FORM 10-K/A-1
SECURlTlES AND EXCHANGE COMMlSSlON
WASHINGTON, D. C. 20549
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (Fee Required)
For the fiscal year ended
December 31, 1995 Commission File Number 1-3132-2
INDIANAPOLIS POWER & LIGHT COMPANY
(Exact name of Registrant as specified in its charter)
Indiana 35-0413620
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
One Monument Circle
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 317-261-8261
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
518,985 Shares of Cumulative Preferred Stock
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to the filing requirements for at least the
past 90 days. Yes X No
--------- ---------
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. (X)
As of January 31, 1996, there were 17,206,630 shares of the
registrant's common stock (without par value) issued and outstanding.
_____________________________________
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Indianapolis Power & Light Company definitive
Information Statement for the Annual Meeting of Shareholders to be
held on April 17, 1996 are incorporated by reference into Part III of
this Report.
PART I
Item 1. BUSINESS
ORGANIZATION
Indianapolis Power & Light Company (IPL) is an operating public utility
incorporated under the laws of the state of Indiana on October 27, 1926.
IPL is a subsidiary of IPALCO Enterprises, Inc. (IPALCO). IPALCO is a
holding company incorporated under the laws of the state of Indiana on
September 14, 1983. All common stock of IPL is owned by IPALCO.
GENERAL
IPL is engaged primarily in generating, transmitting, distributing and
selling electric energy in the city of Indianapolis and neighboring cities,
towns, communities, and adjacent rural areas, all within the state of
Indiana, the most distant point being about forty miles from Indianapolis.
It also produces, distributes and sells steam within a limited area in such
city. There have been no significant changes in the services rendered, or
in the markets or methods of distribution, since the beginning of the
fiscal year. IPL intends to do business of the same general character as
that in which it is now engaged. No private or municipally-owned electric
public utility companies are competing with IPL in the territory it serves.
IPL operates under indeterminate permits subject to the jurisdiction of
the Indiana Utility Regulatory Commission (IURC). Such permits are subject
to revocation by the IURC for cause. The Public Service Commission Act of
Indiana (the PSC Act), which provides for the issuance of such permits,
also provides that if the PSC Act is repealed, indeterminate permits will
cease and a utility will again come into possession of such franchises as
were surrendered at the time of the issue of the permit, but in no event
shall such reinstated franchise be terminated within less than five years
from the date of repeal of the PSC Act.
IPL's business is not dependent on any single customer or group of
customers. During 1995, IPL's sales, according to the Standard Industrial
Classification, were 33%, 42% and 25% for residential, commercial and
industrial customers, respectively.
The electric utility business is affected by the various seasonal
weather patterns throughout the year and, therefore, the operating revenues
and associated operating expenses are not generated evenly by months during
the year.
IPL's electric system is directly interconnected with the electric
systems of Indiana Michigan Power Company, PSI Energy, Inc., Southern
Indiana Gas and Electric Company, Wabash Valley Power Association, Hoosier
Energy Rural Electric Cooperative, Inc. and the Indiana Municipal Power
Agency.
Also, IPL and 29 other electric utilities, known as the East Central
Area Reliability Group (ECAR), are cooperating under an agreement which
provides for coordinated planning of generating and transmission facilities
and the operation of such facilities to provide maximum reliability of bulk
power supply in the nine-state region served by ECAR. Smaller electric
utility systems, independent power producers and power marketers
participate as associate members.
In 1995, approximately 99.5% of the total kilowatt-hours sold by IPL
were generated from coal, 0.2% from middle distillate fuel oil, 0.2% from
gas and 0.1% from secondary steam purchased from the Indianapolis Resource
Recovery Project. In addition to use in oil-fired generating units, fuel
oil is used for start up and flame stabilization in coal-fired generating
units as well as for coal thawing and coal handling. Gas fuel is used in
IPL's newer combustion turbines.
IPL's long-term coal contracts provide for the supply of the major
portion of its burn requirements through the year 1999, assuming
environmental regulations can be met. The long-term coal agreements are
with three suppliers and the coal is produced entirely in the state of
Indiana. These three suppliers are not affiliates of IPL; see Exhibits
listed under Part IV Item 14(a)3(10.1 to 10.5) for a list of coal
contracts. It is presently believed that all coal used by IPL will be
mined by others. IPL normally carries fuel oil and a 70-day supply of coal
to offset unforeseen occurrences such as labor disputes, equipment
breakdowns and power sales to other utilities. When strikes are
anticipated in the coal industry, IPL increases its stockpile to an
approximate 92-day supply.
The combined cost of coal, fuel oil and gas used in the generation of
electric energy for 1995 averaged 1.129 cents per kilowatt-hour or $24.04
per equivalent ton of coal, compared with the 1994 average fuel cost for
electric generation of 1.162 cents per kilowatt-hour or $24.95 per
equivalent ton of coal.
IPL has a long-term contract to purchase steam for use in its steam
distribution system with Ogden Martin Systems of Indianapolis, Inc. (Ogden
Martin). Ogden Martin owns and operates the Indianapolis Resource Recovery
Project which is a waste-to-energy facility located in Marion County,
Indiana. During 1995, IPL's steam system purchased 47.2% of its total
therm requirement from Ogden Martin. Additionally, 35.5% of its 1995 one-
hour peak load was met with steam purchased from Ogden Martin. IPL also
purchased 4.2 million secondary therms which represent Ogden Martin send-
out in excess of the IPL steam system requirements. Such secondary steam
is used to produce electricity at the IPL Perry K and Perry W facilities.
CONSTRUCTION
The cost of IPL's construction program during 1995, 1994 and 1993 was
$175.6 million, $185.6 million and $149.3 million, respectively, including
Allowances for Funds Used During Construction (AFUDC) of $8.7 million, $7.3
million and $3.6 million, respectively.
IPL's construction program is reviewed periodically and is updated to
reflect among other things the changes in economic conditions, revised load
forecasts and cost escalations under construction contracts. Current
projections indicate that IPL will need about 400 megawatts (MW) of new
capacity resources by the summer of 2000 to replace the 200 MW purchase
discussed below and to provide for growth. These resource requirements can
be met in a variety of ways including, but not limited to, a combination of
power purchases and peaking turbines.
During 1992, IPL entered into a five-year firm power purchase agreement
with Indiana Michigan Power Company (IMP), for 200 MW of additional
capacity for the near-term requirements. See Item 7, "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS"
under "Capital Requirements" for additional information regarding the IMP
agreement.
IPL's construction program for the five-year period 1996-2000, is
estimated to cost $528.4 million including AFUDC. The estimated cost of
the program by year (in millions) is $103.6 in 1996; $100.9 in 1997; $106.7
in 1998; $111.9 in 1999 and $105.3 in 2000. It includes $271.2 million for
additions, improvements and extensions to transmission and distribution
lines, substations, power factor and voltage regulating equipment,
distribution transformers and street lighting distribution. The forecast
also includes $107.3 million for combustion turbines with in-service dates
of 1999, 2000 and 2001, and $45.4 million in environmental costs of which
approximately $35 million pertains to the Clean Air Act. With respect to
the expenditures for pollution control facilities to comply with the Clean
Air Act and with respect to the regulatory authority of the IURC as it
relates to the integrated resource plan, see "REGULATORY MATTERS" and Item
7, "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS."
FINANCING
Long-term debt, cash flows from operations and temporary short-term
borrowings are forecasted to provide the funds required for the five-year
construction program. Uncertainties which could affect this forecast
include the impact of inflation on operating expenses, the actual degree of
growth in KWH sales and the level of interchange sales with other
utilities. Additionally, IPL has authority from the IURC to redeem and
replace certain of its existing securities.
EMPLOYEE RELATIONS
As of December 31, 1995, IPL had 2,194 employees of whom 1,110 were
represented by the International Brotherhood of Electrical Workers, AFL-CIO
(IBEW) and 395 were represented by the Electric Utility Workers Union
(EUWU), an independent labor organization. In December 1993, the
membership of the IBEW ratified a new labor agreement which remains in
effect until December 16, 1996. The agreement provided for general pay
adjustments of 4% in 1993 and 3.5% in both 1994 and 1995, and changes in
pension and health care coverage. In March 1995, the membership of the
EUWU ratified a new labor agreement which remains in effect until February
23, 1998. The agreement provided for general pay adjustments of 2% in
1995, 1996 and 1997; lump sum payments of $500 in both 1995 and 1996; and
changes in pension and health care coverage.
REGULATORY MATTERS
IPL is subject to regulation by the IURC as to its services and
facilities, valuation of property, the construction, purchase or lease of
electric generating facilities, classification of accounts, rates of
depreciation, rates and charges, issuance of securities (other than
evidences of indebtedness payable less than twelve months after the date of
issue), the acquisition and sale of public utility properties or securities
and certain other matters. See Note 9 in the Notes to Financial
Statements.
In addition, IPL is subject to the jurisdiction of the Federal Energy
Regulatory Commission (FERC), in respect of short-term borrowings not
regulated by the IURC, the sale and transmission of electric energy in
interstate commerce, the classification of its accounts and the acquisition
and sale of utility property in certain circumstances as provided by the
Federal Power Act.
IPL is also subject to federal, state and local environmental laws and
regulations, particularly as to generating station discharges affecting air
and water quality. The impact of compliance with such regulations on the
capital and operating costs of IPL has been and will continue to be
substantial. See Item 7, "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS" under "Capital
Requirements." Accordingly, IPL has developed a plan to reduce sulfur
dioxide and nitrogen oxide emissions from several generating units. This
plan has been approved by the IURC and the Environmental Protection Agency
(EPA). Estimated annual costs for all air, solid waste and water
environmental compliance measures are $25 million and $5 million in 1996
and 1997, respectively.
INDIANAPOLIS POWER & LIGHT COMPANY
STATISTICAL INFORMATION - ELECTRIC
The following table of statistical information presents additional data on IPL's operation.
Year Ended December 31,
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1995 1994 1993 1992 1991
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Operating Revenues (In Thousands):
Residential $ 243,055 $ 230,805 $ 225,138 $ 212,757 $ 224,039
Small industrial and commercial 130,780 129,346 127,551 126,588 135,456
Large industrial and commercial 275,803 266,703 255,945 243,446 237,200
Public lighting 7,598 6,949 7,186 7,133 7,106
Miscellaneous 8,289 7,186 7,373 6,018 6,960
-------------- -------------- -------------- -------------- --------------
Revenues - ultimate consumers 665,525 640,989 623,193 595,942 610,761
Sales for resale - REMC 1,105 1,098 897 861 900
Sales for resale - other 6,758 7,680 5,237 2,400 4,197
-------------- -------------- -------------- -------------- --------------
Total electric revenues $ 673,388 $ 649,767 $ 629,327 $ 599,203 $ 615,858
============== ============== ============== ============== ==============
Kilowatt-hour Sales (In Millions):
Residential 4,277 4,077 4,014 3,675 3,960
Small industrial and commercial 2,209 2,207 2,202 2,171 2,331
Large industrial and commercial 6,509 6,306 6,169 5,843 5,612
Public lighting 61 64 62 64 64
-------------- -------------- -------------- -------------- --------------
Sales - ultimate consumers 13,056 12,654 12,447 11,753 11,967
Sales for resale - REMC 28 26 24 23 23
Sales for resale - other 394 456 321 169 256
-------------- -------------- -------------- -------------- --------------
Total kilowatt-hours sold 13,478 13,136 12,792 11,945 12,246
============== ============== ============== ============== ==============
Customers at End of Year:
Residential 365,163 360,347 356,015 352,139 347,718
Small industrial and commercial 39,781 38,849 38,359 38,171 38,011
Large industrial and commercial 3,557 3,525 3,342 3,163 2,952
Public lighting 281 266 252 239 229
-------------- -------------- -------------- -------------- --------------
Total ultimate consumers 408,782 402,987 397,968 393,712 388,910
Sales for resale - REMC 1 1 1 1 1
-------------- -------------- -------------- -------------- --------------
Total electric customers 408,783 402,988 397,969 393,713 388,911
============== ============== ============== ============== ==============
Miscellaneous Statistics:
Kilowatt-hour output (In Millions):
Generated (net after station use) 14,032 13,580 13,254 12,525 12,851
Purchased 257 206 325 126 160
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Total generated and purchased 14,289 13,786 13,579 12,651 13,011
Company use, line loss, etc. 811 650 787 706 765
-------------- -------------- -------------- -------------- --------------
Energy sold 13,478 13,136 12,792 11,945 12,246
============== ============== ============== ============== ==============
Load factor (percent) 56.94 57.64 57.44 56.72 56.37
Average BTU per net kilowatt-hour 10,490 10,445 10,503 10,385 10,455
Cost of fuel per million BTU $ 1.076 $ 1.112 $ 1.096 $ 1.103 $ 1.113
Cost of fuel per ton (includes oil and gas
stated in equivalent tons of coal) $ 24.041 $ 24.946 $ 24.488 $ 24.547 $ 24.804
Summer plant capability (megawatts)* 2,986 2,907 2,829 2,829 2,829
Maximum demand on IPL system (megawatts)* 2,786 2,640 2,635 2,505 2,583
Average use per residential
customer (kilowatt-hours) 11,796 11,393 11,345 10,515 11,460
Average revenue per residential customer $ 670.33 $ 645.02 $ 636.28 $ 608.68 $ 648.36
Average revenue per small industrial and
commercial customer $ 3,311.99 $ 3,327.04 $ 3,310.59 $ 3,305.94 $ 3,552.03
Average revenue per large industrial and
commercial customer $ 76,526.98 $ 77,960.62 $ 78,055.83 $ 79,324.43 $ 83,816.09
Average residential revenue per
kilowatt-hour (cents) 5.683 5.662 5.609 5.789 5.658
* All figures are net of station use.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
INDIANAPOLIS POWER & LIGHT COMPANY
By /s/ Stephen J. Plunkett
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(Stephen J. Plunkett, Controller)
Date: March 21, 1996
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