<PAGE>
November 9, 1994
Securities and Exchange Commission
Attention: Filing Desk, Stop 1-4
450 Fifth Street, N.W.
Washington, DC 20549-1004
Dear Sir or Madam:
Electronically filed herewith the Securities and Exchange Commission is
Duquesne Light Company's Form 10-Q for the quarter ended September 30, 1994.
<TABLE>
<CAPTION>
Commission Registrant; State of Incorporation; IRS Employer
File Number Address; and Telephone Number Identification Number
- ------------- ----------------------------------- ---------------------
<S> <C> <C>
1-956 Duquesne Light Company 25-0451600
(A Pennsylvania Corporation)
One Oxford Centre
301 Grant Street
Pittsburgh, Pennsylvania 15279
Telephone (412) 393-6000
</TABLE>
Sincerely,
/s/ M. K. O'Brien
Assistant Controller
<PAGE>
[CONFORMED]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30, 1994
------------------
<TABLE>
<CAPTION>
Commission Registrant; State of Incorporation; IRS Employer
File Number Address; and Telephone Number Identification Number
- ------------- ----------------------------------- ---------------------
<S> <C> <C>
1-956 Duquesne Light Company 25-0451600
(A Pennsylvania Corporation)
One Oxford Centre
301 Grant Street
Pittsburgh, Pennsylvania 15279
Telephone (412) 393-6000
</TABLE>
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 report), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
DQE is the holder of all shares of common stock, $1 par value, of Duquesne Light
Company consisting of 10 shares as of September 30, 1994 and October 31, 1994.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
DUQUESNE LIGHT COMPANY
CONDENSED STATEMENT OF CONSOLIDATED INCOME
(Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Operating Revenues:
- -------------------------------------------------
Sales of Electricity:
Customers $308,709 $335,674 $883,059 $916,989
Phase-in deferrals - (28,722) (28,810) (76,506)
Utilities 8,596 12,359 26,035 26,005
-------- -------- -------- --------
Total Sales of Electricity 317,305 319,311 880,284 866,488
Other 7,123 8,458 21,682 25,590
-------- -------- -------- --------
Total Operating Revenues 324,428 327,769 901,966 892,078
-------- -------- -------- --------
Operating Expenses:
Fuel and purchased power 64,705 64,276 186,181 175,904
Other operating expense 68,578 83,320 206,940 224,200
Maintenance expense 20,797 19,496 58,408 58,113
Depreciation and amortization 40,880 39,605 117,307 113,788
Taxes other than income taxes 22,521 22,811 66,139 65,308
Income taxes 33,391 31,922 78,358 69,271
-------- -------- -------- --------
Total Operating Expenses 250,872 261,430 713,333 706,584
-------- -------- -------- --------
OPERATING INCOME 73,556 66,339 188,633 185,494
-------- -------- -------- --------
Other Income and (Deductions):
Allowance for equity funds used during
construction 267 216 1,062 708
Interest and dividend income 2,078 1,685 5,364 5,450
Income taxes 997 17,904 1,847 14,159
Other - net (6,320) (10,049) (9,893) (4,300)
-------- -------- -------- --------
Total Other Income and (Deductions) (2,978) 9,756 (1,620) 16,017
-------- -------- -------- --------
INCOME BEFORE INTEREST CHARGES 70,578 76,095 187,013 201,511
-------- -------- -------- --------
Interest Charges:
Interest on long-term debt and other interest 25,923 27,794 76,965 86,270
Allowance for borrowed funds used during
construction (221) (177) (877) (595)
-------- -------- -------- --------
Total Interest Charges 25,702 27,617 76,088 85,675
-------- -------- -------- --------
INCOME BEFORE CUMULATIVE EFFECT ON
PRIOR YEARS OF CHANGES IN ACCOUNTING
PRINCIPLES 44,876 48,478 110,925 115,836
Adoption of SFAS 109 - Income taxes - - - 8,000
Accounting for maintenance costs - net - - - (5,425)
-------- -------- -------- --------
NET INCOME 44,876 48,478 110,925 118,411
DIVIDENDS ON PREFERRED AND
PREFERENCE STOCK 1,481 2,284 4,565 6,892
-------- -------- -------- --------
EARNINGS FOR COMMON STOCK $ 43,395 $ 46,194 $106,360 $111,519
-------- -------- -------- --------
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
DUQUESNE LIGHT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
-------------- -------------
<S> <C> <C>
ASSETS
Property, Plant and Equipment $ 4,604,366 $ 4,554,498
Less Accumulated Depreciation and Amortization (1,527,568) (1,435,732)
----------- -----------
Property, Plant and Equipment - Net 3,076,798 3,118,766
----------- -----------
Other Property and Investments 73,185 61,060
----------- -----------
Current Assets:
Cash and temporary cash investments 39,438 -
Receivables 131,404 139,759
Other current assets, principally materials and supplies 124,713 99,808
----------- -----------
Total Current Assets 295,555 239,567
----------- -----------
Other Assets:
Extraordinary property loss 25,820 35,781
Unamortized loss on reacquired debt 91,337 95,266
Beaver Valley Unit 2 sale/leaseback premium 33,786 34,903
Deferred rate synchronization costs 51,149 51,149
Phase-in plan deferrals - 28,621
Uncollected deferred income taxes 559,421 569,555
Deferred debits 130,729 153,435
----------- -----------
Total Other Assets 892,242 968,710
----------- -----------
TOTAL ASSETS $ 4,337,780 $ 4,388,103
----------- -----------
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock - $1 par value (shares - 90,000,000 authorized; 10 issued) $ - $ -
Capital surplus 823,193 805,755
Retained earnings 289,276 294,916
----------- -----------
Total Common Stockholder's Equity 1,112,469 1,100,671
----------- -----------
Non-redeemable preferred and preference stock 90,340 121,906
Redeemable preferred and preference stock - 8,392
Non-redeemable preference stock, Plan Series A 29,885 29,956
----------- -----------
Total preferred and preference stock before deferred ESOP
benefit (involuntary liquidation values of $120,088 and
$160,117, exceed par by $43,910 and $81,585,
respectively) 120,225 160,254
Deferred employee stock ownership plan (ESOP) benefit (25,417) (27,126)
----------- -----------
Total Preferred and Preference Stock 94,808 133,128
----------- -----------
Long-term debt 1,366,999 1,416,705
----------- -----------
Total Capitalization 2,574,276 2,650,504
----------- -----------
Obligations Under Capital Leases 50,833 55,733
----------- -----------
Current Liabilities:
Notes payable 600 10,991
Current maturities and sinking fund requirements 89,248 45,741
Accounts payable 102,985 112,401
Accrued liabilities 58,694 63,530
Other current liabilities 55,470 46,544
----------- -----------
Total Current Liabilities 306,997 279,207
----------- -----------
Investment Tax Credits Unamortized 125,087 129,574
----------- -----------
Accumulated Deferred Income Taxes 1,137,071 1,145,782
----------- -----------
Deferred Credits 143,516 127,303
----------- -----------
Commitments and Contingencies (Note 6)
TOTAL CAPITALIZATION AND LIABILITIES $ 4,337,780 $ 4,388,103
----------- -----------
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
DUQUESNE LIGHT COMPANY
CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS
(Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1994 1993
--------- ---------
<S> <C> <C>
Cash Flows from Operating Activities:
Operations $ 255,023 $ 295,877
Changes in working capital (21,877) (61,927)
Other - net 62,771 4,317
--------- ---------
Net Cash Provided from Operating Activities 295,917 238,267
--------- ---------
Cash Flows Used by Investing Activities:
Construction expenditures (65,918) (68,140)
Allowance for borrowed funds used during construction (877) (595)
Other - net 5,220 (9,140)
--------- ---------
Net Cash Used by Investing Activities (61,575) (77,875)
--------- ---------
Cash Flows Used in Financing Activities:
Sale of bonds - 740,500
Dividends on capital stock (117,326) (119,655)
Reductions of long-term obligations (65,211) (757,448)
Reduction in notes payable (10,391) -
Premium on reacquired debt - (30,463)
Other - net (1,976) 2,528
--------- ---------
Net Cash Used in Financing Activities (194,904) (164,538)
--------- ---------
Net increase (decrease) in cash and temporary cash investments 39,438 (4,146)
Cash and temporary cash investments at beginning of period - 6,156
--------- ---------
Cash and temporary cash investments at end of period $ 39,438 $ 2,010
--------- ---------
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. CONSOLIDATION AND RECLASSIFICATIONS
The condensed consolidated financial statements include the accounts of Duquesne
Light Company (Duquesne) and its wholly owned subsidiary. All material
intercompany balances and transactions have been eliminated in the preparation
of the condensed consolidated financial statements.
In the opinion of management, the unaudited condensed consolidated financial
statements included in this report reflect all adjustments that are necessary
for a fair presentation of the results of interim periods, and are normal,
recurring adjustments. Prior period financial statements were reclassified to
conform with the 1994 presentation.
These statements should be read with the financial statements and notes included
in the Form 10-K filed with the Securities and Exchange Commission for the year
ended December 31, 1993. The results of operations for the three and nine
months ended September 30, 1994 are not necessarily indicative of the results
which may be expected for the full year.
2. RECEIVABLES
Components of Receivables for the periods indicated are as follows:
<TABLE>
<CAPTION>
Amounts in Thousands of Dollars
---------------------------------------------
September 30, September 30, December 31,
1994 1993 1993
-------------- -------------- -------------
<S> <C> <C> <C>
Electric customer accounts receivable $105,469 $115,809 $107,342
Other accounts receivable 39,814 45,187 54,699
Less: Allowance for uncollectible accounts (13,879) (17,391) (13,282)
-------- -------- --------
Receivables less allowance for uncollectible
accounts 131,404 143,605 148,759
Less: Receivables sold - (5,000) (9,000)
-------- -------- --------
Total Receivables $131,404 $138,605 $139,759
-------- -------- --------
</TABLE>
An arrangement between Duquesne and an unaffiliated corporation entitles
Duquesne to periodically sell up to $50 million of its accounts receivable. The
sales agreement includes a limited recourse obligation under which Duquesne
could be required to repurchase certain of the receivables. At September 30,
1994, Duquesne had not sold any receivables to the unaffiliated corporation,
and, therefore, was not subject to any contingent liability under the limited
recourse obligation. The arrangement expires on June 27, 1995.
3. EXTRAORDINARY PROPERTY LOSS
Duquesne abandoned its interest in Perry Unit 2 in 1986 and subsequently
disposed of its interest in 1992. In 1987, the Pennsylvania Public Utility
Commission (PUC) approved recovery, over a 10-year period, of Duquesne's
original $155 million investment in Perry Unit 2. Duquesne is not earning a
return on the as yet unrecovered portion (approximately $27.8 million at
September 30, 1994) of its investment in the unit.
5
<PAGE>
4. INCOME TAXES
Since DQE's formation in 1989, Duquesne has filed consolidated federal income
tax returns with its parent and other companies in the affiliated group.
Federal income tax returns have been audited by the Internal Revenue Service and
closed for the tax years through 1989. Federal income tax returns filed for the
tax years 1990 to date remain subject to IRS review. Duquesne does not believe
that final settlement of the federal income tax returns for these years will
have a material adverse effect on its financial position or results of
operations.
With respect to financial presentation of Statement of Financial Accounting
Standards Number 109 (SFAS No. 109), Duquesne records the amortization of
uncollected deferred income taxes in depreciation and amortization expense and
reversals of accumulated deferred income taxes in income tax expense.
5. RATE MATTERS
1987 Rate Case
In March 1988, the PUC adopted a rate order that increased Duquesne's annual
revenues by $232 million phased-in from April 1988 through April 1994.
Deficiencies which resulted from the phase-in plan in current revenues were
included in the condensed consolidated income statement as deferred revenues.
Deferred revenues were recorded on the balance sheet as a deferred asset. As
customers were billed for deficiencies related to prior periods, this deferred
asset was reduced. As designed, the phase-in plan provided for carrying charges
(at the after-tax AFC rate) on revenues deferred for future recovery. Duquesne
recovered previously deferred revenues and carrying charges of approximately
$315 million during the phase-in period which concluded in April of 1994.
At this time, Duquesne has no pending base rate case and has no immediate plans
to file a base rate case.
Deferred Coal Costs
The PUC has established two market price coal cost standards for Duquesne's
interests in mines that supply coal to its generating stations. One applies
only to coal delivered at the Mansfield plant. The other, the system-wide coal
cost standard, applies to coal delivered to the remainder of Duquesne's system.
Both standards are updated monthly to reflect prevailing market prices for
similar coal. The PUC has directed Duquesne to defer recovery of the delivered
cost of coal to the extent that such cost exceeds generally prevailing market
prices, as determined by the PUC, for similar coal. The PUC allows deferred
amounts to be recovered from customers when the delivered costs of coal fall
below such PUC-determined prevailing market prices.
In 1990, the PUC approved a joint petition for settlement that clarified certain
aspects of the system-wide coal cost standard and gave Duquesne options to
extend the standard through March 2000. In December 1991, Duquesne exercised the
first of two options that extended the standard through March 1996. The
unrecovered cost of coal used at Mansfield amounted to $7.5 million and the
unrecovered cost of coal used throughout the system amounted to $3.4 million at
September 30, 1994. Duquesne believes that all deferred coal costs will be
recovered.
Electric Operating Revenues
Duquesne is authorized by the PUC to recover fuel costs and purchased energy
costs through an Energy Cost Rate Adjustment Clause (ECR), which is adjusted
annually. Revenues are adjusted for differences between recoverable fuel costs
and amounts actually recovered in current rates. Through the ECR, Duquesne
passes to its customers the profits from short-term power sales to other
utilities.
6
<PAGE>
Warwick Mine Costs
The 1990 joint petition for settlement (See preceding section on deferred coal
costs.) also recognized costs at Duquesne's Warwick Mine, which had been on
standby since 1988, and allowed for recovery of such costs, including the costs
of ultimately closing the mine. In 1990, Duquesne entered into an agreement
under which an unaffiliated company will operate the mine until March 2000 and
sell the coal produced. Production began in late 1990. The mine reached a full
production rate in early 1991. The Warwick Mine coal reserves include both high
and low sulfur coal; the sulfur content averages in the mid-range at 1.7 percent
- - 1.9 percent sulfur content. More than 60 percent of the coal mined at Warwick
currently is used by Duquesne. Duquesne receives a royalty on sales of coal in
the open market. In the past year, the Warwick Mine supplied less than one-
fifth of the coal used in the production of electricity at Duquesne's wholly
owned and jointly owned plants.
Costs at the Warwick Mine and Duquesne's investment in the mine are expected to
be recovered through the cost of coal in the ECR. Recovery is subject to the
system-wide coal cost standard. Duquesne also has an opportunity to earn a
return on its investment in the mine through the cost of coal during the period
of the system-wide coal cost standard, including extensions. At September 30,
1994, Duquesne's net investment in the mine was $20.3 million. The estimated
liability, including final site reclamation, mine water treatment and certain
labor liabilities, for mine closing is $33 million and Duquesne has collected
approximately $11.0 million toward these costs.
Property Held for Future Use
In 1986, the PUC approved Duquesne's request to remove the Phillips and most of
the Brunot Island (BI) power stations from service and place them in cold
reserve. Duquesne expects to recover its net investment in these plants through
future electric sales. Phillips and BI represent licensed, certified, clean
sources of electricity that will be necessary to meet expanding opportunities in
the bulk power markets. Duquesne believes that anticipated growth in peak load
demand for electricity within its service territory will require additional
peaking generation. Duquesne looks to BI to meet this need. The Phillips Power
Plant is an important component in Duquesne's strategy to identify and serve
opportunities for providing bulk power service. With recent legislation
permitting wider transmission access to bulk power markets and with the
opportunity to package a sale of power from Phillips with the support of
Duquesne's system, the Phillips plant can be made a highly reliable, cost-
competitive alternative for most purchasers. In summary, Duquesne believes its
investment in these cold-reserved plants will be necessary in order to meet
future business needs. If business opportunities do not develop as expected,
Duquesne will consider the sale of these assets. In the event that market
demand, transmission access or rate recovery do not support the utilization or
sale of the plants, Duquesne may have to write off part or all of their costs.
Nuclear Decommissioning
The PUC ruled that recovery of the decommissioning costs for Beaver Valley Unit
1 could begin December 24, 1977, and that recovery for Beaver Valley Unit 2 and
Perry Unit 1 could begin March 25, 1988. Duquesne expects to decommission each
nuclear plant following the end of its life, a date that currently coincides
with the expiration of each plant's operating license.
Based upon site specific studies finalized in 1992 for Beaver Valley Unit 2 and
in 1994 for Beaver Valley Unit 1 and Perry Unit 1, Duquesne's share of the total
estimated decommissioning costs, including removal and decontamination costs,
currently being used to determine Duquesne's cost of service, are $122 million
for Beaver Valley Unit 1, $35 million for Beaver Valley Unit 2, and $67 million
for Perry Unit 1.
7
<PAGE>
In conjunction with an August 22, 1994 PUC Accounting Order, Duquesne is
increasing the annual contribution to its decommissioning trusts by
$2 million to bring the total annual funding to approximately $4 million per
year. Duquesne plans to continue making periodic reevaluations of estimated
decommissioning costs, to provide additional funding from time to time, and to
seek regulatory approval for recognition of these increased funding levels.
Duquesne records decommissioning costs under the category of depreciation and
amortization expense and accrues a liability equal to that amount for nuclear
decommissioning expense. Such nuclear decommissioning funds are deposited in
external, segregated trust accounts. The funds are invested in a portfolio
consisting of municipal bonds, certificates of deposit, and U.S. government
securities having a weighted average duration of 4 - 7 years. Trust fund
earnings increase the fund balance and the recorded liability. The market
value of the aggregate trust fund balances at September 30, 1994 totaled $19
million. On Duquesne's condensed consolidated balance sheet, the
decommissioning trusts have been reflected in long-term investments, and the
related liability has been recorded as deferred credits.
6. COMMITMENTS AND CONTINGENCIES
Westinghouse Lawsuit
In 1991, the owners of Beaver Valley Units 1 and 2 filed suit against
Westinghouse Electric Corporation (Westinghouse) in the United States District
Court for the Western District of Pennsylvania. The suit alleges that six steam
generators supplied by Westinghouse for the two units contain serious defects -
in particular defects causing tube corrosion and cracking.
Steam generator maintenance costs have increased as a result of these defects
and are likely to continue increasing. The condition of the steam generators is
being monitored closely. Replacement of the Beaver Valley Unit 1 steam
generator lower assemblies may be as early as 1997. While Duquesne has not yet
completed a detailed, site-specific study, replacement cost per unit is
estimated to be approximately $125 million. Other utilities with similar units
have replaced steam generators at comparable costs.
A jury trial began September 12, 1994 in Federal District Court in Western
Pennsylvania. Pennsylvania Power Company, Ohio Edison Company, Cleveland
Electric Illuminating Company, Toledo Edison Company and Duquesne are joined in
the litigation against Westinghouse. Twelve additional lawsuits have been
brought by other utility companies around the country against Westinghouse for
similar problems with Westinghouse steam generators. This is the first steam
generator case to begin trial before a jury. The trial is expected to end in
early December, 1994. Duquesne is seeking monetary damages.
Duquesne cannot predict the outcome of this matter; however, Duquesne does not
believe that resolution will have a material adverse effect on its financial
position or results of operations. Duquesne's percentage interests (ownership
and leasehold) in Beaver Valley Unit 1 and in Beaver Valley Unit 2 are 47.5
percent and 13.74 percent, respectively. The remainder of Beaver Valley Unit 1
is owned by Ohio Edison Company and Pennsylvania Power Company. The remaining
interest in Beaver Valley Unit 2 is held by Ohio Edison Company, Cleveland
Electric Illuminating Company and Toledo Edison Company. Duquesne operates both
units on behalf of these owners.
8
<PAGE>
Nuclear Insurance
All of the companies with an interest in the Beaver Valley Power Station
maintain the maximum available nuclear insurance for the $5.9 billion total
investment in Beaver Valley Units 1 and 2. The insurance program provides $2.8
billion for property damage, decommissioning, and decontamination liabilities.
Similar property insurance is held by the joint owners of the Perry Plant for
their $5.4 billion total investment in Perry Unit 1. Duquesne would be
responsible for its share of any damages in excess of insurance coverage. In
addition, if the property damage reserves of Nuclear Electric Insurance Limited
(NEIL), an industry mutual, are inadequate to cover claims arising from an
incident at any United States nuclear site covered by that insurer, Duquesne
could be assessed retrospective premiums totaling a maximum of $6.5 million.
The Price-Anderson Amendments to the Atomic Energy Act limit public liability
from a single incident at a nuclear plant to $9.0 billion. Duquesne has
purchased $200 million of insurance, the maximum amount available, which
provides the first level of financial protection. Additional protection of $8.4
billion would be provided by an assessment of up to $75.5 million per incident
on each nuclear unit in the United States. Duquesne's maximum total assessment,
$56.6 million, which is based upon its ownership interests in nuclear generating
stations, would be limited to a maximum of $7.5 million per incident per year.
A further surcharge of 5 percent could be levied if the total amount of public
claims exceeded the funds provided under the assessment program. Additionally,
a state premium tax (typically 3 percent) would be charged on the assessment and
surcharge. Finally, the United States Congress could impose other revenue-
raising measures on the nuclear industry if funds prove insufficient to pay
claims.
Duquesne carries extra expense insurance; coverage includes the incremental cost
of any replacement power purchased (in addition to costs that would have been
incurred had the units been operating) and other incidental expense after the
occurrence of certain types of accidents at its nuclear units. The amounts of
the coverage are 100 percent of the estimated extra expense per week during the
52-week period starting 21 weeks after an accident and 80 percent of such
estimate per week for the following 104 weeks. The amount and duration of
actual extra expense could substantially exceed insurance coverage.
Guarantees
Duquesne and the other co-owners have guaranteed certain debt and lease
obligations related to a coal supply contract for the Bruce Mansfield plant. At
September 30, 1994, Duquesne's share of these guarantees was $30.3 million. The
prices paid for the coal by the companies under this contract are expected to be
sufficient to meet debt and lease obligations to be satisfied through the year
2000. (See discussion regarding deferred coal costs at Note 5.) The minimum
future payments to be made by Duquesne solely in relation to these obligations
are $33.8 million at September 30, 1994.
Residual Waste Management Regulations
In July 1992, the Pennsylvania Department of Environmental Resources (DER)
issued residual waste management regulations governing the generation and
management of non-hazardous waste. Duquesne is currently conducting tests and
developing compliance strategies for these regulations. Capital compliance
costs are estimated, on the basis of currently available information, at $10
million through 1995. Through the year 2000, the expected additional capital
cost of compliance, which is subject to the results of ground water assessments
and DER final approval of compliance plans, is approximately $25 million.
9
<PAGE>
Other
Duquesne is involved in various other legal proceedings and environmental
matters. Duquesne believes that such proceedings and matters, in total, will
not have a materially adverse effect on its financial position or results of
operations.
______________________________
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Duquesne Light Company (Duquesne) is a wholly owned subsidiary of DQE, an energy
services holding company formed in 1989. Duquesne is engaged in the production,
transmission, distribution and sale of electric energy. Duquesne was formed
under the laws of Pennsylvania by the consolidation and merger in 1912 of three
constituent companies.
Results of Operations
- --------------------------------------------------------------------------------
Seasonality
The quarterly results are not necessarily indicative of full-year operations
because of seasonal fluctuations. Electric sales to residential and commercial
customers tend to increase during the warmer summer months because of increased
use of electricity for air conditioning. Sales also increase during the winter
months because of the use of electricity for heating.
Operating Revenues
Total operating revenues for the third quarter of 1994 decreased when compared
with those of the third quarter of 1993 by 1.0%. The $3.3 million decrease was
largely attributable to reduced sales of electricity to other utilities.
The third quarter 1994 total sales of electricity decreased $2.0 million
when compared to the third quarter of 1993. This 1994 net decrease
represents a $1.8 million increase in third quarter sales to customers
(primarily due to higher industrial sales), reduced by a $3.8 million decrease
in short-term power sales to other utilities. Major plant maintenance outages
scheduled during the third quarter of 1994 resulted in a decrease of 286,000
megawatt hours of short-term off-system power sales when compared to the third
quarter of 1993.
The third quarter 1994 decrease of $1.3 million in other operating revenue is
consistent with the decline in miscellaneous revenues such as billings to other
owners of jointly owned power stations.
Operating Expenses
Fuel and purchased power expense in the third quarter of 1994 was consistent
with the third quarter of 1993. The nine month ending comparative increase in
fuel and purchased power of $10.3 million results from increased power purchases
due to more maintenance and refueling outages in the first three quarters of
1994. Other operating expense for the third quarter of 1994 decreased $14.7
million from the third quarter in 1993. The $14.7 million reduction in third
quarter 1994 other operating expenses primarily reflects an absence of the
$12.8 million charge related to the Oxford Centre subleasing agreements, which
was recorded in the third quarter of 1993. Maintenance expenses increased
$1.3 million in the third quarter of 1994 when compared to the same quarter of
1993 because of expenses associated with the extended maintenance outage at
Perry Unit 1.
Income taxes for the nine months ended September 30, 1994 when compared to the
nine months ended September 30, 1993 fluctuates because of the difference in
taxable income and the absence of a 1993 $15 million favorable federal income
tax audit settlement.
11
<PAGE>
Financial Condition
- -----------------------------------------------------------------------------
Financing
Duquesne plans to meet its current obligations and debt maturities through 1998
with funds generated from operations and through new financings. At September
30, 1994, Duquesne was in compliance with all of its debt covenants.
On October 26, 1994, Duquesne issued $75.5 million of Beaver County Pollution
Control Revenue Refunding Bonds. The proceeds will be used to redeem a like
amount of outstanding Beaver County Pollution Control Bonds on December 1,
1994. The refunding bonds bear variable interest rates and mature on
October 1, 2029.
Short-Term Borrowings
At September 30, 1994, Duquesne had a $225 million extendible revolving credit
agreement with a group of banks. In October of 1994, Duquesne extended the term
of this revolving credit agreement to October 6, 1995, and reduced the credit
facility from $225 million to $150 million. A term loan feature was also added
to the credit agreement to provide a two year repayment period for any amounts
outstanding at the expiration of the revolving credit period. The arrangement
provides flexible borrowing options at interest rates based on prime, Eurodollar
or certificate of deposit rates and requires payment of fees based on the
unborrowed amounts of the commitments.
During 1993, the maximum short-term bank and commercial paper borrowings
outstanding was $27 million; the average daily short-term borrowings outstanding
was $1.6 million; and the weighted average daily interest rate applied to such
borrowings was 3.42 percent. Short-term borrowings outstanding on September 30,
1994 were $0.6 million. There were no short-term borrowings outstanding at
September 30, 1993.
Sale of Accounts Receivable
In 1994, Duquesne and an unaffiliated corporation entered into an agreement that
entitles Duquesne to periodically sell up to $50 million of its accounts
receivable. At September 30, 1994, Duquesne had not sold any receivables to the
unaffiliated corporation. The accounts receivable sales agreement is one of
many sources of funds available to Duquesne. The agreement expires on June 27,
1995.
Nuclear Fuel Leasing
Duquesne finances its acquisitions of nuclear fuel through a leasing arrangement
under which it may finance up to $75 million of nuclear fuel. As of September
30, 1994, the amount of nuclear fuel financed by Duquesne under this arrangement
totaled approximately $57.4 million. Duquesne plans to continue leasing nuclear
fuel to fulfill its requirements at least through the remaining term of the
leasing arrangement. In October of 1994, the lease arrangement was extended to
September 30, 1996.
Transmission Access
- -------------------------------------------------------------------------------
On March 17, 1994, Duquesne submitted, pursuant to the Federal Power Act, a
"good faith" request for transmission service with the Allegheny Power System
(APS) and Pennsylvania-New Jersey-Maryland Interconnection Association (PJM
Companies). The request is based on 20-year firm service with flexible delivery
points for 300 megawatts of transfer capability over the transmission network
that extends from Western Pennsylvania to the East Coast. On August 5 and
September 16, 1994, Duquesne filed with the Federal Energy Regulatory Commission
applications for transmission service from the PJM Companies and APS,
respectively. The applications are authorized under Section 211 of the Federal
Power Act, which requires electric utilities to provide firm wholesale
transmission service.
12
<PAGE>
Construction
- -------------------------------------------------------------------------------
During 1993, Duquesne spent approximately $100 million for construction to
improve and expand its production, transmission and distribution systems.
Duquesne estimates that it will spend approximately $110 million for
construction in 1994. Year-to-date construction expenditures incurred through
September 30, 1994 totaled $65.9 million. These amounts exclude AFC, nuclear
fuel, expenditures for the refurbishing of Phillips and Brunot Island and
expenditures for the possible early replacement of steam generators at the
Beaver Valley Power Station. (See Note 6 to Duquesne's condensed consolidated
financial statements.) Duquesne currently has no plans for construction of new
base load generating plants.
Duquesne anticipates that funds for planned capital expenditures in the next
several years will be provided primarily from cash becoming available from
operations and, to a lesser degree, from additional financings. Interim
financing has been and will continue to be provided through bank borrowings and
sales of commercial paper. Substantially all funds needed for 1994 capital
expenditures are expected to be generated internally.
Rate Matters
- -------------------------------------------------------------------------------
Demand-Side Management
In March of 1994, Duquesne filed with the PUC an updated Demand-Side Management
(DSM) Plan designed to encourage customer energy conservation and load
management. Duquesne's proposed DSM programs include compact fluorescent
lighting, load management, cool storage systems, customer generation networks
and long-term interruptible rates. The Pennsylvania Industrial Energy Coalition
(PIEC) has filed appeals in the Commonwealth Court of Pennsylvania requesting
reversal of PUC orders of December 13, 1993 and April 8, 1994, which originated
electric utility DSM programs in Pennsylvania and allow utilities to recover
prudently incurred DSM program costs through an automatic adjustment clause
mechanism. Implementation of Duquesne's DSM plan awaits PUC approval and
disposition of these appeals.
See Note 5 to Duquesne's condensed consolidated financial statements for
additional discussion of rate-related matters.
Environmental Matters
- -------------------------------------------------------------------------------
The Comprehensive Environmental Response, Compensation and Liability Act of 1980
(Superfund) and the Superfund Amendments and Reauthorization Act of 1986
established a variety of informational and environmental action programs. The
Environmental Protection Agency (EPA) has informed Duquesne of its involvement
or potential involvement in three hazardous waste sites. If Duquesne is
ultimately determined to be a responsible party with respect to these sites, it
could be liable for all or a portion of the cleanup costs. With regard to one
site, Duquesne has been classified as a de minimis party and a tentative
agreement for participating in the cleanup costs has been reached. However, in
each case, other solvent, potentially responsible parties that may bear all or
part of any liability are also involved. In addition, Duquesne believes that
available defenses, along with other factors (including overall limited
involvement and low estimated remediation costs for one site) will limit any
potential liability that Duquesne may have for cleanup costs. Duquesne believes
that it is adequately reserved for all known liabilities and costs and,
accordingly, that these matters will not have a material adverse effect on its
financial position or results of operations.
In 1990, Congress approved amendments to the Clean Air Act. Among other
innovations, this legislation established the Emission Allowance Trading System.
An "emission allowance" permits emission of one ton of sulphur dioxide (SO/2/)
for one year. These allowances are issued by the EPA to fossil-fired stations
with generating capability of more than 25 megawatts that were in existence as
of the passage of the 1990 amendments. Allowances
13
<PAGE>
are part of a market-based approach to SO/2/ reduction. Emission allowances
can also be obtained through purchases on the open market or directly from other
sources. Excess allowances may be banked for future use or sold on the open
market to other parties for their use in offsetting emissions.
The legislation requires significant reductions of SO/2/ and oxides of
nitrogen (NO/X/) by 1995 and additional reductions by the year 2000. Duquesne
continues to work with the operators of its jointly owned stations to implement
cost-effective compliance strategies to meet these requirements. Duquesne's
plans for meeting the 1995 SO/2/ compliance requirements include increasing
the use of scrubbed capacity, switching to fuel with a lower sulfur content and
purchasing emission allowances. NO/X/ reductions under Title IV are required
by 1995 at only the Cheswick station; work to achieve the reductions was
completed in 1993. The ozone attainment provisions of Title I of the Clean Air
Act Amendments will require NO/X/ reductions by 1995 at Duquesne's Elrama
plant and at the jointly owned Mansfield plant. Duquesne plans to achieve such
reductions with low NO/X/ burner technology. Duquesne has currently 1,187
megawatts of scrubbed capacity, including 300 megawatts at the currently cold-
reserved Phillips plant, as well as 570 megawatts of capacity that meets the
1995 standards of the Clean Air Act amendments through the use of low sulfur
coal. Capital costs totaling $28 million were expended over the last three
years to achieve 1995 compliance standards. Through the year 2000, Duquesne is
planning a combination of compliance methods that include fuel switching;
increased use of, and improvements in, scrubbed capacity; flue gas conditioning;
low NO/X/ burner technology; and the purchase of emission allowances.
Duquesne currently estimates that additional capital costs to comply with
environmental requirements from 1995 through the year 2000 will be approximately
$20 million. This estimate is subject to the finalization of federal and state
regulations.
Duquesne is closely monitoring other potential air quality programs and air
emission control requirements that could be imposed in the future. These areas
include additional NO/X/ control requirements that could be imposed on fossil
fuel plants by the Ozone Transport Commission, more stringent ambient air
quality and emission standards for SO/2/ and particulates, or carbon dioxide
(CO/2/) control measures. As these potential programs are in various stages of
discussion and consideration, it is impossible to make reasonable estimates of
the potential costs and impacts.
In July 1992, the Pennsylvania Department of Environmental Resources (DER)
issued Residual Waste Management Regulations governing the generation and
management of non-hazardous waste. Duquesne is currently conducting tests and
developing compliance strategies. Capital compliance costs are estimated, on the
basis of information currently available, at $10 million through 1995. The
expected additional capital cost of compliance from 1995 through 2000 is
approximately $25 million; this estimate is subject to the results of continuing
ground water assessments and DER final approval of compliance plans.
Duquesne operates the scrubbed Elrama plant and converts the scrubber slurry to
a fixated pozolonic material. This material is placed at an off-site disposal
area having approximately five years of remaining capacity. Additionally,
Duquesne owns 17 percent of the scrubbed Mansfield plant, which is operated by
Pennsylvania Power. This plant pumps a similar slurry to an off-site impoundment
where the slurry is treated by using a Calcilox fixation process. The site has
at least thirteen years of remaining capacity. Both plants have limited
temporary on-site storage for flue gas desulfurization material and no permanent
on-site disposal capacity. While there is no imminent shortage of disposal
capacity, Duquesne continues to monitor this situation and to plan for future
disposal. The siting of future disposal facilities will be facilitated by the
1993 EPA determination that coal combustion waste products are not hazardous
waste and are therefore exempt from the Hazardous Waste Regulations. The second
phase of EPA's determination will consider the co-management of coal combustion
wastes with other low volume fossil fuel combustion waste streams.
Under the Nuclear Waste Policy Act of 1982, which establishes a policy for
handling and disposing of spent nuclear fuel and requires the establishment of a
final repository to accept spent fuel, contracts for jointly owned nuclear
plants have been entered into with the Department of Energy (DOE)for permanent
disposal of spent nuclear fuel and high-level radioactive waste. The DOE has
indicated that the repository will not be available for
14
<PAGE>
acceptance of spent fuel before 2010. Existing on-site spent fuel storage
capacities at Beaver Valley 1, Beaver Valley 2 and Perry Unit 1 are expected to
be sufficient until 1996, 2010, and 2009, respectively. Duquesne is currently
increasing the storage capacity at Beaver Valley 1 by equipping the spent fuel
pool with high density fuel storage racks. Duquesne anticipates that such action
will increase the spent fuel storage capacity at Beaver Valley 1 to provide for
sufficient storage through 2014.
In October 1992, the President signed into law the National Energy Policy Act of
1992 (energy act). The energy act addresses a wide range of energy issues,
including several matters affecting bulk power competition in the electric
utility industry. See discussion in "Outlook" below. The energy act requires
utilities (including Duquesne) that have purchased uranium enrichment services
from the DOE to collectively contribute as much as $150 million annually
(adjusted for inflation) up to a total of $2.25 billion for decommissioning and
decontamination of DOE enrichment facilities. Assessments are based on the
amount of uranium a utility had processed for enrichment prior to enactment of
the energy act and are to be paid by such utilities over a fifteen year period.
The energy act states that the assessments shall be deemed a necessary and
reasonable current cost of fuel and shall be fully recoverable in rates in all
jurisdictions in the same manner as the utility's other fuel costs. Duquesne
believes these assessments will be fully recoverable through rates. Duquesne's
total estimated liability for contributions is $12.5 million.
The Low-Level Waste Policy Act of 1980 (LLWPA) mandated that the responsibility
for the disposal of low-level radioactive waste rests with the individual
states. Most states, including Pennsylvania and Ohio, have formed regional
compacts to comply with the LLWPA by providing permanent disposal sites for
radioactive waste generated within each compact. However, plans for these
disposal sites have not progressed as anticipated in the LLWPA and it is not
certain when the regional sites will be available for disposal of waste.
Radioactive waste from Duquesne's jointly owned nuclear plants is currently
shipped to a disposal facility in South Carolina. This facility announced that
it would not accept any additional waste from outside the Southeast Compact
after June 30, 1994. The co-owners have constructed on-site waste storage
facilities at the Beaver Valley Power Station and the Perry Power Plant for
interim storage of the plants' low-level radioactive waste. The Beaver Valley
on-site facility is expected to be sufficient to meet site storage requirements
until regional disposal facilities become available. The Perry on-site facility
is expected to be sufficient to meet site storage requirements for a period of
five years.
Duquesne believes that it is adequately reserved for all known environmental
liabilities and costs. Accordingly, Duquesne believes that the ultimate outcome
of these environmental matters will not have a material adverse effect on its
financial position or the results of its operations.
Outlook
- -------------------------------------------------------------------------------
Competition
Regulatory developments in the industry are placing increasing competitive
pressures on electric public utilities. Duquesne, like the industry in general,
is continuing to assess the impact of these competitive forces on its future
operations.
The National Energy Policy Act of 1992 (energy act) was designed, among other
things, to foster competition. Among other provisions, the energy act amends the
Public Utility Holding Company Act of 1935 (1935 act) and the Federal Power Act.
Amendments to the 1935 act create a new class of independent power producers
known as Exempt Wholesale Generators (EWGs), which are exempt from the corporate
structure regulations of the 1935 act. EWGs, which may include independent power
producers as well as affiliates of electric utilities, do not require Securities
and Exchange Commission approval or regulation. At the current time, Duquesne
has not made, and has no plans to make, any investment in EWGs. In addition,
brokers and marketers, without owning or operating any generation or
transmission facilities, are being permitted to enter into the business of
buying and selling electric capacity and energy.
15
<PAGE>
Amendments to the Federal Power Act create the potential for utilities and other
power producers to gain increased access to transmission systems of other
utilities to facilitate sales to other utilities. The amendments permit the
FERC to order utilities to transmit power over their lines for use by other
suppliers and to enlarge or construct additional transmission capacity to
provide these services. Duquesne is currently pursuing expanded transmission
access under these amendments. See discussion in "Transmission Access" on page
12.
The energy efficiency title of the energy act requires states to consider
adopting integrated resource planning, which allows utility investments in
conservation and other demand-side management techniques to be at least as
profitable as supply investments. The energy act also establishes new
efficiency standards in industrial and commercial equipment and lighting and
requires states to establish commercial and residential building codes with
energy efficiency standards. Additionally, the energy act requires utilities to
consider energy efficiency programs in their integrated resource planning. The
effects on Duquesne of these standards and requirements cannot be determined at
this time.
The energy act encourages increased use of alternative transportation fuels by
federal, state, city and power provider fleets. The energy act also provides
funding for development of electric vehicles and associated infrastructures.
The effects on Duquesne cannot be determined at this time.
The nuclear-related provisions of the energy act generally encourage further
development of the nuclear power industry through a variety of measures,
including the consolidation of construction and operating license steps into one
proceeding. The impact of these provisions on Duquesne is not expected to be
material.
These new regulations also permit industrial and large commercial customers to
own and operate facilities to generate their own electric energy requirements
and, if such facilities are qualifying facilities, to require the displaced
electric utility to purchase the output of such facilities. Customers may also
have the option of substituting fuels, such as the use of natural gas, oil or
wood for heating and/or cooling purposes rather than electric energy or of
relocating their facilities to a lower cost environment.
In addition, increased competition may also result from the 1990 Amendments to
the Clean Air Act. Such amendments exempt from SO\2\ and NO\X\ control
requirements existing units with less than 25 megawatts of generating capacity
and new or existing co-generation units supplying less than one-third of their
electric output and less than 25 megawatts for commercial sale.
Employees
The collective bargaining agreement with the International Brotherhood of
Electrical Workers (IBEW) expired on September 30, 1994. At expiration, the
contract was extended on a day to day basis with either party required to
give five days notice prior to cancellation.
_____________________________
16
<PAGE>
DUQUESNE LIGHT COMPANY
OPERATING STATISTICS
(000 omitted)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30
------------------
Percent
1994 1993 Change
----- ----- -------
<S> <C> <C> <C>
Kilowatt-hour Sales:
Residential 892,498 948,476 (5.9)
Commercial 1,553,712 1,556,827 (0.2)
Industrial 826,823 751,823 10.0
Miscellaneous 21,291 21,378 (0.4)
Other Utilities 655,264 941,244 (30.4)
-----------------------
Total Kilowatt-hour Sales 3,949,588 4,219,748 (6.4)
=======================
Operating Revenues:
Electric Sales:
Residential $ 114,425 $ 119,148 (4.0)
Commercial 137,207 134,932 1.7
Industrial 52,525 48,307 8.7
Miscellaneous 4,552 4,565 (0.3)
Other Utilities 8,596 12,359 (30.4)
Other Operating Revenues 7,123 8,458 (15.8)
-----------------------
Total Operating Revenues $ 324,428 $ 327,769 (1.0)
=======================
Nine Months Ended
September 30
------------------
Percent
1994 1993 Change
---- ---- -------
Kilowatt-hour Sales:
Residential 2,513,613 2,492,684 0.8
Commercial 4,261,219 4,190,495 1.7
Industrial 2,438,524 2,288,165 6.6
Miscellaneous 62,908 62,854 0.1
Other Utilities 1,950,090 1,890,472 3.2
-----------------------
Total Kilowatt-hour Sales 11,226,354 10,924,670 2.8
=======================
Operating Revenues:
Electric Sales:
Residential $ 315,182 $ 313,130 0.7
Commercial 373,156 367,666 1.5
Industrial 152,426 146,117 4.3
Miscellaneous 13,485 13,570 (0.6)
Other Utilities 26,035 26,005 0.1
Other Operating Revenues 21,682 25,590 (15.3)
-----------------------
Total Operating Revenues $ 901,966 $ 892,078 1.1
=======================
</TABLE>
17
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits:
EXHIBIT 12.1 - Calculation of Ratio of Earnings to Fixed Charges.
EXHIBIT 24.1 - Consent.
EXHIBIT 27.1 - Financial Data Schedule.
b. Reports on Form 8-K filed during the three months ended September 30,
1994:
(1) August 16, 1994 - The following event was reported:
Item 5. Appointment of James E. Cross as Vice President of the
Nuclear Group, Senior Vice President and Chief Nuclear
Officer of Duquesne's Nuclear Power Division.
No financial statements were filed with this report.
(2) September 6, 1994 - The following event was reported:
Item 5. An update of the Westinghouse Lawsuit.
No financial statements were filed with this report.
_____________________________
18
<PAGE>
Duquesne Light Company and Subsidiary
Calculation of Ratio of Earnings to Fixed Charges
(Thousands of Dollars)
<TABLE>
<CAPTION>
EXHIBIT 12.1
Nine Year Ended December 31,
Months Ended --------------------------------------------
September 30, 1994 1993 1992 1991 1990 1989
------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
FIXED CHARGES:
Interest on long-term debt $ 70,815 $102,938 $119,179 $127,606 $135,850 $140,623
Other interest 1,399 3,517 2,464 2,339 6,148 12,332
Amortization of debt discount,
premium and expense-net 4,751 5,541 4,223 3,892 4,039 4,010
Portion of lease payments
representing an interest factor 33,838 45,925 60,721 64,189 64,586 64,854
-------- -------- -------- -------- -------- --------
Total Fixed Charges $110,803 $157,921 $186,587 $198,026 $210,623 $221,819
-------- -------- -------- -------- -------- --------
EARNINGS:
Income from continuing operations $110,925 $144,787 $149,768 $143,133 $135,456 $129,437
Income taxes 76,511* 75,042* 107,999 101,073 84,478 75,151
Fixed charges as above 110,803 157,921 186,587 198,026 210,623 221,819
-------- -------- -------- -------- -------- --------
Total Earnings $298,239 $377,750 $444,354 $442,232 $430,557 $426,407
-------- -------- -------- -------- -------- --------
RATIO OF EARNINGS TO FIXED CHARGES 2.69 2.39 2.38 2.23 2.04 1.92
-------- -------- -------- -------- -------- --------
</TABLE>
Duquesne's share of the fixed charges of an unaffiliated coal supplier, which
amounted to approximately $2.8 million for the nine months ended September 30,
1994, has been excluded from the ratio.
* Earnings related to income taxes reflect a $5.3 million decrease for the nine
months ended September 30, 1994, and a $9.6 million decrease for the year ended
December 31, 1993 due to a financial statement reclassification related to SFAS
109. The Ratio of Earnings to Fixed Charges absent this reclassification equals
2.74 and 2.45 for the nine months ended September 30, 1994 and the year ended
December 31, 1993, respectively.
19
<PAGE>
EXHIBIT 24.1
CONSENT
I hereby consent to the use of my name under the caption "Legal Opinions" in
the pricing supplements of Duquesne Light Company (the "Company") to the
Company's Prospectus, dated November 19, 1992, as supplemented, and its
Prospectus dated June 15, 1993, as supplemented.
Dated: ___November 9, 1994___ ____/s/ Larry R. Crayne___
Larry R. Crayne
Chief Counsel
20
<PAGE>
[ARTICLE] UT
[RESTATED]
[CIK] 0000030573
[NAME] DUQUESNE LIGHT CO
[SUBSIDIARY]
[NUMBER] 0
[NAME] 0
[MULTIPLIER] 1,000
[CURRENCY] 0
<TABLE>
<S> <C>
[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] [BLANK]
[PERIOD-START] JAN-01-1994
[PERIOD-END] SEP-30-1994
[EXCHANGE-RATE] [BLANK]
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] $3,076,798
[OTHER-PROPERTY-AND-INVEST] $73,185
[TOTAL-CURRENT-ASSETS] $295,555
[TOTAL-DEFERRED-CHARGES] $215,664
[OTHER-ASSETS] $676,578
[TOTAL-ASSETS] $4,337,780
[COMMON] 0
[CAPITAL-SURPLUS-PAID-IN] $823,193
[RETAINED-EARNINGS] $289,276
[TOTAL-COMMON-STOCKHOLDERS-EQ] $1,112,469
[PREFERRED-MANDATORY] 0
[PREFERRED] $94,808
[LONG-TERM-DEBT-NET] $1,366,999
[SHORT-TERM-NOTES] 0
[LONG-TERM-NOTES-PAYABLE] 0
[COMMERCIAL-PAPER-OBLIGATIONS] $600
[LONG-TERM-DEBT-CURRENT-PORT] $60,883
[PREFERRED-STOCK-CURRENT] 0
[CAPITAL-LEASE-OBLIGATIONS] $50,833
[LEASES-CURRENT] $28,365
[OTHER-ITEMS-CAPITAL-AND-LIAB] $1,622,823
[TOT-CAPITALIZATION-AND-LIAB] $4,337,780
[GROSS-OPERATING-REVENUE] $901,966
[INCOME-TAX-EXPENSE] $78,358
[OTHER-OPERATING-EXPENSES] $634,975
[TOTAL-OPERATING-EXPENSES] $713,333
[OPERATING-INCOME-LOSS] $188,633
[OTHER-INCOME-NET] ($1,620)
[INCOME-BEFORE-INTEREST-EXPEN] $187,013
[TOTAL-INTEREST-EXPENSE] $76,088
[NET-INCOME] $110,925
[PREFERRED-STOCK-DIVIDENDS] $4,565
[EARNINGS-AVAILABLE-FOR-COMM] $106,360
[COMMON-STOCK-DIVIDENDS] $112,000
[TOTAL-INTEREST-ON-BONDS] 0
[CASH-FLOW-OPERATIONS] $295,917
[EPS-PRIMARY] 0
[EPS-DILUTED] 0
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant identified below has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
DUQUESNE LIGHT COMPANY
----------------------
(Registrant)
Date November 9, 1994 /s/ Gary L. Schwass
---------------------- -----------------------------
(Signature)
Gary L. Schwass
Vice President - Finance, and
Principal Financial Officer
Date November 9, 1994 /s/ Raymond H. Panza
---------------------- ----------------------------
(Signature)
Raymond H. Panza
Controller and
Principal Accounting Officer
