SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC
FORM U5S
ANNUAL REPORT
For the year ended December 31, 1997
Filed pursuant to the Public Utility Holding
Company Act of 1935
By
PECO ENERGY POWER COMPANY
2301 Market Street, Philadelphia, Pennsylvania 19101
<PAGE>
- 2 -
<TABLE>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 1997
<CAPTION>
% of Issuer Owner's
Number of Common Voting Book Book
Name of Company Shares Owned Power Value Value
PECO Energy Power
Company (PEPCO)
(the registrant
and owner) (1)
Susquehanna Power
Company
<S> <C> <C> <C> <C>
(SPCO) (the issuer) 1,273,000 100% $71.61 $71.61
The Proprietors of the
Susquehanna Canal* (2)
* Inactive Company
<FN>
(1) $91,161,453 investment in Susquehanna Power Company
(2) This Company was acquired in connection with the development of the
Conowingo Hydroelectric Project. It is an inactive company, owning no
properties and conducting no business activities of any nature. The total
investment therein is reflected on the books of Susquehanna Power Company
at $1.
</FN>
</TABLE>
ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS
None
ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM
SECURITIES
None
ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES
None
ITEM 5. INVESTMENTS IN SECURITIES OF NONSYSTEM COMPANIES
None
<PAGE>
- 3 -
ITEM 6. OFFICERS AND DIRECTORS
<TABLE>
PART I. AS OF DECEMBER 31, 1997
<CAPTION>
Name of System
Companies with
Which Connected
--------------------------
PEPCO SPCO
<S> <C> <C> <C>
C. A. McNeill, Jr. 2301 Market St., Philadelphia, PA 19101 Pres. - Director Pres. - Director
K .G. Lawrence 2301 Market St., Philadelphia, PA 19101 VP - Director VP - Director
J. M. Madara, Jr. 2301 Market St., Philadelphia, PA 19101 VP - Director VP - Director
J. B. Mitchell 2301 Market St., Philadelphia, PA 19101 Treasurer Treasurer
K. K. Combs 2301 Market St., Philadelphia, PA 19101 Secretary Secretary
E. J. Cullen, Jr. 2301 Market St., Philadelphia, PA 19101 Assist. Sec. Assist. Sec.
D. Moy Kelly 2301 Market St., Philadelphia, PA 19101 Assist. Treas. Assist. Treas.
G. R. Shicora 2301 Market St., Philadelphia, PA 19101 Assist. Treas. Assist. Treas.
J. W. Durham 2301 Market St., Philadelphia, PA 19101 Director Director
</TABLE>
PART II.
<TABLE>
<CAPTION>
Position Held Applicable
Name of Officer Name and Location of in Financial Exemption
or Director Financial Institution Institution Rule
--------------- --------------------- ------------- ----------
<S> <C>
None
</TABLE>
<PAGE>
- 4 -
PART III.
(a) COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS OF SYSTEM
COMPANIES
None
(b) INTEREST IN SECURITIES OF SYSTEM COMPANIES
None
(c) CONTRACTS AND TRANSACTIONS
None
(d) INDEBTEDNESS
None
(e) BONUS AND PROFIT SHARING ARRANGEMENTS
None
(f) INDEMNIFICATION
None
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS
None
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS
Part I: None
Part II: None
Part III: None
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES
Part I: None
Part II: None
Part III: None
<PAGE>
- 5 -
ITEM10. FINANCIAL STATEMENTS AND EXHIBITS (a) Index to Financial Statements and
Schedules:
PAGE
----
6 Report of Independent Accountants
7 Consolidating Statement of Income for the year ended December 31, 1997
8-9 Consolidating Balance Sheet as of December 31, 1997
10 Consolidating Statement of Cash Flows for the year ended December 31,
1997
11 Consolidating Statement of Changes in Shareholder's Equity for the
year ended December 31, 1997
12-16 Notes to Consolidating Financial Statements
Ex 27 Financial Data Schedule as of December 31, 1997
(b) Index to Exhibits
Exhibit A
None
Exhibit B
1. PECO Energy Power Company's Certificate of Organization and
Charter, By-laws amended as of December 23, 1993, and amendment
to Articles of Incorporation filed February 8, 1994, are
incorporated herein by reference (1991 Form U5S and 1993 Form
10-K, File No.1-1392).
2. Susquehanna Power Company's Certificate of Organization is
incorporated herein by reference (1991 Form U5S, File No.
1-1392); By-laws amended December 23, 1993, and Charter
amendment filed February 8, 1994 are incorporated herein by
reference (1993 Form U5S, File No. 1-1392).
Exhibit C
None
Exhibit D
None
Exhibit E
None
Exhibit F
None
Exhibit G
See Item 10(a), Index to Financial Statements and Schedules.
Exhibit H
None
Exhibit I
None
<PAGE>
- 6 -
COOPERS Coopers & Lybrand L.L.P.
& LYBRAND a professional services firm
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
PECO Energy Power Company
Philadelphia, Pennsylvania
We have audited the consolidating and individual financial statements of
PECO Energy Power Company (subsidiary of PECO Energy Company) and subsidiary
company listed in Item 10 of this Form U5S. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidating and individual financial positions of
PECO Energy Power Company and subsidiary company as of December 31, 1997, and
the consolidated and individual results of their operations and their cash flows
for the year ended December 31, 1997, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 2, 1998
<PAGE>
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<TABLE>
PECO ENERGY POWER COMPANY & SUBSIDIARY COMPANY
CONSOLIDATING STATEMENT OF INCOME
For the Year Ended December 31, 1997
<CAPTION>
PECO
Energy Susquehanna
Power Power
Company Company Eliminations Consolidated
-------- ----------- ------------ ----------
Rentals from Utility Plant Leased to Others
<S> <C> <C> <C>
Affiliates $805,099 $17,217,135 --- $18,022,234
Others 267,759 249 --- 268,008
---------- ------------ ---------- -----------
Total Rentals from Utility Plant
Leased to Others 1,072,858 17,217,384 --- 18,290,242
---------- ------------ --------- ----------
Expenses of Utility Plant Leased to Others
General --- --- --- ---
Depreciation and Amortization 45,294 1,615,326 --- 1,660,620
Other Taxes 209,446 2,361,468 --- 2,570,914
---------- ------------ ---------- ----------
Total Expenses of Utility Plant
Leased to Others 254,740 3,976,794 --- 4,231,534
---------- ------------ ---------- ----------
Income from Leased Utility Plant 818,118 13,240,590 --- 14,058,708
---------- ------------ ---------- -----------
Other Income and Deductions
Interest Charges (5,231) (5,303) --- (10,534)
Allowance for Funds Used
During Construction --- 770,413 --- 770,413
Other, Net --- 129,635 --- 129,635
Equity in Net Income of Subsidiary 118,174 --- (118,174) ---
---------- ----------- ----------- ----------
Total Other Income and Deductions 112,943 894,745 (118,174) 889,514
---------- ----------- ---------- ----------
Income Before Taxes and Extraordinary Item 931,061 14,135,335 (118,174) 14,948,222
Income Taxes 5,819 4,486,685 --- 4,492,504
---------- ---------- ---------- ----------
Income Before Extraordinary Item 925,242 9,648,650 (118,174) 10,455,718
Extraordinary Item (net of income taxes) (345,630) (9,530,476) --- (9,876,106)
---------- ------------ ---------- -----------
Net Income $579,612 $118,174 ($118,174) $579,612
========== ============ =========== ==========
See Notes to Consolidating Financial Statements
<PAGE>
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</TABLE>
<TABLE>
PECO ENERGY POWER COMPANY & SUBSIDIARY COMPANY
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
(ASSETS)
<CAPTION>
PECO
Energy Susquehanna
Power Power
Company Company Eliminations Consolidated
-------- ----------- ------------ ------------
ASSETS
<S> <C> <C> <C>
Utility Plant $6,103,452 $135,293,902 --- $141,397,354
Less Accumulated Provision for
Depreciation and Amortization 689,363 34,140,340 --- 34,829,703
------------- ------------ -------------- -------------
5,414,089 101,153,562 --- 106,567,651
------------- ------------ -------------- -------------
Construction Work in Progress --- 7,034,968 --- 7,034,968
------------- ------------ -------------- -------------
5,414,089 108,188,530 --- 113,602,619
------------- ------------ -------------- -------------
Investments
Investment in Subsidiary Company 91,161,453 --- ($91,161,453) ---
Nonutility Property, Net 384,727 1,113,008 --- 1,497,735
------------- ------------ -------------- -------------
91,546,180 1,113,008 (91,161,453) 1,497,735
------------- ------------ -------------- -------------
Current Assets
Cash and Temporary Cash Investments 234,588 608,958 --- 843,546
Accounts Receivable, Affiliates 583,261 1,747,879 (500,000) 1,831,140
Accounts Receivable, Other 105,591 --- --- 105,591
Prepayments 30,164 153,405 --- 183,569
------------- ------------ -------------- -------------
953,604 2,510,242 (500,000) 2,963,846
------------- ------------ -------------- -------------
Deferred Debits
Miscellaneous Deferred Debits --- 87,059 --- 87,059
------------- ------------ -------------- -------------
--- 87,059 --- 87,059
------------- ------------ -------------- -------------
Total Assets $97,913,873 $111,898,839 ($91,661,453) $118,151,259
============= ============ ============== =============
See Notes to Consolidating Financial Statements.
</TABLE>
<PAGE>
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<TABLE>
PECO ENERGY POWER COMPANY & SUBSIDIARY COMPANY
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
(CAPITALIZATION & LIABILITIES)
<CAPTION>
PECO
Energy Susquehanna
Power Power
Company Company Eliminations Consolidated
-------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
CAPITALIZATION & LIABILITIES
Capitalization
Common Shareholder's Equity
Common Stock ($25 par)
Authorized 1,500,000 Shares, $24,600,000 --- --- $24,600,000
Outstanding 984,000 Shares
Common Stock (without par value) --- $ 47,047,450 ($47,047,450) ---
Authorized 1,500,000 Shares,
Outstanding 1,273,000 Shares
Other Paid-In Capital 73,740,078 46,715,078 (46,715,078) 73,740,078
Retained Earnings (1,719,666) (2,601,075) 2,601,075 (1,719,666)
------------- ------------ -------------- --------------
96,620,412 91,161,453 (91,161,453) 96,620,412
------------- ------------ -------------- --------------
Current Liabilities
Accounts Payable, Affiliates 500,000 245,872 (500,000) 245,872
Accounts Payable, Other (2,687) 774,503 --- 771,816
Taxes Accrued 445,916 4,668,675 --- 5,114,591
Interest Accrued --- --- --- ---
------------- ------------ -------------- --------------
943,229 5,689,050 (500,000) 6,132,279
------------- ------------ -------------- --------------
Deferred Credits
Deferred Income Taxes 350,232 15,048,336 --- 15,398,568
------------- ------------ -------------- --------------
350,232 15,048,336 --- 15,398,568
------------- ------------ -------------- --------------
Total Capitalization & Liabilities $97,913,873 $111,898,839 ($91,661,453) $118,151,259
============= ============ ============== =============
See Notes to Consolidating Financial Statements.
</TABLE>
<PAGE>
- 10 -
<TABLE>
PECO ENERGY POWER COMPANY & SUBSIDIARY COMPANY
CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1997
<CAPTION>
PECO
Energy Susquehanna
Power Power
Company Company Eliminations Consolidated
-------- ----------- ------------ ------------
Cash Flows from Operating Activities
<S> <C> <C> <C> <C>
Net Income $579,612 $118,174 ($118,174) $579,612
Extraordinary Item (net of income taxes) (345,630) (9,530,476) --- (9,876,106)
--------- ----------- ---------- -----------
Income Before Extraordinary Item 925,242 9,648,650 (118,174) 10,455,718
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 45,294 1,615,326 --- 1,660,620
Deferred Income Taxes 244,536 5,510,802 --- 5,755,338
Decrease/(Increase) in Receivables 1,081,093 858,203 --- 1,939,296
Decrease in Payables and
Accrued Expenses (1,323,735) (489,836) --- (1,813,571)
Recoverable Deferred Income Taxes
(512,262) (5,321,169) --- (5,833,431)
Other, Net (196) (14,433) --- (14,629)
---------- ------------ ----------- ------------
Net Cash Flows Provided by Operating
Activities 459,972 11,807,543 (118,174) 12,149,341
---------- ------------ ----------- ------------
Cash Flows from Investing Activities
Investment in Utility Plant --- (10,466,608) --- (10,466,608)
Nonutility Plant --- (121,236) --- (121,236)
Net Investment in Subsidiary Company 2,547,426 --- (2,547,426) ---
---------- ------------ ----------- ------------
Net Cash Flows Used by Investing Activities 2,547,426 (10,587,844) (2,547,426) (10,587,844)
---------- ------------ ----------- ------------
Cash Flows from Financing Activities
Capital Contribution from Parent Company 5,000,000 6,500,000 (6,500,000) 5,000,000
Dividends on Common Stock (9,692,400) (9,165,600) 9,165,600 (9,692,400)
---------- ------------ ------------ -----------
Net Cash Flows Used by Financing Activities (4,692,400) (2,665,600) 2,665,600 (4,692,400)
------------ ------------ ----------- -----------
Increase in Cash and Cash Equivalents (1,685,002) (1,445,901) --- (3,130,903)
---------- ------------ ------------ -----------
Cash & Cash Equivalents at beginning of period 1,919,590 2,054,859 --- 3,974,449
---------- ------------ ----------- -----------
Cash & Cash Equivalents at end of period $234,588 $608,958 --- $843,546
========== ============ =========== ===========
See Notes to Consolidating Financial Statements.
</TABLE>
<PAGE>
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<TABLE>
PECO ENERGY POWER COMPANY & SUBSIDIARY COMPANY
CONSOLIDATING STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
For the Year Ended December 31, 1997
<CAPTION>
Capital
Contributions
From
Balance Net Parent Balance
1/1/97 Dividends Income Company 12/31/97
---------- ---------- ---------- -------------- -----------
PECO Energy Power Company
<S> <C> <C> <C> <C> <C>
Common Stock $24,600,000 --- --- --- $24,600,000
Other Paid-In Capital 68,740,078 --- --- 5,000,000 73,740,078
Retained Earnings 7,393,122 (9,692,400)* 579,612 --- (1,719,666)
Susquehanna Power Company
Common Stock 47,047,450 --- --- --- 47,047,450
Other Paid-In Capital 40,215,078 --- --- 6,500,000 46,715,078
Retained Earnings 6,446,351 (9,165,600)** 118,174 --- (2,601,075)
Eliminations
Common Stock (47,047,450) --- --- --- (47,047,450)
Other Paid-In Capital (40,215,078) --- --- (6,500,000) (46,715,078)
Retained Earnings (6,446,351) 9,165,600 (118,174) --- 2,601,075
Consolidated
Common Stock 24,600,000 --- --- --- 24,600,000
Other Paid-In Capital 68,740,078 --- --- 5,000,000 73,740,078
Retained Earnings 7,393,122 (9,692,400) 579,612 --- (1,719,666)
<FN>
* $9.85 per share
** $7.20 per share
</FN>
</TABLE>
<PAGE>
- 12 -
NOTES TO CONSOLIDATING FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CONSOLIDATION
The consolidating financial statements include the accounts
of PECO Energy Power Company (Company) and its subsidiary, Susquehanna Power
Company (SPCO). The Company and SPCO (Companies) are owned by PECO Energy
Company (Parent Company), which together with another subsidiary leases and
operates the utility plant of the Company and SPCO.
The Companies are joint holders of a license from the Federal Energy
Regulatory Commission (FERC) for Project No. 405 (Conowingo Project).
DEPRECIATION AND AMORTIZATION
The annual provision for depreciation is
provided over the estimated service lives of plant on the straight-line method.
The annual provision for financial reporting purposes in 1997, expressed as a
percent of average depreciable plant in service, was 1.07% for the property of
the Company and 1.32% for the property of SPCO.
Costs for relicensing the Conowingo Hydroelectric Project are being
amortized over 30 years on the straight-line method.
INCOME TAXES
Deferred federal and state income taxes are provided on all
significant temporary differences between book and tax basis of assets and
liabilities, transactions that reflect taxable income in a year different than
book income and tax carryforwards. Investment tax credits previously used for
income tax purposes have been deferred on the Consolidated Balance Sheet and are
recognized in book income over the life of the related property. The Companies
join with the Parent Company and its other subsidiaries in filing a consolidated
federal income tax return. The provision for federal income taxes is computed on
a separate return basis after giving consideration to consolidated return
savings.
ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION (AFUDC)
AFUDC is the cost, during the period of construction, of debt and
equity funds used to finance construction projects. AFUDC is recorded
as a charge to Construction Work in Progress and credit to Other
Income and Deductions. The rate used for capitalizing AFUDC, which
averaged 8.88% in 1997, was computed under a method prescribed by the
regulatory authorities on the basis of the Parent Company's book
balances and cost rates, and is utilized by all of the subsidiaries of
the Parent Company, including the Companies. AFUDC is not included in
regular taxable income and the depreciation of capitalized AFUDC is
not tax deductible.
Effective January 1, 1998, the Companies ceased accruing AFUDC for
electric generation-related construction projects and will use SFAS
No. 34, "Capitalized Interest Costs," to calculate the costs during
the period of construction of debt funds used to finance its electric
generation-related construction projects.
<PAGE>
-13-
2. Accounting Changes:
The Companies account for regulated operations in accordance with Statement
of Financial Accounting Standards (SFAS) No. 71, "Accounting for the Effects of
Certain Types of Regulation," which allows the Companies to record the financial
statement effects of rate regulation. Use of SFAS No. 71 is applicable to the
utility operations of the Companies which meet the following criteria: (1)
third-party regulation of rates; (2) cost-based rates; and (3) a reasonable
assumption that all costs will be recoverable from customers through rates.
In 1997, the Financial Accounting Standards Board (FASB) through its
Emerging Issues Task Force (EITF) issued EITF No. 97-4, "Deregulation of the
Pricing of Electricity - Accounting for the Discontinuation of Application of
FASB Statement No. 71, Accounting for the Effects of Certain Types of
Regulation, and No. 101, Regulated Enterprises - Accounting for the
Discontinuation of Application of FASB Statement No. 71." The EITF agreed that:
a) an entity should cease to apply SFAS No. 71 no later than the date the
specific deregulation plan is enacted and the details of that plan are known,
and b) both stranded costs and regulated assets and liabilities should continue
to be recognized to the extent that the transition plan provides for their
recovery through the regulated transmission and distribution portion of the
business.
The Companies believe that the Opinion and Order entered by the
Pennsylvania Public Utility Commission in December 1997 (revised in January
1998) provides sufficient details regarding the deregulation of the Companies'
retail electric generation operations to require the discontinuance of SFAS No.
71 for those operations. Effective December 31, 1997, the Companies adopted the
provisions of SFAS No. 101 for its electric generation operations. SFAS No. 101
requires a determination of impairment of assets under SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of.", and the elimination of all effects of rate regulation that have been
recognized as assets and liabilities pursuant to SFAS No. 71.
At December 31, 1997, the Companies performed an impairment test of its
electric generation assets pursuant to SFAS No. 121 on a plant specific basis
and determined that none of the Companies assets would be impaired as of
December 31, 1997.
Due to the market-based pricing of electric generation provisions of the
PJM Interconnection, L.L.C. (PJM) restructuring order approved by the Federal
Energy Regulatory Commission in November 1997, the Companies believe that their
wholesale energy sales operations are no longer subject to the provisions of
SFAS No. 71.
With the deregulation of the Companies' wholesale energy sales operations
and the market-based pricing of electric generation provisions of the PJM, the
management of PEPCO and SPCO have determined that it would be prudent to
discontinue SFAS No. 71 for their
<PAGE>
- 14-
operations. At December 31, 1997, PEPCO and SPCO incurred an extraordinary
charge against income of $590,719 and $15,765,881 $345,630 and $9,530,476 after
income taxes) as a result of the discontinuance of SFAS No. 71. The
extraordinary charge was made up of the following items:
PEPCO SFAS No. 109 Regulatory Asset $ 345,630
SPCO SFAS No. 109 Regulatory Asset 9,530,476
Consolidated Total $ 9,876,106
3. Income Taxes:
Income tax expense is comprised of the following components:
PECO Energy Susquehanna
Power Power
Company Company Consolidated
----------- ----------- -----------
Federal
Current $207,684 $3,536,507 $3,744,191
Deferred (268,741) 157,982 (110,759)
Investment tax credit,net --- (16,272) (16,272)
State
Current 65,861 760,545 826,406
Deferred 1,015 47,923 48,938
--------- ----------- -----------
Total $5,819 $4,486,685 $4,492,504
========= =========== ===========
The total income tax provisions differed from amounts computed by applying the
federal statutory rate to income as shown below:
Percent of Income Before Income Taxes
-------------------------------------
PECO Energy Susquehanna
Power Power
Company Company Consolidated
------------ ----------- -----------
Federal statutory rate 35% 35% 35%
State income tax,
net of federal
income tax benefit 5% 4% 4%
Plant related flow-through -39% -6% -8%
Other 0% -1% -1%
---- --- ---
Effective rate 1% 32% 30%
==== === ===
<PAGE>
- 15-
The tax effect of temporary differences which give rise to the Companies' net
deferred tax liability as of December 31, 1997 are as follows:
Liability or (Asset)
-------------------------------------
PECO Energy Susquehanna
Power Power
Company Company Consolidated
----------- ------------ ------------
Nature of Temporary Difference:
Plant basis difference $350,232 $14,131,247 $14,481,479
Deferred investment tax credit --- 917,089 917,089
-------- ----------- ------------
Deferred income taxes on
the balance sheet $350,232 $15,048,336 $15,398,568
========= =========== ============
4. Taxes, Other Than Income Taxes - Operating:
PECO Energy Susquehanna
Power Company Power Company Consolidated
------------- ------------- ------------
Capital stock $101,446 $634,800 $736,246
Real estate 108,000 1,704,000 1,812,000
Other --- 22,668 22,668
-------- ---------- ----------
$209,446 $2,361,468 $2,570,914
======== ========== ==========
5. Notes Payable, Banks:
There are no specific requirements for compensating balances in
conjunction with the bank loans. The Parent Company maintains normal
working balances with all lending banks. During 1997, the Parent Company
discontinued its compensating balance agreements for these credit lines.
At December 31, 1997, the Companies had no outstanding loans under
formal and informal lines of credit aggregating approximately $3.0
million.
6. Utility Plant - Leased to Related Parties:
Utility plant consists principally of a hydroelectric generating station
and related transmission facilities and is leased to and operated by
affiliated companies. Rentals are based on an annual return on net
original cost of utility plant plus working capital together with a
reimbursement of operating expenses, taxes and depreciation as reflected
in the Consolidating Statement of Income. The license granted by the
Federal Energy Regulatory Commission for the Conowingo Project expires
in 2014. Minimum rental payments due in future years through 2014
aggregated $132.9 million at December 31, 1997, with approximately $8.4
million of rentals, net of expenses, due in each of the next five years.
-16-
7. Cash and Cash Equivalents:
For purposes of the Consolidating Statement of Cash Flows, the Companies
consider all highly liquid debt instruments purchased with a maturity of
three months or less to be cash equivalents. The following disclosures
supplement the accompanying Consolidating Statement of Cash Flows:
PECO Energy Susquehanna
Power Company Power Company Consolidated
------------- ------------- ------------
Cash Paid During the Year:
Income taxes (net of refunds) $339,195 $3,902,680 $4,241,875
<PAGE>
SIGNATURE
The undersigned system company has duly caused this annual report to be
signed on its behalf by the undersigned thereunto duly authorized pursuant to
the requirements of the Public Utility Holding Company Act of 1935. The
signature of the undersigned company shall be deemed to relate only to matters
having reference to such company or its subsidiary.
PECO ENERGY POWER COMPANY
Date: April 29, 1998 By: /S/ J. BARRY MITCHELL
---------------------------- ---------------------------
J.Barry Mitchell, Treasurer
<TABLE> <S> <C>
<ARTICLE> OPUR1
<SUBSIDIARY>
<NUMBER> 1
<NAME> SUSQUEHANNA POWER COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 113603
<OTHER-PROPERTY-AND-INVEST> 1498
<TOTAL-CURRENT-ASSETS> 2964
<TOTAL-DEFERRED-CHARGES> 87
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 118151
<COMMON> 24600
<CAPITAL-SURPLUS-PAID-IN> 73740
<RETAINED-EARNINGS> (1720)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 96620
0
0
<LONG-TERM-DEBT-NET> 0
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 21531
<TOT-CAPITALIZATION-AND-LIAB> 118151
<GROSS-OPERATING-REVENUE> 18290
<INCOME-TAX-EXPENSE> 4493
<OTHER-OPERATING-EXPENSES> 4232
<TOTAL-OPERATING-EXPENSES> 8724
<OPERATING-INCOME-LOSS> 14059
<OTHER-INCOME-NET> 900
<INCOME-BEFORE-INTEREST-EXPEN> 14959
<TOTAL-INTEREST-EXPENSE> 10
<NET-INCOME> 580<F1>
0
<EARNINGS-AVAILABLE-FOR-COMM> 580
<COMMON-STOCK-DIVIDENDS> 9692
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 12149
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Net income includes an extraordinary item of $9,876 (net of $6,480 of income taxes).
</FN>
</TABLE>
