<PAGE 1>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to
____________
Commission file number 1-2255
VIRGINIA ELECTRIC AND POWER COMPANY
(Exact name of registrant as specified in its charter)
VIRGINIA 54-0418825
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
One James River Plaza, Richmond, Virginia 23219 - 3932
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (804) 771-3000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes x No
At October 31, 1995, 171,484 shares of common stock, without par
value, of the registrant were outstanding.<PAGE>
<PAGE 2>
VIRGINIA ELECTRIC AND POWER COMPANY
INDEX
Page
Number
PART I. Financial Information
Item 1. Financial Statements
Statements of Income - Three and Nine Months 3
Ended September 30, 1995 and 1994
Balance Sheets - September 30, 1995 4-5
and December 31, 1994
Statements of Cash Flows - Nine Months Ended 6
September 30, 1995 and 1994
Notes to Financial Statements 7-10
Item 2. Management's Discussion and Analysis of 11-17
Financial Condition and Results of
Operations
PART II. Other Information
Item 1. Legal Proceedings 18
Item 5. Other Information 18
The Company 18
Rates 18-19
Competition 19
Sources of Power 19
Item 6. Exhibits and Reports on Form 8-K 20-22
<PAGE>
<PAGE 3>
VIRGINIA ELECTRIC AND POWER COMPANY
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<S>
Three Months Ended Nine
Months Ended
September 30,
September 30,
1995 1994 1995
1994
(Millions)
<C> <C> <C>
<C>
Operating revenues $1,276.6 $1,151.2 $3,324.0
$3,243.5
Operating expenses:
Operation:
Fuel, net 289.3 254.1 769.8
743.5
Purchased power capacity,
net 187.5 176.5 518.2
507.0
Other 127.9 143.3 398.9
403.4
Maintenance 62.1 62.2 202.6
203.3
Restructuring 30.6 36.6
Depreciation and amortization 117.1 112.4 349.1
334.9
Amortization of terminated
construction project costs 8.6 8.6 25.8
25.8
Taxes - Income 108.0 86.1 203.1
204.3
- Other 66.4 67.0 192.3
198.1
Total 997.5 910.2 2,696.4
2,620.3
Operating income 279.1 241.0 627.6
623.2
Other income 3.1 1.3 7.6
6.4
Income before interest charges 282.2 242.3 635.2
629.6
Interest charges:
Interest on long-term debt 76.5 72.9 227.8
217.0
Other 4.5 4.4 15.8
13.8
Allowance for borrowed funds used
during construction (1.2) (0.9) (3.8)
(2.6)
Total 79.8 76.4 239.8
228.2
Distributions - preferred
securities of subsidiary trust,
net 0.6 0.6
Net income 201.8 165.9 394.8
401.4
Preferred dividends 11.5 10.7 34.9
31.0
Balance available for Common
Stock $ 190.3 $ 155.2 $ 359.9
$ 370.4
</TABLE>
_____________
The accompanying notes are an integral part of the financial
statements.<PAGE>
<PAGE 4>
VIRGINIA ELECTRIC AND POWER COMPANY
BALANCE SHEETS
ASSETS
(Unaudited)
September 30, December 31,
1995 1994
(Millions)
(*)
Utility plant (includes $787.6
plant under construction in 1995
and $828.2 in 1994) $14,207.8 $13,896.6
Less accumulated depreciation 4,723.3 4,426.9
9,484.5 9,469.7
Nuclear fuel, net 141.2 153.7
Net utility plant 9,625.7 9,623.4
Investments:
Nuclear decommissioning trust funds 325.2 260.9
Pollution control project funds 15.2 20.3
Other 21.0 21.1
Total investments 361.4 302.3
Current assets:
Cash and cash equivalents 203.9 28.8
Customer accounts receivable, net 378.2 202.7
Accrued unbilled revenues 118.9 97.4
Materials and supplies:
Plant and general 190.6 186.7
Fossil fuel 75.1 122.9
Other 104.0 104.9
Total current assets 1,070.7 743.4
Deferred debits and other assets:
Regulatory assets 830.5 871.0
Unamortized debt issuance costs 26.2 22.8
Other 85.9 85.0
Total deferred debits and
other assets 942.6 978.8
Total assets $12,000.4 $11,647.9
________________
The accompanying notes are an integral part of the financial
statements.
(*) The balance sheet at December 31, 1994 has been taken from
the audited financial statements at that date.<PAGE>
<PAGE 5>
VIRGINIA ELECTRIC AND POWER COMPANY
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
(Unaudited)
September 30, December 31,
1995 1994
(Millions)
(*)
Long-term debt $ 3,936.4 $ 3,910.4
Company obligated mandatorily
redeemable preferred securities
of subsidiary trust (**) 135.0
Preferred stock subject to
mandatory redemption 180.0 221.7
Preferred stock not subject to
mandatory redemption 509.0 594.0
Common stockholder's equity:
Common Stock 2,737.4 2,737.4
Other paid-in capital 20.4 20.4
Earnings reinvested in business 1,342.3 1,277.8
Total common stockholder's
equity 4,100.1 4,035.6
Current liabilities:
Securities due within one year 404.6 312.2
Accounts payable, trade 300.0 318.3
Taxes accrued 145.2 1.9
Interest accrued 96.4 96.2
Other 234.2 220.5
Total current liabilities 1,180.4 949.1
Deferred credits and other
liabilities:
Accumulated deferred income taxes 1,491.7 1,466.7
Deferred investment tax credits 276.5 289.2
Deferred fuel expenses 54.9 51.5
Other 136.4 129.7
Total deferred credits and
other liabilities 1,959.5 1,937.1
Total liabilities and shareholders'
equity $12,000.4 $11,647.9
________________
The accompanying notes are an integral part of the financial
statements.
(*) The balance sheet at December 31, 1994 has been taken from
the audited financial statements at that date.
(**) As described in Note (c) to FINANCIAL STATEMENTS, the 8.05%
Junior Subordinated Notes totaling $139.2 million principal
amount constitute 100% of the Trust s assets.
<PAGE>
<PAGE 6> VIRGINIA ELECTRIC AND POWER COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<S> Nine Months Ended
September 30,
1995
1994
(Millions)
<C>
<C>
Cash flow from operating activities:
Net income $ 394.8 $
401.4
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 435.6
411.5
Allowance for other funds used
during construction (5.4)
(3.9)
Deferred income taxes 21.9
58.0
Deferred investment tax credits, net (12.7)
(12.7)
Noncash return on terminated construction
project costs - pretax (6.5)
(7.9)
Deferred fuel expenses 3.4
(29.0)
Deferred capacity expenses 10.1
42.4
Restructuring 27.0
Changes in:
Accounts receivable (103.8)
7.4
Accrued unbilled revenues 16.9
25.1
Materials and supplies 43.8
2.4
Accounts payable, trade (19.1)
2.2
Accrued expenses 141.5
60.5
Provision for rate refunds (12.2)
(97.7)
Other 28.1
0.8
Net cash flow from operating activities 963.4
860.5
Cash flow from (to) financing activities:
Issuance of long-term debt 240.0
264.0
Issuance of preferred securities of
subsidiary trust 135.0
Issuance of short-term debt 12.1
Repayment of long-term debt and
preferred stock (246.6)
(202.0)
Common Stock dividend payments (295.4)
(295.0)
Preferred stock dividend payments (34.9)
(31.1)
Other (9.0)
(4.3)
Net cash flow from (to) financing activities (210.9)
(256.3)
Cash flow from (used in) investing activities:
Utility plant expenditures (excluding
AFC-other funds) (394.0)
(387.3)
Nuclear fuel (excluding AFC-other funds) (46.0)
(52.1)
Nuclear decommissioning contributions (19.5)
(18.3)
Pollution control project funds 5.1
5.2
Sale of accounts receivable (110.0)
(130.0)
Other (13.0)
(12.2)
Net cash flow (used in) investing activities (577.4)
(594.7)
Increase (decrease) in cash and cash equivalents 175.1
9.5
Cash and cash equivalents at beginning of period 28.8
21.6
Cash and cash equivalents at end of period $ 203.9 $
31.1
Cash paid during the period for:
Interest (reduced for the net cost of
borrowed funds capitalized as AFC) $ 241.1 $
236.0
Income taxes 90.4
115.7
________________
The accompanying notes are an integral part of the financial
statements.
/TABLE
<PAGE>
<PAGE 7>
VIRGINIA ELECTRIC AND POWER COMPANY
NOTES TO FINANCIAL STATEMENTS
(a) In the opinion of the management of Virginia Electric and
Power Company the accompanying unaudited financial statements
contain all adjustments, consisting of only normal recurring
accruals, necessary to present fairly the financial position as
of September 30, 1995, the results of operations for the three
and nine month periods ended September 30, 1995 and 1994, and the
cash flows for the nine-month periods ended September 30, 1995
and 1994. Certain amounts in the 1994 financial statements have
been reclassified to conform to the 1995 presentation.
The results of operations for the interim period are not
necessarily indicative of the results to be expected for the full
year.
The financial statements include the accounts of the Company
and its subsidiaries, with all significant intercompany
transactions and accounts being eliminated on consolidation.
These financial statements should be read in conjunction with
the financial statements, and notes thereto, included in the
Company's Annual Report on Form 10-K for the year ended December
31, 1994.
(b) Contingencies
Nuclear Insurance
The Price-Anderson Act limits the total public liability of
owners of nuclear power plants to $8.9 billion for a single
nuclear incident. The Company is a member of certain insurance
programs that provide coverage for property damage to members'
nuclear generating plants, replacement power and liability in the
event of a nuclear incident. The Company may be subject to
retrospective premiums in the event of major incidents at nuclear
units owned by covered utilities (including the Company). For
additional information, see Note C to FINANCIAL STATEMENTS
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1994.
(c) Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trust
In the third quarter 1995, the Company established Virginia
Power Capital Trust I (VP Capital Trust). VP Capital Trust sold
5,400,000 shares of Preferred Securities for $135.0 million,
representing preferred beneficial interests and 97% beneficial
ownership in the assets held by VP Capital Trust.
<PAGE>
<PAGE 8>
VIRGINIA ELECTRIC AND POWER COMPANY
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
Virginia Power issued $139.2 million of its 1995 Series A,
8.05% Junior Subordinated Notes (the Notes) in exchange for the
$135.0 million realized from the sale of the Preferred Securities
and $4.2 million of common securities of VP Capital Trust. The
common securities represent the remaining 3% beneficial ownership
interest in the assets held by VP Capital Trust. The Notes
constitute 100% of VP Capital Trust's assets.
The Notes are due September 30, 2025, but may be extended up
to an additional ten years, subject to satisfying certain
conditions. However, the Company may redeem the Notes on or after
September 30, 2000, under certain circumstances. The Preferred
Securities are subject to mandatory redemption upon repayment of
the Notes at maturity or earlier redemption. At redemption, each
Preferred Security shall be entitled to receive a liquidation
amount of $25 plus accrued and unpaid distributions, including
any interest thereon.
(d) Preferred Stock
As of September 30, 1995, there were 2,217,319 and 5,940,140
issued and outstanding shares of preferred stock subject to
mandatory redemption and preferred stock not subject to mandatory
redemption, respectively. There are a total of 10,000,000
authorized shares of the Company's preferred stock.
(e) Restructuring Charges
In March 1995, the Company announced the implementation phase
of its Vision 2000 program. During this phase, the Company began
reviewing operations with the objective of outsourcing services
where economical and appropriate and re-engineering the remaining
functions to streamline operations. The re-engineering process is
resulting in decentralization, reorganization and downsizing for
portions of the Company's operations. As part of this process,
the Company is reevaluating its utilization of capital resources
in the operations of the Company to identify further
opportunities for operational efficiencies through outsourcing or
re-engineering of its processes.
<PAGE>
<PAGE 9>
VIRGINIA ELECTRIC AND POWER COMPANY
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
In May 1995, the Company established a comprehensive
involuntary severance package for salaried employees who lose
their positions as a result of these initiatives. The Company is
recognizing the cost associated with employee terminations in
accordance with Emerging Issues Task Force Consensus No. 94-3 as
management identifies the positions to be eliminated. Severance
payments will be made over a period not to exceed twenty months.
As of September 30, 1995, management had decided to eliminate 486
positions, for which a liability of $29.6 million has been
recorded. The recognition of severance costs resulted in a charge
to operations in the second and third quarter of $.7 million and
$28.9 million, respectively. At September 30, 1995, 256 employees
have been terminated and severance payments totaling $2.6 million
have been paid. The Company estimates that these staffing
reductions will result in annual savings, net of outsourcing
costs, in the range of $20 million to $25 million. These savings
will be reflected in lower construction expenditures as well as
lower operation and maintenance expenses.
As part of the restructuring, the Company is evaluating its
long-term purchased power contracts and negotiating modifications
to their terms, including cancellations, where it is determined
to be economically advantageous to do so. The Company also
negotiated settlements with several other parties to terminate
their rights to sell power to the Company. During the first and
second quarter of 1995, the cost of contract cancellations and
negotiated settlements was $3 million. Based on contract terms
and estimated quantities of power that would have otherwise been
delivered, the cancellation of these contracts and rights to sell
power to the Company has the effect of reducing the Company's
future purchased power costs, including energy payments, by up to
$19 million annually.
Restructuring charges of $30.6 million and $36.6 million for
the three months and nine months, respectively, ended September
30, 1995, included severance costs, purchase power contract
cancellation and negotiated settlement costs, consultant fees and
other costs incurred directly as a result of the Vision 2000
initiatives. The Vision 2000 review of operations is ongoing. At
this time, Company management cannot estimate the restructuring
costs yet to be incurred.
<PAGE>
<PAGE 10>
VIRGINIA ELECTRIC AND POWER COMPANY
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
(f) Rates
Virginia
On September 19, 1995, Virginia Power filed an application to
revise its annual fuel factor. The Company proposed that the
present fuel factor be decreased by $97.1 million. The Staff of
the Virginia Commission proposed certain adjustments, which
Virginia Power did not oppose, resulting in a recommended
reduction of $107.3 million. A hearing was completed on October
30, 1995, and on October 31, 1995 the Virginia Commission
approved the reduction of $107.3 million, effective November 1,
1995.
North Carolina
The Company filed an application with the North Carolina
Commission on September 15, 1995, for a $1.3 million annual
increase in fuel rates. A hearing is scheduled for November 21,
1995.<PAGE>
<PAGE 11>
VIRGINIA ELECTRIC AND POWER COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
As detailed in the Statements of Cash Flows, cash flow from
operating activities for the nine month period ended September
30, 1995 increased $102.9 million, as compared to the nine month
period ended September 30, 1994, primarily as a result of normal
operations.
Cash from (to) financing activities was as follows:
Nine Months Ended September 30,
1995 1994
(Millions)
Mortgage bonds $ 200.0 $ 164.0
Preferred securities of
subsidiary trust 135.0
Medium-term notes 40.0 100.0
Repayment of long-term debt
and preferred stock (246.6) (202.0)
Dividend payments (330.3) (326.1)
Other (9.0) 7.8
Total $(210.9) $(256.3)
Financing activities for the first nine months of 1995
resulted in a net cash outflow of $210.9 million. In the first
quarter of 1995, the Company sold $200 million of First and
Refunding Mortgage Bonds (Bonds) with an annual stated interest
rate of 8.25%, the proceeds of which were used primarily to
replace first quarter mandatory debt maturities totaling $185
million ($180 million of Bonds and $5 million of Medium-Term
Notes).
In the second quarter of 1995, the Company sold $40 million of
Medium-Term Notes with an annual stated interest rate of 6.35%,
the proceeds of which were used to meet a portion of the
Company's capital requirements. Also during the quarter, the
Company retired, through mandatory debt maturities, $56.6 million
of Bonds and $5 million of Medium-Term Notes.
The proceeds from the Sale of Preferred Securities (see Note
(c) to FINANCIAL STATEMENTS) were invested on a short-term basis
and then on October 2, 1995 were used to redeem 450,000 shares of
the Company's $7.20 Dividend Preferred Stock, 417,319 shares of
the $7.30 Dividend Preferred Stock, and 400,000 shares of the
$7.45 Dividend Preferred Stock and for other capital
requirements.
<PAGE>
<PAGE 12>
VIRGINIA ELECTRIC AND POWER COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
During the second quarter of 1995, the Company filed two
shelf registration statements with the Securities and Exchange
Commission, one for $500 million of First and Refunding Mortgage
Bonds and the other for $200 million of Medium-Term Notes, Series
F, which combine to provide the Company with $700 million in
unused capital resources. The Company intends to issue
securities from time to time to meet capital requirements.
Additionally, a total of $300 million under the Company's
commercial paper program may be outstanding at any point in time.
The commercial paper program is supported by a $300 million
revolving credit facility which replaced the Inter-Company Credit
Agreement with Dominion Resources, Inc. Proceeds from the sale
of commercial paper are primarily used to finance working capital
for operations. As of September 30, 1995, no amount was
outstanding under the program.
Cash from (used in) investing activities was as follows:
Nine Months Ended September 30,
1995 1994
(Millions)
Utility plant expenditures $(394.0) $(387.3)
Nuclear fuel (46.0) (52.1)
Nuclear decommissioning
contributions (19.5) (18.3)
Pollution control project
funds 5.1 5.2
Sale of accounts receivable (110.0) (130.0)
Other (13.0) (12.2)
Total $(577.4) $(594.7)
Investing activities for the first nine months of 1995
resulted in a net cash outflow of $577.4 million primarily due to
$394.0 million of construction expenditures and $46.0 million of
nuclear fuel expenditures. Of the construction expenditures,
approximately $224.5 million was spent on transmission and
distribution projects, $113.7 million on power production
projects, and $29.3 million on new generating facilities.
<PAGE>
<PAGE 13>
VIRGINIA ELECTRIC AND POWER COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
Clover Unit 1, a pulverized coal-fired unit that is part of a
two-unit facility jointly owned with Old Dominion Electric
Cooperative, began commercial operation on October 7, 1995. The
unit is rated at 416 MW (both summer and winter) and the
Company s fifty percent ownership share was completed at an
approximate cost of $288.0 million. The Company s annual
depreciation and operations and maintenance expenses are
estimated to be in the range of $12.0 million to $14.0 million.
Results of Operations
Balance available for Common Stock increased for the three
month period ended September 30, 1995, as compared to the same
period in 1994, primarily as a result of the warmer weather
experienced during the summer of 1995, partially offset by
restructuring costs recognized during the period.
Balance available for Common Stock decreased for the nine
month period ended September 30, 1995, as compared to the same
period in 1994, primarily as a result of restructuring costs
recognized during the period.
Operating Revenues
Operating revenues changed primarily due to the following:
Three Months Ended Nine Months Ended
September 30, September 30,
1995 vs. 1994 1995 vs. 1994
(Millions)
Customer growth $ 19.8 $ 67.1
Weather 57.8 (39.1)
Change in base revenues 10.2 29.5
Fuel cost recovery 2.9 8.8
Other, net 6.0 (2.1)
Total retail 96.7 64.2
Sales for resale 6.4 4.7
Other operating revenues 22.3 11.6
Total revenues $125.4 $ 80.5
<PAGE>
<PAGE 14>
VIRGINIA ELECTRIC AND POWER COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
Customer kilowatt-hour sales changed as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
1995 vs. 1994 1995 vs. 1994
Residential 11.1% (0.4)%
Commercial 6.0 1.3
Industrial 2.1 4.5
Public authorities 4.7 1.7
Total retail sales 7.0 1.2
Resale 24.7 5.4
Total sales 8.8 1.7
The increase in kilowatt-hour retail sales for the three
month period ended September 30, 1995, as compared to the same
period in 1994, reflects the warmer weather experienced during
the summer of 1995. For the quarter ended September 30, 1995, as
compared to the same period in 1994, cooling degree days were
12.9 percent higher.
The increase in kilowatt-hour retail sales for the nine
month period ended September 30, 1995, as compared to the same
period in 1994, is primarily due to increased customer growth and
the warmer weather experienced during the summer of 1995,
partially offset by the milder weather experienced in the first
six months of 1995.
The increase in sales for resale for the three and nine
month periods ended September 30, 1995, as compared to the same
periods in 1994, was primarily due to warmer weather experienced
by other utilities in surrounding regions during the summer of
1995 and increased marketing efforts by the Company.
Fuel, net
Fuel, net increased for the three month period ended
September 30, 1995, as compared to the same period in 1994,
primarily due to increased generation necessitated by higher
sales.
<PAGE>
<PAGE 15>
VIRGINIA ELECTRIC AND POWER COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
Operation - Other and Maintenance
Operation - other and maintenance expenses decreased for the
three month period ended September 30, 1995, as compared to the
same period in 1994, primarily as a result of 1994 payroll and
voluntary separation costs for those employees who elected to
terminate service with the Company under the 1994 Early
Retirement and Voluntary Separation Programs and a decrease in
the level of nuclear operation and maintenance expenses in 1995,
partially offset by the operation and maintenance expenses
associated with the North Branch Power Station acquired by the
Company in December of 1994.
Operation - other and maintenance expenses decreased for
the nine month period ended September 30, 1995, as compared to
the same period in 1994. Expenses during the 1994 period included
1994 payroll and voluntary separation costs for those employees
who elected to terminate service with the Company under the 1994
Early Retirement and Voluntary Separation Programs, offset in
part by recognition of insurance policyholder distributions.
Expenses during the 1995 period reflected a decrease in payroll
costs in commercial operations due to reduced staffing levels and
weather-related overtime, partially offset by the operation and
maintenance expenses associated with the North Branch Power
Station and increased nuclear outage costs.
Restructuring
As of September 30, 1995, no material savings have been
realized due to recently implemented, 1995 involuntary staffing
reductions. See Note (e) to FINANCIAL STATEMENTS for a discussion
of the Company's restructuring activities under its Vision 2000
program. The Company will incur additional restructuring charges
in the fourth quarter of 1995 and 1996. However, the amount of
restructuring charges yet to be incurred is not known at this
time. Furthermore, because the Company's review of its operations
has not been completed, the amount of savings ultimately to be
realized cannot be estimated at this time. The savings will
ultimately be reflected in lower construction expenditures as
well as lower operation and maintenance expenses.
<PAGE>
<PAGE 16>
VIRGINIA ELECTRIC AND POWER COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
As a regulated utility, Virginia Power provides service to
its customers at rates based on its cost of operations and an
opportunity to earn a return on its shareholder's investment.
From time to time, the Company reviews its cost of providing
regulated services and files such information with certain
regulatory commissions having jurisdiction. The Company or the
regulatory commissions may initiate proceedings to review rates
charged to Company jurisdictional customers. The incurrence of
restructuring charges and the savings resulting therefrom in
subsequent periods are elements of the Company's cost of
operations. Accordingly, Vision 2000 costs and related savings
will be considered in any future review of the Company's overall
regulatory cost of service.
Income Taxes-Operating
Income taxes-operating increased for the three month period
ended September 30, 1995, as compared to the same period in 1994,
primarily as a result of higher income subject to tax.
Regulatory Assets
Under Statement of Financial Accounting Standards (SFAS) No.
71, Accounting for the Effects of Certain Types of Regulation,
certain expenses normally reflected in income are deferred on the
balance sheet as regulatory assets and are recognized in income
as the related amounts are included in rates and recovered from
customers. The incurred costs underlying these regulatory assets
may represent expenditures by the Company or may represent the
recognition of liabilities that ultimately will be settled at
some time in the future. For some of those regulatory assets
representing past expenditures that are not included in the
Company's rate base or used to adjust the Company's capital
structure, the Company is not allowed to earn a return on the
unrecovered balance. Of the $830.5 million of regulatory assets
at September 30, 1995, approximately $132 million represent past
expenditures that are effectively excluded from rate base by the
Virginia State Corporation Commission that has primary
jurisdiction over the Company's rates. However, of that amount
approximately $109 million represent the present value of amounts
to be recovered through future rates for North Anna Unit 3
project termination costs. Those costs are reported pursuant to
SFAS No. 90, Regulated Enterprises - Accounting for Abandonments
and Disallowances of Plant Costs, and thus reflect a reduction in
the actual dollars to be recovered through future rates for the
time value of money. The Company does not earn a return on the
remaining $23 million of regulatory assets, effectively excluded
from rate base, to be recovered over various recovery periods up
to 23 years, depending on the nature of the deferred costs.
<PAGE 17>
VIRGINIA ELECTRIC AND POWER COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
Contingencies
For information on contingencies, see Note (b) to FINANCIAL
STATEMENTS.
Future Issues
Competition
In reference to the plans of the City of Falls Church,
Virginia, to pursue the establishment of a municipal electric
system (for additional information see Part II - Other
Information - Competition) the Company will not experience a
material loss of load, revenues or net income should a municipal
electric system be created.
Accounting Standards
In March 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards (SFAS) No.
121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which must be adopted by the
Company by January 1, 1996. This statement requires the Company
to review long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an
asset may not be recoverable and requires rate-regulated
companies to write-off regulatory assets against earnings
whenever those assets no longer meet the criteria for recognition
of a regulatory asset as defined by SFAS No. 71, Accounting for
the Effects of Certain Types of Regulation. Based on the
Company s current operating environment, adoption of SFAS No. 121
is not expected to have a material impact on the Company s
financial statements.
<PAGE>
<PAGE 18>
VIRGINIA ELECTRIC AND POWER COMPANY
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
In reference to the arbitration between Virginia Power and
Smith Cogeneration of Virginia, Inc., the parties have agreed to
a settlement and on October 24, 1995 the Virginia Commission
dismissed the proceeding.
In reference to the proceeding before the Virginia
Commission into the holding company structure and the
relationship between Dominion Resources and Virginia Power, on
September 29, 1995 Dominion Resources and Virginia Power each
filed its Response to the Final Report of the Commission s Staff
dated April 12, 1995. The Staff is to file its reply by December
15, 1995. As regards the CSX Transportation, Inc. coal
transportation contract, negotiations concluded on August 10,
1995 with the execution of a contract amendment.
In reference to the lawsuit filed against Virginia Power by
Doswell Limited Partnership (Doswell), on September 21, 1995 the
Virginia Supreme Court granted Doswell s appeal and both parties
are preparing briefs for an early 1996 oral argument.
Item 5. Other Information
The Company
The Company s strategic planning initiative, called Vision
2000, has moved into the active implementation phase in many
areas of the company (for additional information on Vision 2000,
see note (e) to Financial Statements and Restructuring under
MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS).
Rates
Virginia
On September 18, 1995 the State Corporation Commission of
Virginia (the Virginia Commission) established a proceeding to
review and consider Commission policy regarding restructuring of
and competition in the electric utility industry. The Commission
stated that it intends to fully consider reliability, continuity
and stability of rates, fairness to all customers, fairness to
investors, and whether truly competitive markets that are in the
public interest can be developed. It directed the Commission s
Staff to investigate the emerging issues in the electric utility
industry and prepare a report of its findings and recommendations
on or before March 29, 1996. All interested parties may file
written comments and requests for oral argument in response to
the Staff Report on or before May 30, 1996.<PAGE>
<PAGE 19>
VIRGINIA ELECTRIC AND POWER COMPANY
PART II. - OTHER INFORMATION
(CONTINUED)
In reference to Virginia Power's 1992 rate case before the
Virginia Commission, on October 2, 1995 the United States Supreme
Court denied the Writ of Certiorari sought by a group of
industrial cogenerators.
For additional information see Rates-Virginia, note (f) to
Financial Statements.
North Carolina
See Rates-North Carolina, note (f) to Financial Statements.
Competition
In reference to Virginia Power s declaratory judgment
proceeding before the Virginia Commission against the City of
Falls Church, Virginia, in which Virginia Power seeks a
declaration that the City s plans to pursue the establishment of
a municipal electric system would be illegal unless approved by
the Commission, pursuant to the Virginia Commission s order of
August 4, 1995, the Commission s Staff filed a memorandum on
August 31, 1995 supporting Virginia Power s Motion for Summary
Judgement. The City did not respond to the Motion.
If the City prevails and forms a municipal electric system,
Mwh sales by customer class will decrease as follows:
Residential 36,000
Commercial 67,000
Industrial 0
Other 5,000
Total 108,000
No other city has communicated to Virginia Power any interest in
forming a municipal electric system.
Sources of Power
On October 7, 1995 Clover Power Station Unit 1 achieved
commercial operation (for additional information, see Liquidity
and Capital Resources under MANAGEMENT S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS).
<PAGE>
<PAGE 20>
VIRGINIA ELECTRIC AND POWER COMPANY
PART II. - OTHER INFORMATION
(CONTINUED)
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3(i) - Restated Articles of Incorporation, as amended, as in
effect on September 12, 1994 (Exhibit 3(i), Form 8-K dated
October 19, 1994, File No. 1-2255, incorporated by
reference).
3(ii) - Bylaws, as amended, as in effect on December 31,
1994 (Exhibit 3(ii), Form 10-K for the fiscal year ended
December 31, 1994, File No. 1-2255, incorporated by
reference).
4(i) - Indenture of Mortgage of the Company, dated November
1, 1935, as supplemented and modified by fifty-eight
Supplemental Indentures, Exhibit 4(ii), Form 10-K for
the fiscal year ended December 31, 1985, File No. 1-2255,
incorporated by reference; Fifty-Ninth Supplemental
Indenture, Exhibit 4(ii), Form 10-Q for the quarter ended
March 31, 1986, File No. 1-2255, incorporated by reference;
Sixtieth Supplemental Indenture, Exhibit 4(ii), Form 10-Q for
the quarter ended September 30, 1986, File No. 1-2255,
incorporated by reference; Sixty-First Supplemental
Indenture, Exhibit 4(ii), Form 10-Q for the quarter ended
June 30, 1987, File No.1-2255, incorporated by reference;
Sixty-Second Supplemental Indenture, Exhibit 4(ii), Form 8-K,
dated November 3, 1987, File No. 1-2255, incorporated by
reference; Sixty-Third Supplemental Indenture, Exhibit 4(i),
Form 8-K, dated June 8, 1988, File No. 1-2255, incorporated
by reference; Sixty-Fourth Supplemental Indenture, Exhibit
4(i), Form 8-K, dated February 8, 1989, File No. 1-2255,
incorporated by reference; Sixty-Fifth Supplemental
Indenture, Exhibit 4(i), Form 8-K, dated June 22, 1989, File
No. 1-2255, incorporated by reference; Sixty-Sixth
Supplemental Indenture, Exhibit 4(i),Form 8-K, dated February
27, 1990, File No. 1-2255, incorporated by reference; Sixty-
Seventh Supplemental Indenture, Exhibit 4(i), Form 8-K, dated
April 2, 1991, File No. 1-2255, incorporated by reference;
Sixty-Eighth Supplemental Indenture, Exhibit 4(i), Sixty-
Ninth Supplemental Indenture, Exhibit 4(ii) and Seventieth
Supplemental Indenture, Exhibit 4(iii), Form 8-K, dated
February 25, 1992, File No. 1-2255, incorporated by
reference; Seventy-First Supplemental Indenture, Exhibit 4(i)
and Seventy-Second Supplemental Indenture, Exhibit 4 (ii),
Form 8-K, dated July 7, 1992, File No. 1-2255, incorporated
by reference; Seventy-Third Supplemental Indenture, Exhibit <PAGE>
<PAGE 20>
VIRGINIA ELECTRIC AND POWER COMPANY
PART II. - OTHER INFORMATION
(CONTINUED)
4(i), Form 8-K, dated August 6, 1992, File No. 1-2255,
incorporated by reference; Seventy-Fourth Supplemental
Indenture, Exhibit 4(i), Form 8-K, dated February 10, 1993,
File No. 1-2255, incorporated by reference; Seventy-Fifth
Supplemental Indenture, Exhibit 4(i), Form 8-K, dated April
6, 1993, File No. 1-2255, incorporated by reference;
Seventy-Sixth Supplemental Indenture, Exhibit 4(i), Form 8-K,
dated April 21, 1993, File No. 1-2255, incorporated by
reference; Seventy-Seventh Supplemental Indenture, Exhibit
4(i), Form 8-K, dated June 8, 1993, File No. 1-2255,
incorporated by reference; Seventy-Eight Supplemental
Indenture, Exhibit 4(i), Form 8-K, dated August 10, 1993,
File No. 1-2255, incorporated by reference; Seventy-Ninth
Supplemental Indenture, Exhibit 4(i), Form 8-K, dated August
10, 1993, File No.1-2255, incorporated by reference,
Eightieth Supplemental Indenture, Exhibit 4(i), Form 8-K,
dated October 12, 1993, File No. 1-2255, incorporated by
reference, Eighty-First Supplemental Indenture, Exhibit
4(iii), Form 10-K for the fiscal year ended December 31,
1993, File No. 1-2255, incorporated by reference; Eighty-
Second Supplemental Indenture, Exhibit 4(i), Form 8-K, dated
January 18, 1994, File No. 1-2255, incorporated by reference,
Eighty-Third Supplement Indenture, Exhibit 4(i), Form 8-K,
dated October 19, 1994, File No. 1-2255, incorporated by
reference and Eighty-Fourth Supplemental Indenture, Exhibit
4(i), Form 8-K dated March 22, 1995, File No. 1-2255,
incorporated by reference.
4(ii) - Indenture, dated April 1, 1985, from Virginia
Electric and Power Company to Crestar Bank (formerly United
Virginia Bank) pursuant to which Medium-Term Notes, Series A
were issued (Exhibit 4(iv), Form 10-K for the fiscal year
ended December 31, 1993, File No. 1-2255, incorporated by
reference).
4(iii) - Indenture, dated as of June 1, 1986, from Virginia
Electric and Power Company to Chemical Bank pursuant to which
Medium-Term Notes, Series B were issued (Exhibit 4(v), Form
10-K for the fiscal year ended December 31, 1993, File No. 1-
2255, incorporated by reference).
4(iv) - Indenture, dated as of April 1, 1988, from Virginia
Electric and Power Company to Chemical Bank, Trustee,
pursuant to which Medium-Term Notes, Series C (Multi-
Currency) were issued as supplemented and modified by a First
Supplemental Indenture, dated as of August 1, 1989, pursuant
to which Medium-Term Notes, Series D (Multi-Currency), Series
E and Series F were issued (Exhibit 4(vi), Form 10-K for the
fiscal year ended December 31, 1993, File No. 1-2255,
incorporated by reference).<PAGE>
<PAGE 21>
VIRGINIA ELECTRIC AND POWER COMPANY
PART II. - OTHER INFORMATION
(CONTINUED)
4(v) - Indenture, dated as of August 1, 1995, from Virginia
Electric and Power Company to Chemical Bank, Trustee, as
supplemented and modified by a First Supplemental Indenture,
dated as of August 1, 1995, pursuant to which the Series A
8.05% Junior Subordinated Notes were issued to fund the
purchase of Virginia Power Capital Trust 1 Common Stock and
Preferred Securities proceeds (Exhibits 4(a) and 4(b),
respectively, Form S-3 Registration Statement No.33-61265 as
filed on July 24, 1995 and amended on August 21, 1995 and
August 22, 1995, incorporated by reference).
10* - Employment Agreement Amendment September 15, 1995
between Virginia Power and James T. Rhodes (Filed herewith)
27 - Financial Data Schedule (filed herewith)
*Indicates management contract or compensatory plan or
arrangement
(b) Reports on Form 8-K:
None
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
VIRGINIA ELECTRIC AND POWER COMPANY
Registrant
November 7, 1995
/S/ R. E. RIGSBY
R. E. Rigsby
Senior Vice President-Finance
and Controller
(Principal Accounting Officer)
<PAGE>
Exhibit 10
AMENDMENT
TO
EMPLOYMENT AGREEMENT
This AMENDMENT (the "September 1995 Amendment") to the
Employment Agreement dated as of April 21, 1995 (the "April 1995
Employment Agreement") between VIRGINIA ELECTRIC AND POWER
COMPANY (the "Company") and JAMES T. RHODES (the "Executive") is
made as of September 15, 1995.
RECITALS:
The Board of Directors of the Company (the "Board of
Directors") recognizes that outstanding management of the Company
is essential to advancing the best interests of the Company, its
shareholders and its subsidiaries. The Board of Directors has
and continues to believe that it is particularly important to
have stable, excellent management. The Board of Directors
believes that the continued services of the Executive are
essential to preserve consistent management of the Company at the
present time. Therefore, the Executive and the Board of
Directors have agreed that the term of employment of the
Executive should be extended under the April 1995 Employment
Agreement until July 31, 1999. To accomplish this, the
Organization and Compensation Committee of the Board of Directors
has recommended, and the Board of Directors has approved, certain
amendments to the April 1995 Employment Agreement. All terms in
this Amendment that are defined in the April 1995 Employment
Agreement have the meaning provided therein, unless otherwise
specified in this Amendment.
NOW, THEREFORE, in consideration of the foregoing, the
parties agree as follows:
1. Section 1 of the April 1995 Employment Agreement is amended by
replacing the phrase "July 31, 1996" with the phrase "July 31,
1999".
3. Section 5(a) is amended by changing the title of the section
to "Completion Benefits" and by replacing the phrase "the Term of
this Agreement, and terminates his employment at the end of the
Term of this Agreement" with the phrase "July 31, 1996."
2. Section 5(a)(i) is amended by replacing the phrase "the
Executive's annual salary during his final year of employment" in
the first sentence with the phrase "the Executive's highest rate
of annual salary in effect at any time during his final year of
employment."
3. Section 5(a)(ii) of the April 1995 Employment Agreement is
amended by replacing the phrase "55%" with the phrase "65%".
<PAGE>
4. Section 5(a)(iv) of the April 1995 Employment Agreement is
amended by replacing the phrase "July 31, 1996" each place it
appears with the phrase "the date of termination of his
employment".
5. Section 5(a)(v) of the April 1995 Employment Agreement is
amended by replacing the phrase "August 1, 1996" with the phrase
"the day following the date of termination of his employment".
6. Sections 5(b) and 5(b)(i) of the April 1995 Employment
Agreement are replaced with the following:
"(b)In addition to the foregoing, if the Executive continues
in the employment of the Company through July 31, 1996, the
Executive will receive upon his termination of employment with
the Company a single lump sum cash payment equal to the present
value of the annual base salary and annual cash incentive awards
(computed as described below) that the Executive is projected to
receive for employment in the period from August 1, 1996 until
April 21, 1997 (i.e., the end of the term of the 1994 Employment
Agreement). The lump sum will be computed as follows:
(i) For purposes of this calculation, the annual base salary
that the Executive is projected to receive for employment from
August 1, 1996 until April 21, 1997 will be calculated at the
highest annual base salary rate in effect for the Executive
during the three-year period ending on July 31, 1996. For
purposes of this calculation, the annual cash incentive awards
that the Executive is projected to receive for employment from
August 1, 1996 until April 21, 1997 will be calculated at a rate
equal to the highest annual cash incentive award paid to the
Executive during the three-year period ending on July 31, 1996.
Salary and bonus that the Executive elected to defer will be
taken into account for purposes of this Agreement without regard
to the deferral."
7. Sections 6(a) and 6(b) of the April 1995 Employment Agreement
are amended to read as follows:
"6.Termination of Employment.
(a) During the Term of this Agreement, the Company may
terminate the Executive's employment only for Cause. During the
Term of this Agreement, the Executive may voluntarily terminate
employment under the circumstances described in clauses (i)-(v)
of this subsection (a). After July 31, 1996, the Executive may
voluntarily terminate employment under the circumstance described
in clause (vi) of this subsection (a). If the Executive's
employment is terminated for Cause on or before July 31, 1996, he
will be entitled only to the benefits described in Section 12.
If the Executive's employment is terminated for Cause after July
31, 1996, or if the Executive voluntarily terminates employment
pursuant to this Section 6(a), the Executive will be entitled to
receive the benefits described in subsection (b) below. Subject
to the provisions of this subsection (a), the Executive may
voluntarily terminate employment after (i) the Executive's base
salary is reduced, (ii) the Executive is not in good faith
considered for incentive awards as described in Section 4(a)(ii),
(iii) the Company fails to provide benefits as required by
Section 4(b), (iv) the Executive's place of employment is
relocated to a location further than 30 miles from Richmond,
Virginia, (v) the Executive's working conditions or management
responsibilities are substantially diminished (other than on
account of the Executive's disability, as defined in Section 7
below), or (vi) the Executive voluntarily terminates employment
on or after August 1, 1996 upon 90 days prior written notice to
the Company. In order for clause (i), (ii), (iii), (iv) or (v)
of this subsection (a) to be effective: (1) the Executive must
give written notice to the Company indicating that the Executive
intends to terminate employment under this subsection (a), (2)
the Executive's voluntary termination under this subsection must
occur within 60 days after an event described in clause (i),
(ii), (iii), (iv) or (v) of the preceding sentence, or within 60
days after the last in a series of such events, and (3) the
Company must have failed to remedy the event described in clause
(i), (ii), (iii), (iv) or (v), as the case may be, within 30 days
after receiving the Executive's written notice. If the Company
remedies the event described in clause (i), (ii), (iii), (iv) or
(v), as the case may be, within 30 days after receiving the
Executive's written notice, the Executive may not terminate
employment under this subsection (a) on account of the event
specified in the Executive's notice.
(b) In accordance with the provisions of Section 6(a) above,
the Executive will be entitled to receive the following benefits
determined as of the date of his termination of employment:
(i) The Executive will receive the benefits described in
Section 5(a)(i), (ii), (iii), (iv), (v) and (vi) above as of the
date of his termination of employment. In addition, the
Executive will receive the single lump sum cash payment described
in Section 5(b) of this Agreement if such payment is not
otherwise payable under the terms of Section 5(b).
(ii) The Executive will be credited with a total of 30
years of service and will be considered to have attained age 60
(if he has not already done so) for purposes of the Company's
retirement plans.
(iii) The Executive will be credited with age and service
credit through the end of the Term of this Agreement for purposes
of computing benefits under the Company's medical and other
welfare benefit plans, and the Company will continue the
Executive's coverage under the Company's welfare benefit plans as
if the Executive remained employed through the end of the Term of
this Agreement. Notwithstanding the foregoing, if the Company
determines that giving such age and service credit or continued
coverage could adversely affect the tax qualification or tax
treatment of a benefit plan, or otherwise have adverse legal
ramifications, the Company may pay the Executive a lump sum cash
amount that reasonably approximates the after-tax value to the
Executive of such age and service credit and continued coverage
through the end of the Term of this Agreement, in lieu of giving
such credit and continued coverage."
<PAGE>
8. The last sentence of Section 6(c) of the April 1995 Employment
Agreement is amended to read as follows:
"If the Executive voluntarily terminates employment prior to
the end of the Term of this Agreement for a reason not described
in subsection (a) above or Section 7 or Section 12
below, this Agreement will immediately terminate, and the
Executive shall be entitled to the payment of the benefits under
Sections 5(a) and 5(b) if the termination occurs after July 31,
1996."
9. The first two sentences of Section 7 of the April 1995
Employment Agreement are deleted and the following new sentences
are added in their place:
"If the Executive becomes disabled (as defined below) during
the Term of this Agreement while he is employed by the Company,
the Executive shall be entitled to receive the benefits described
in Sections 5(a)(i), 5(a)(ii), 5(a)(iii), 5(a)(iv), 5(a)(v),
5(a)(vi), and 6(b)(ii) of this Agreement as of the date on which
he is determined by the Company to be disabled. If the Executive
dies during the Term of this Agreement while he is employed by
the Company, the benefits described in Sections 5(a)(i),
5(a)(ii), 5(a)(iii), 5(a)(iv), 5(a)(v), 5(a)(vi), and 6(b)(ii)
will be provided to the Executive's beneficiary designated under
the terms of the applicable benefit plan. In addition, if the
Executive becomes disabled or dies on or after August 1, 1996, he
or his beneficiary shall be entitled to the benefit described in
Section 5(b)."
10. Section 8 of the April 1995 Employment Agreement is amended
in its entirety to read as follows:
8. Cause. For purposes of this Agreement, the term "Cause"
means (i) material misappropriation with respect to the business
or assets of the Company, (ii) persistent refusal or willful
failure of the Executive materially to perform his duties and
responsibilities to the Company, which continues after the
Executive receives notice of such refusal or failure, (iii)
conviction of a felony involving moral turpitude, or (iv) the use
of drugs or alcohol that interferes materially with the
Executive's performance of his duties. The foregoing acts or
events will constitute "Cause" for purposes of this Agreement
only to the extent that they were committed on or after the date
of the September 1995 Amendment."
<PAGE>
WITNESS the following signatures.
VIRGINIA ELECTRIC AND POWER COMPANY
/S/WILLIAM G. THOMAS
By:________________________
William G. Thomas
Chairman, Organization
and Compensation
Committee
Dated:9/15/95
/S/ J. T. RHODES
James T. Rhodes
Dated:9/15/95
<PAGE>
Exhibit 27
VIRGINIA ELECTRIC AND POWER COMPANY
FINANCIAL DATA SCHEDULE
(Unaudited)
September 30,
1995
(Millions)
Item Number Item Description
1 Total net utility plant $ 9,625.7
2 Other property and investments 361.4
3 Total current assets 1,070.7
4 Total deferred charges 942.6
5 Balancing amount for total assets 0.0
6 Total assets 12,000.4
7 Common stock 2,737.4
8 Capital surplus, paid in 20.4
9 Retained earnings 1,342.3
10 Total common stockholder's equity 4,100.1
11 Preferred stock subject to
mandatory redemption 180.0
12 Preferred stock not subject to
mandatory redemption 509.0
13 Long-term debt, net 3,936.4
14 Short-term notes 0.0
15 Notes payable 0.0
16 Commercial paper 0.5
17 Long-term debt--current portion 277.9
18 Preferred stock--current portion 126.7
19 Obligations under capital leases 0.0
20 Obligations under capital leases
-- Current portion 0.0
21 Balancing amount for capitalization
and liabilities 2,870.3
22 Total capitalization and liabilities 12,000.4
23 Gross operating revenue 3,324.0
24 Federal and state income taxes
expense 203.1
25 Other operating expenses 2,493.3
26 Total operating expenses 2,696.4
27 Operating income (loss) 627.6
28 Other income (loss), net 7.6
29 Income before interest charges 635.2
30 Total interest charges 240.4
31 Net income 394.8
32 Preferred stock dividends 34.9
33 Earnings available for common stock 359.9
34 Common stock dividends 295.4
35 Total annual interest charges on all
bonds N/A
36 Cash flow from operations 963.4
37 Earnings per share--primary N/A
38 Earnings per share--full diluted N/A
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 9,626
<OTHER-PROPERTY-AND-INVEST> 361
<TOTAL-CURRENT-ASSETS> 1,071
<TOTAL-DEFERRED-CHARGES> 943
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 12,000
<COMMON> 2,737
<CAPITAL-SURPLUS-PAID-IN> 20
<RETAINED-EARNINGS> 1,342
<TOTAL-COMMON-STOCKHOLDERS-EQ> 4,100
180
509
<LONG-TERM-DEBT-NET> 3936
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 1
<LONG-TERM-DEBT-CURRENT-PORT> 278
127
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,870
<TOT-CAPITALIZATION-AND-LIAB> 12,000
<GROSS-OPERATING-REVENUE> 3,324
<INCOME-TAX-EXPENSE> 203
<OTHER-OPERATING-EXPENSES> 2,493
<TOTAL-OPERATING-EXPENSES> 2,696
<OPERATING-INCOME-LOSS> 628
<OTHER-INCOME-NET> 8
<INCOME-BEFORE-INTEREST-EXPEN> 635
<TOTAL-INTEREST-EXPENSE> 240
<NET-INCOME> 395
35
<EARNINGS-AVAILABLE-FOR-COMM> 360
<COMMON-STOCK-DIVIDENDS> 295
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 963
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
