
$813,398
*Issued 1981 **Issued 1979
ln 1982 the Company issued $61 million of 9'/4% unsecured three-year notes in connection with a tax-exempt
financing and $50 million principal amount of first mortgage bonds, 18% series, due 2012. At December 31, 198 I long-
term debt (exclusive of notes payable to banks) which will become due during the following five calendar years is:
1982 1983 1984 1985 1988
(Thousands of Dollars)$50,000 $2,397 $25,100 $20,100 $71,675
The Company's mortgage provides for a sinking and improvement fund. The provisions require the Company to
., make annual cash deposits with the Trustee equivalent to 1% of the principal amount of all bonds deliveredand,'authenticated by the Trustee prior to January 1 of that year (excluding any bonds issued on the basis of the
retirement of bonds). Pursuant to the terms of the mortgage, the Company has satisfied these requirements bycrediting "bondable value of property additions" against the amount of cash to be deposited.
Mandatory annual cash sinking fund requirements are $3,000,000 for the 93/8% series due 2006, $2,100,000begrinning July 1, 1984 for the 9.35% series, $600,000 beginning June 1, 2001 for the 7'/~% series and $250,000
beginning December 1, 1992 for the 6'/e% series. The amount increases to $500,000 and $750,000 on December 1,
1997 and December 1, 2002, respectively, for the 6T/8% series.The mortgage indenture secures the first mortgage bonds which constitute a direct first mortgage lien on
substantially all utility plant.
5. Common Stock and Capital in Excess of Par ValueAt December 31, 1981 common stock and capital in excess of par value were as follows:
Common stock, par value $6.66~/a a share, 60,000,000 shares authorized(shares issued: 2,500,000 in 1981 and in 1980 and 1,949,819 through theDividend Reinvestment and Stock Purchase Plan sinceJanuary 1, 1979)
Capital in excess of par value increased $26,117,000, $27,766,000 and$4,102,000 in 1981, 1980 and 1979, respectively, resulting from salesof the Company's common stock at amounts in excess of par value........
In February 1982 the Company sold 2,500,000 shares of common stock.
SharesD~ufsfandfn
32,624,755
Amount(Thousands~of Dollars
$217,499
$234,746
23
$ 104.00103.75101.00102.00102.00103.00 f102.00 J106.14103.94102.0027.2926.7626.2325.70
2/1/83Thereafter
3/1/863/1/91
Thereafter2/1/842/1/892/1/94
Thereafter
8.80'/o 100
8.48'/o 25
6. Preferred StockAt December 31, 1981 serial cumulative preferred stock was composed
Par
Redeemable
Series Share Prior to Per Share
Redeemable solely at the option of the Company:3 75o/o $ 1004 '/~o/o (1949) 1004 15'/o IOO4 400/0 1004.15/o(1954) 1006.48'/o 100
of the following:
SharesAuthorized(1)
andOutstanding
150,00040,00040,00075,00050,000
300,000
250,000
1,000,000
Amount(Thousandsof Dollars)
$ 15,0004,0004,0007,5005,000
30,000
25,000
25,000
Subject to mandatory4 500/08.25'/o**9 000/
15 ~/8'/o*
8 50o/9.10'/o
15 '/o*
Total
redemption100100100100
252525
requirements:(2)(3)
1/1/83(2)10/1/82(4)4/1/86(5)7/1/82(6)7/1/84(7)1/1/87(8)
105.25109.00106.50115.3825.0028.7528.75
6,125200,000267,000300,000360,000600,000
1,200,000
$ 115,500
$ 61220,00026,70030,000
9,00015,00030,000
131,31210,737
5.00 4/1/96
Less sinking fund requirements at par value—included in current liabilitiesTotal $ 120,575
21. *Issued 1981 **Issued 1979
At-December 31, 1981 redeemable preferred stock sinking fund requirements for the following five calendar years are:
1982 1983 1984 1985 1986(Thousands of Dollars)
$ 10,740 $ 1,740 $ 1,740 $24,740 $4,740
(1) At December 31, 1981 there were 1,250,000 shares of $ 100 par value preferred stock, 3,600,000 shares of $25par value preferred stock and 1,000,000 shares of $ 100 par value preference stock authorized but unissued.
(2) Each of the following series of preferred stock is not redeemable prior to the date designated, through certainrefunding operations, but otherwise is redeemable at the indicated price per share prior to the indicated date.The indicated price per share will be reduced either (A) annually or (B) at five-year intervals by the reductionamount. As of the redemption at par date and thereafter, the redemption price will be at par. By the redemptiondate, the Company must set aside the amount required to redeem at par all shares outstanding.
Date Indicated Indicated Reduction Redemption RedemptionSeries ~Desi nated Price Date Amount at Par Date8.25 /o 1/1/85 $ 109.00(A) 1/1/83 $ 1.00 1/1/85 3/28/859.00/o 10/1/86 106.50(A) 10/1/82 .50 10/1/94 9/30/96
15 /8/o 4/1/86 115.38 4/1/86110.00(B) 4/1/91 4/1/06
9.1 0 /o 7/1/84 28.75 7/1/8425.65(A) 7/1/85 .16 7/1/88 7/1/89
15 '/o I/1/87 28.75(B) 1/1/87 1.25 1/1/97 1/1/1 1
24
(3) By March 31, in each year 1982 through 1988, the Company must redeem at $ 103.25 per share 875 shares of the
4.50% Series. Since 1979, 875 shares have been reacquired and canceled annually.
(4) By September 30, in each year 1982 through 1995, the Company must redeem at par 16,500 shares of the
9.00% Series. Since 1980, 16,500 shares have been reacquired and canceled annually.
(5) By April 1, in each year 1987 through 2006, the Company must redeem at par 15,000 shares of the 15'/8% Series.
(6) By July 1, 1982 the Company must redeem at par 360,000 shares of the 8.50% Series. Since 1980, 120,000shares have been reacquired and canceled annually.
(7) By July 1, in each year 1985 through 1989, the Company must redeem at par 120,000 shares of the 9.10%Series.
(8) By January 1, in each year 1987 through 2011'he Company must redeem at par 48,000 shares of the 15%
Series.
1981
7. Bank Loans and Other BorrowingsThe Company has revolving credit agreements with banks (see Note 4) which provide for borrowing, at prime, up to$ 100 million through January 31, 1985 and payment of annual commitment fees of approximately three-eighthspercent on the unborrowed amount. The loan agreements do not require compensating balances, but balancesgenerally have averaged ten percent of the available line of credit during 1981. A substantial portion of thesebalances represents normal working account funds. Interim financing in the form of short-term borrowings on commer-cial paper is utilized to finance construction expenditures. The Company also has agreements with three bankswhich provide for borrowing, at prime, up to $30 million through November 30, 1982.
Information relative to short-term borrowings is as follows:Commercial Pa er ~N
1981 1980 1979
(Thousands of Dollars)Ending balance $35,000 $ 6,800 $25,500 $Maximum amount outstanding ..... $99,100 $73,500 $72,000 $60,000Average amount outstanding(1).... $40,600 $42,500 $22,500 $ 10,400
'Weighted average interest rate:., On ending balance............. 13.4% 17.5% 13.5%'uring the period(2) ............ 16.5% 12.8% 11.6% 17.0%
(1) Calculated as the average of the sum of daily borrowings.(2) Calculated by dividing total interest expense by the average of the sum of daily borrowings.
,'8. Abandoned Projects —New Haven and JamesportThe Company and Long Island Lighting Company have been denied certain regulatory approvals to construct, on a
joint venture basis, nuclear generating facilities near New Haven, N.Y. and Jamesport, N.Y. The New York StateBoard on Electric Generation Siting and the Environment (Siting Board) granted the companies a Certificate of Environ-mental, Compatibility and Public Need (Certificate) for one 800,000-kw coal fired generating unit near Jamesport.The'Company has notified the Siting Board that it will not accept the Certificate and that it has decided to terminateits participation in the Jamesport project.
The Company has filed petitions with the PSC requesting authorization to (1) continue to accumulate AFDC on its
share of costs until amortization of such costs commences to be recovered in rates, (2) amortize the investmentsthrough rates and (3) include in rates appropriate carrying charges on the unamortized balances. The Companyis planning to file applications with the FERC requesting authorization to continue to accumulate AFDC in the samemanner as requested in the petitions to the PSC.
PSC proceedings are continuing in connection with the New Haven petition. The PSC has authorized the Company tocontinue to accrue and accumulate AFDC on the nuclear related costs of the Jamesport project until a decisionis made with respect to the prudence and disposition of the nuclear costs. If the requests to the PSC or to the FERC
to continue to accumulate AFDC are denied, the Company may have to reverse certain accruals of AFDC previouslyrecorded. If the request to amortize the investments is denied and alternative regulatory relief is not granted, theCompany would have to charge income with the project costs, net of the federal income tax effect.
The Company's net income for 1981 includes $4 million of AFDC attributable to the New Haven project and $5 millionof AFDC attributable to the Jamesport project. As of December 31, 1981, the Company had expended, includingAFDC, approximately $44 million for the New Haven project and $60 million for the Jamesport project. The Companyexpects to incur additional expenditures in connection with the cancellation of the Jamesport nuclear units.
9. CommitmentsThe Company estimates that 1982 costs for the construction program will approximate $602 million. The programis subject to periodic review and revision, and actual construction costs to be incurred may vary because of revisedload estimates, imposition of additional regulatory requirements and the availability and cost of capital. (See Note 10.)
25
10. Jointly Owned Generating StationsThe Company has an undivided 50% interest in the output and costs of three generating units comprising the Homer.City Generating Station. The station is owned with Pennsylvania Electric Company which also operates thefacility. The Company's share of the rated capability is 944,000-kw and its net utility plant investment is $274 million,which includes $30 million of CWIP. The accumulated provision for depreciation as of December 31, 1981 was$55 million. The Company's share of operation and maintenance expense of the station is reflected in the Statementof Income.
The Company also has an undivided 18% interest in the 1,084,000-kw Nine Mile Point nuclear generating unit No. 2(Unit) being constructed by Niagara Mohawk Power Corporation (Niagara Mohawk) near Oswego, N.Y. In early1980 the co-tenants having an interest in the Unit (Co-tenants) engaged independent engineering and managementconsulting firms to perform a review of the Unit's estimated cost and scheduled in-service date, together withengineering, construction and management systems. Also, a reassessment was conducted by Niagara Mohawk andStone & Webster, the architect-engineer and construction agent. As a result of those reviews, a $2.4 billionrevised cost, exclusive of AFDC and nuclear fuel, and a rescheduling of the operation date from 1984 to late 1986were announced in September 1980. The Company's share of the construction cost, including AFDC, is now estimatedat $712 million. The Company's investment of $235 million, excluding nuclear fuel costs, is included in CWIP atDecember 31, 1981.
During 1980 the PSC directed Theodore Barry and Associates and Canatorn Limited to perform a comprehensivemanagement audit covering essentially the same areas as the review commissioned by the Co-tenants, and areport thereon (TB&AReport) was issued in July 1981. The TB&AReport stated that the planned 1986 completion dateis possible, but that a likely one-year slippage in schedule, new regulatory requirements, higher escalation andAFDC could significantly increase the Unit's cost.
In July 1981, various parties petitioned the PSC to establish a public evidentiary proceeding to consider the futureof the Unit. In September 1981, the PSC Staff issued a report on a comparative analysis of the economic andfinancial feasibility of the Unit and coal alternatives which concluded that completion of the Unit is warranted. InSeptember 1981, the PSC established a proceeding to inquire into the financial and cost implications of completingthe Unit. Hearings were completed in December.
Event subsequent to the date of the'auditors'pinionAt'a February 9, 1982 meeting the PSC stated its consensus that completion of the Unit is warranted and that no basisexists at this time to take further action regarding abandonment of the Unit. The PSC also concurred with the PSCStaff recommendation that the Co-tenants must emphasize their attention to the control of the Unit's cost and the con-struction schedule to minimize the impact on ratepayers and indicated its intention to monitor closely all constructionactivities. In addition, the PSC decided to explore the feasibility of instituting a yet undefined incentive program thatcould cause the return on the equity portion of the investment in the Unit to vary depending on a variety of itemsrelated to the Unit's ultimate cost and completion date. A formal PSC decision is expected upon completion of its re-view of the feasibility of instituting an incentive program. The Company is unable to predict what recommendationsor:actions may arise as a result of this review or what further actions, if any, may be brought by the intervening parties.
Real estate and personal property.Franchise and gross receiptsMiscellaneous
Total-charged principally to tax expense
11. Supplementary Income Statement InformationCharges for maintenance, repairs and depreciation, other than those set forth in the Statement of Income, were notsignificant in amount. Taxes, other than payroll and federal income taxes, are classified as follows:
1981 1980 1979thousands of Dollars)
$33,640 $29,622 $26,77333,575 28,652 31,633
4,556 3,690 3,098$71,771 $61,964 $61,504
26
12. Industry Segment InformationCertain information pertaining to the electric and gas operations of the Company is as follows:
1981 1980
Electric Gas Electric Gas Electric
(Thousands of Dollars)
1979Gas
$ 110,568103,701
6,8673,128
$ 158,361150,086
8,2753,794
$ 138,812133,082
5,7303,353
4,3487,927259,065 6,480
97,538103,302
Dec
Operating:Revenues ........... $ 609,178 $ 506,502 $ 477,643Expenses ........... 472,848 397,605 373,735Income ............. 136,330 108,897 103,908
Depreciation* .......... 45,654 44,133 40,679Construction
expenditures ........ 146,589 141,580Identifiable
assets**............. 1,894,367 106,165 1,654,492 1,532,984*Included in operating expenses.
**Corporate assets ($127,766, $ 114,187 and $ 107,001 at December 31, 1981, 1980 and 1979, respectively) consist
primarily of cash, special deposits, accounts receivable, prepayments and unamortized debt expense.
13. Quarterly Financial Information (Unaudited)The following is a summary of quarterly results of Company operations as previously reported to stockholders:
Quarter Ended
March 31 June 30 Sept. 30 . 31(Thousands)
1981Operating revenues .
Operating income .
Net income„,Earnings available for common stock ..
. Earnings per share (in dollars) ........; Average shares outstanding...:......
1980" Operating revenues'perating income
- Net income .
~ Earnings available for common stock ..'-.Earnings per share (in dollars)........
~:"-'~Average shares outstanding..........
$220,705$ 36,832$ 30,110$ 26,528
$ .9029,323
$ 192,070$ 32,933$ 26,434$ 22,751
$ .8726,185
$ 173,281$ 28,498$ 22,661$ 18,273
$ .6229,558
$ 149,122$ 26,602$ 19,790$ 16,107
$ .6126,314
$ 168,365$ 35,628$ 22,532$ 17,862
$ .5830,920
$ 135,180$ 28,047$ 22,390$ 18,771
$ .6827,613
$205,188$ 43,647$ 32,498$ 27,602
$ .8532,505
$ 168,942$ 27,046$ I9,590$ 16,008
$ .5529,109
14. Supplementary Information to Disclose the Effects of Changing Prices (Unaudited)The following presentation is intended to show certain information about the impact of inflation on the Company'sfinancial operations. The information was developed using assumptions and estimates and therefore should not beviewed as precise indications of the effects of inflation.
Constant dollar amounts represent historical costs stated in terms of dollars of equal purchasing power, as measured
by the Consumer Price Index for all Urban Consumers (CPI-U). Current cost amounts reflect the changes in
specific prices of utility plant from the date the plant was acquired to the present. The current cost of utility plantrepresents the estimated cost of replacing existing utility plant assets and was determined primarily by indexingexisting plant by the Handy-Whitman Index of Public UtilityConstruction Costs. The provisions for depreciation on
the constant dollar and current cost amounts of utility plant were determined by applying the Company'sdepreciation rates to the indexed plant amounts.
Under the rate-making processes to which the Company is subject, only the historical cost of utility plant isrecoverable in revenues. Therefore, the excess of the cost of utility plant stated in terms of constant dollars or currentcost over the historical cost of plant is not presently recoverable in rates as depreciation and is reflected as areduction to net recoverable value. While the rate-making process gives no recognition to the cost of replacing utilityplant, based on past practices the Company believes it will be allowed to earn on the increased cost of its netinvestment when replaced.
To properly reflect the economics of rate regulation, the reduction of utility plant to net recoverable value should beoffset by the purchasing power gain on net amounts owed. The gain from the decline in purchasing power ofnet amounts owed is primarily attributable to the substantial amount of debt which has been used to finance utilityplant. Since the depreciation on this plant is limited to the recovery of historical costs, the Company does not have
the opportunity to realize a holding gain on debt and is limited to recovery of only the embedded cost of debt capital.
27
Income from Continuing Operations Adjusted for Changing PricesAvera e 1981 Dollars
Constant CurrentDollar Cost
(Thousands-except per share data)erations, as reported $ 107,801 $ 107,801eciation expense ~58,138) ~69,530erations . $ 49,663" $ 38,271
Income from continuing opAdjustment to restate deprIncome from continuing op
Income from continuing operations per common share(after preferred stock dividends)
Increase in specific prices of utilityplant held during the year** ..Less increase in general price level..........................
Net change .......Reduction of utilityplant to net recoverable value
$ .68$ 1.05"
$ 291,494266,320
$ 25,174
$ 110,560~$ 96.778)
Operating revenuesAs reported . $767,539In 1981 purchasing power ......... $767,539
Income from continuing operationsAs reported . $ 107,801
~ - Constant dollar basis*" ............ $ 49,663Current cost basis ................ $ 38,271
Income from continuing operations per.common share (after preferred stock
":.dividends)As reported . $2.95Constant dollar basis** ............ $ 1.05Current cost basis ................ $ .68
Net assets at year-end at netrecoverable value
As reported .
Constant dollar and current cost ....Reduction of utility plant to net
recoverable valueConstant dollar basis $ 96,778Current cost basis ................ $ 110,560
Net change in value of utility plantheld during the year $ (171,793)
Purchasing power gain onnet amounts owed $ 114,534
Cash dividends per common shareAs reported . $ 1.94In 1981 purchasing power ......... $ 1.94
Market price per common shareat year-end
As reported.......... $ 15.00 $ 14.88In 1981 purchasing power ......... $ 15.00 $ 16.42
Average CPI-U 272.4 246.8
*Allconstant dollar and current cost data for 1979 and 1980 have been"*Excludes the reduction of utility plant to net recoverable value.
"**The Financial Accounting Standards Board does not require the calculato 1979, nor is the data readily available.
$ 645,314$ 712,251
$ 588,211 $532,171$ 737,022 $741,880
$459,452$689,558
$ 87,389 $ 70,563$ 62,742 .
"*"
$ 44 798
$ 88,204$ 44,810$ 32,111
$ 59,945 ~
$2.70$ 1.05
$ .58
$2.46$2.83$ 1.74$ 1.05
$2.21
$838,209 $ 757,717 $ 684,863 $648,906 $558,450$809,674 $ 836,313 $ 858,126
$ 182,210$ 39,449
$ (124,817)
$ 126,645
$ 154,662$
$ 25,174
$ 85,602
$ 1.82$2.01
$ 1.60$2.40
$ 1.72$2.16
$ 1.68$2.34
$ 15.75 $16.88$ 19.73 $23.53
217.4 195.4
restated to average 1981 dollars.
$ 19.13$28.71
181.5
tion of inflation-adjusted data for years prior
*After the reduction of utility plant to net recoverable value, income from continuing operations on a constant dollarbasis would change to a loss of $47,115 or $2.11 per average common share.
**AtDecember 31, 1981, current cost of net utility plant was $3,300,210, while net recoverable value at historical costwas $ 1,901,133.
Five-Year Summary of Selected Financial Data Adjusted for Changing Prices1981 1980* 1979* 1978 1977
(Thousands-except per share data)
28
'Selected Financial Data"I
Operating revenues .............Net incomeEarnings per share ..............Dividends paid per share ........Average shares outstanding ......Interest chargesAFDC-other and borrowed fundsDepreciationOthertaxesUtilityplant additions ............Total assetsLong-term obligations and
redeemable preferred stock ....
1981
$ 767,539$ 107,801
$2.95$ 1.94
30,586$ 78,760$ 32,719$ 49,448$ 72,935$ 265,545$2,128,298
1980 1979 1978
(Thousands —except per share data)$ 645,314 $ 588,211 $ 532,171$ 88,204 $ 87,389 $ 70,563
$2.70 $2.83 $2.46$ 1.82 $ 1.72 $ 1.68
27,311 25,886 23,393$ 67,578 $ 58,636 $ 57,639$ 30,925 $ 25,342 $ 16,655$ 47,486 $ 43,807 $ 41,462$ 63,552 $ 63,362 $ 57,064$ 154,516 $ 145,928 $ 143,229$ 1,871,981 $ 1,737,523 $ 1,603,425
1977
$ 459,452$ 59,945
$2.21$ 1.60
21,208$ 49,129$ 25,363$ 34 544$ 50,645$ 158,493$ 1,489,862
$ 933,973 $ 849,132 $ 844,214 $ 772,134 $ 733,336
Ilanagement's Discussion and Analysis ofFinancial Condition and Results of Operations
The Company is constructing a wholly owned 625,000-kwcoal fired generating unit (Somerset Generating Sta-tion) and associated rail facilities near Somerset, N.Y.,scheduled for service in late 1984. The current estimatefor the cost of the plant is $ 1,072 million, of whichapproximately $352 million will be spent in 1982. TheCompany also has an undivided 18% interest in the1,084,000-kw Nine Mile Point nuclear generating unitNo. 2 (Unit) being constructed by Niagara Mohawk PowerCorporation near Oswego, N.Y. The Company's share
'of the construction cost, including allowance for fundsused during construction (AFDC), is estimated at$712 million and its investment of $235 million, excludingnuclear fuel costs, is included in construction work inprogress (CWIP) at December 31, 1981. (See Note 10.)
The Company's construction program, includingAFDC, is currently estimated to cost $602 million, $563million and $368 million for the years 1982, 1983 and1984, respectively. Included in the three-year program is$886 million for the Somerset Generating Station
and associated rail facilities and $307 million, includingnuclear fuel, for the Unit. The construction programis under continuing review and is revised from time to timein light of the Company's financial condition, loadforecasts, the availability and cost of capital, licensingdecisions, regulatory requirements, inflation andother factors.
The Company anticipates that to finance its construc-tion program through 1984, approximately 70% ofthe funds required will be raised through the issuanceof securities. The nature, amounts and timing offuture financings will depend in part on the level of con-struction, load growth, the timeliness and adequacyof rate relief, the availability and cost of capital and thecontinuing ability of the Company to meet its propertyadditions and interest coverage requirements underits Mortgage and preferred stock dividend coveragerequirements in its Certificate of Incorporation.
A $ 115,610,000 increase in the cost of fuel for electricgeneration, power purchased and interchanged and
29
in the cost of gas purchased, which was recoveredthrough the fuel and gas adjustment clauses, and a$96,806,000 increase in electric and gas rates accountedfor 90/0 of the Company's $235,368,000 increasein operating revenues over the past three years. Thebalance is chiefly attributable to kilowatt-hour sales,which increased 5%%d, and unit sales of gas, whichincreased 2/o.
During the same period operating expenses increased$ 193,725,000, or 31/o, principally as a result of in-creases in (a) fuel and natural gas purchased costs($107,488,000), (b) wages, materials and supplies usedin operations ($46,916,000) and (c) federal incometaxes ($27,494,000).
Increased AFDC rates and higher levels of CWIPresulted in a $ 1 6,064,000 increase in AFDC during thethree-year period. Interest charges before the reductionfor AFDC-borrowed funds increased 37/o ($21,121,000)due to increased borrowings at higher interest ratesto finance the Company's construction program.
Earnings available for interest charges provided 2.48times the interest on the Company's first mortgagebonds for 1981. This calculation is based on the provi-sion stated in the Company's Mortgage and compareswith 2.69 in 1980 and 2.54 in 1979. The Mortgagecontains a requirement, subject to certain exceptions,that first mortgage bonds may be issued only if netearnings, as defined, are at least 2.0 times the annualinterest charges on bonds outstanding and to be
-, outstanding. Earnings available for interest charges and- preferred stock dividends provided 1.70 times theinterest and dividends on preferred stock in 1981. Thiscalculation is based on the provision stated in theCompany's Certificate of Incorporation and compares to1.72 and 1.85 for 1980 and 1979, respectively. TheCertificate of Incorporation contains a requirement that
, preferred stock may be issued only if net earnings,as defined, are at least 1.5 times the annual interestcharges on all outstanding indebtedness plus the annualdividend requirements on preferred stock outstandingand to be outstanding. These coverages will vary infuture years depending on decisions in rate cases andon the need for external funds to finance the Company'sconstruction program.
Earnings available for common stock were$90,265,000, or $2.95 per share in 1981, compared with$73,637,000, or $2.70 in 1980 and $73,272,000, or$2.83 in 1979. Average shares outstanding were30,586,063 in.1981, 27,311,154 in 1980 and 25,886,419in 1979. Return on average common equity was13.4%%d in 1981, 12.3/. in 1980 and 13.4%%d in 1979. Theincrease in 1981 earnings was principally due to rateincreases received in June and October.
On October 20, 1981, the Public Service Commissionof the State of New York (PSC) issued a rate decisionapproving $ 124,500,000 in added electric revenues, a
22.2/o increase, and $8,800,000 in added gas revenue,a 5%%d increase. The electric increase includes $45million allowed on a temporary basis in June. The higherrevenues are approximately 87/o of the amountsoriginally requested and are designed to produce a 17 0
return on common equity. The increases becameeffective on October 25, 1981 and allowed the inclusioof $200 million of CWIP in rate base.
On February 18, 1982, the Company applied for increased electric and gas rates. The requested increasein annual electric and gas revenues are $ 148,928,000and $4,924,000, respectively, based on a projectedtest year ending December 31, 1983, the inclusion inrate base of $450 million of CWIP and the recovery overa ten-year period of the expenditures related to theterminated New Haven and Jamesport projects. Therequested increases are designed to produce a 17.5%%d
return on common equity. The PSC is not expectedto reach a final decision on this rate application untilJanuary 1983. The Company has no assurance thatsuch higher rates will be granted.
The Company's funds requirements were providedby the following sources:
OperationsSecurities sales
BondsPreferred stockCommon stock
Notes payableBank loansCommercial paper
Contract settlementagreement
Sale and leasebackof service centers
1981 1980 1979(Thousands of Dollars)
$ 155,872 $ 128,702 $ 118,317
160,00060,00050,609
28,200
11,271
48,416
74,500
50,00020,000
7,243
44,215
9,300$465,952 $260,918 $239,775
In 1982 the Company will be required to raise externalfunds of approximately $470 million. This externalfunds requirement is needed for the construction programand to supply the $60,737,000 needed for refundingand sinking fund requirements on first mortgage bondsand preferred stock. In 1982 the Company issued$61 million of 9'/4/o unsecured three-year notes in con-nection with a tax-exempt financing, $50 millionprincipal amount of first mortgage bonds, 18/o series due2012 and 2,500,000 shares of common stock.
Management has provided supplementary informationto disclose the effects of changing prices in Note 14.
30
4
Financial andOperating Statistics
SUMMARYOF EARNINGS
OPERATING REVENUESElectricGas .
Total .
OPERATING EXPENSES
Operation —fuel—otherElectricity purchased and
interchangedGas purchasedMaintenanceDepreciationFederal income taxOthertaxes
Total .
OPERATING INCOME ........OTHER INCOME,
AND DEDUCTIONSAllowance for other funds
s~ used1during construction .
Federal:income tax credit ...Other, stet
4iNCOME BEFOREINTEREST CHARGES ......
INTEREST CHARGESInterest on long-term debt .....Other Ir)terestAllowance for borrowed funds
used during construction ....Interest charges —net .....
NET INCOMEPREFERRED STOCK
DIVIDENDS
EARNINGS AVAILABLEFORCOMMON STOCK ............
.COMMON STOCK DIVIDENDS ...RETAINED EARNINGS ..........
1981 1980
$609,178158,361
$506,502,.138,812
767,539 645,314
1979 1978 1977
(Dollars in Thousands)
$477,643 $433,774 $374,456110,568 98,397 84,996
588,211 532,171 459,452
1976 1971
$330,87077,397
$176,57444,488
408,267 221.062
177,592108,294
7,029112,17651,61649,44843,84472,935
151,40496,877
(2,030)100,895
44,12147,48628,38263,552
142,14183,226
2,62674,54240,56943,80727,16363,362
118,384. 74,465
19,05963,89638,52941,46216,35057,064
87,18167,544
46,59956,28433,70934,544
33050,645
72,62160,132
33,67947,94429,75732,589
7,75144,296
32,20532,574
15,29326,45517,29424,118
1,82525,608
622,934 530,687 477,436 429,209 376,836 328,769 175,372
144,605 114,627 110,775 102,962 82,616 79,498 45,690
21,9229,471
(234)
21,02910,496
(266)
17,4869,815
93
10,6598,383
202
14,056 7,803 9751,255 1,166(160) (158) 109
175,764 145,886 138,169 122,206 97,767 88,309 46,774
68,7739,987
61,2176,361
55,3473,289
52,3375,302
45,1194,010
39,7122,673
20,877653
(10,797) (9,896) (7,856) (5,996) (11,307) (5,961) (796)
57,682 37,822
59,945
13,094
67,963
107,801
17,536
90,26558,657
36,424 20,73450,780
87,389
14,117
73,27244,441
51,64326,04051,88588,204
14,567
73,63749,091
70,563
13,090
57,47338,732
10,465 5,205
20,83517,145
46,85133,564
41,42028,375
$ 31,608 $ 24,546 $ 28,831 $ 18,741 $ 13,287 $ 13,045 $ 3,690
Average number of shares ofcommon stock outstanding(thousands) .
Earnings per average share ...Dividends paid per share .....
30,586$2.95$ 1.94
27,311
$2.70$ 1.82
25,886 23,393 21,208 18,181 12,365
$2.83 $2.46 $2.21 $2.28 $ 1.68
$1.72 $1.68 $ 1.60 $ 1.60 $ 1.39
Financial Statistics
INCOME STATISTICS:Return on average common
stock equity—percent .....Mortgage bond interest—times earned ...........Interest charges and
preferred dividends—times earned ...........Average common stock
equity per share ..........PROPERTY, PLANT
AND EQUIPMENT:ElectricGasOther
Total
. ACCUMULATEDDEPRECIATION ............
CAPITALIZATION:Long-term debt
'referred stock.........Common stock equity ...
Total capitalization ..CAPITALIZATION'ATIOS (percent):
Long-term debtPreferred stock .........Common stock equity ...
NOTES PAYABLE:Bank loansCommercial paper ......
Total .
NUMBER OFSTOCKHOLDERS:Common stock ..........Preferred stock ..........
PAYROLL (includingpensions, etc):Charged to operations ...Charged to construction
and other accounts ....Total .... ..........
1981
13.4
2.8
1.9
$22.01
$2,209,278133,15649,278
$2,391,712
$ 490,579
$ 863,398246,812722,709
$ 1,832,919
,47.113.539.4
$ 2,00035,000
$ 37,000
71,4645,932
$ 83,044
44,504
$ 127,548
1980 1979 1978 1977
(Dollars in Thousands)
1976 1971
12.3
2.6
13.4 11.8
2.6 2.5
10.9
2.5
1 1.4
2.6
1.9 2.0 1.8 1.8 1.8 1.8
$21.92 $21.17 $20.82 $20.17 $ 19.96 $ 18.33
$ 1,942,378127,45647,407
$ 1,787,229120,76040,910
$1,659,928117,16840,584
$ 1,520,410114,07638,597
$ 1,353,604111,06236,743
$2,117,241 $ 1,948,899 $ 1,817,680 $1,673,083 $ 1,501,409
$795,04994,56720,818
$910,434
$ 452,464 $ 411,742 $ 376,933 $ 350,014 $ 324,852 $217,597
$ 837,819 $ 780,671191,550 196,287642,217 569,363
$ 721,347176,375533,406
$ 677,961176,463442,950
$ 595,026176,543393,184
~~
$394,79291,957
227,446$ 1,671,586 $ 1,546,321 $ 1,431,128 $ 1,297,374 $ 1,164,753 $714,195
50.111.538.4
50.512.736.8
50.412.337.3
52.313.634.1
51.115.133.8
55.312.931.8
$ 74,500 $ — $6,800 25,500 35,300
$ 81,300 $ 25,500 $ 35,300
$ 21,00059,500
$ 80,500
$ 15,000 $'40,500 4 000
$ 55,500 $ 4,000
70,7376,083
67,0146,308
64,5796,503
51,5806,544
45,1466,591
25,0333,605
$ 73,442 $ 66,611 $ 58,186 $ 55,639 $ 51,175 $ 28,594
43,046 41,664 40,179 37,518 34,419 18,176
$ 116,488 $ 108,275 $ 98,365 $ 93,157 $ 85,594 $ 46,770
Number of employeesend of year ......... 4,307 4,310 4,200 4,215 4,202 4,170 3,785
32
Electric Sales Statistics1
1981 1980 1979 1978 1977 1976 1971
Kwh Sales (millions):Residential .
CommercialIndustrial .
Public authoritiesOther electric utilities
Total .
4,4292,5162,8451,218
8
11,016
4,3252,4852,7691,163
16
4,3292,4552,8431,152
10
4,2972,4382,6321,125
23
4,2032,3702,5151,123
27
10,758 10,789 10,515 10,238
4,0932,3222,3691,112
25
9,922
3,1251,7002,045
8811,296
9,047
Operating Revenues (thousands):Residential .
CommercialIndustrialPublic authoritiesOther electric utilities ..............Other operating revenues ..........
Total operating revenues
'Operating Revenues per kwh (cents):- Residential, Commerciali, Industrial
Public authoritiesOther electric utilities .....
Average revenue per kwh ......
$271,335142,643121,61864,113
3019,168
$226,867119,54598,97653,139
4677,508
$215,504111,29294,01349,802
3016,731
$197,024103,19281,33245,679
4386,109
$ 168,04189,89970,00940,776
4475,284
$151,79079,85758,09535,808
4144,906
$ 80,35035,53624,70517,14115,8093,033
6.135.674.275.263.76
5.53
5.254.813.574.572.92
4.71
4.984.533.314.323.01
4.43
4.594.233.094.061.90
4.13
4.003.792.783.631.66
3.66
3.71 2.573.44 2.092.45 1.213.22 1.951.59 1.22
3.33 1.95
$609,178 $506,502 $477,643 $433,774 $374,456 $330,870 $176,574
'Number of Customers (average for year):ResidentialCommercial .
IndustrialOther
Total
599,11758,164
1,3489,684
586,66556,568
1,2909,396
578,98255,725
1,2989,226
571,70155,113
1,2849,042
564,50254,808
1,2798,633
593,32157,174
1,3199,554
513,18751 ~
1921,2177,577
668,313 661,368 653,919 645,231 637,140 629,222 573,173
Annual Average Use (kwh):Residential .
Commercial .
Industrial (thousands) ...
7,39343,257
2,111
7,28943,464
2,099
7,37943,399
2,204
7,42243,751
2,028
7,35243,003
1,959
7,25242,366
1,852
6,08933,208
1,680
'Annual Average Bill:Residential .
Commercial .
Industrial
$ 4532,452
90,221
$ 3822,091
75,039
$ 367 $ 340 $ 294 $ 269 $ 1571,967 1,852 1,631 1,457 694
72,878 62,659 54,524 45,422 20,300
Electric Operating Statistics
1981 1980 1979 1978 1977 1976 1971PRODUCTION DATA:System Capability (megawatts):
Net generating capability:SteamHydroInternal combustion ..........
TotalPurchased —Power Authority ....—Other .............
Total system capability .....Annual Load Factor (percent) .....Coal Burned (thousands of
net tons)Coal Heat Value (Btu per lb.) ......Btu per Kwh Generated (net) ......Kwh Production —net (millions):
. Generated-PurchasedInterchanged
Total
Production Expenses (thousands):Generated
. PurchasedInterchanged (net) .............
Total
Production Costs per Kwh (mills):GeneratedPurchased ~
Total incl. interchange .....ELECTRIC OPERATION AND
MAINTENANCEEXPENSES(thousands):ProductionTransmissionDistributionCustomer accounting .........Customer serviceAdministrative and general
Total .
1,7203811
1,769764242
2,775
64.4
4,86711,60010,701
10,7622,419(923)
12,258
1,7453811
1,794774250
2,818
67.1
4,72411,53710,639
10,4493,127
(1,408)
12,168
1,7343814
1,786680200
2,666
65.2
4,74811,37810,582
10,4302,765
(1,082)
12,113
1,7283814
1,780712100
2,592
63.6
4,43011,14110,744
9,3503,282
(909)
11,723
1,5273814
1,579824100
2,503
62.9
3,72011,05611,145
7,6063,509
201
11,316
1,3773814
1,429848200
2,477
61.0
3,39511,12311,112
7,0464,383
(298)
11 ~ 131
1,3543814
1,406541
1,947
63.8
3,21411,35310,879
6,9203,101
(47)
9,974
$216,80547,140
(40,111)
$ 185„199 $171,079 $148,285 $ 110,44847,202 35,757 37,297 39,670
(49,231) (33,131) - (18,238) 6,929
$ 91,72434,926(1,247)
$45,034'5,486
(193)
20.1519A9
18.26
17.7215.09
15.05
16 4012.93
14.34
15.8611.36
14.27
14.5211.30
13.88
13.027.97
11.27
6.51,4.99
6.05
$223,83411,30832,28713,4493,719
40,129
$ 183,1709,930
30,45511,3793,669
34,423
$173,7058,616
27,30610,4673,137
29,664
$ 167,3448,171
22,6449,4672,887
25,537
$157,0477,612
22,5448,5272,605
22,972
$ 125,4037,058
21,5697,6722,507
20,068
$ 60,3274,356
11,7124,2931,8208,398
$324,726 $273,026 $252,895 $236,050 $221,307 $ 184,277 $ 90,906
$223,834 $ 183,170 $ 173,705 $ 167,344 $ 157,047 $ 125 403 $ 60,327
Gas Department Statistics
Dekatherm (dth) Sales (thousands):ResidentialCommercial .
IndustrialOther
Total
Operating Revenues (thousands):Residential .
Commercial .
IndustrialOther
Total operating revenues .........Operating Revenues per dth:
Residential .
Commercial .
Industrial .
Other
Average revenue per dth .........Number of Customers (average for year):
Residential with house heatingResidential without house heating ......
'$ Commercial with space heatingCommercial without space heating .....Industrial ..Other
Total .
Annual Average Use (dth):ResidentialCommercialIndustrial
Annual Average Bill:ResidentialCommercialIndustrial
Cost of Natural Gas Purchased:Amount (thousands)Perdth .
Gas Operation and MaintenanceExpenses (thousands):ProductionTransmission and distributionCustomer accountingCustomer serviceAdministrative and general .....
Total
1981
16,4128,044
11,5093,991
39,956
$ 71,39930,98940,07715,896
$ 158,361
$ 4.353.853.483.98
$ 3.96
102,3869,910
13,5401,080
3951,144
128,455
146550
29,137
$ 6362,120
101,461
$ 112,1762,82
$ 112,4108,2492,975
8717,476
$131,981
1980 1979 1978 1977 1976 1971
16,4827,9379,8833,356
17,3128,1509,3363,600
18,3868,6548,6513,638
18,373 19,9588,408 9,4847,968 9,2433,132 3,808
20,7819,600
12,2703,420
37,658 38,398 39,329 37,881 42,493 46,071
$ 66,33328,69831„73012,051
$ 54,19622,89423,46110,017
$ 50,64220,90818,2528,595
$ 44,895 $ 40,38718,236 16,85015,205 13,6686,660 6,492
$ 23,6379,2568,4953,\00
$ 138,812 $ 110,568 $ 98,397 $ 84,996 $ 77,397 $ 44.488
99,96911,11712,909
1,108383
1 ~ 174
98,04411,91712,714
1,198365
1,163
97,46912,12412,752
1,233371
1,185
97,08212,63012,809
1,234380
1,241
97,49612,81212,985
1,266384
1,142
92,02115,73T13,146
1,379417
1,130
126,660 125,401 125,134 125,376 126,085 123,830
148566
25,804
$ 5972,047
82,846
157586
25,578
$ 4931,646
64,277
168619
23,321
$ 4621,495
49,197
167599
20,968
$ 4091,300
40,013
181665
24,070
$ 3661,182
35,594
193661
29,424
$ 219637
20,366
$ 100,8952.59
$ 74,5421.94
$ 63,896 $ 56,284 $ 47,944 $ 26,4551.62 1.50 1.11 .58
$ 101,1747,6082,589
7496,121
$ 74,8047,1772,158
6465,424
$ 64,0896,7751,988
4794,952
$ 56,9236,4691,812
4804,326
$ 48,2105,9391,705
3213,681
$ 26,4903,0181,024
1792,205
$118,241 $ 90,209 $ 78,283 $ 70,010 $ 59,856 $ 32,916
$ 4.02 $ 3.13 $ 2.75 $ 2.44 $ 2.02 $ 1.14-
3.62 2.81 2.42 2.17 1.78 .963.21 2.51 2.11 1.91 1.48 .693.59 2.78 2.36 2.13 1.70 .91
$ 3.69 $ 2.88 $ 2.50 $ 2.24 $ 1.82 $ .97
DirectorsCharles F. KennedyChairman and Chief ExecutiveOfficer of the Company
Wells P. Allen, Jr.President and Chief OperatingOfficer of the Company
Roy S. ArrandaleRetired Senior Vice President,Research and Engineering,Thatcher Glass ManufacturingCo. ~ Elmira, N.Y.
Alison P. CasarettDean, The Graduate School,Cornell University. Ithaca. N,Y.
Everett A. GilmourChairman and President.The National Bankand Trust Company of Norviich,Norwich, N.Y.
Howard W. GunlockeFormer President, GunlockeChair Company,Wayland, N.Y.
Legare R. HolePresident, Columbian Rope Company,Auburn, N.Y.
Alexander HorwitzDirector of various corporationsBinghamton, N.Y.
William A. LyonsChairman of the Executiveand Finance Committeeof the Company
Alton G. MarshallPresident. Alton G,Marshall Associates, Inc.New York, N.Y.
David R. NewcombPresident.Buffalo Forge Company,Buffalo. N.Y.
C. William StuartFormer Chairman of the Board,C.H. Stuart, Inc,.Newark, N.Y.
Charles A. WindingDirector of variouscorporations, Elmira, N.Y.
Directors EmeritusSheldon H. CloseAttorney. Oneonta, N.Y.
Edgar W. CouperFormer Chancellor, New YorkState Board of Regents,Binghamton, N.Y.
Charles F. KennedyChairman andChief Executive Officer
Wells P. Allen, Jr.President andChief Operating Officer
Dolores R. Hix*Richard KrobothAssistants to the Chairman
E. Eugene ForrestSenior Vice PresidentAdministration
Robert B. MacKenzieSenior Vice PresidentEngineering and Operations
James A. AckermanVice PresidentArea Administration
Francis X. CarneyVice PresidentResearch and Development
Orlin W. DarrachVice PresidentCustomer Services
Allen E. KintighVice PresidentGeneration
Raymond A. PerineVice PresidentGas Operations
Bernard M. RiderVice PresidentElectrical Engineeringand Planning
Jack H. RoskozVice PresidentElectric Operations
Michael J. TurkovicVice PresidentPurchasing
William P. WalkerVice PresidentPersonnel
Michael J. RayAssistant Vice PresidentProject Engineering andConstruction
Vincent W. RiderAssistant Vice PresidentOperations and GenerationServices
Lynn L. SweetlandAssistant Vice PresidentIndustrial Development
'Also Assistant Secretary
Ithaca Executive OfficesRoute 13, Dryden Road, Ithaca, N.K 14850Tel. 607/347-4131
L. Theodore EverettSenior Vice PresidentCorporate
Eugene P. WatersSenior Vice Presidentand Treasurer
Jaime S. HechtSecretary
Richard A. JacobsonComptroller
Richard W. PageAssistant Vice PresidentComputer Services
John D. ScottAssistant Vice PresidentEconomics
Richard P. FaganAssistant Comptrotler
Matthew F. Felo, Jr.Assistant Treasurer
James M. NieferAssistant Secretary
General Counsel:Huber Lawrence & Abell99 Park Avenue, New York, N.Y. 10016
Transfer Agent for Preferred Stock:Chemical Bank55 Water Street, New York, N.Y. 10041
OfficersBinghamton Executive Offices4500 Vestal Parkway East, Binghamton, N.Y. 13902Tel. 607/729-2551
Stockholder Records: Communicationsregarding stock transfer requirement'sor lost certificates should be directed tothe transfer agent. Changes of addressmay be sent to the Secretary. Inquirieson dividends and dividend reinvestmentshould be directed to Shareholder Ser-vices.
The Company files an annual reporton Form 10-K with the Securities andExchange Commission. Stockholdersmay obtain a free copy of this reportfrom the Secretary upon request.
Securities Listed on the New YorkStock Exchange:
Common Stock3.75/o Preferred Stock8.80'/o Preferred Stock8.48/o Preferred Stock ($25 Par VaIue)
15/o Preferred Stock ($25 Par Value)10.60/o First Mortgage Bonds due 1982
7s/e/o First Mortgage Bonds due 20019s/e'/o First Mortgage Bonds due 20059s/e'/o First Mortgage Bonds due 20068s/e/o First Mortgage Bonds due 2007
Transfer Agent for Common Stock:Manufacturers Hanover Trust Company4 New York Plaza, New York, N.Y. 10015
ervice Area
T e service territory covers 17,000s uare miles, has a populationo 1,800,000 and is largelys burban and rural in nature. It in-c udes 13 relatively-small cities,t e largest of which is Binghamton
ith a population of 56,000.mong major customers are 20olleges and universities.ndustry is well-diversified withigh-technology firms predominat-
ng. Economic growth hasgenerally paralleled that of thenation.
o"yr
PLATTSBURGHI-2:O
Somerset
TONO
~KBPEWST R 8
SLONG ISLAND
NEW YORK CITY
PENNSYLVANIA
g To HOMER CITY
~ DISTRICT OFFICES
(under construction) LAKE ONTARIO
I
I.P+ LOCKPORT 0 CHESTER SYRACUSE0
BUFFALO~ .LANCASTER I ~
MECHANICVILLE
LAKE ERIE GENE A g L ALBANY0
o ONEOOll AITHACA
HORN LL~
~ ELIIIRA I5E BINGHAM
Homer City Generating Station, locatedin western Pennsylvania, is lointly-owned with Pennsylvania ElectricCompany. It provides a little over halfof NYSEG's generating capacity.
M Electric
I Gas~ Electric & Gas
Major Generating StationsAll coal-fired(Kilowatts)
1. Homer City2. Milliken3. Greenidge4. Goudey5. Hickling6. Jennison
Total 1,720,000
37
New York State Electric & Gas CorporationBox 287, Ithaca, New York 14850
BULK RATEU.S. POSTAGE PAID
New York StateElectric 8 Gas
Corporation
Address Correction Requested ~ Return Postage Guaranteed