<PAGE>
File No. 69-351
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM U-3A-2
STATEMENT BY HOLDING COMPANY CLAIMING EXEMPTION
UNDER RULE U-3A-2 FROM THE PROVISIONS OF
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
To be filed annually prior to March 1
DUKE POWER COMPANY
hereby files (on behalf of itself and all of the members of its consolidated
group as described herein) with the Securities and Exchange Commission, pursuant
to Rule 2, its statement claiming exemption as a holding company from the
provisions of the Public Utility Holding Company Act of 1935, and submits the
following information:
<PAGE>
1. Name, State of organization, location and nature of business of
claimant and every subsidiary thereof, other than any exempt wholesale generator
(EWG) or foreign utility company in which claimant directly or indirectly holds
an interest.
Duke Power Company (the "Claimant"), a North Carolina corporation, is
engaged in the generation, transmission, distribution and sale of electric
energy in the central portion of North Carolina and the western portion of South
Carolina. Its service area, approximately two-thirds of which is located in
North Carolina, covers about 20,000 square miles with an estimated population of
5,100,000 and includes a number of cities, of which the largest are Charlotte,
Greensboro, Winston-Salem and Durham in North Carolina and Greenville and
Spartanburg in South Carolina. During the year ended December 31, 1996, the
Claimant's electric revenues amounted to approximately $4.4 billion, of which
about 70% was derived from North Carolina and 30% from South Carolina. The
Claimant is also engaged in a variety of diversified operations, most of which
are organized in separate subsidiaries. The subsidiaries and diversified
activities of the Claimant are organized into the Associated Enterprises Group.
The Claimant's executive offices are located in the Power Building, 422 South
Church Street, Charlotte, North Carolina 28242. (Reference is made to Form 10-K
Annual Report of the Claimant for the year ended December 31, 1996, to be
incorporated herein by reference for additional information concerning the
business of Claimant.)
2
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The Claimant has the following active direct subsidiaries, all of which
are wholly owned:
1. Nantahala Power and Light Company ("NP&L"), a North Carolina
corporation, is engaged in the business of generating, transmitting and
distributing electric power in western North Carolina.
2. Church Street Capital Corp. ("Church Street"), a Delaware
corporation, serves as a parent company and provides equity funding and credit
enhancement services for the non-electric operating subsidiaries in the
Claimant's system.
The Claimant has the following inactive subsidiaries, all of which are
wholly owned:
1. Eastover Mining Company, a Kentucky corporation
2. Eastover Land Company, a Kentucky corporation
3. Catawba Mfg. & Electric Power Company, a North Carolina
corporation
4. Western Carolina Power Company, a North Carolina corporation
5. Caldwell Power Company, a North Carolina corporation
6. Southern Power Company, a North Carolina corporation
7. Greenville Gas & Electric Light & Power Company, a
South Carolina corporation
8. Wateree Power Company, a South Carolina corporation
3
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9. Western Fuel, Inc., a Wyoming corporation
2. A brief description of the properties of claimant and each of its
subsidiary public utility companies used for the generation, transmission and
distribution of electric energy for sale, or for the production, transmission
and distribution of natural or manufactured gas, indicating the location of
principal generating plants, transmission lines, producing fields, gas
manufacturing plants, and electric and gas distribution facilities, including
all such properties which are outside the State in which the claimant and its
subsidiaries are organized and all transmission or pipelines which deliver or
receive electric energy or gas at the borders of such State.
At December 31, 1996, the Claimant operated three nuclear generating
stations, eight coal-fired stations and twenty hydroelectric stations, all of
which are located in North Carolina or South Carolina.
The following is a list of the major generating stations owned by the
Claimant at December 31, 1996:
<TABLE>
<CAPTION>
Facility Energy Source Net MW
<S> <C> <C>
Oconee Nuclear 2,538
McGuire Nuclear 2,258
Catawba Nuclear 282(1)
Belews Creek Coal 2,240
Marshall Coal 2,090
Allen Coal 1,140
Cliffside Coal 760
Others Coal 1,469
Bad Creek Hydroelectric 1,065
Jocassee Hydroelectric 610
Others Hydroelectric 1,010
Combustion Oil and gas 1,784
turbines
</TABLE>
-------------------
1 Represents the Claimant's 12-1/2 percent ownership share of
the Catawba Nuclear Station.
4
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The Claimant has completed the construction of a combustion turbine
facility in Lincoln County, North Carolina, to provide capacity at periods of
peak demand. The station consists of 16 combustion turbines with a total
generating capacity of 1,200 megawatts. During 1995, twelve units of the Lincoln
Combustion Turbine Station began commercial operation. The last four units began
commercial operation in the first quarter of 1996. The facility is designed to
operate on either natural gas or oil.
In addition to the electric generating plants described above, the
Claimant owned, as of December 31, 1996, approximately 8,300 conductor miles of
transmission lines, including 600 conductor miles of 500 kilovolts, 1,400
conductor miles of 220 kilovolts, 3,400 conductor miles of 100 kilovolts, and
2,900 conductor miles of 13 - 66 kilovolts.
The Claimant also owned, as of December 31, 1996, approximately 74,100
conductor miles of distribution lines, including 47,200 conductor miles of rural
overhead lines, 14,700 conductor miles of urban overhead lines, 6,900 conductor
miles of rural underground lines and 5,300 conductor miles of urban underground
lines.
As of such date, the Claimant's transmission and distribution systems
comprised approximately 1,600 substations with an installed transformer capacity
of approximately 85,200,000 kVA.
NP&L's generation facilities consist of eleven hydroelectric plants
with an aggregate nameplate capacity of approximately 100 MW. Duke Power
supplies all of NP&L's supplemental power needs from Duke Power's Tuckaseegee
Substation near NP&L's Thorpe Plant. NP&L also has an interconnection of 161 kV
with the Tennessee Valley Authority ("TVA") at Santeetlah, North Carolina. The
transmission backbone of the NP&L system is a 161 kV line from Duke Power's
Tuckaseegee Substation to the interconnection with TVA at Santeetlah, with
Nantahala substations at Robbinsville,
5
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Nantahala Plant, Oak Grove, Webster and Thorpe Plant. At these substations,
voltage is stepped down and sent over lower voltage lines to customers.
Reference is made to the map attached hereto as Exhibit D for the
locations of principal generating plants, transmission lines, and distribution
facilities of the Claimant and NP&L. Such map is incorporated herein by
reference.
3. The following information for the last calendar year with respect to
the claimant and each of its subsidiary public utility companies:
(a) Number of kwh. of electric energy sold (at retail or wholesale),
and Mcf. of natural or manufactured gas distributed at retail.
Number of kwh. of electric energy sold (at retail or wholesale):
Company Kwh.
Claimant 70,133,551,000(1) (retail)
6,774,912,000(2) (wholesale)
NP&L 931,990,000(3) (retail)
474,943,000(4) (wholesale)
- --------------
1 Excludes (56,506,000) Kwh for change in electric service
rendered but not yet billed to customers.
2 Excludes 9,868,780,000 Kwh received by the other joint owners of
the Catawba Nuclear Station, which represents delivery of the
other joint owners' energy entitlements. These deliveries are
not reflected as sales by the Claimant. Includes sales to NP&L
of 724,000,000 Kwh.
3 Excludes 66,851,000 Kwh rendered but not yet billed to
customers.
4 Includes sales to Claimant of 298,005,000 Kwh.
Gas Sales (at retail)
Company Mcf.
Claimant None
NP&L None
(b) Number of kwh. of electric energy and Mcf. of natural or
manufactured gas distributed at retail outside the State in which each company
is organized.
6
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Company Kwh.
Claimant 21,422,397,000
NP&L None
Company Mcf.
Claimant None
NP&L None
(c) Number of kwh. of electric energy and Mcf. of natural or
manufactured gas sold at wholesale outside the State in which each such company
is organized, or at the State line.
Company Kwh.
Claimant 2,877,514,000(1)
NP&L 90,893,000(2)
Company Mcf.
Claimant None
NP&L None
------------------
1 Excludes 1,302,215,000 Kwh delivered to the other joint owners
of the Catawba Nuclear Station outside North Carolina associated
with the McGuire reliability exchange agreement.
2 Kwh bought from Claimant and sold to TVA, which is organized
outside North Carolina. However, sales are made at
interconnection points inside North Carolina.
7
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(d) Number of kwh. of electric energy and Mcf. of natural or
manufactured gas purchased outside the State in which each such company is
organized, or at the State line.
Company Kwh.
Claimant 2,467,513,000(1)
NP&L 298,005,000(2)
Company Mcf.
Claimant None
NP&L None
- ------------------
1 Excludes 1,321,224,000 Kwh delivered from the other joint
owners of the Catawba Nuclear Station outside North Carolina
associated with the McGuire reliability exchange agreement.
2 This amount reflects purchases from TVA, which is organized
outside North Carolina. However, such purchases are made at
interconnection points inside North Carolina. All Kwh purchased
from TVA were sold to Claimant.
4. The following information for the reporting period with respect to
claimant and each interest it holds directly or indirectly in an EWG or a
foreign utility company, stating monetary amounts in United States dollars:
(a) Name, location, business address and description of the facilities
used by the EWG or foreign utility company for the generation, transmission and
distribution of electric energy for sale or for the distribution at retail of
natural or manufactured gas.
The Claimant owns indirect equity interests in three foreign utility
companies that directly own electric facilities in Argentina, and one foreign
utility company that directly owns electric facilities in Indonesia. Such
electric facilities are described below:
(1) Central Termica Guemes S.A. ("Guemes")
Location of Ruta 34 KM 1135
Facility: (4430) GRAL.M.M. de Guemes
Salta, Argentina
Business Adolfo Alsina 633, Fifth Floor
Address: 1384 Buenos Aires
Republic of Argentina
8
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Guemes owns the Guemes Power Station, which is comprised of three gas
fired units, two of which have a nameplate capacity of 60 MW each and one of
which has a nameplate capacity of 125 MW.
Guemes sells electric energy and capacity in the "Wholesale Electric
Market" which has been established by statute in Argentina under the
jurisdiction of the Argentine Secretariat of Energy and the National Regulatory
Entity of Electricity. Energy and capacity are sold on a competitive spot market
basis in accordance with dispatch instructions from a central dispatch center
and under term agreements.
(2) Compania de Transporte de Energia
Electrica en Alta Tension
Transener S.A. ("Transener")
Location of Paseo Colon 728
Facility: Buenos Aires, Argentina
Business Av. de Mayo, 645 First Floor
Address: Buenos Aires
Republic of Argentina
Transener holds an exclusive 95-year concession for the transmission of
high tension electric energy in Argentina. The transmission facilities that
Transener owns consist of 6,867 kilometers of 500 kV transmission lines, 284
kilometers of 220 kV transmission lines and 27 transforming substations.
(3) Hidroelectrica Piedra del Aguila S.A.
("Piedra del Aguila")
Location of (8314) VILLA Piedra del Aguila
Facility: Neuquen, Argentina
Business Av. de Mayo, 645 First Floor
Address: Buenos Aires
Republic of Argentina
9
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Piedra del Aguila holds an exclusive 30-year concession for the
generation of hydroelectric energy from the facility located at Piedra del
Aguila in the Provinces of Neuquen and Rio Negro in Argentina. The facility
consists of four 350 MW units. Energy and capacity are sold on a competitive
spot market basis in accordance with dispatch instructions from a central
dispatch center and under term agreements.
(4) P.T. Puncakjaya Power ("PJP")
Location of Irian Jaya region
Facility: of eastern Indonesia
Business Plaza 89, 5th Floor
Address: J1. H.R. Rasuna Said Kav. X-7 No. 6
Jakarta 12940, Indonesia
PJP owns certain facilities consisting of power generation and power
delivery assets located in Irian Jaya, Indonesia. Such facilities provide
electric power to a large mining and milling operation and its surrounding
infrastructure. The generation assets include eight separate power generation
facilities consisting of an aggregate of 66 diesel-fueled generating units
(ranging from .32 MW to 4.7 MW), and one hydroelectric generating facility
consisting of two hydroelectric generating units (approximately 3.15 MW each).
The power plants have a combined adjusted nameplate capacity of approximately
194 MW.
The facilities also include the following transmission assets: a 5
kilometer 115 kV ring bus which interconnects certain of the power production
plants, a 15 kilometer 20 kV transmission line which joins two portions of the
facilities and a 10 kilometer 13 kV transmission line which joins other portions
of the facilities.
10
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(b) Name of each system company that holds an interest in such EWG or
foreign utility company; and description of the interest held.
Set forth below, under the names of the facilities described in Section
4(a) above, are the system companies holding interests therein and the
relationship of such companies to the Claimant. Each of the companies listed
below is a foreign utility company. The interests in foreign utility companies
described in Section 4(a) are all directly or indirectly held by Duke Energy
Group, Inc., a Delaware corporation ("DEG"), which is a wholly owned subsidiary
of Church Street. Church Street is a direct subsidiary of the Claimant.
Reference is made to the organizational charts in Exhibits C-1 through C-4.
(1) Guemes Facility
Central Termica Guemes S.A.
Duke Guemes, Inc.
Powerco S.A.
Powerco Services S.A.
Duke Guemes Operating Corp.
Duke Guemes, Inc., a Delaware corporation ("Duke Guemes"), is a wholly
owned direct subsidiary of DEG. Duke Guemes in turn owns a 25% equity interest
in Powerco S.A., an Argentine corporation headquartered in Buenos Aires
("Powerco"). Powerco owns a 60% equity interest in Guemes. This ownership
results in Duke Guemes owning a 15% indirect equity interest in Guemes. Duke
Guemes also owns 51% of Powerco Services S.A., an Argentine corporation
("Powerco Services"), which provides operating expertise to the Guemes facility,
and is the operator of the Guemes station presently qualified by the Argentine
government. Duke Guemes owns 100% of the outstanding voting stock of Duke Guemes
Operating Corp., a Delaware corporation ("DGOC"), which assists Powerco Services
in operating the Guemes Power Station.
11
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(2) Transener Facilities
Compania de Transporte de Energia
Electrica en Alta Tension
Transener S.A.
Duke Transener, Inc.
Compania Inversora en Transmision
de Electrica Citelec S.A. ("Citelec")
Duke Transener Operating Corp.
Duke Transener, Inc., a Delaware corporation ("Duke Transener"), is a
wholly owned direct subsidiary of DEG. Duke Transener in turn owns a 15% equity
interest in Citelec, an Argentine corporation based in Buenos Aires. Citelec
owns a 65% equity interest in Transener, resulting in Duke Transener holding a
9.75% indirect equity interest in Transener. Duke Transener is an operator of
the Transener facilities presently qualified by the Argentine government. Duke
Transener also owns 100% of the outstanding voting stock of Duke Transener
Operating Corp., a Delaware corporation ("DTOC"). DTOC assists Duke Transener in
operating the Transener facilities.
(3) Piedra del Aguila Facility
Hidroelectrica Piedra del Aguila S.A.
Duke Hidronor, Inc.
Duke Hidronor (Caymans) Ltd.
Hidroneuquen S.A.
Duke Hidronor Operating Corp.
Duke Hidronor, Inc., a Delaware corporation ("Duke Hidronor"), is a
wholly owned direct subsidiary of DEG. Duke Hidronor owns 100% of Duke Hidronor
(Caymans) Ltd. ("DHCL"), which in turn owns a 16.54% equity interest in
Hidroneuquen S.A. ("Hidroneuquen"), an Argentine corporation. Hidroneuquen owns
a 59% equity interest in Piedra del Aguila, resulting in Duke Hidronor
holding a 9.76% indirect equity interest in Piedra del Aguila. Duke Hidronor
also owns 100% of the outstanding voting stock of Duke Hidronor Operating
Corp., a Delaware corporation ("DHOC"). In January 1996,
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DHOC replaced Duke Hidronor as an operator of the Piedra del Aguila facility.
Duke Hidronor continues to be a foreign utility company by virtue of the
ownership interests described herein.
(4) PJP Facilities
P.T. Puncakjaya Power
P.T. Nusantara Power Services ("NPS")
Duke Irian Jaya, Inc.
Thirty percent of the outstanding voting stock of PJP is owned by Duke
Irian Jaya, Inc., a Delaware corporation ("Duke Irian Jaya"), which is a wholly
owned direct subsidiary of DEG. The outstanding voting stock of NPS is 40% owned
by Duke Coal Project Services Pacific, Inc., a Nevada corporation ("DCPSP").
DCPSP is a wholly owned direct subsidiary of Duke Coal Project Services Group,
Inc., a Delaware corporation ("DCPSG"), which is a wholly owned subsidiary of
Church Street. NPS is the operator of the PJP facilities.
13
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(c) Type and amount of capital invested, directly or indirectly, by the
holding company claiming exemption; any direct or indirect guarantee of the
security of the EWG or foreign utility company by the holding company claiming
exemption; and any debt or other financial obligation for which there is
recourse, directly or indirectly, to the holding company claiming exemption or
another system company, other than the EWG or foreign utility company.
(1) Guemes
As of December 31, 1996, DEG had an equity investment of $14,351,000 in
Duke Guemes. Duke Guemes had equity investments of $5,853,000 in Powerco and
$128,000 in Powerco Services, and Powerco had an equity investment of
$30,995,000 in Guemes. Also as of December 31, 1996 Duke Guemes had an
outstanding loan of $2,900,000 to Powerco.
(2) Transener
As of December 31, 1996, DEG had an equity investment of $19,520,000 in
Duke Transener. Duke Transener had an equity investment of $18,571,000 in
Citelec. Citelec had an equity investment of $209,857,000 in Transener.
(3) Piedra del Aguila
As of December 31, 1996, DEG had an equity investment of $47,450,000 in
Duke Hidronor. Duke Hidronor had an equity investment of $47,556,000 in DHCL,
and DHCL had an equity investment of $46,820,000 in Hidroneuquen. Hidroneuquen
had an equity investment of $270,798,000 in Piedra del Aguila. As of December
31, 1996, Duke Hidronor, along with certain other shareholders of Hidroneuquen,
participated in a $30,000,000 standby credit facility for Piedra del Aguila,
of which Duke Hidronor's share was $5,733,000. Church Street guaranteed Duke
Hidronor's share of this facility. The credit facility had no amount
outstanding at December 31, 1996.
14
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(4) PJP
As of December 31, 1996, DEG had an equity investment of $17,586,000 in
Duke Irian Jaya. Duke Irian Jaya had an equity investment of $16,645,000 in PJP.
As of December 31, 1996, DCPSG had an equity investment of $171,000 in
DCPSP. DCPSP had an equity investment of $290,000 in NPS.
(d) Capitalization and earnings of the EWG or foreign utility
company during the reporting period.
See Exhibit A-5 for capitalization and earnings of foreign utility
companies.
(e) Identify any service, sales or construction contract(s) between the
EWG or foreign utility company and a system company, and describe the services
to be rendered or goods sold and fees or revenues under such agreement(s).
During the reporting period, the following service contracts were in
effect:
1. Powerco Services and Guemes are parties to an Operation,
Maintenance and Management Services Agreement under which Powerco
Services provides operation, maintenance and management services
for the Guemes Facility. Guemes reimburses Powerco Services for
its direct costs incurred in providing such services plus an
additional 7% of non-labor direct costs. Guemes also pays Powerco
Services a fixed fee of $15,000 per month (adjusted based on
increases in the GNP Implicit Price Deflator), and a quarterly
variable fee of 6% of Guemes's net quarterly earnings before
interest, principal, taxes and depreciation.
2. Powerco Services and Duke Guemes Operating Corp. are parties to a
Technical Assistance and Staffing Agreement, whereby Duke Guemes
Operating Corp. provides technical assistance and personnel
necessary to allow Powerco Services to carry out its obligations
under the contract described in #1 above. Powerco Services agrees
to pay to Duke Guemes Operating Corp. a fixed fee of $7,650 per
month (adjusted similarly as above), and a quarterly variable fee
equal to 51% of the variable fee described in #1 above.
3. Transener, DTOC and four other entities are parties to a Technical
Assistance Agreement for the Operation, Maintenance and Management
of the Transener
15
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Facilities. DTOC and the other parties provide technical
assistance to Transener in connection with its operation,
maintenance and management of the Transener Facilities. Transener
pays to DTOC and the other parties a fee equal to five percent of
Transener's annual income, distributed pro rata based upon
ownership in Citelec, Transener's direct parent.
4. Piedra del Aguila, DHOC and two other entities are parties to a
Technological Assistance and Transfer of Technology Agreement
whereby DHOC and the other two parties provide technical knowledge
and assistance and transfers of certain technology to Piedra del
Aguila for operation of the Piedra del Aguila Facility. As
compensation under the Agreement, Piedra del Aguila agrees to pay
DHOC and the other parties 1.5% of its annual gross income. The
fee is to be distributed equally among DHOC and the other two
parties providing services under the Agreement.
5. Duke Energy Corp. ("DEC"), a subsidiary of DEG, has entered into a
Services Agreement with Duke Guemes pursuant to which DEC provides
to Duke Guemes administrative, financial and other services, as
requested by Duke Guemes, related to the Guemes Facility. DEC is
reimbursed by Duke Guemes for all reasonable costs incurred in its
performance of such services. DEC has identical agreements with
Duke Transener, Duke Hidronor, Duke Irian Jaya, DGOC, DTOC, DHOC
and DHCL, each agreement relating to the project with which such
company is associated.
6. PJP and DEC are parties to a Project Administrative Services
Agreement, under which DEC provides administrative services to PJP
related to PJP's insurance, credit agreement, accounting and
treasury functions. DEC receives a fee based on its cost of
providing such services, at rates which may be revised from time
to time.
7. PJP and NPS are parties to an Operation, Maintenance and Services
Agreement under which NPS provides operation, maintenance and
management services for the PJP facilities. PJP reimburses NPS for
its direct costs incurred in providing such services, spare parts,
and equipment. PJP also pays NPS a fixed fee of $50,000 per month
(adjusted annually based on changes in the GDP Deflator Ratio),
plus an incentive fee.
8. Duke Engineering & Services, Inc. ("DE&S"), a wholly owned
subsidiary of Church Street, and Piedra del Aguila are parties to
a Master Services Agreement under which DE&S has agreed to furnish
certain engineering and related services which Piedra del Aguila
may request from time to time. Piedra del Aguila has agreed to
reimburse DE&S at agreed-upon hourly rates for labor, DE&S'
commercial rates plus 10% for non-labor charges, and any
additional amounts arising out of Argentine government
requirements.
9. DE&S and Guemes are parties to a Master Services Agreement under
which DE&S has agreed to furnish certain engineering and related
services which Guemes may request
16
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from time to time. Guemes has agreed to reimburse DE&S at
agreed-upon hourly rates for labor, DE&S' actual costs for
non-labor charges, some of which will be increased by 10%, and any
additional amounts arising out of Argentine government
requirements.
17
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The above-named Claimant has caused this statement to be duly executed
on its behalf by its authorized officer on this 27th day of February, 1997.
DUKE POWER COMPANY
By: Ellen T. Ruff
Ellen T. Ruff, Secretary
and Deputy General Counsel
{CORPORATE SEAL}
ATTEST:
Robert T. Lucas III
Name, title and address of officer to whom notices and correspondence concerning
this statement should be addressed:
Ellen T. Ruff
Secretary and Deputy General Counsel
Duke Power Company PB05E
422 South Church Street
Charlotte, North Carolina 28242-0001
18
<PAGE>
EXHIBIT A
A consolidating statement of income and surplus of the Claimant and its
subsidiary companies for the last calendar year, together with a consolidating
balance sheet of the Claimant and its subsidiary companies as of the close of
such calendar year.
Exhibit A-1 - Consolidating Statement of Income of Duke Power Company
for 1996 and Consolidating Balance Sheet of Duke Power
Company as of December 31, 1996.
Exhibit A-2 - Consolidated Statement of Retained Earnings of Duke
Power Company for 1996.
Exhibit A-3 - Statement of Income and Retained Earnings of Nantahala
Power and Light Company for 1996 and Balance Sheet of
Nantahala Power and Light Company as of December 31, 1996.
Exhibit A-4 - Consolidated Statements of Income and Retained Earnings
of Foreign Utility Companies Wholly Owned by Claimant for
1996 and Consolidated Balance Sheets of Foreign Utility
Companies Wholly Owned by Claimant as of December 31, 1996.
Exhibit A-5 - Duke Power Company Capitalization and Earnings of
Foreign Utility Companies as of and for the year ended
December 31, 1996.
<PAGE>
Exhibit A-1
Page 1 of 2
DUKE POWER COMPANY
CONSOLIDATING STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996
(Dollars in Thousands)
(unaudited)
<TABLE>
<CAPTION>
UNCONSOLIDATED ASSOCIATED ELIMINATING CONSOLIDATED
DUKE POWER ENTERPRISES & ADJUSTING DUKE POWER
COMPANY GROUP ENTRIES COMPANY
<S> <C> <C> <C> <C>
REVENUES
Electric revenues ............................. $ 4,396,873 $ 67,668 $ (27,948) $ 4,436,593
Diversified operations ........................ -- 347,526 (26,145) 321,381
Total revenues ............................. 4,396,873 415,194 (54,093) 4,757,974
OPERATING EXPENSES
Fuel used in electric generation .............. 758,498 -- -- 758,498
Net interchange and purchased power ........... 376,616 30,057 (27,949) 378,724
Other operation and maintenance ............... 1,252,490 261,693 (9,155) 1,505,028
Depreciation and amortization ................. 475,865 15,909 411 492,185
General taxes ................................. 251,935 9,225 176 261,336
Total operating expenses ................... 3,115,404 316,884 (36,517) 3,395,771
OPERATING INCOME ................................ 1,281,469 98,310 (17,576) 1,362,203
INTEREST EXPENSE AND OTHER INCOME
Interest expense .............................. (273,325) (11,536) 1,786 (283,075)
AFUDC and other deferred returns .............. 111,441 449 1 111,891
Earnings of subsidiaries ...................... 43,777 -- (43,777) --
Other, net .................................... 9,195 1,564 3,879 14,638
Total interest expense and other income .... (108,912) (9,523) (38,111) (156,546)
INCOME BEFORE INCOME TAXES ...................... 1,172,557 88,787 (55,687) 1,205,657
INCOME TAXES
Current ....................................... 464,281 43,460 (4,409) 503,332
Deferred ...................................... (10,590) (5,821) -- (16,411)
Investment tax credit - amortization of credits (11,100) (130) -- (11,230)
Total income taxes ......................... 442,591 37,509 (4,409) 475,691
NET INCOME ...................................... 729,966 51,278 (51,278) 729,966
Dividends on preferred and preference stock ..... 44,245 -- -- 44,245
EARNINGS FOR COMMON STOCK ....................... $ 685,721 $ 51,278 $ (51,278) $ 685,721
Average common shares outstanding (thousands) ............................................... 203,553
Earnings per share .......................................................................... $ 3.37
Dividends per share ......................................................................... $ 2.08
</TABLE>
<PAGE>
Exhibit A-1
Page 2 of 2
DUKE POWER COMPANY
CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31,1996
(Dollars in Thousands)
(unaudited)
<TABLE>
<CAPTION>
UNCONSOLIDATED ASSOCIATED ELIMINATING CONSOLIDATED
DUKE POWER ENTERPRISES & ADJUSTING DUKE POWER
ASSETS COMPANY GROUP ENTRIES COMPANY
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash ............................................................ $ 12,439 $ 23,185 $ 482 $ 36,106
Short-term investments .......................................... -- 72,712 -- 72,712
Receivables (less allowance for losses:
1996 - $7,134)............................................ $ 668,537 149,849 (108,394) 709,992
Inventory - at average cost ..................................... 259,572 52,742 (10,949) 301,365
Prepayments and other ........................................... 11,700 13,446 (1,215) 23,931
Total current assets ...................................... 952,248 311,934 (120,076) 1,144,106
INVESTMENTS AND OTHER ASSETS
Investments in and advances to subsidiaries ..................... 659,034 -- (659,034) --
Investments in affiliates ....................................... -- 188,982 -- 188,982
Other investments, at cost or less .............................. 26,185 115,753 (27,269) 114,669
Nuclear decommissioning trust funds ............................. 362,627 -- -- 362,627
Pre-funded pension cost ......................................... 80,000 -- -- 80,000
Total investments and other assets ........................ 1,127,846 304,735 (686,303) 746,278
PROPERTY, PLANT AND EQUIPMENT
Electric plant in service (at original cost)
Production .................................................... 7,245,462 32,977 -- 7,278,439
Transmission .................................................. 1,478,887 64,801 -- 1,543,688
Distribution .................................................. 4,214,927 88,958 -- 4,303,885
Other ......................................................... 1,059,968 15,019 (6,645) 1,068,342
Electric plant in service ................................... 13,999,244 201,755 (6,645) 14,194,354
Less accumulated depreciation and amortization .............. 5,356,838 81,660 -- 5,438,498
Electric plant in service, net ............................ 8,642,406 120,095 (6,645) 8,755,856
Nuclear fuel .................................................... 604,813 -- -- 604,813
Less accumulated amortization ................................... 363,290 -- -- 363,290
Nuclear fuel, net ............................................. 241,523 -- -- 241,523
Construction work in progress (including nuclear fuel in process:
1996 - $27,546) .......................................... 373,925 15,073 1 388,999
Total electric plant, net ................................... 9,257,854 135,168 (6,644) 9,386,378
Other property - at cost (less accumulated depreciation:
1996 - $31,544) .......................................... 59,432 403,772 (37,165) 426,039
Total property, plant and equipment, net .................. 9,317,286 538,940 (43,809) 9,812,417
DEFERRED DEBITS
Purchased capacity costs ........................................ 892,000 -- -- 892,000
Debt expense, primarily refinancing costs, being amortized
over the terms of related debt ................................ 169,842 -- -- 169,842
Regulatory asset related to income taxes ........................ 488,936 -- -- 488,936
Regulatory asset related to DOE assessment fee .................. 94,717 -- -- 94,717
Other ........................................................... 110,919 16,380 (5,905) 121,394
Total deferred debits ..................................... 1,756,414 16,380 (5,905) 1,766,889
TOTAL ASSETS ...................................................... $ 13,153,794 $ 1,171,989 $ (856,093) $ 13,469,690
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable ............................................... $ 310,541 $ 68,308 $ (51,534) $ 327,315
Notes payable .................................................. 92,000 13,550 -- 105,550
Taxes accrued .................................................. (14,627) 25,040 (9,440) 973
Interest accrued ............................................... 64,192 398 (1) 64,589
Current maturities of long-term debt ........................... 174,726 37,583 -- 212,309
Other .......................................................... 135,906 22,135 (5,808) 152,233
Total current liabilities ................................ 762,738 167,014 (66,783) 862,969
LONG-TERM DEBT ................................................... 3,389,267 148,847 -- 3,538,114
ACCUMULATED DEFERRED INCOME TAXES ................................ 2,341,676 39,488 (5,152) 2,376,012
DEFERRED CREDITS AND OTHER LIABILITIES
Investment tax credit .......................................... 249,048 1,069 -- 250,117
DOE assessment fee ............................................. 94,717 -- -- 94,717
Nuclear decommissioning costs externally funded ................ 362,627 -- -- 362,627
Other .......................................................... 381,006 31,916 (503) 412,419
Total deferred credits and other liabilities.............. 1,087,398 32,985 (503) 1,119,880
PREFERRED AND PREFERENCE STOCK
Without sinking fund requirements .............................. 450,000 -- -- 450,000
With sinking fund requirements ................................. 234,000 -- -- 234,000
Total preferred and preference stock ..................... 684,000 -- -- 684,000
COMMON STOCKHOLDERS' EQUITY
Common stock, no par ........................................... 1,896,141 10,568 (10,568) 1,896,141
Additional paid in capital ..................................... -- 429,272 (429,272) --
Retained earnings .............................................. 2,992,574 343,816 (343,816) 2,992,574
Less treasury stock at cost, 10 shares ......................... -- 1 (1) --
Total common stockholders' equity ........................ 4,888,715 783,655 (783,655) 4,888,715
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ....................... $ 13,153,794 $ 1,171,989 $ (856,093) $ 13,469,690
</TABLE>
<PAGE>
Exhibit A-2
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
FOR TWELVE MONTHS ENDED DECEMBER 31, 1996
(Dollars in Thousands)
(audited)
BALANCE - December 31, 1995 ............................... $2,858,275
ADD - Net income .......................................... 729,966
Total ......................................... 3,588,241
DEDUCT
Dividends
Common stock .......................................... 423,064
Preferred and preference stock ........................ 44,245
Capital stock transactions, net ......................... 128,358
Total deductions .............................. 595,667
BALANCE - December 31, 1996 ............................... $2,992,574
<PAGE>
Exhibit A-3
Page 1 of 2
NANTAHALA POWER AND LIGHT COMPANY
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
Operating Revenues
Electric revenues $ 67,667,785
Operating Expenses
Purchased power 30,056,992
Other operations 7,790,338
Maintenance 5,820,698
Depreciation 4,872,792
Taxes other than income 4,450,144
Total Electric Expenses 52,990,964
Operating Income 14,676,821
Interest Expense and Other Income
Interest expense (4,933,402)
AFUDC and other deferred returns 449,167
Other, net 3,577
Total Other Income (4,480,658)
Income Before Income Taxes 10,196,163
Income Taxes 3,931,604
Net Income 6,264,559
Retained Earnings-Beginning of Period 54,758,231
Dividends paid (2,422,000)
Retained Earnings-End of Period $ 58,600,790
<PAGE>
Exhibit A-3
Page 2 of 2
NANTAHALA POWER AND LIGHT COMPANY
BALANCE SHEET
AS OF DECEMBER 31, 1996
(UNAUDITED)
Current Assets
Cash $ 88,017
Receivables, net-customers 10,834,650
Receivables-parent 41,795
Materials and supplies 2,897,356
Prepayments 305,155
Total Current Assets 14,166,973
Property, Plant And Equipment
Electric plant in service 201,865,349
Less: accumulated depreciation & amortization 81,659,324
Electric plant in service, net 120,206,025
Construction work in progress 15,073,257
Total Electric Plant, net 135,279,282
Other property 1,180,941
Total Property, Plant and Equipment, Net 136,460,223
Deferred Debits 16,380,470
Total Assets $167,007,666
Current Liabilities
Accounts payable-trade $ 512,095
Accounts payable-parent 3,694,220
Notes payable 8,550,000
Taxes accrued 929,669
Current portion of long-term debt 766,651
Customer deposits 441,821
Deferred purchased power costs 1,306,115
Other accrued liabilities 2,832,103
Total Current Liabilities 19,032,674
Long-Term Debt 67,605,235
Accumulated Deferred Income Tax 7,528,321
Deferred Credits And Other Liabilities
Deferred investment tax credit 1,068,639
Other 10,552,599
Total Deferred Credits 11,621,238
Stockholder's Equity
Common Stock 382,020
Additional Paid-In-Capital 2,237,388
Retained Earnings 58,600,790
Total Stockholder's Equity 61,220,198
Total Liabilities and Stockholder's Equity $167,007,666
<PAGE>
Exhibit A-4
Page 1 of 2
FOREIGN UTILITY COMPANIES WHOLLY OWNED BY CLAIMANT
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
DUKE DUKE DUKE DUKE
GUEMES TRANSENER HIDRONOR IRIAN JAYA
<S> <C> <C> <C> <C>
Operating Revenues
Income from operations of facilities $ 815,050 $ 570,863 $ 464,352 $-
Earnings of Powerco (1,512,943)
Earnings of Citelec 1,904,049
Earnings of Hidroneuquen (1,958,703)
Earnings of PJP -- -- -- 4,595,620
Total Revenues (697,893) 2,474,912 (1,494,351) 4,595,620
Operating Expenses
Administrative and other 723,079 265,177 201,691 69,586
Reserve for Argentine Market Analysis 10,000,000
Depreciation and amortization 173,809 140,395 185,974 206,628
Other taxes 28,610 820 652 4,923
Total Expenses 10,925,498 406,392 388,317 281,137
Operating Income (11,623,391) 2,068,520 (1,882,668) 4,314,483
Other Income, Net 393,842 1,179 1,177,121 18,972
Income Before Income Taxes (11,229,549) 2,069,699 (705,547) 4,333,455
Provision for Income Taxes
Current (62,136) 189,991 544,078 2,586,144
Deferred (3,797,573) 223,942 (685,546) (677,794)
Net Income (Loss) (7,369,840) 1,655,766 (564,079) 2,425,105
Retained Earnings (Deficit) - Beginning of the Period (1,620,056) 103,960 1,874,418 270,166
Dividends Paid to DEG -- (400,000) (784,000) (750,000)
Retained Earnings (Deficit) - End of the Period $ (8,989,896) $ 1,359,726 $ 526,339 $ 1,945,271
</TABLE>
<PAGE>
Exhibit A-4
Page 2 of 2
FOREIGN UTILITY COMPANIES WHOLLY OWNED BY CLAIMANT
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
DUKE DUKE DUKE DUKE
GUEMES TRANSENER HIDRONOR IRIAN JAYA
<S> <C> <C> <C> <C>
Current Assets
Cash $ 107,522 $ 647,613 $ 356,911 $ 98,692
Accounts receivable-affiliate 443,523 402,737 92,735 16,638
Interest receivable 103,336
Other current assets 442,000 -- -- --
Total Current Assets 1,096,381 1,050,350 449,646 115,330
Investments And Other
Investment in Powerco 5,853,064
Investment in Citelec 18,570,885
Investment in Hidroneuquen 46,819,893
Investment in PJP 16,644,974
Notes receivable 2,900,000
Other deferred costs 316,828 245,692 418,442 607,867
Total Investments And Other 9,069,892 18,816,577 47,238,335 17,252,841
Total Assets $ 10,166,273 $ 19,866,927 $ 47,687,981 $ 17,368,171
Current Liabilities
Accounts payable-affiliate $ 303,429 $ 20 $ 34,120 --
Taxes accrued 13,167 510,353 (67,212) 896,959
Other 19,000 -- -- --
Total Current Liabilities 335,596 510,373 (33,092) 896,959
Deferred Credits And Other Liabilities
Accumulated Deferred Income Taxes (4,642,417) (163,628) 270,718 (1,114,664)
Minority Interest in Consolidated Joint Venture 121,990 -- -- --
Total Deferred Credits And Other Liabilities (4,520,427) (163,628) 270,718 (1,114,664)
Stockholder's Equity
Common Stock- no par 1,000 1,000 1,000 1,000
Additional Paid-In-Capital 23,340,000 18,159,456 46,923,016 15,639,605
Retained Earnings (Deficit) (8,989,896) 1,359,726 526,339 1,945,271
Total Stockholder's Equity 14,351,104 19,520,182 47,450,355 17,585,876
Total Liabilities and Stockholder's Equity $ 10,166,273 $ 19,866,927 $ 47,687,981 $17,368,171
</TABLE>
<PAGE>
Exhibit A-5
Page 1 of 1
DUKE POWER COMPANY
CAPITALIZATION AND EARNINGS OF FORIEGN UTILITY COMPANIES
AS OF AND FOR YEAR ENDED DECEMBER 31, 1996
( US $ )
(UNAUDITED)
CAPITALIZATION:
Amount
Guemes
Shareholders' Equity $ 51,658,215
Long-term Debt 60,680,000
Total Capitalization $ 112,338,215
Transener
Shareholders' Equity $ 322,857,456
Short-term Debt 13,497,176
Long-term Debt 89,654,054
Total Capitalization $ 426,008,686
Piedra del Aguila
Shareholders' Equity $ 458,979,277
Short-term Debt 54,828,320
Long-term Debt 396,614,286
Total Capitalization $ 910,421,883
PJP
Shareholders' Equity $ 55,908,350
Long-term Debt 151,271,248
Total Capitalization $ 207,179,598
NPS
Shareholders' Equity $ 724,058
Long-term Debt --
Total Capitalization $ 724,058
EARNINGS:
Guemes $ (2,217,850)
Transener $ 31,609,338
Piedra del Aguila $ (19,518,280)
PJP $ 15,318,734
NPS $ 258,674
<PAGE>
EXHIBIT B
FINANCIAL DATA SCHEDULE
Duke Power Company Consolidated Information
(Dollars in Thousands)
Total Assets $13,469,690
Total Operating Revenues $ 4,757,974
Net Income $ 729,966
<PAGE>
EXHIBIT C
An organizational chart showing the relationship of each EWG or foreign
utility company to associate companies in the holding-company system.
Exhibit C-1 Chart showing relationship of Guemes to associate
companies in the holding-company system.
Exhibit C-2 Chart showing relationship of Transener to associate
companies in the holding company system.
Exhibit C-3 Chart showing relationship of Piedra del Aguila to associate
companies in the holding-company system.
Exhibit C-4 Chart showing relationship of PJP to associate companies in
the holding-company system.
<PAGE>
EXHIBIT C-1
GUEMES
Claimant
Church Street
DEG
Duke Guemes Duke Guemes
Operating Corp.
51%
25%
Powerco
Services S.A.
Powerco S.A.
60%
Guemes
Ownership is 100% unless otherwise specified.
<PAGE>
EXHIBIT C-2
TRANSENER
Claimant
Church Street
DEG
Duke Transener
Duke Transener
15% Operating Corp.
Citelec
65%
Transener
Ownership is 100% unless otherwise specified.
<PAGE>
EXHIBIT C-3
PIEDRA DEL AGUILA
Claimant
Church Street
DEG
Duke Hidronor
Duke Hidronor
Operating Corp.
Duke Hidronor
(Caymans) Ltd.
16.54%
Hidroneuquen S.A.
59%
Piedra del Aguila
Ownership is 100% unless otherwise specified.
<PAGE>
EXHIBIT C-4
PJP
Claimant
Duke Coal
Church Street Project Services
Group, Inc.
DEG
Duke Coal Project
Services Pacific, Inc.
Duke Irian Jaya 40%
30% NPS
PJP
Ownership is 100% unless otherwise specified.
<PAGE>
EXHIBIT D
Map showing principal generating plants, transmission lines, and
distribution facilities of Claimant and NP&L. Reference is made to Exhibit C of
the Claimant's Form U-3A-2, File Number 69-351, for the year ended December 31,
1993, filed under cover of Form SE on February 25, 1994. Such exhibit is hereby
incorporated herein by reference.
