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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-1839
COMMONWEALTH EDISON COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ILLINOIS 36-0938600
(STATE OR OTHER (IRS EMPLOYER
JURISDICTION OF IDENTIFICATION
INCORPORATION OR NO.)
ORGANIZATION)
37TH FLOOR, 10 SOUTH DEARBORN STREET,
POST OFFICE BOX 767, CHICAGO, ILLINOIS 60690-0767
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 312/394-4321
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF
TITLE OF EACH
EACH CLASS EXCHANGE
- ---------------------- ON WHICH
REGISTERED
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FIRST MORTGAGE BONDS:
7 5/8% SERIES 25, DUE 8 1/8% SERIES 36, DUE
JUNE 1, 2003 JUNE 1, 2007
8% SERIES 26, DUE 8 1/4% SERIES 37, DUE
OCTOBER 15, 2003 DECEMBER 1, 2007 NEW YORK
8 1/8% SERIES 35, DUE
JANUARY 15, 2007
SINKING FUND
DEBENTURES:
3%, DUE APRIL 1, 1999 7 5/8% SERIES 1, DUE NEW YORK
2 7/8%, DUE APRIL 1, FEBRUARY 15, 2003
2001
2 3/4%, DUE APRIL 1, NEW YORK AND
1999 CHICAGO
COMMON STOCK, $12.50 PAR VALUE NEW YORK, CHICAGO
AND PACIFIC
COMMON STOCK PURCHASE WARRANTS--1971 WARRANTS
AND SERIES B WARRANTS NEW YORK, CHICAGO
AND PACIFIC
CUMULATIVE PREFERENCE STOCK, WITHOUT PAR VALUE:
$1.90; $2.00; $7.24; $8.40; $8.38; AND $8.40 SERIES B NEW YORK, CHICAGO
AND PACIFIC
$1.425 CONVERTIBLE PREFERRED STOCK, WITHOUT PAR VALUE NEW YORK, CHICAGO
AND PACIFIC
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS RE-
QUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS, AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR 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. [ ]
THE ESTIMATED AGGREGATE MARKET VALUE OF THE COMPANY'S OUTSTANDING COMMON
STOCK, $1.425 CONVERTIBLE PREFERRED STOCK AND CUMULATIVE PREFERENCE STOCK WAS
APPROXIMATELY $6,500,000,000 AS OF FEBRUARY 28, 1994. IN EXCESS OF 99.97% OF
THE COMPANY'S VOTING STOCK WAS OWNED BY NON-AFFILIATES AS OF THAT DATE.
COMMON STOCK OUTSTANDING AT FEBRUARY 28, 1994: 213,794,548 SHARES
DOCUMENTS INCORPORATED BY REFERENCE:
PORTIONS OF THE COMPANY'S CURRENT REPORT ON FORM 8-K/A-1 DATED JANUARY 28,
1994 ARE INCORPORATED BY REFERENCE INTO PARTS I, II AND IV HEREOF AND PORTIONS
OF THE COMPANY'S DEFINITIVE PROXY STATEMENT RELATING TO ITS ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD MAY 10, 1994 ARE INCORPORATED BY REFERENCE INTO PARTS
I AND III HEREOF.
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COMMONWEALTH EDISON COMPANY
FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
TABLE OF CONTENTS
PAGE
----
Part I
Item 1. Business.......................................................... 1
The Company............................................................. 1
Net Electric Generating Capability...................................... 2
Construction Program.................................................... 2
Electric Rates.......................................................... 4
Rate Proceedings........................................................ 4
Fuel Supply............................................................. 6
Regulation.............................................................. 7
Employees............................................................... 14
Interconnections........................................................ 14
Franchises.............................................................. 14
Business and Competition................................................ 15
Executive Officers of the Registrant.................................... 16
Operating Statistics.................................................... 17
Item 2. Properties........................................................ 18
Item 3. Legal Proceedings................................................. 19
Item 4. Submission of Matters to a Vote of Security Holders............... 19
Part II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters........................................................... 20
Item 6. Selected Financial Data........................................... 21
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................. 21
Item 8. Financial Statements and Supplementary Data....................... 21
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.............................................. 21
Part III
Item 10. Directors and Executive Officers of the Registrant............... 22
Item 11. Executive Compensation........................................... 22
Item 12. Security Ownership of Certain Beneficial Owners and Management... 22
Item 13. Certain Relationships and Related Transactions................... 22
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.. 23
Report of Independent Public Accountants on Supplemental Schedules........ 28
Schedule V--Property, Plant and Equipment................................. 29
Schedule VI--Accumulated Depreciation, Depletion and Amortization of Prop-
erty, Plant and Equipment................................... 31
Schedule VII--Guarantees of Securities of Other Issuers................... 33
Schedule VIII--Valuation and Qualifying Accounts.......................... 34
Schedule IX--Short-Term Borrowings........................................ 35
Signatures................................................................ 36
i
PART I
ITEM 1. BUSINESS.
THE COMPANY
Commonwealth Edison Company (Company) is engaged principally in the
production, purchase, transmission, distribution and sale of electricity to a
diverse base of residential, commercial and industrial customers. The Company
was organized in the state of Illinois on October 17, 1913 as a result of the
merger of Cosmopolitan Electric Company into the original corporation named
Commonwealth Edison Company. The latter had been incorporated on September 17,
1907. The Company's electric service territory has an area of approximately
11,540 square miles and an estimated population of approximately 8.1 million as
of December 31, 1991, approximately 8.2 million as of December 31, 1992 and
approximately 8.1 million as of December 31, 1993. It includes the city of
Chicago, an area of about 225 square miles with an estimated population of
three million from which the Company derived approximately one-third of its
ultimate consumer revenues in 1993. The Company had approximately 3.3 million
electric customers at December 31, 1993. The Company's principal executive
offices are located at 10 South Dearborn Street, Post Office Box 767, Chicago,
Illinois 60690-0767, and its telephone number is 312/394-4321.
The Company's financial condition is dependent upon its ability to generate
revenues to cover its costs. To maintain a satisfactory financial condition,
the Company must recover the costs of and a return on completed construction
projects, including its three most recently completed generating units, and
maintain adequate debt and preferred and preference stock coverages and common
stock equity earnings. The Company has no significant revenues other than from
the sale of electricity. Under the economic and political conditions prevailing
in Illinois, the Company's management recognizes that competitive and
regulatory circumstances may limit the Company's ability to raise its rates.
Therefore, the Company's financial condition will depend in large measure on
the Company's levels of sales, expenses and capital expenditures. See "Rate
Proceedings" and "Business and Competition" below.
In response to the adverse regulatory and judicial decisions in the
proceedings relating to the level of the Company's rates, the Company
implemented a cost reduction plan in 1992 involving various management
workforce reductions through early retirement and voluntary and involuntary
separations. Such reductions, when combined with other actions, are estimated
by the Company to have saved approximately $130 million in operation and
maintenance expenses during 1993. The management workforce reduction resulted
in a charge to income of approximately $23 million (net of income tax effects)
in 1992. In addition, the Company reached agreement in August 1993 with its
unions regarding certain cost reduction actions. The agreement provides for a
wage freeze until April 1, 1994, changes to reduce health care plan cost,
increased use of part-time employment and changes in holiday provisions. The
agreement also includes a continuation of negotiations relative to other
issues. Further, the Company has reduced planned construction program
expenditures by approximately $200 million compared with the common years
(1994-95) of the previously approved three-year construction program.
The Company and union representatives reached agreement in February 1994 and
announced an offer of a voluntary early retirement program. This program is
available to management, non-union and union employees. Participants currently
eligible will be given a 45-day period during which to consider and elect to
participate in this voluntary program.
In addition, the quarterly common stock dividends, payable on and since
November 1, 1992, were reduced by 47% from the seventy-five cents per share
amount paid quarterly since 1982 to forty cents per share. Dividends have been
declared on the outstanding shares of the Company's preferred and preference
stocks at their regular quarterly rates. The Company's Board of Directors will
continue to review quarterly the payment of dividends.
1
See "Fuel Supply," "Regulation" and "Item 3. Legal Proceedings" herein for
information concerning administrative and legal proceedings and certain other
matters involving the Company, Commonwealth Edison Company of Indiana, Inc.
(Indiana Company) and Cotter Corporation, a wholly-owned subsidiary of the
Company. The outcome of certain of the proceedings or matters described or
referred to therein, if not favorable to the Company and the Indiana Company
(companies), could have a material adverse effect on the future business and
operating results of the companies.
NET ELECTRIC GENERATING CAPABILITY
The owned (non-summer) generating capability of the companies is considered
by the companies to be 22,522,000 kilowatts. After deducting summer limitations
of 557,000 kilowatts, the net summer generating capability of the companies is
considered by the companies to be 21,965,000 kilowatts. The net generating
capability available for operation at any time may be less due to regulatory
restrictions, fuel restrictions, efficiency of cooling facilities and to
generating units being temporarily out of service for inspection, maintenance,
refueling, repairs or modifications required by regulatory authorities. See
"Item 2. Properties."
The highest peak load experienced to date occurred on August 27, 1993 and was
17,771,000 kilowatts; and the highest peak load experienced to date during a
winter season occurred on January 18, 1994 and was 14,179,000 kilowatts. The
Company's kilowatthour sales and generation are generally higher (primarily
during the summer periods but also during the winter periods) when temperature
extremes create demand for either summer cooling or winter heating.
CONSTRUCTION PROGRAM
The construction program for the three-year period 1994-96 consists
principally of improvements to the companies' existing nuclear and other
electric production, transmission and distribution facilities. It does not
include funds (other than for planning) to add new generating capacity to the
Company's system. The program, as approved by the Company in January 1994,
calls for electric plant and equipment expenditures of approximately $2,450
million (excluding nuclear fuel expenditures of approximately $780 million).
This amount reflects a decrease of approximately $200 million compared with the
common years (1994-95) of the previously approved construction program. In
part, the decrease reflects a reduction in capital spending announced by the
Company in July 1992 due to adverse financial circumstances. For additional
information concerning the cost reduction plan, see "The Company" above. It is
estimated that such construction expenditures, with cost escalation computed at
4% annually, will be as follows:
THREE-YEAR
1994 1995 1996 TOTAL
---- ---- ---- ----------
--MILLIONS OF DOLLARS--
Production................................. $295 $310 $250 $ 855
Transmission and Distribution.............. 340 445 505 1,290
General.................................... 115 95 95 305
---- ---- ---- ------
Total.................................. $750 $850 $850 $2,450
---- ---- ---- ------
---- ---- ---- ------
Construction expenditures during 1993 were approximately $842 million.
The Company's gross investment in nuclear generating capacity (excluding
nuclear fuel) is approximately $13.8 billion at December 31, 1993, and the
Company expects that investment to be approximately $14.2 billion by the end of
1996 as a result of improvements.
The Company's forecasts of peak load indicate a need for additional resources
to meet demand, either through generating capacity or through equivalent
purchased power or demand-side management resources, in 1997 and each year
thereafter through the year 2000. The projected
2
resource needs reflect the current planning reserve margin recommendations of
the Mid-America Interconnected Network (MAIN), the reliability council of
which the Company is a member. The Company's forecasts indicate that the need
for additional resources during this period would exist only during the summer
months. The Company does not expect to make expenditures for additional
capacity to the extent the need for capacity can be met through cost-effective
demand-side management resources, non-utility generation or other power
purchases. To assess the market potential to provide such cost-effective
resources, the Company solicited proposals to supply it with cost-effective
demand-side management resources, non-utility generation resources and other-
utility power purchases sufficient to meet forecasted requirements through the
year 2000. The responses to the solicitation suggest that adequate resources
to meet the Company's needs could be obtained from those sources but the
Company has not yet determined whether those sources represent the most
economical alternative. If the Company were to build additional capacity to
meet its needs, it would need to make additional expenditures during the 1994-
96 period.
The Company has not budgeted for a number of projects, particularly at
generating stations, which could be required, but which the Company does not
expect to be required during the budget period. In particular, the Company has
not budgeted for the construction of scrubbers at its Kincaid generating
station, for the replacement of major amounts of piping at its boiling water
reactor nuclear stations or for the replacement of steam generators at its
pressurized water reactor nuclear stations. See "Regulation," subcaption
"Nuclear" below.
The 1994-96 construction program includes approximately $91 million for
environmental control facilities, of which approximately $39 million, $37
million and $15 million is budgeted for 1994, 1995 and 1996, respectively.
Expenditures on such facilities were $28 million, $22 million and $28 million
during 1991, 1992 and 1993, respectively.
Purchase commitments, principally related to construction and nuclear fuel,
approximated $1,187 million at December 31, 1993. In addition, the Company has
substantial commitments for the purchase of coal under long-term contracts as
indicated in the following table.
CONTRACT PERIOD COMMITMENT(1)
- -------------------- --------- -------------
Black Butte Coal Co. 1994-2007 $1,212
Decker Coal Co. 1994-2015 $ 862
Peabody Coal Co. 1994 $ 34
Big Horn Coal Co. 1998 $ 21
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(1) Estimated costs in millions of dollars FOB mine. No estimate of future
cost escalation has been made.
For additional information concerning these coal contracts and the Company's
fuel supply, see "Fuel Supply" below and Notes 3, 17 and 19 of Notes to
Financial Statements in the Company's Current Report on Form 8-K/A-1 dated
January 28, 1994 (the "January 28, 1994 Form 8-K/A-1 Report").
The construction program will be reviewed and modified as necessary to adapt
to changing economic conditions, rate levels and other relevant factors
including changing business and legal needs and requirements. The Company
cannot anticipate all such possible needs and requirements. While regulatory
requirements in particular are more likely, on balance, to necessitate
increases in construction expenditures than decreases, the Company's financial
condition may require compensating or greater reductions in other construction
expenditures. See "Rate Proceedings," "Regulation" and "Item 3. Legal
Proceedings" herein.
The Company has forecast that internal sources will provide approximately
one-half of the funds required for its construction program and other capital
requirements, including nuclear fuel expenditures, contributions to nuclear
decommissioning trusts, sinking fund obligations and refinancing of scheduled
debt maturities (the annual sinking fund requirements for preference stock and
long-term debt are summarized in Notes 7 and 8 of Notes to Financial
Statements in the January 28, 1994 Form 8-K/A-1 Report). The forecast assumes
the rate levels reflected in the Rate Matters Settlement (described below),
and reflects the payments required to be made to customers under the Rate
Matters Settlement and the Fuel Matters Settlement (described below). See
"Rate Proceedings" herein for additional information.
3
The Company periodically reviews its projection of probable future demand for
electricity in its service territory. It currently projects long-term average
annual growth of 2% in annual peak load and 1.75% in annual output.
Gross additions to and retirements from utility property, excluding nuclear
fuel, of the companies for the five years ended December 31, 1993 were $4,640
million and $511 million, respectively.
See Note 1 of Notes to Financial Statements and "Results of Operations"
subcaption "Other Items" in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the January 28, 1994 Form 8-K/A-1
Report for information concerning Allowance for Funds Used During Construction.
ELECTRIC RATES
The following table summarizes rate increases granted in the Company's major
rate proceedings before the Illinois Commerce Commission (ICC) since January 1,
1985. Revenues actually realized as a result of the rate increases may vary
depending on levels of kilowatthour sales to each class of customers. See Notes
2 and 3 of Notes to Financial Statements in the January 28, 1994 Form 8-K/A-1
Report.
ANNUAL
AMOUNT
REQUESTED AUTHORIZED
(IN ----------------------------------------------------------------
MILLIONS) PERCENT END OF
AND ANNUAL INCREASE TWELVE-MONTH
DATE OF AMOUNT (IN OVER PREVIOUS TEST PERIOD CITED IN
FILING EFFECTIVE DATE MILLIONS)(a) REVENUES(a) FINAL RATE ORDER
- ------------ ---------------- ------------ ------------- --------------------
$583
November 29,
1984 October 29, 1985 $495(b) 11.0 December 1984
$1,415
August 21,
1987 January 1, 1989 $235(c) 4.5(c) December 1987
$1,231
April 12,
1990 March 20, 1991 $750(d) 14.0(d) December 1991
- --------
(a) The amounts granted and the related percent increases are based on the test
periods cited in the rate orders and exclude add-on revenue taxes.
(b) Includes approximately $81 million of revenue included in rates effective
January 1, 1987 pursuant to a phase-in plan. The phase-in plan reflects the
recovery of the $81 million postponed portion of the increase and an
additional recovery ($56 million) of a full return on the postponed portion
over a two-year period.
(c) Represents the first step of a rate increase relating to Byron Unit 2 and
Braidwood Units 1 and 2 (Units) authorized by a December 1988 rate order
which was reversed by the Illinois Supreme Court on December 21, 1989 and
excludes a $56 million decrease resulting from completion of the recovery
period referred to in note (b). This rate increase was rolled back,
effective July 1, 1990.
(d) Represents the aggregate amount of the rate increase, which was to be
phased-in over a three-year period. As a result of subsequent proceedings
and the Rate Matters Settlement described below, only an increase of
approximately $144 million in annual electric operating revenues remains
effective. See "Rate Proceedings," subcaption "Settlements Relating to
Certain Rate Matters" below and Note 2 of Notes to Financial Statements in
the January 28, 1994 Form 8-K/A-1 Report.
RATE PROCEEDINGS
The Company's revenues, net income, cash flows and plant carrying costs have
been affected directly by various rate-related proceedings. During the periods
presented in the financial statements, the Company was involved in proceedings
concerning its October 1985 ICC rate order (which related principally to the
recovery of costs associated with its Byron Unit 1 nuclear generating unit),
4
proceedings concerning its March 1991 ICC rate order (which related principally
to the recovery of costs associated with the Units), proceedings concerning the
reduction in the difference between the Company's summer and non-summer
residential rates that was effected in the summer of 1988, and ICC fuel
reconciliation proceedings principally concerning the recoverability of the
costs of the Company's western coal. In addition, there were outstanding issues
related to the appropriate interest rate and rate design to be applied to a
refund that was made in 1990 following the reversal of a December 1988 ICC rate
order and a rider to the Company's rates that the Company was required to file
as a result of the change in the federal corporate income tax rate made by the
Tax Reform Act of 1986. The uncertainties associated with such proceedings and
issues, among other things, led to the Rate Matters Settlement and the Fuel
Matters Settlement (which are discussed below).
The effects of the aforementioned rate proceedings during the periods
presented are discussed in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," subcaption "Results of Operations" in the
January 28, 1994 Form 8-K/A-1 Report. For additional information regarding such
proceedings, see Notes 2 and 3 of Notes to Financial Statements in the
Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30,
1993.
Settlements Relating to Certain Rate Matters
On September 24, 1993, the Company's Board of Directors approved two proposed
settlements which the Company's management had reached with parties involved in
several of the proceedings and matters relating to the level of the Company's
rates for electric service. One of the proposed settlements (Rate Matters
Settlement) concerned the proceedings relating to the Company's 1985 and 1991
ICC rate orders, the proceedings relating to the reduction in the difference
between the Company's summer and non-summer residential rates, the outstanding
interest rate and rate design issues, and a rider related to the change in the
federal corporate income tax rate made by the Tax Reform Act of 1986. The other
proposed settlement (Fuel Matters Settlement) related to the ICC fuel
reconciliation proceedings involving the Company for the period from 1985
through 1988 and to future challenges by the settling parties to the prudency
of the Company's western coal costs for the period from 1989 through 1992. Each
of these settlements was subject to appropriate action by the ICC or the courts
having jurisdiction over the proceedings.
As a result of subsequent ICC and judicial actions, the Rate Matters
Settlement became final on November 4, 1993. Under the Rate Matters Settlement,
effective as of November 4, 1993, the Company reduced its rates by
approximately $339 million annually and commenced refunding approximately $1.26
billion (including revenue taxes), plus interest at five percent on the unpaid
balance, through temporarily reduced rates over an initial refund period
scheduled to be twelve months (to be followed by a reconciliation period of no
more than five months). The Company had previously deferred the recognition of
revenues during 1993 as a result of developments in the proceedings related to
the March 1991 ICC rate order, which resulted in a reduction to 1993 net income
of approximately $160 million. The recording of the effects of the Rate Matters
Settlement in October 1993 reduced the Company's 1993 net income and retained
earnings by approximately $292 million or $1.37 per common share, in addition
to the effect of the deferred recognition of revenues and after the partially
offsetting effect of recording approximately $269 million (or $1.26 per common
share) in deferred carrying charges, net of income taxes, authorized in the ICC
rate order issued on January 6, 1993 (as subsequently modified, the Remand
Order). In January 1994, a purported class action was filed in the Circuit
Court of Cook County, Illinois challenging the making of refunds to current
rather than to historical residential customers in the Rate Matters Settlement.
The Company does not believe that the complaint has any merit.
As a result of subsequent ICC actions, the Fuel Matters Settlement became
final on November 15, 1993. Under the Fuel Matters Settlement, effective as of
December 2, 1993, the Company commenced paying approximately $108 million
(including revenue taxes) to its customers through
5
temporarily reduced collections under its fuel adjustment clause over a twelve-
month period. The Company recorded the effects of the Fuel Matters Settlement
in October 1993, which effects reduced the Company's net income and retained
earnings by approximately $62 million or $0.29 per common share.
Other Rate Matters
On February 10, 1994, the Company filed a request with the ICC to increase
electric operating revenues by approximately $460 million, or 7.9%, on an
annual basis above the level of revenues approved in the Rate Matters
Settlement. This request principally reflects the inclusion of the Units in the
Company's rate base as fully "used and useful," increased operation and
maintenance expenses over the level reflected in the Remand Order, increased
contributions to the external trust funds which the Company is required to fund
to cover the eventual decommissioning of its nuclear power plants and lower
debt and equity costs. The ICC has suspended the rates, appointed hearing
examiners and ordered an investigation. Under the Illinois Public Utilities
Act, the ICC must decide the case by early January 1995.
In the Remand Order, the rate determination was based upon, among other
things, findings by the ICC with respect to the extent to which the Units were
"used and useful" during the 1991 test year period of the rate order. With
respect to the "used and useful" issue, the ICC applied a needs and economic
benefits methodology, using a twenty percent reserve margin and forecasted peak
demand, and found Byron Unit 2 and Braidwood Units 1 and 2 to be 93%, 21% and
0%, respectively, "used and useful." The Company has not recorded any
disallowances related to the "used and useful" issue. The Company considers the
"used and useful" disallowance in the Remand Order to be temporary. The ICC
concluded in the Remand Order that the forecasts in the record in that
proceeding indicate that Braidwood Units 1 and 2 will be fully "used and
useful" within the reasonably foreseeable future.
FUEL SUPPLY
The kilowatthour generation of the companies for 1993 was provided from the
following fuel sources: nuclear 75%, coal 23%, oil 1% and gas 1%.
Nuclear Fuel
The Company has uranium concentrate inventory, supply contracts and
subsidiary resources sufficient to meet the majority of its uranium concentrate
requirements through 1994 and portions of its requirements for periods beyond
1994. The Company's contracted conversion services are sufficient to meet all
of its uranium conversion requirements through 1995. All of the Company's
enrichment requirements have been contracted for through 1999. Commitments for
fuel fabrication have been obtained for the Company's nuclear units at least
through 1999. The Company does not anticipate that it will have any difficulty
in negotiating contracts for uranium concentrates, conversion, enrichment and
fuel fabrication services for periods after the dates indicated.
The Company has contracted with the United States Department of Energy (DOE)
for the final disposal of spent nuclear fuel and high-level radioactive waste
beginning not later than January 1998; however, this delivery schedule is
expected to be delayed significantly. The Company has the primary
responsibility for providing interim storage for its spent nuclear fuel. The
Company's capability to store spent fuel is more than adequate for some years
to come. All stations except Dresden and Zion stations will have spent fuel
capacity at least through the year 2005. Dresden station has capacity through
2001. Zion station has capacity through 2003. Meeting spent fuel storage
requirements beyond the years described above could require new and separate
storage facilities, the costs for which have not been determined. See
"Regulation," subcaption "Nuclear" herein for further information concerning
the disposal of radioactive waste.
6
Coal
The Company burns low sulfur western coal at all but one of its coal-fired
stations. The other coal-fired station burns Illinois coal. This Illinois coal
is provided under a contract which expires in 1994. The Company's present
policy is to maintain a coal inventory equal to 30 days of high utilization. As
of February 28, 1994, coal inventories approximated 30 days. The average cost
per ton of coal consumed by the companies for the years 1991, 1992 and 1993,
including transportation charges, was $50.31, $52.57 and $49.42, respectively.
Compared to other utilities, the Company has relatively low average fuel
costs. This results from the Company's reliance predominantly on lower cost
nuclear generation. The Company's coal costs, however, are high compared to
those of other utilities. The Company's western coal contracts and its rail
contracts for delivery of the western coal were renegotiated during 1992
effective as of January 1, 1993, to provide, among other things, for
significant reductions in the delivered price of the coal over the duration of
the contracts. However, the renegotiated contracts provide for the purchase of
certain coal at prices substantially above currently prevailing market prices
and the Company has significant purchase commitments under its contracts. For
additional information concerning the Company's coal purchase commitments, fuel
reconciliation proceedings and coal reserves, see "Construction Program" above
and "Fuel Adjustment Clause" below and Notes 2, 17 and 19 of Notes to Financial
Statements in the January 28, 1994 Form 8-K/A-1 Report.
Oil and Gas
The Company's fast-start peaking units use middle distillate oils.
Approximately half of this capacity can also be fueled with natural gas. The
Company's 2,698,000 kilowatt Collins station is fueled with natural gas and
residual oil. The Company purchases oil under various purchase orders. The
recent cost for oil at Collins station, including transportation charges, has
been $16 per barrel. The conversion of three of the five units at Collins
station to dual fuel capability (residual oil and natural gas) was
substantially completed during 1993. The Company expects the conversion of all
three units to be completed in the near future. The Company has a contract for
the delivery and storage of natural gas from gas pipelines to Collins station
which expires in 2003.
Fuel Adjustment Clause
Through its fuel adjustment clause, the Company recovers from its customers
the cost of the fuel used to generate electricity and of purchased power as
compared to fuel costs included in base rates. The amounts collected under the
fuel adjustment clause are subject to review by the ICC, which, under the
Illinois Public Utilities Act, is required to hold annual public hearings to
reconcile the collected amounts with the actual cost of fuel and power
prudently purchased. In the event that the collected amounts exceed such actual
cost, then the ICC can order that the excess be refunded.
For additional information concerning the Company's fuel reconciliation
proceedings and coal reserves, see Notes 2, 17 and 19 of Notes to Financial
Statements in the January 28, 1994 Form 8-K/A-1 Report and Note 3 of Notes to
Financial Statements in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1993.
REGULATION
The companies are subject to state and federal regulation in the conduct of
their respective businesses, including the operations of Cotter Corporation.
Such regulation includes rates, securities issuance, nuclear operations,
environmental and other matters. The Company is subject to regulation
7
by the ICC as to rates and charges, issuance of securities (other than debt
securities maturing in not more than twelve months), service and facilities,
classification of accounts, transactions with affiliated interests as defined
in the Illinois Public Utilities Act and other matters. In addition, the ICC in
certain of its rate orders has exercised jurisdiction over the Company's
environmental control program.
The Company is subject to the jurisdiction of the Federal Energy Regulatory
Commission (FERC) with respect to the issuance of debt securities maturing in
not more than twelve months. The Company is also subject to the jurisdiction of
the FERC and the DOE under the Federal Power Act with respect to certain other
matters, including the sale for resale of electric energy and the transmission
of electric energy in interstate commerce, and to the jurisdiction of the DOE
with respect to the disposal of spent nuclear fuel and other radioactive
wastes.
On July 13, 1993, legislation became effective in Illinois which permits the
Company to create certain unregulated subsidiaries, and to form a holding
company, without being required to obtain the approval of the ICC. The Company
has created an unregulated subsidiary to engage in energy service activities
and is in the process of obtaining necessary shareholder and Federal regulatory
approvals to create a holding company structure for its operations.
The Company is a holding company as defined by the Public Utility Holding
Company Act of 1935 because of its ownership of common stock of the Indiana
Company. By filing an exemption statement annually, the Company is exempt from
most of the provisions of such Act.
The Indiana Company, an "affiliated interest" of the Company within the
meaning of the Illinois Public Utilities Act, is subject to regulation by the
Indiana Utility Regulatory Commission and to the jurisdiction of the FERC, the
DOE and federal and state of Indiana pollution control and other agencies.
Currently, the ICC is conducting a focused management audit of the Company's
fuel procurement process, which began in December 1993 and is scheduled to be
completed in midyear 1994.
Nuclear
The Illinois Department of Nuclear Safety (IDNS) has jurisdiction over
certain activities in Illinois relating to nuclear power and safety, and
radioactive materials. Effective June 1, 1987, the IDNS replaced the Nuclear
Regulatory Commission (NRC) as the regulator and licensor of certain source,
by-product and special nuclear material in quantities not sufficient to form a
critical mass, including such material contained in various measuring devices
used at fossil-fuel power plants. The IDNS has promulgated regulations which
are substantially similar to the corresponding federal regulations. The IDNS
also has authority to license a low-level radioactive waste disposal facility
and to regulate alternative methods for disposing of materials which contain
only trace amounts of radioactivity.
The Company is subject to the jurisdiction of the NRC with respect to its
nuclear generating stations. The NRC regulations control the granting of
permits and licenses for the construction and operation of nuclear generating
stations and subject such stations to continuing review and
regulation. The NRC review and regulatory process covers, among other things,
operations, maintenance, and environmental and radiological aspects of such
stations. The NRC may modify, suspend or revoke licenses and impose civil
penalties for failure to comply with the Atomic Energy Act, the regulations
under such Act or the terms of such licenses. Attempts are made from time to
time by various individuals or citizen groups to prohibit the development or
use of nuclear power
8
through initiation of proceedings before the NRC, other agencies or courts.
Such proceedings frequently involve attacks on the validity of NRC rules which,
if successful, could provide a basis for challenges to permits and licenses
granted by the NRC in the past.
Under the Nuclear Waste Policy Act of 1982, the DOE is responsible for the
selection and development of repositories for, and the disposal of, spent
nuclear fuel and high-level radioactive waste. The Company, as required by that
Act, has signed a contract with the DOE to provide for the disposal of spent
nuclear fuel and high-level radioactive waste from the Company's nuclear
generating stations beginning not later than January 1998. The contract with
the DOE requires the Company to pay the DOE a one-time fee applicable to
nuclear generation through April 6, 1983 of approximately $277 million, with
interest to date of payment, and a fee payable quarterly equal to one mill per
kilowatthour of nuclear-generated and sold electricity after April 6, 1983. The
Company has elected to pay the one-time fee, with interest, just prior to the
first scheduled delivery of spent nuclear fuel to the DOE, which is scheduled
to occur not later than January 1998; however, this delivery schedule is
expected to be delayed significantly. The costs incurred by the DOE for
disposal activities will be paid out of fees charged to owners and generators
of spent nuclear fuel and high-level radioactive waste. The Company has primary
responsibility for the interim storage of its spent nuclear fuel. The Company
anticipates the possibility of serious difficulties in disposing of high-level
radioactive waste. See "Fuel Supply," subcaption "Nuclear Fuel" herein for
further information.
The Company currently disposes of its low-level radioactive waste at a site
in the state of South Carolina. There are no other commercial operating sites
in the United States for the disposal of low-level radioactive waste available
to the Company. The federal Low-Level Radioactive Waste Policy Act of 1980
provides that states may enter into compacts to provide for regional disposal
facilities for such waste, subject to approval by the United States Congress
(Congress) of each such compact. Under the 1985 amendments to that Act, a
compact could restrict the use of a region's disposal facilities after January
1, 1993 to waste generated within the region. South Carolina belongs to a
regional compact. South Carolina has granted the Company access to its waste
disposal site for an 18-month period which began January 1, 1993. Illinois has
entered into a compact with the state of Kentucky, which has been approved by
Congress. The IDNS had estimated that a low-level radioactive waste disposal
facility would be operational in Illinois by March 31, 1994 at the earliest.
However, in 1992, an independent panel rejected the only site in Illinois then
being considered for a low-level waste disposal facility. Illinois has since
enacted legislation changing the procedures for siting a low-level waste
disposal facility. The Company has temporary on-site storage capacity at its
nuclear generating stations for a limited amount of low-level radioactive waste
and is planning additional such capacity pending development of disposal
facilities by the state of Illinois. The Company anticipates the possibility of
serious difficulties in disposing of low-level radioactive waste. The
continuing viability of commercial nuclear power is subject to resolution of
the issues of spent nuclear fuel storage and disposal of radioactive waste.
Federal regulations provide that any operating nuclear generating facility
may be required to cease operation if the NRC determines that there are
deficiencies in state, local or utility emergency preparedness plans relating
to such facility and the deficiencies are not corrected within four months of
such determination. Under the regulations, the NRC may permit the operation of
facilities, even though the emergency preparedness plans are deficient, upon an
examination of other factors, including whether the deficiencies are
significant for the facility in question, whether adequate interim compensatory
actions have been or will be taken promptly and whether other compelling
reasons exist for operation consistent with public health and safety. The
Company's emergency preparedness plans for all of its nuclear generating
stations have been approved by the NRC. State and local plans relating to the
Company's nuclear generating stations have been approved by the Federal
Emergency Management Agency. The Company continues to cooperate with the NRC
and appropriate local and state agencies in Illinois, Indiana, Iowa and
Wisconsin on emergency preparedness issues.
9
In February 1993, the Company was notified by the NRC that the Company's Zion
station, which was placed on the NRC's list of plants to be monitored closely
in early 1991, was removed from that list. In January 1994, the Company was
notified by the NRC that the Company's Dresden station, which was placed on the
NRC's list of plants to be monitored closely in early 1992, would remain on
that list. Also in January 1994, the NRC noted adverse performance trends at
Quad-Cities station as well as at LaSalle County station. The Company had
already identified and was working to correct most of the problems cited. As a
consequence, the Company anticipates continued increased expenditures in
connection with those stations.
In accordance with a commitment to the NRC, the Company examined its
operating boiling water nuclear generating units in 1983 to determine the
existence or extent of inter-granular stress corrosion in certain of the large
diameter piping in those units. Inter-granular stress corrosion was discovered
in the Dresden and Quad-Cities units. The Company replaced the stainless steel
piping susceptible to stress corrosion at Dresden Unit 3 and is taking
alternative remedial actions which are intended to minimize the need to replace
such piping at Dresden Unit 2, Quad-Cities Units 1 and 2 and LaSalle Units 1
and 2. If the Company is required to replace all of such piping, the estimated
construction expenditures, in current-year dollars, would be approximately $520
million.
The Company has studied the possibility of having to replace the steam
generators at its Zion nuclear generating plant. The initial studies were
completed in early June 1991 and additional follow-up studies are continuing.
Based on the findings of these studies, the Company plans to replace the Zion
Unit 1 steam generators, for service in 2000, at an estimated cost of
approximately $225 million. The Company is also studying the replacement of the
steam generators at Byron Unit 1 and Braidwood Unit 1 and expects such
replacement may be needed; initial and on-going studies indicate possible
replacements as early as 2000 for Byron Unit 1 and 2002 for Braidwood Unit 1;
however, alternative remedial actions are also being explored. If required, the
replacement cost of the steam generators at Byron Unit 1 and Braidwood Unit 1
would be comparable to Zion Unit 1. Approximately $3 million of preliminary
engineering expenditures are included in the 1994-96 construction program. See
"Item 3. Legal Proceedings" concerning litigation by the Company against
Westinghouse Electric Corporation concerning steam generators.
During the year 1993, civil penalties were imposed on the Company by the NRC
on seven occasions for violations of NRC regulations in amounts aggregating
$562,500. Since January 1, 1994, there have been no violations of NRC
regulations identified which have resulted in civil penalties. However, there
are several potentially enforceable issues currently outstanding and under
review by the NRC.
The uranium mining and milling operations of the Company's subsidiary, Cotter
Corporation, are subject to regulation by the state of Colorado and the NRC.
Environmental
The companies are subject to regulation regarding environmental matters by
the United States and by the states of Illinois, Indiana, Iowa and, in the case
of Cotter Corporation, Colorado, and by local jurisdictions where the companies
operate their facilities. The Illinois Pollution Control Board (IPCB) has
jurisdiction over environmental control in the state of Illinois, which
includes authority to regulate air, water and noise emissions and solid waste
disposal, together with the Illinois Environmental Protection Agency (Illinois
Agency), which enforces regulations of the IPCB and issues permits in
connection with environmental control. The United States Environmental
Protection Agency (Federal Agency) administers certain federal statutes
relating to such matters. The IPCB has published a proposed rule under which it
would have the power to regulate radioactive air pollutants under the Illinois
Environmental Protection Act and the Federal Clean Air Act Amendments of 1977.
10
Air quality regulations, promulgated by the IPCB as well as the Indiana and
Hammond Departments of Environmental Management in accordance with federal
standards, impose restrictions on the emission of particulates, sulfur dioxide,
nitrogen oxides and other air pollutants and require permits from the
respective state and local environmental protection agencies for the operation
of emission sources. Permits authorizing operation of the Company's fossil-
fueled generating facilities subject to this requirement have been obtained
and, where such permits are due to expire, the Company has, in a timely manner,
filed applications for renewal or requested extensions of the existing permits.
Under the Federal Clean Water Act, National Pollutant Discharge Elimination
System (NPDES) permits for discharges into waterways are required to be
obtained from the Federal Agency or from the state environmental agency to
which the permit program has been delegated. Those permits must be renewed
periodically. The companies either have NPDES permits for all of their
generating stations or have filed applications for renewals of such permits
under the current delegation of the program to the Illinois Agency or the
Indiana Department of Environmental Management. The Company is also subject to
the jurisdiction of certain pollution control agencies of the state of Iowa
with respect to the discharge into the Mississippi River from the Quad-Cities
station. Reissued NPDES permits for several generating facilities establish
schedules by which the facilities must meet tighter discharge limits when using
certain biocides in condenser cooling water systems. The Company has embarked
on a program to obtain compliance with the new permit requirements by the April
1995 compliance date.
On August 10, 1990, the Sierra Club filed suit in the U.S. District Court
under Section 505 of the Federal Clean Water Act alleging violations of state
of Illinois water quality standards with respect to thermal effluents at the
Company's Fisk, Crawford, Will County, Joliet and Dresden generating stations.
In July 1991, the Sierra Club and the Company reached a settlement of this suit
which was approved by the Court on November 1, 1991. Under the settlement, the
Company has agreed to perform an ecological study of the thermal effluents
discharged from the generating stations. Ultimately, this study, which is
currently underway, may determine whether the installation of closed cycle
cooling facilities or operational restrictions are necessary at one or more of
these stations.
The Great Lakes Critical Programs Act of 1990 requires that, following the
issuance of guidance by the Federal Agency, the states of Illinois and Indiana,
among others, adopt water quality standards, policies and procedures to assure
protection of the water quality of the Great Lakes. Water quality standards and
procedures that the states would be required to adopt under the current version
of the Federal Agency's draft guidance ultimately could require that the
Company install additional pollution control equipment or restrict operations
at its facilities that discharge, either directly or indirectly, into Lake
Michigan. The Federal Agency is expected to issue final guidance in 1995.
The Clean Air Act Amendments of 1990 (Amendments) will require reductions in
sulfur dioxide emissions from the Company's Kincaid station. The Amendments
also bar future utility sulfur dioxide emissions except to the extent utilities
hold allowances for their emissions. Allowances which authorize their holder to
emit sulfur dioxide will be issued by the Federal Agency based largely on
historical levels of sulfur dioxide emissions. These allowances will be
transferable and marketable. The Company's ability to increase generation in
the future to meet expected increased demand for electricity will depend in
part on the Company's ability to acquire additional allowances or to reduce
emissions below otherwise allowable levels from its existing generating plants.
In addition, the Amendments require studies to determine what controls, if any,
should be imposed on utilities to control air toxic emissions, including
mercury. The Company's Clean Air Compliance Plan for Kincaid station was
approved by the ICC on July 8, 1993. In late 1993, however, a federal court
declared the Illinois law under which the approval was received to be
unconstitutional and compliance plans prepared and approved in reliance on the
law to be void. Under the Plan approved by the ICC, the Company would have been
allowed to burn low sulfur Illinois coal at Kincaid station without the
11
installation of pollution control equipment for the years 1995 through 1999,
and to purchase any necessary emission allowances that are expected to be
available under the Amendments during this period. Also, under the Plan, the
Company expected to install pollution control equipment for Kincaid station by
the year 2000. When the final outcome of the federal litigation is known, the
Company will determine whether any changes are required.
The Amendments also will require reductions in nitrogen oxide emissions from
the Company's fossil fuel generating units. The Illinois Agency has proposed
rules with respect to such emissions which would require modifications to
certain of the Company's boilers. The Company's construction program for the
three-year period 1994-96 includes $25 million for such modifications.
The Comprehensive Environmental Response, Compensation and Liability Act of
1980 (CERCLA) provides for immediate response and removal actions coordinated
by the Federal Agency to releases of hazardous substances into the environment
and authorizes the federal government either to clean up sites at which
hazardous substances have created actual or potential environmental hazards or
to order persons responsible for the situation to do so. Under CERCLA,
generators and transporters of hazardous substances, as well as past and
present owners and operators of hazardous waste sites, are made strictly,
jointly and severally liable for the clean-up costs of waste at sites, most of
which are listed by the Federal Agency on the National Priorities List (NPL).
These responsible parties can be ordered to perform a clean-up, can be sued for
costs associated with a Federal Agency directed clean-up, or may voluntarily
settle with the federal government concerning their liability for clean-up
costs, or may voluntarily begin a site investigation and site remediation prior
to listing on the NPL under state oversight. Various states, including
Illinois, have enacted statutes which contain provisions substantially similar
to CERCLA. The Company and its subsidiaries are or are likely to become parties
to proceedings initiated by the Federal Agency, state agencies and/or other
responsible parties under CERCLA with respect to a number of sites, including
manufactured gas plant (MGP) sites, or may voluntarily undertake to investigate
and remediate sites for which they may be liable under CERCLA. MGPs
manufactured gas in Illinois from approximately 1850 to 1950. The Company
generally did not operate MGPs as a corporate entity but did, however, acquire
MGP sites as part of the absorption of smaller utilities. Approximately half of
these sites were transferred to Northern Illinois Gas Company as part of a
general conveyance in 1954. The Company also acquired former MGP sites as
vacant real estate on which Company facilities have been constructed. While
there is a possibility that in the aggregate the cost of MGP site investigation
and remediation will be substantial over time, the Company is not able to
determine the most probable liability for MGPs. In accordance with accounting
standards, the Company recorded a provision of $25 million in 1991 which
reflects the low end of the range of its estimate of the liability associated
with former MGPs. In 1993, the Company recorded a provision of $5 million which
reflects the low end of the range of its estimate of the liability associated
with cleanup costs of remediation sites other than former MGP sites. The
Company presently estimates that its costs of investigating and remediating
these other sites pursuant to CERCLA and state environmental laws will not in
the aggregate be material to the business or operations of the Company. These
cost estimates are based on currently available information regarding the
responsible parties likely to share in the costs of responding to site
contamination, the extent of contamination at sites for which the investigation
has not yet been completed and the cleanup levels to which sites are expected
to have to be remediated.
On July 17, 1991, the United States Government (Government) filed a complaint
in U.S. District Court alleging that the Company and four other defendants are
"potentially responsible parties" (PRPs) under CERCLA for remediation costs
associated with surface, soil and groundwater contamination alleged to have
occurred from the disposal by other persons of hazardous wastes at a site
located near the Company's Byron station in Byron, Illinois. The Government
alleges that a portion of the site is owned by the Company. The Government is
presently seeking reimbursement from the PRPs for study and response costs
associated with the site. The Company presently expects
12
such costs to total approximately $10 million. The Company is currently
pursuing cost recovery from other PRPs that have been identified at this site.
On October 16, 1992, the Federal Agency notified the Company and four other
companies, including the site operator, that they were PRPs under CERCLA for
the costs associated with the investigation and removal of contaminated soil at
the Elgin Salvage and Supply site in Elgin, Illinois. The Company sent
substantial amounts of scrap cable and other scrap metal to the site. The site
investigation and remediation is currently estimated to be approximately $8 to
$10 million. The operator is currently in default of his 50% portion of the
interim allocation. Therefore, this share has been reapportioned among the
remaining PRPs with the Company's present allocation being between $3 and $4
million. In February 1994, the Company recorded a provision of $3 million which
reflects the low end of the range of its estimate of this additional liability,
and also recorded a receivable of $3 million as this additional $3 million is
probable of recovery from insurance companies and/or other PRPs. In addition,
the Company and the other PRPs have filed a cost recovery action against the
site operator and the site owner to require that they provide their share of
the remediation costs.
In the operation of its electric distribution system, the Company has
utilized equipment containing polychlorinated biphenyls (PCBs). Such equipment
included transformers located in customer-owned buildings and in sidewalk
vaults. Under regulations adopted by the Federal Agency, these transformers
containing PCBs were required to be modified (with non-PCB fluid) or be
replaced. The Company has completed the replacement of over 2,000 PCB fluid
transformers that were located in or near commercial buildings and were subject
to the federal regulations. The estimated cost to the Company of replacing or
modifying these transformers and disposing of the PCB fluid was approximately
$120 million, which had been expended through the end of 1993. Some of the
Company's electrical equipment containing PCBs was sent to scrap and salvage
facilities and, as a result, the Company may be liable for penalties and for
the costs of cleanup of those facilities. An accident or spill involving PCB
oil filled electrical equipment, resulting in exposure of persons or property
to PCBs or their by-products, could result in material liability claims against
the Company.
In September 1990, the IPCB replaced existing landfill regulations with new,
more stringent design and performance standards. These regulations are expected
to increase the cost to the Company for disposal of coal combustion by-products
at its Joliet station. At Joliet, an existing landfill utilized for disposal of
coal ash may require the installation by 1997 of engineered retrofits designed
to protect groundwater. The Company intends to request exemptions from certain
of the new regulations from the IPCB. If its request is denied, then
alternative landfill siting, commercial disposal, or retrofitting of the
existing facility could result in significant increases in disposal
expenditures.
The outcome of many of the regulatory proceedings referred to above, if not
favorable, could have a material adverse effect on the Company's future
business and operating results.
An unresolved issue is whether exposure to electric and magnetic fields
(EMFs) may result in adverse health effects or damage to the environment. EMFs
are produced by virtually all devices carrying or utilizing electricity,
including transmission and distribution lines as well as home appliances. If
regulations are adopted related to EMFs, they could affect the construction and
operation of electric equipment, including transmission and distribution lines
and the cost of such equipment. The Company cannot predict the effect on the
cost of such equipment or operations if new regulations related to EMFs are
adopted. In the absence of such regulations, EMFs have nonetheless become an
issue in siting facilities and in other land use contexts. Litigation has been
filed in a variety of locations against a variety of defendants (including the
Company) alleging that the presence or use of electrical equipment has had an
adverse effect on the health of persons. If plaintiffs are successful in
litigation of this type and it becomes widespread, the impact on the Company
and on the electric utility industry is not predictable, but could be severe.
13
From time to time, the companies are, or are claimed to be, in violation of
or in default under orders, statutes, rules or regulations relating to
environmental controls and other matters, compliance plans imposed upon or
agreed to by them or permits issued by various state and federal agencies for
the construction or operation of the companies' facilities. The Company does
not believe, so far as it now foresees, that such violations or defaults will
have a material adverse effect on its future business and operating results,
except for events otherwise described in this Annual Report on Form 10-K which
could have such an effect.
EMPLOYEES
The total number of employees of the companies was approximately 19,008 at
December 31, 1993. Of that amount, about 11,214 employees of the Company are
represented by 17 local unions of the International Brotherhood of Electrical
Workers (AFL-CIO) (IBEW), and about 182 employees of the Indiana Company are
represented by the United Steelworkers of America, Local 12502. The Company has
been notified that effective May 1, 1994, the 17 local unions of the IBEW will
be reorganized into one local union. Collective bargaining agreements with the
unions are effective through March 31, 1995 with a wage reopener to be
effective April 1, 1994. In March 1994, the Company and the unions reached
agreement on a general wage increase effective April 1, 1994, including an
incentive pay element which provides for additional compensation based on the
achievement of specified corporate financial results in 1994. The agreement is
subject to ratification by the unions' membership. Increases in the rates of
compensation for supervisory and administrative employees are made from time to
time. An incentive compensation arrangement has been implemented under the
Company's 1993 Long-Term Incentive Plan for supervisory and administrative
employees for 1994, with payments based upon the achievement of specified
financial and other goals. Supplemental agreements covering life insurance,
savings and investment, medical, dental and vision care plans are effective
until March 31, 1995. Supplemental agreements covering pension matters are
effective until March 31, 1995. See "The Company" above for information
relating to changes to union agreements during 1993.
INTERCONNECTIONS
The Company has interconnections for the transmission of electricity with
Central Illinois Light Company, Central Illinois Public Service Company,
Illinois Power Company, Indiana Michigan Power Company (a subsidiary of
American Electric Power Company), Interstate Power Company, Iowa-Illinois Gas
and Electric Company, Northern Indiana Public Service Company, Wisconsin
Electric Power Company and Wisconsin Power and Light Company for the purpose of
exchanging energy and for other forms of mutual assistance.
The Company and thirteen other Midwest power systems are members of MAIN.
The members have entered into an agreement to work together to ensure the
reliability of electric power production and transmission throughout the area
they serve.
FRANCHISES
The Company's franchises are in general deemed adequate to permit it to
engage in the business it now conducts.
In the city of Chicago, the Company operates under a nonexclusive electric
franchise ordinance effective January 1, 1992, and continuing in force until
December 31, 2020. The Company derives approximately one-third of its ultimate
consumer revenues from the city of Chicago.
The electric business outside of the city of Chicago is conducted in
municipalities under nonexclusive franchises and, where required, under
certificates of convenience and necessity granted
14
by the ICC. The following tabulation summarizes as of December 31, 1993 the
expiration dates of the electric franchises held in 395 of the 396
municipalities outside of the city of Chicago capable of granting franchises
and in which the Company currently provides electric service.
FRANCHISE ESTIMATED
EXPIRATION NUMBER OF AGGREGATE
PERIODS MUNICIPALITIES POPULATION
- ---------- -------------- ----------
1996-2006....... 4 108,000
2007-2017....... 15 113,000
2018-2028....... 4 5,000
FRANCHISE ESTIMATED
EXPIRATION NUMBER OF AGGREGATE
PERIODS MUNICIPALITIES POPULATION
- ---------- -------------- ----------
2029-2039....... 1 *
2040 and subse-
quent years.... 367 3,995,000
No stated time
limit.......... 4 71,000
*Less than one thousand people.
BUSINESS AND COMPETITION
The electric utility business has historically been characterized by retail
service monopolies in state or locally franchised service territories.
Investor-owned electric utilities have tended to be vertically integrated with
all aspects of their business subject to pervasive regulation. Although
customers have normally been free to supply their electric power needs through
self-generation, they have not had a choice of electric suppliers and self-
generation has not generally been economical.
The market in which electric utilities like the Company operate has become
more competitive and many observers believe competition will intensify. Self-
generation can be economical for certain customers, depending on how and when
they use electricity and other customer-specific considerations. A number of
competitors are currently seeking to identify and do business with those
customers. In addition, suppliers of other forms of energy are increasingly
competing to supply energy needs which historically were supplied primarily or
exclusively by electricity.
The Energy Policy Act of 1992 will likely have a significant effect on
companies engaged in the generation, transmission, distribution, purchase and
sale of electricity. This Act, among other things, expands the authority of the
FERC to order electric utilities to transmit or "wheel" wholesale power for
others, and facilitates the creation of non-utility electric generating
companies. Although the Company cannot now predict the full impact of this Act,
it will likely create and increase competition affecting the Company.
The Company is facing increased competition from several non-utility
businesses which seek to provide energy services to users of electricity,
especially larger customers such as industrial, commercial and wholesale
customers. Such suppliers include independent power producers and unregulated
energy services companies. In this regard, natural gas utilities operating in
the Company's service area have established subsidiary ventures to provide
heating, ventilating and air conditioning services, attempting to attract the
Company's customers. Also, several utilities in the United States have
established unregulated energy services subsidiaries which pursue business
opportunities wherever they exist. In addition, cogeneration and energy
services companies have begun soliciting the Company's customers to provide
alternatives to using the Company's electricity.
On July 13, 1993, legislation became effective in Illinois which permits the
Company to create certain unregulated subsidiaries, and to form a holding
company, without being required to obtain the approval of the ICC. The
legislation gives the Company and its affiliates flexibility to compete with
unregulated competitors to provide energy services. The Company has created an
unregulated subsidiary to engage in energy service activities and is in the
process of obtaining necessary shareholder and Federal regulatory approvals to
create a holding company structure for its operations. For additional
information, see "Item B. Corporate Restructuring Plan" in the Company's Proxy
Statement relating to its Annual Meeting of shareholders to be held May 10,
1994.
15
EXECUTIVE OFFICERS OF THE REGISTRANT
EFFECTIVE DATE OF ELECTION
NAME AGE POSITION TO PRESENT POSITION
------------------ --- --------------------- --------------------------
James J. O'Connor 57 Chairman March 1, 1980
Samuel K. Skinner 55 President February 1, 1993
Thomas J. Maiman 55 Senior Vice President June 10, 1992
Robert J. Manning 51 Senior Vice President June 10, 1992
Donald A. Petkus 52 Senior Vice President June 10, 1992
Cordell Reed 56 Senior Vice President June 5, 1987
Michael J. Wallace 46 Senior Vice President December 9, 1993
John C. Bukovski 51 Vice President February 1, 1989
Louis O. DelGeorge 46 Vice President April 22, 1992
Harlan M. Dellsy 46 Vice President September 15, 1986
William H. Downey 49 Vice President June 10, 1992
J. Stanley Graves 57 Vice President June 5, 1987
Emerson W. Lacey 52 Vice President November 17, 1992
Paul D. McCoy 43 Vice President June 10, 1992
Robert A. Paul 50 Vice President January 26, 1994
James A. Small 50 Vice President July 1, 1993
Pamela B. Strobel 41 Vice President and June 1, 1993
General Counsel
John J. Viera 62 Vice President March 29, 1977
Roger F. Kovack 45 Comptroller February 1, 1989
Dennis F. O'Brien 48 Treasurer February 1, 1989
David A. Scholz 52 Secretary February 1, 1989
The present term of office of each of the above executive officers extends to
the first meeting of the Company's Board of Directors after the next annual
election of Directors scheduled to be held on May 10, 1994.
Each of the above executive officers (except for Messrs. Skinner, Paul and
Small and Ms. Strobel), has been employed by the Company for more than five
years in executive or management positions. Since January 1, 1989 and prior to
his election as President of the Company, Mr. Skinner was a partner in the law
firm of Sidley & Austin prior to February 1989, Secretary of the United States
Department of Transportation from February 1989 to December 1991, Chief of
Staff to the President of the United States from December 1991 to August 1992,
and General Chairman of the Republican National Committee from August 1992 to
January 1993. Since January 1, 1989 and prior to his election as Vice
President, Mr. Paul was employed at Digital Equipment Corporation in the
following capacities: prior to 1989 as Group Technology Manager, from 1989 to
1992 as Corporate Technology and Business Acquisition Manager and from 1992 to
January 1994 as Corporate Purchasing Manager. Since January 1, 1989 and prior
to his election as Vice President, Mr. Small was General Manager of Fuel
Services at Georgia Power Company. Since January 1, 1989 and prior to her
election as Vice President and General Counsel, Ms. Strobel was a partner in
the law firm of Sidley & Austin. Since January 1, 1989 and prior to election to
the positions shown above, the following officers held other positions in the
Company: Messrs. Maiman, Manning and Petkus were Vice Presidents; Mr. Wallace
was Manager of Projects and Construction Services prior to February 1, 1989,
Manager of Engineering and Construction Services prior to July 25, 1990 and
Vice President
16
thereafter; Messrs. Bukovski and DelGeorge were Assistant Vice Presidents; Mr.
Downey was Operating Manager prior to September 1990 and Manager of Marketing
and Customer Services thereafter; Mr. Lacey was Operations Manager--Fossil
Stations prior to November 1989 and Fossil Engineering and Construction
Manager thereafter; Mr. McCoy was Division Operating Manager--Northern from
April 1988 to September 1990, Operating Manager from September 1990 to
September 1991 and Manager of Transmission and Distribution Operations
thereafter; Mr. Kovack was Assistant Comptroller; Mr. O'Brien was Assistant
Treasurer; and Mr. Scholz was Assistant Vice President.
There are no family relationships among the executive officers, directors
and nominees for director of the Company.
OPERATING STATISTICS
YEAR ENDED DECEMBER 31
----------------------------------
1993 1992 1991
---------- ---------- ----------
Electric Operating Revenues (thousands of
dollars)(1):
Residential............................... $2,341,155 $2,146,523 $2,306,940
Small commercial and industrial........... 1,962,662 1,874,393 1,905,920
Large commercial and industrial........... 1,437,680 1,373,939 1,408,725
Public authorities........................ 474,034 452,508 464,895
Electric railroads........................ 27,593 27,633 28,458
Provisions for revenue refunds--ultimate
consumers................................ (1,281,788) (18,372) (851)
Sales for resale (net of provisions for
revenue refunds)......................... 237,573 113,603 107,755
Other revenues............................ 61,531 56,094 53,691
---------- ---------- ----------
Total.................................. $5,260,440 $6,026,321 $6,275,533
---------- ---------- ----------
---------- ---------- ----------
Sales (millions of kilowatthours):
Residential............................... 20,818 19,269 21,603
Small commercial and industrial........... 23,463 22,662 23,152
Large commercial and industrial........... 22,917 22,163 22,575
Public authorities........................ 6,741 6,562 6,776
Electric railroads........................ 405 410 422
Sales for resale.......................... 13,417 4,614 4,073
---------- ---------- ----------
Total.................................. 87,761 75,680 78,601
---------- ---------- ----------
---------- ---------- ----------
Sources of Electric Energy (millions of
kilowatthours):
Generation--
Nuclear.................................. 70,403 66,683 63,512
Fossil................................... 23,839 13,188 18,500
Fast-start peaking units................. 24 18 34
---------- ---------- ----------
Net generation......................... 94,266 79,889 82,046
Purchased power........................... 637 2,555 3,374
Company use and losses.................... (7,142) (6,764) (6,819)
---------- ---------- ----------
Total.................................. 87,761 75,680 78,601
---------- ---------- ----------
---------- ---------- ----------
Cost of Fuel Consumed (per million Btu):
Nuclear................................... $0.52 $0.52 $0.49
Coal...................................... $2.89 $2.96 $2.84
Oil....................................... $3.03 $3.02 $3.37
Natural gas............................... $2.70 $2.36 $2.48
Average all fuels......................... $1.15 $0.97 $1.07
Peak Load (kilowatts)...................... 17,771,000 15,994,000 17,733,000
Number of Customers (at end of year):
Residential............................... 3,009,508 2,981,141 2,955,962
Small commercial and industrial........... 283,764 282,092 279,660
Large commercial and industrial........... 1,503 1,527 1,509
Public authorities........................ 12,023 11,886 12,029
Electric railroads and resale............. 19 18 18
---------- ---------- ----------
Total.................................. 3,306,817 3,276,664 3,249,178
---------- ---------- ----------
---------- ---------- ----------
Average Annual Revenue Per Residential
Customer
(excludes light bulb service)............. $779.54 $721.27 $780.43
Average Use Per Residential Customer
(kilowatthours)........................... 6,954 6,497 7,333
Average Revenue Per Kilowatthour(2):
Residential (excludes light bulb
service)................................. 11.21c 11.10c 10.64c
Small commercial and industrial........... 8.36c 8.27c 8.23c
Large commercial and industrial........... 6.27c 6.20c 6.24c
- --------
(1) See "Rate Proceedings" above.
(2) Average revenue per kilowatthour after reflecting provisions for revenue
refunds and after reflecting revenue refunds and related interest credited
to customers in 1993, 1992 and 1991, respectively, were as follows:
17
1993 1992 1991
-------------------------------- -------------------------------- --------------------------------
AFTER DEDUCTIONS FOR AFTER DEDUCTIONS FOR AFTER DEDUCTIONS FOR
-------------------------------- -------------------------------- --------------------------------
PROVISIONS FOR REVENUE PROVISIONS FOR REVENUE PROVISIONS FOR REVENUE
REVENUE REFUNDS REFUNDS CREDITED REVENUE REFUNDS REFUNDS CREDITED REVENUE REFUNDS REFUNDS CREDITED
--------------- ---------------- --------------- ---------------- --------------- ----------------
Residential 8.61c 10.78c 10.90c 10.45c 10.61c 10.45c
Small commercial and
industrial 6.80c 8.16c 8.20c 8.02c 8.22c 8.13c
Large commercial and
industrial 5.07c 6.10c 6.13c 5.97c 6.23c 6.16c
ITEM 2. PROPERTIES.
The Company's electric properties are located in Illinois and the Indiana
Company's electric facilities are located in Indiana. In management's opinion,
the companies' operating properties are adequately maintained and are
substantially in good operating condition. The electric generating,
transmission, distribution and general facilities of the companies represent
approximately 69%, 9%, 19% and 3%, respectively, of their gross investment in
electric plant and equipment in service.
The electric generating stations, substations and a portion of the
transmission rights of way of the companies are owned in fee. A significant
portion of the electric transmission and distribution facilities are located
over or under highways, streets, other public places or property owned by
others, for which permits, grants, easements or licenses (deemed satisfactory
by the Company, but without examination of underlying land titles) have been
obtained. The principal plants and properties of the Company are subject to
the lien of the Company's Mortgage dated July 1, 1923, as amended and
supplemented, under which the Company's first mortgage bonds are issued.
The net generating capability of the Company and the Indiana Company is
derived from the following electric generating facilities:
NET GENERATING
CAPABILITY
STATION LOCATION (KILOWATTS)
------- ---------------- --------------
Nuclear--
Zion Zion 2,080,000
Dresden Near Morris 1,588,000
Quad-Cities Near Cordova 1,183,000(1)
LaSalle County Near Seneca 2,156,000
Byron Near Byron 2,240,000
Braidwood Near Braidwood 2,240,000
Fossil--
Collins Near Morris 2,698,000
Powerton Near Pekin 1,400,000
Joliet 6 Near Joliet 302,000
Joliet 7 & 8 Near Joliet 1,025,000
Kincaid Near Taylorville 1,108,000
Will County Near Lockport 1,092,000
Waukegan Waukegan 725,000
Crawford Chicago 542,000
State Line Hammond, Indiana 490,000
Fisk Chicago 321,000
Fast-Start Peaking Units(2) Various 1,332,000
----------
Net non-summer generating capability 22,522,000
Deduct--Summer limitations 557,000
----------
Net summer generating capability 21,965,000
----------
----------
- --------
(1) Excludes the 25% undivided interest of Iowa-Illinois Gas and Electric
Company in the Quad-Cities station.
(2) Generating units normally designed for use only during the maximum load
period of a designated time interval. Such units are capable of starting
and coming on-line quickly.
18
Major electric transmission lines owned and in service are as follows:
VOLTAGE CIRCUIT
(VOLTS) MILES
------- -------
765,000........................................................... 90
345,000........................................................... 2,513
138,000........................................................... 2,692
The Company's electric distribution system includes 37,275 pole line miles of
overhead lines and 29,666 cable miles of underground lines. A total of
approximately 1,315,024 poles are included in the Company's distribution
system, of which about 589,957 are owned jointly with telephone companies.
ITEM 3. LEGAL PROCEEDINGS.
During 1989 and 1991, actions were brought in federal and state courts in
Colorado against the Company and its subsidiary, Cotter Corporation (Cotter),
alleging that Cotter has permitted radioactive and other hazardous material to
be released from its mill into areas owned or occupied by the plaintiffs
resulting in property damage and potential adverse health effects. The
plaintiffs seek from Cotter and the Company unspecified compensatory, exemplary
and medical monitoring fund damages, unspecified response costs under CERCLA,
and temporary and permanent injunctive relief. Although the cases will
necessarily involve the resolution of numerous contested issues of fact and
law, the Company's determination is that these actions will not have a material
adverse impact on the Company's financial statements.
In October 1990, the Company filed a complaint in the Circuit Court of Cook
County, Illinois (Circuit Court), against Westinghouse Electric Corporation
(Westinghouse) and certain of its employees. The complaint alleges that the
defendants knowingly concealed information regarding the durability of the
metal used in the steam generators (a major component of the nuclear steam
supply systems) at the Zion, Byron and Braidwood stations. The complaint
further alleges that the defects in the steam generators will prevent the
plants from maintaining their full power output through their forty year design
life without costly remanufacture or replacement of the steam generators.
Damages, including punitive damages, in an unspecified amount are claimed.
Westinghouse has filed a counterclaim against the Company which seeks recovery
of Westinghouse's costs of defense and damages of approximately $13 million.
Shareholder derivative lawsuits were filed on October 1, 1992 and on April
14, 1993 in the Circuit Court against current and former directors of the
Company alleging that they breached their fiduciary duty and duty of care to
the Company in connection with the management of the activities associated with
the construction of the Company's four most recently completed nuclear
generating units. The lawsuits sought restitution to the Company by the
defendants for unquantified and undefined losses and costs alleged to have been
incurred by the Company. Both lawsuits were dismissed by the Circuit Court;
however, appeals are pending before the Illinois Appellate Court.
A number of complaints have been filed by former employees with the Equal
Employment Opportunity Commission, and several lawsuits have been filed by
former employees in the United States District Court, alleging that the
employees' terminations (which occurred as part of the Company's management
workforce reductions that were implemented in the second half of 1992) involved
discrimination on the basis of age, race, sex, national origin and/or
disabilities, in violation of applicable law. The complainants are seeking,
among other things, awards of back pay and lost benefits, reinstatement,
pecuniary damages, and costs and attorneys' fees.
See "Item 1. Business," subcaptions "Construction Program," "Rate
Proceedings," "Fuel Supply" and "Regulation" above for information concerning
legal proceedings involving various regulatory agencies.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
19
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The current ratings of the Company's securities by three principal securities
rating agencies are as follows:
STANDARD DUFF &
MOODY'S & POOR'S PHELPS
------- -------- ------
First mortgage and secured pollution control bonds.. Baa2 BBB BBB
Publicly-held debentures and unsecured pollution
control obligations................................ Baa3 BBB- BBB-
Convertible preferred stock......................... baa3 BBB- BB+
Preference stock.................................... baa3 BBB- BB+
Commercial paper.................................... P-2 A-2 Duff 2
The foregoing ratings reflect downgradings during 1992 and in January 1993 as
a result of developments in the proceedings leading to, and the issuance of,
the Remand Order. In December 1993, Standard & Poor's affirmed its ratings of
the Company's debt, although on October 27, 1993, it changed its "outlook" on
the Company's ratings from stable to negative as part of its larger assessment
of the electric utility industry. In December 1993, Moody's and Duff & Phelps
affirmed their ratings of the Company's securities, and Moody's rating outlook
on the Company remained stable.
The above ratings reflect only the views of such rating agencies and each
rating should be evaluated independently of any other rating. Generally,
rating agencies base their ratings on information furnished to them by the
issuing company and on investigations, studies and assumptions by the rating
agencies. There is no assurance that any particular rating will continue for
any given period of time or that it will not be changed or withdrawn entirely
if in the judgment of the rating agency circumstances so warrant. Such ratings
are not a recommendation to buy, sell or hold securities.
The following is a brief summary of the meanings of the above ratings and the
relative rank of the above ratings within each rating agency's classification
system.
Moody's top four long-term debt ratings (Aaa, Aa, A and Baa) are generally
considered "investment grade." Obligations rated Baa are considered as medium
grade obligations, neither highly protected nor poorly secured. Such
obligations lack outstanding investment characteristics and in fact have
speculative characteristics. (A numerical modifier in Moody's system shows
relative standing within the principal rating category, with 1 indicating the
high end of that category, 2 the mid-range and 3 the low end.) Standard &
Poor's top four bond ratings (AAA, AA, A and BBB) are generally considered to
describe obligations in which investment characteristics predominate.
Obligations rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. It normally exhibits adequate protection
parameters, but adverse economic conditions or changing circumstances are more
likely to lead to weakened capacity to pay. (A plus or minus sign in Standard &
Poor's system shows relative standing within the major rating categories.)
Both Moody's and Standard & Poor's preferred stock ratings represent relative
security of dividends. Moody's top four preferred stock ratings (aaa, aa, a
and baa) are generally considered "investment grade." Moody's baa rating
describes a medium grade preferred stock, neither highly protected nor poorly
secured. Standard & Poor's top four preferred stock ratings (AAA, AA, A and
BBB) are generally considered "investment grade." Standard & Poor's BBB rating
applies to medium grade preferred stock which is below A ("sound") and above BB
("lower grade").
20
Duff & Phelps' credit rating scale has 17 alphabetical categories, of which
ratings AAA through BBB (with AAA being the highest rating) represent
investment grade securities. Ratings of BBB+, BBB and BBB- represent the
lowest category of "investment grade" rating. This category describes
securities with below average protection factors but which are considered
sufficient for institutional investment. Considerable variability in risk
occurs during economic cycles. Ratings of BB+, BB and BB- describe below
investment grade securities which are deemed likely to meet obligations when
due. Present or prospective financial protection factors of these securities
fluctuate according to industry conditions or company fortunes.
Moody's Prime-2 (P-2) rating of commercial paper is the second highest of
three possible ratings; P-2 describes a strong capacity for repayment of short-
term promissory obligations. Standard & Poor's rates commercial paper in four
basic categories with A-2 being the second highest category. Duff & Phelps
rates commercial paper in three basic categories, with Duff 2 indicating the
middle category.
Further explanations of the significance of ratings may be obtained from the
rating agencies.
Additional information required by Item 5 is incorporated herein by reference
to the "Price Range and Dividends Paid Per Share of Common Stock" on page 26 of
the January 28, 1994 Form 8-K/A-1 Report.
ITEM 6. SELECTED FINANCIAL DATA.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by Items 6, 7 and 8 is incorporated herein by
reference to the "Summary of Selected Consolidated Financial Data" on page 26,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 10 through 22, and the audited consolidated financial
statements and notes thereto on pages 25 and 27 through 51 of the January 28,
1994 Form 8-K/A-1 Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
21
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required by Item 10 relating to directors and nominees for
election as directors at the Company's Annual Meeting of shareholders to be
held on May 10, 1994 is incorporated herein by reference to pages 12 through 14
of the Company's definitive Proxy Statement (1994 Proxy Statement) filed with
the Securities and Exchange Commission pursuant to Regulation 14A under the
Securities Exchange Act of 1934. The information required by Item 10 relating
to executive officers is set forth in Part I of this Annual Report on Form 10-K
under "Item 1. Business," subcaption "Executive Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION.
The information required by Item 11 is incorporated herein by reference to
the paragraph labelled "Compensation of Directors" on page 14, under the
heading "Executive Compensation--Summary Compensation Table" on page 16 and
under the heading "Executive Compensation--Service Annuity System Plan" on page
17 of the 1994 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by Item 12 is incorporated herein by reference to
the stock ownership information under the heading "Security Ownership of
Certain Beneficial Owners and Management" on pages 10 and 11 of the 1994 Proxy
Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
22
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a)FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND EXHIBITS:
PAGE OF
JANUARY 28,
1994 FORM
8-K/A-1
REPORT
-----------
The following financial statements are incorporated herein by
reference to the Company's January 28, 1994 Form 8-K/A-1 Re-
port:
Report of Independent Public Accountants..................... 25
Statements of Consolidated Income for each of the three years
in the period ended December 31, 1993....................... 27
Consolidated Balance Sheets--December 31, 1993 and December
31, 1992.................................................... 28-29
Statements of Consolidated Capitalization--December 31, 1993
and December 31, 1992....................................... 30
Statements of Consolidated Cash Flows for each of the three
years in the period ended December 31, 1993................. 31
Statements of Consolidated Retained Earnings for each of the
three years in the period ended December 31, 1993........... 32
Statements of Consolidated Premium on Common Stock and Other
Paid-In Capital for each of the three years in the period
ended December 31, 1993..................................... 32
Notes to Financial Statements................................ 33-51
PAGE OF THIS
REPORT ON
FORM 10-K
------------
The following supplemental schedules are included herein:
Report of Independent Public Accountants on Supplemental
Schedules.................................................. 28
Schedule V--Property, Plant and Equipment for each of the
three years in the period ended December 31,
1993........................................... 29-30
Schedule VI--Accumulated Depreciation, Depletion and Amorti-
zation of Property, Plant and Equipment for
each of the three years in the period ended
December 31, 1993............................. 31-32
Schedule VII--Guarantees of Securities of Other Issuers at
December 31, 1993............................ 33
Schedule VIII--Valuation and Qualifying Accounts for each of
the three years in the period ended December
31, 1993.................................... 34
Schedule IX--Short-Term Borrowings for each of the three
years in the period ended December 31, 1993... 35
The following schedules are omitted as not applicable or not required
under rules of Regulation S-X: I, II, III, IV, XI, XII, XIII and XIV.
Significant information required by Schedule X--Supplementary Income
Statement Information is included as Note 15 of Notes to Financial
Statements incorporated herein by reference to the January 28, 1994
Form 8-K/A-1 Report.
23
Individual financial statements and schedules of the Company have been
omitted because it is primarily an operating company and all subsidiaries
included in the consolidated financial statements are totally-held
subsidiaries.
Financial statements and schedules of the Company's nonconsolidated
subsidiaries have been omitted because the investments are not material in
relation to the Company's financial position and results of operations. As
of December 31, 1993, the assets of the nonconsolidated subsidiaries in the
aggregate approximated 1% of the Company's consolidated assets and for the
year 1993 annual revenues of the nonconsolidated subsidiaries in the
aggregate were less than 1% of the Company's consolidated annual revenues.
The following exhibits are filed herewith or incorporated herein by
reference. Documents indicated by an asterisk (*) are incorporated herein
by reference to the File No. indicated.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- --------------------------------------------------------------------------
*(3)-1 Restated Articles of Incorporation of the Company effective February 20,
1985 (File No. 1-1839, Form 10-K for the year ended December 31, 1985,
Exhibit (3)-1).
*(3)-2 Statement of Resolution Establishing Series, relating to the establishment
of a new series of preference stock known as the "$9.30 Cumulative Pref-
erence Stock," dated December 10, 1985 (File No. 1-1839, Form 10-K for
the year ended December 31, 1992, Exhibit (3)-2).
*(3)-3 Statement of Resolution Establishing Series, relating to the establishment
of a new series of preference stock known as the "$9.00 Cumulative Pref-
erence Stock," dated July 25, 1990 (File No. 1-1839, Form 10-K for the
year ended December 31, 1990, Exhibit (3)-2).
*(3)-4 Statement of Resolution Establishing Series, relating to the establishment
of a new series of preference stock known as the "$6.875 Cumulative Pref-
erence Stock," dated May 21, 1993 (File No. 1-1839, Form 8-K dated May
21, 1993, Exhibit (3)-1).
*(3)-5 By-Laws of the Company, effective September 2, 1988 (File No. 1-1839, Form
10-Q for the quarter ended September 30, 1988, Exhibit (3)).
*(3)-6 Amendment to By-Laws of the Company, effective July 1, 1989 (File No.
1-1839, Form 10-Q for the quarter ended June 30, 1989, Exhibit (3)).
*(3)-7 Amendment to By-Laws of the Company, effective February 1, 1991 (File No.
1-1839, Form 10-K for the year ended December 31, 1990, Exhibit (3)-4).
*(3)-8 Amendment to By-Laws of the Company, effective September 10, 1992 (File
No. 1-1839, Form 10-K for the year ended December 31, 1992, Exhibit (3)-
6).
*(4)-1 Mortgage of the Company to Illinois Merchants Trust Company, Trustee (Con-
tinental Illinois National Bank and Trust Company of Chicago, successor
Trustee), dated July 1, 1923, Supplemental Indenture thereto dated August
1, 1944, and amendments and supplements thereto dated, respectively, Au-
gust 1, 1946, April 1, 1953, April 1, 1966, November 1, 1966, December 1,
1966, March 31, 1967, April 1, 1967, February 1, 1968, July 1, 1968, Oc-
tober 1, 1968, February 28, 1969, May 29, 1970, January 1, 1971, June 1,
1971, May 31, 1972, June 1, 1973, June 15, 1973, October 15, 1973, May
31, 1974, July 1, 1974, June 13, 1975, May 28, 1976, January 15, 1977,
June 1, 1977 and June 3, 1977 (File No. 2-60201, Form S-7, Exhibit 2-1).
24
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- --------------------------------------------------------------------------
*(4)-2 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, December 1, 1977, May 17, 1978, August 31, 1978, June 18, 1979, June
20, 1980, April 16, 1981, April 30, 1982, April 15, 1983, April 13, 1984,
March 1, 1985 and April 15, 1985 (File No. 2-99665, Form S-3, Exhibit
(4)-3).
*(4)-3 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, April 15, 1986 and May 1, 1986 (File No. 33-6879, Form S-3, Exhibit
(4)-9).
*(4)-4 Supplemental Indenture to Mortgage dated July 1, 1923 dated January 12,
1987 (File No. 33-13193, Form S-3, Exhibit (4)-6).
*(4)-5 Supplemental Indenture to Mortgage dated July 1, 1923 dated June 30, 1989
(File No. 33-32929, Form S-3, Exhibit (4)-11).
*(4)-6 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, February 15, 1990 and June 15, 1990 (File No. 33-38232, Form S-3, Ex-
hibits (4)-11 and (4)-12).
*(4)-7 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, June 1, 1991, October 1, 1991 and October 15, 1991 (File No. 33-
44018, Form S-3, Exhibits (4)-12, (4)-13 and (4)-14).
*(4)-8 Supplemental Indenture to Mortgage dated July 1, 1923 dated February 1,
1992 (File No. 1-1839, Form 10-K for the year ended December 31, 1991,
Exhibit (4)-18).
*(4)-9 Supplemental Indenture to Mortgage dated July 1, 1923 dated May 15, 1992
(File No. 33-48542, Form S-3, Exhibit (4)-14).
*(4)-10 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, July 15, 1992, September 15, 1992 and October 1, 1992 (File No. 33-
53766, Form S-3, Exhibits (4)-13, (4)-14 and (4)-15).
*(4)-11 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, February 1, 1993 and March 1, 1993 (File No. 1-1839, Form 10-K for
the year ended December 31, 1992, Exhibits (4)-14 and (4)-15).
*(4)-12 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, April 1, 1993 and April 15, 1993 (File No. 33-64028, Form S-3, Exhib-
its (4)-12 and (4)-13).
*(4)-13 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, June 15, 1993 and July 1, 1993 (File No. 1-1839, Form 8-K dated May
21, 1993, Exhibits (4)-1 and (4)-2).
*(4)-14 Supplemental Indenture to Mortgage dated July 1, 1923 dated July 15, 1993
(File No. 1-1839, Form 10-Q for the quarter ended June 30, 1993, Exhibit
(4)-1).
(4)-15 Supplemental Indenture to Mortgage dated July 1, 1923 dated January 15,
1994.
*(4)-16 Indentures of the Company to The First National Bank of Chicago, Trustee
(Harris Trust and Savings Bank, successor Trustee), dated April 1, 1949,
October 1, 1949, October 1, 1950, October 1, 1954, January 1, 1958, Janu-
ary 1, 1959 and December 1, 1961 (File No. 1-1839, Form 10-K for the year
ended December 31, 1982, Exhibit (4)-20).
*(4)-17 Indenture of the Company dated February 15, 1973 to The First National
Bank of Chicago, Trustee (LaSalle National Bank, successor Trustee), and
Supplemental Indenture thereto dated July 13, 1973 (File No. 2-66100,
Form S-16, Exhibit (b)-2).
*(4)-18 Indenture dated as of September 1, 1987 between the Company and Citibank,
N.A., Trustee relating to Notes (File No. 33-20619, Form S-3, Exhibit
(4)-13).
25
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- --------------------------------------------------------------------------
*(4)-19 Supplemental Indenture to Indenture dated September 1, 1987 dated Septem-
ber 15, 1987 (File No. 33-20619, Form S-3, Exhibit (4)-14).
*(4)-20 Supplemental Indenture to Indenture dated September 1, 1987 dated May 18,
1988 (File No. 33-23036, Form S-3, Exhibit (4)-14).
*(4)-21 Supplemental Indenture to Indenture dated September 1, 1987 dated July 14,
1989 (File No. 33-32929, Form S-3, Exhibit (4)-16).
*(4)-22 Supplemental Indenture to Indenture dated September 1, 1987 dated April 1,
1991 (File No. 33-44018, Form S-3, Exhibit (4)-21).
*(4)-23 Supplemental Indenture to Indenture dated September 1, 1987 dated April
15, 1992 (File No. 33-48542, Form S-3, Exhibit (4)-22).
*(4)-24 Supplemental Indenture to Indenture dated September 1, 1987 dated July 15,
1992 (File No. 33-53766, Form S-3, Exhibit (4)-24).
*(4)-25 Supplemental Indenture to Indenture dated September 1, 1987 dated October
15, 1993 (File No. 1-1839, Form 10-Q for the quarter ended September 30,
1993, Exhibit (4)-1).
*(4)-26 Credit Agreement dated as of October 1, 1991, among Commonwealth Edison
Company, as borrower, the Banks named therein and the other Lenders from
time to time parties thereto, and Citibank, N.A. (File No. 1-1839, Form
10-K for the year ended December 31, 1991, Exhibit (4)-27).
*(4)-27 Credit Agreement dated as of October 1, 1991, among Commonwealth Edison
Company, as borrower, the Banks named therein and the other Lenders from
time to time parties thereto, and Citibank, N.A. (File No. 1-1839, Form
10-K for the year ended December 31, 1991, Exhibit (4)-28).
(4)-28 Letter Agreement dated as of October 4, 1993, among Commonwealth Edison
Company and certain of the Banks party to the Credit Agreement dated as
of October 1, 1991.
*(4)-29 Term Loan Agreement dated as of January 7, 1992, between Commonwealth Edi-
son Company, as borrower, and The First National Bank of Chicago, indi-
vidually and as agent (File No. 1-1839, Form 10-K for the year ended De-
cember 31, 1992, Exhibit (4)-28).
*(4)-30 Term Loan Agreement dated as of January 15, 1992, between Commonwealth Ed-
ison Company, as borrower, and Westpac Banking Corporation, Chicago
Branch, individually and as agent (File No. 1-1839, Form 10-K for the
year ended December 31, 1992, Exhibit (4)-29).
*(4)-31 Term Loan Agreement dated as of January 16, 1992, between Commonwealth Ed-
ison Company, as borrower, and The Bank of New York, individually and as
agent (File No. 1-1839, Form 10-K for the year ended December 31, 1992,
Exhibit (4)-29).
(10)-1 Nuclear Fuel Lease Agreement dated as of November 23, 1993, between CommEd
Fuel Company, Inc., as Lessor, and Commonwealth Edison Company, as Les-
see.
*(10)-2 1993 Long-Term Incentive Plan (File No. 1-1839, Proxy Statement dated
March 26, 1993, Exhibit A).
(10)-3 1994 Long-Term Performance Unit Award for Executive and Group Level Em-
ployes Payable in 1995 under the 1993 Long-Term Incentive Plan.
(10)-4 1994 Long-Term Performance Unit Award for Executive and Group Level Em-
ployes Payable in 1996 under the 1993 Long-Term Incentive Plan.
26
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- --------------------------------------------------------------------------
(10)-5 1994 Long-Term Performance Unit Award for Executive and Group Level Em-
ployes Payable in 1997 under the 1993 Long-Term Incentive Plan.
(10)-6 1994 Variable Compensation Award for Management Employes under the 1993
Long-Term Incentive Plan.
*(10)-7 Deferred Compensation Plan (included in Exhibit (3)-1 above).
*(10)-8 Management Incentive Compensation Plan, effective January 1, 1989 (File
No. 1-1839, Form 10-K for the year ended December 31, 1988, Exhibit (10)-4).
*(10)-9 Amendments to Management Incentive Compensation Plan, dated December 14,
1989 and March 21, 1990 (File No. 1-1839, Form 10-K for the year ended
December 31, 1989, Exhibit (10)-5).
*(10)-10 Amendment to Management Incentive Compensation Plan, dated March 21, 1991
(File No. 1-1839, Form 10-K for the year ended December 31, 1991, Exhibit
(10)-6).
*(10)-11 Retirement Plan for Directors, effective January 1, 1987 (File No. 1-1839,
Form 10-K for the year ended December 31, 1988, Exhibit (10)-5).
*(10)-12 Executive Group Life Insurance Plan (File No. 1-1839, Form 10-K for the
year ended December 31, 1980, Exhibit (10)-3).
*(10)-13 Amendment to the Executive Group Life Insurance Plan (File No. 1-1839,
Form 10-K for the year ended December 31, 1981, Exhibit (10)-4).
*(10)-14 Amendment to the Executive Group Life Insurance Plan dated December 12,
1986 (File No. 1-1839, Form 10-K for the year ended December 31, 1986,
Exhibit (10)-6).
*(10)-15 Amendment of Executive Group Life Insurance Plan to implement program of
"split dollar life insurance" dated December 13, 1990 (File No. 1-1839,
Form 10-K for the year ended December 31, 1990, Exhibit (10)-10).
*(10)-16 Commonwealth Edison Company Supplemental Management Retirement Plan (File
No. 1-1839, Form 10-K for the year ended December 31, 1985, Exhibit
(10)-6).
*(10)-17 Amendment of Executive Group Life Insurance Plan to stabilize the death
benefit applicable to participants dated July 22, 1992 (File No. 1-1839,
Form 10-K for the year ended December 31, 1992, Exhibit (10)-13).
*(10)-18 Letter Agreement dated December 16, 1992 between Commonwealth Edison Com-
pany and Samuel K. Skinner (File No. 1-1839, Form 10-K for the year ended
December 31, 1992, Exhibit (10)-14).
(12) Statement re computation of ratios of earnings to fixed charges and ratios
of earnings to fixed charges and preferred and preference stock dividend
requirements.
(21) Subsidiaries of Commonwealth Edison Company.
(23) Consent of experts.
(24) Powers of attorney of Directors whose names are signed to this Form 10-K
pursuant to such powers.
(99) Commonwealth Edison Company's Current Report on Form 8-K/A-1 dated January
28, 1994.
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the Company hereby
agrees to furnish to the Securities and Exchange Commission, upon
request, any instrument defining the rights of holders of long-term
debt of the Company not filed as an exhibit herein. No such instrument
authorizes securities in excess of 10% of the total assets of the
Company.
(B) REPORTS ON FORM 8-K:
None.
27
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SUPPLEMENTAL SCHEDULES
To Commonwealth Edison Company:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements of Commonwealth Edison Company and subsidiary
companies incorporated by reference in this Annual Report on Form 10-K, and
have issued our report thereon dated March 18, 1994. Our report on the
financial statements includes an explanatory paragraph that describes the
Company's change in its method of accounting for postretirement health care
benefits and income taxes as discussed in Notes 13 and 14, respectively, to the
financial statements.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed on page 23, Item
14.(a), are presented for purposes of complying with the Securities and
Exchange Commission's rules and are not part of the basic financial statements.
These schedules have been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, fairly state in
all material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
Arthur Andersen & Co.
Chicago, Illinois
March 18, 1994
28
SCHEDULE V
(PAGE 1 OF 2)
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT (a)
--THOUSANDS OF DOLLARS--
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- -------------------------------- ----------- ---------- -------- ---------- -----------
OTHER
BALANCE AT CHANGES--
BEGINNING ADDITIONS RETIRE- ADD BALANCE AT
CLASSIFICATION OF YEAR AT COST MENTS (DEDUCT) END OF YEAR
- -------------------------------- ----------- ---------- -------- ---------- -----------
FOR THE YEAR ENDED DECEMBER 31,
1991
- --------------------------------
Utility Plant:
Plant and equipment, at original
cost:
Electric--
Plant in service--
Production................... $16,834,598 $ 235,290 $ 34,820 $ (733,759)(b) $16,303,717(b)
2,408 (c)
Transmission................. 1,933,689 82,242 729 1,535 (c) 2,016,737
Distribution................. 3,830,855 356,703 45,103 (1,708)(c) 4,140,747
(146)(c)
General...................... 379,574 51,254 4,848 (5,767)(e) 420,067(d)
Construction work in progress.. 816,247 219,748(f) -- -- 1,035,995
383 (c)
Plant held for future use...... 455,532 94,609(g)(h) -- (16,480)(i) 534,044
----------- ---------- -------- ---------- -----------
$24,250,495 $1,039,846 $ 85,500 $ (753,534) $24,451,307(b)
=========== ========== ======== ========== ===========
Nuclear fuel, at cost.......... $ 2,008,268 $ 248,089(j) $151,797 $ (31)(k)(l)(m)(n) $ 2,104,529(o)
=========== ========== ======== ========== ===========
FOR THE YEAR ENDED DECEMBER 31,
1992
- --------------------------------
Utility Plant:
Plant and equipment, at original
cost:
Electric--
Plant in service--
Production................... $16,303,717(b) $ 314,497 $ 37,475 $ (40)(c) $16,580,699
Transmission................. 2,016,737 67,464 9,736 42 (c) 2,074,507
Distribution................. 4,140,747 387,214 44,213 (57)(c) 4,483,691
7 (c)
General...................... 420,067 96,217 10,412 (4,389)(e) 501,490(d)
(2,535)(p)
Construction work in progress.. 1,035,995 132,153(f) -- (461)(c) 1,165,152
(138)(c)
Plant held for future use...... 534,044 78,297(g)(h) -- (16,920)(i) 595,283
----------- ---------- -------- ---------- -----------
$24,451,307(b) $1,075,842 $101,836 $ (24,491) $25,400,822
=========== ========== ======== ========== ===========
Nuclear fuel, at cost.......... $ 2,104,529 $ 217,821(j) $302,841 $ (6,762)(k)(l)(m)(n) $ 2,012,747(o)
=========== ========== ======== ========== ===========
See Notes on Page 2 of 2.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
29
SCHEDULE V
(PAGE 2 OF 2)
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT--CONCLUDED (a)
--THOUSANDS OF DOLLARS--
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- ------------------------ ----------- --------- -------- --------- -----------
OTHER
BALANCE AT CHANGES--
BEGINNING ADDITIONS RETIRE- ADD BALANCE AT
CLASSIFICATION OF YEAR AT COST MENTS (DEDUCT) END OF YEAR
- ------------------------ ----------- --------- -------- --------- -----------
FOR THE YEAR ENDED DE-
CEMBER 31, 1993
- ------------------------
Utility Plant:
Plant and equipment, at
original cost:
Electric--
Plant in service--
Production........... $16,580,699 $ 430,013 $ 98,593 $ (71)(c) $16,912,048
Transmission......... 2,074,507 129,380 (322) 820 (c) 2,205,029
Distribution......... 4,483,691 275,533 25,044 (807)(c) 4,733,373
General.............. 501,490 126,042 13,062 (2,789)(c) 615,443(d)
3,762 (e)
Construction work in
progress.............. 1,165,152 (123,853)(f) -- (590)(c) 1,040,014
(695)(p)
Plant held for future
use................... 595,283 4,453 (g)(h) -- (1,921)(c) 592,027
(5,788)(i)
----------- --------- -------- --------- -----------
$25,400,822 $ 841,568 $136,377 $ (8,079) $26,097,934
=========== ========= ======== ========= ===========
Nuclear fuel, at cost.. $ 2,012,747 $260,703 (j) $200,627 $ 1,215 (k)(l)(m) $ 2,074,038(o)
=========== ========= ======== ========= ===========
Notes:
(a) Reference is made to Note 1 of Notes to Financial Statements in the
Current Report on Form 8-K/A-1 dated January 28, 1994, incorporated herein
by reference, for information relating to the accounting policies for
depreciation of plant and equipment and amortization of nuclear fuel.
(b) The 1991 balance includes a reduction of $733,759 from plant in service
reflecting the write-offs in March and November 1991 of disallowed plant
costs relating to Byron Unit 2 and Braidwood Units 1 and 2.
(c) Transfers to and from nonutility property and between other plant and
equipment accounts.
(d) Includes plant and equipment under capital leases of $11,266, $6,877 and
$10,639 at December 31, 1991, 1992 and 1993, respectively.
(e) Leased plant and equipment capitalized net of amortization.
(f) Net of transfers to plant in service and to nonutility property.
(g) Includes investment in coal reserves of $78,678, $79,961 and $43 during
the years 1991, 1992 and 1993, respectively.
(h) Net of transfers of property to construction work in progress.
(i) Coal reserves transferred to fuel inventory.
(j) Excludes nuclear fuel expenditures related to nonutility property of
$2,470, $2,473 and $667 for 1991, 1992 and 1993, respectively, for uranium
exploration and mine development.
(k) Includes additions of $148,652, $230,454 and $286,977 for discharged
nuclear fuel assemblies previously leased during the years 1991, 1992 and
1993, respectively.
(l) Includes reductions for nuclear fuel sold and leased back to the Company
of $240,263, $190,830 and $204,254 for the years 1991, 1992 and 1993,
respectively.
(m) Includes net additions/(reductions) for leased nuclear fuel capitalized of
$94,880, $(37,145) and $(81,508) for the years 1991, 1992 and 1993,
respectively.
(n) Charged to expense for writedowns of $3,300 and $9,241 for the years 1991
and 1992, respectively, to reflect the decline in realizable value of
uranium ore inventory.
(o) Includes leased nuclear fuel capitalized of $1,362,433, $1,325,287 and
$1,243,779 at December 31, 1991, 1992 and 1993, respectively.
(p) Write-off of expenditures for preliminary engineering and analysis deemed
to be not useful.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
30
SCHEDULE VI
(PAGE 1 OF 2)
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
SCHEDULE VI--ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY,
PLANT AND EQUIPMENT (a)
--THOUSANDS OF DOLLARS--
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- ------------------------ ---------- ---------- -------- --------- -----------
ADDITIONS OTHER
BALANCE AT CHARGED TO CHANGES--
BEGINNING COSTS AND RETIRE- ADD BALANCE AT
CLASSIFICATION OF YEAR EXPENSES MENTS (DEDUCT) END OF YEAR
- ------------------------ ---------- ---------- -------- --------- -----------
FOR THE YEAR ENDED
DECEMBER 31, 1991
- ------------------------
Accumulated Provision
for Depreciation of
Plant and Equipment:
Electric--
Production............ $4,112,035 $632,782 $ 62,278 $(82,689)(b) $4,552,347
(47,503)(c)
Transmission.......... 640,563 45,859 3,332 1,110 (c) 684,200
Distribution.......... 1,961,534 153,811 62,139 (1,115)(c) 2,054,748
2,657 (d)
General............... 135,847 20,783 5,395 (103)(c) 151,132
---------- -------- -------- --------- ----------
$6,849,979 $853,235 $133,144 (e) $(127,643) $7,442,427
========== ======== ======== ========= ==========
Accumulated Provision
for Amortization of
Nuclear Fuel........... $1,295,733 $ 18,987 $151,797 $ 228,664 (f)(g) $1,391,587(h)
========== ======== ======== ========= ==========
FOR THE YEAR ENDED
DECEMBER 31, 1992
- ------------------------
Accumulated Provision
for Depreciation of
Plant and Equipment:
Electric--
Production............ $4,552,347 $651,010 $ 88,621 $ (1)(c) $5,114,735
Transmission.......... 684,200 47,479 13,173 (266)(c) 718,240
Distribution.......... 2,054,748 155,115 62,466 270 (c) 2,149,953
2,286 (d)
General............... 151,132 24,369 11,981 (3)(c) 163,517
---------- -------- -------- --------- ----------
$7,442,427 $877,973 $176,241(e) $ 2,286 $8,146,445
========== ======== ======== ========= ==========
Accumulated Provision
for Amortization of
Nuclear Fuel........... $1,391,587 $ 14,565 $302,841 $ 243,472 (f)(g) $1,346,783(h)
========== ======== ======== ========= ==========
See Notes on Page 2 of 2.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
31
SCHEDULE VI
(PAGE 2 OF 2)
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
SCHEDULE VI--ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY,
PLANT AND EQUIPMENT--CONCLUDED (a)
--THOUSANDS OF DOLLARS--
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- ------------------------ ---------- ---------- -------- --------- -----------
ADDITIONS OTHER
BALANCE AT CHARGED TO CHANGES--
BEGINNING COSTS AND RETIRE- ADD BALANCE AT
CLASSIFICATION OF YEAR EXPENSES MENTS (DEDUCT) END OF YEAR
- ------------------------ ---------- ---------- -------- --------- -----------
FOR THE YEAR ENDED
DECEMBER 31, 1993
- ------------------------
Accumulated Provision
for Depreciation of
Plant and Equipment:
Electric--
Production............ $5,114,735 $ 668,668 $134,636 $ (334)(b) $5,647,056
(1,377)(c)
Transmission.......... 718,240 49,790 3,022 228 (c) 765,236
Distribution.......... 2,149,953 165,781 40,286 (199)(c) 2,278,845
3,596 (d)
General............... 163,517 29,147 15,757 (20)(c) 176,887
---------- --------- -------- -------- ----------
$8,146,445 $ 913,386 $193,701(e) $ 1,894 $8,868,024
========== ========= ======== ======== ==========
Accumulated Provision
for Amortization of
Nuclear Fuel........... $1,346,783 $ 17,944 $200,627 $247,375 (f)(g) $1,411,475(h)
========== ========= ======== ======== ==========
Notes:
(a) Reference is made to Note 1 of Notes to Financial Statements in the Current
Report on Form 8-K/A-1 dated January 28, 1994, incorporated herein by
reference, for information relating to the accounting policies for
depreciation of plant and equipment, nuclear plant decommissioning and
amortization of nuclear fuel.
(b) The year 1991 includes reversal of prior years' depreciation on disallowed
plant costs recorded in March and November 1991 discussed on page 30 note
(b). The year 1993 includes net adjustments of prior years' provisions
relating to additional disallowed plant costs recorded in October 1989 and
May 1990 for Byron Unit 1.
(c) Transfers between reserves for plant and equipment and to and from
nonutility property. Also includes a reclassification, in 1991, of nuclear
chemical cleaning from accumulated provision for depreciation of plant and
equipment for years prior to 1991 of $48,373, to other noncurrent
liabilities.
(d) Reimbursements for highway relocations.
(e) Includes removal costs, less salvage, of plant and equipment retired.
(f) Includes discharged nuclear fuel assemblies previously leased of $148,652,
$230,454 and $286,977 for the years 1991, 1992 and 1993, respectively.
(g) Includes net additions/(reductions) for accumulated amortization for leased
nuclear fuel capitalized of $80,012, $13,018 and $(39,602) for the years
1991, 1992 and 1993, respectively.
(h) Includes accumulated amortization for leased nuclear fuel capitalized of
$793,973, $806,991 and $767,389 for the years 1991, 1992 and 1993,
respectively.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
32
SCHEDULE VII
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
SCHEDULE VII--GUARANTEES OF SECURITIES OF OTHER ISSUERS
DECEMBER 31, 1993
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G
---------------------------- ----------------- ------------ ------------ ---------- ---------- -----------
NATURE OF
ANY
DEFAULT BY
ISSUER
OF
SECURITIES
GUARANTEED
IN
PRINCIPAL,
INTEREST,
AMOUNT SINKING
OWNED BY AMOUNT IN FUND OR
NAME OF ISSUER OF SECURITIES PERSON OR TREASURY REDEMPTION
GUARANTEED BY PERSON TITLE OF ISSUE OF TOTAL AMOUNT PERSONS FOR OF ISSUER PROVISIONS,
FOR EACH CLASS OF GUARANTEED WHICH OF OR
WHICH STATEMENT IS SECURITIES AND STATEMENT IS SECURITIES NATURE OF PAYMENT OF
FILED GUARANTEED OUTSTANDING FILED GUARANTEED GUARANTEE DIVIDENDS
---------------------------- ----------------- ------------ ------------ ---------- ---------- -----------
Edison Development Promissory note $ 1,760,000(b)(c) -- -- Principal --
Company (a) and
interest
Cotter Corporation (d) (e) (e) -- -- (e) --
CommEd Fuel Company, Commercial paper, $516,144,000(g) -- -- Principal, --
Inc. (f) bank borrowings interest
and intermediate and other
term notes financing
costs (h)
Northwind Inc. (i) Letters of Credit $ 2,500,000 -- -- Principal --
and
interest
Notes:
(a) Edison Development Company is a wholly-owned subsidiary which owns coal
land, land rights, and mineral rights to low-sulfur coal, owns certain
other real estate investments, and has an interest in uranium ore deposits
for the purpose of furnishing Commonwealth Edison Company with a future
source of fuel for electric generation.
(b) Represents portion of purchase cost of coal land.
(c) Excludes interest, which is at a rate of prime plus 1%.
(d) Cotter Corporation is a wholly-owned subsidiary which owns uranium mining
properties in Colorado and other Western states and a mineral processing
plant to furnish a supply of uranium concentrate for Commonwealth Edison
Company's nuclear fuel requirements.
(e) Cotter Corporation received from the state of Colorado the renewal and
amendment of its existing license to operate its uranium mill and
associated tailings impoundment at its Canon City uranium mill by obtaining
a $10,500,000 Performance Bond. An insurance company agreed to provide
Cotter Corporation with the required bond for a premium of $65,625 per
year. In addition, Cotter Corporation obtained Performance Bonds
principally for the reclamation of certain Western Slope mines and the
Charlie Orebody mine, and other related facilities. An insurance company
agreed to provide Cotter Corporation with Performance Bonds in the amount
of $3,981,825 for premiums of $25,779 per year. Commonwealth Edison Company
guaranteed payment of these premiums and any losses sustained by the
insurance company under the bonds.
(f) CommEd Fuel Company, Inc. (CommEd Fuel Company) is a non-affiliated company
established to lease nuclear fuel materials to the Company under a nuclear
fuel lease agreement. CommEd Fuel Company owns the nuclear fuel materials
and finances the purchase of such materials through its sale of commercial
paper and intermediate term notes, and bank borrowings.
(g) A maximum of $700,000,000 of obligations may be incurred, consisting of
$300,000,000 of commercial paper or bank borrowings and $400,000,000 of
intermediate term notes.
(h) The Company has agreed in its nuclear fuel lease agreement with CommEd Fuel
Company to make rent payments thereunder in amounts sufficient to cover the
principal, interest and other financing costs of CommEd Fuel Company
incurred in connection with its purchase and lease of nuclear fuel
materials to the Company.
(i) Northwind Inc. is an indirect, wholly-owned subsidiary which has been
formed to provide energy-related services to the Company's customers and
others.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
33
SCHEDULE VIII
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
--THOUSANDS OF DOLLARS--
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------------------------- --------- ------------------ ---------- --------
ADDITIONS
------------------
BALANCE CHARGED
AT TO COSTS CHARGED BALANCE
BEGINNING AND TO OTHER AT END
DESCRIPTION OF YEAR EXPENSES ACCOUNTS DEDUCTIONS OF YEAR
- -------------------------- --------- -------- -------- ---------- --------
FOR THE YEAR ENDED
DECEMBER 31, 1991
- --------------------------
Reserves Deducted From As-
sets In Consolidated Bal-
ance Sheet:
Reserve for nonutility
property................ $ 742 $ 20 $ -- $ (762)(b) $ --
======= ======= ======== ======= =======
Provision for uncollecti-
ble accounts (a)........ $12,300 $(4,900) $ -- $ -- $ 7,400
======= ======= ======== ======= =======
Other Reserves:
Estimated Liabilities As-
sociated with
Remediation Costs and
Former Manufactured Gas
Plant Sites............. $ -- $25,112 $ -- $ (112)(c) $25,000
======= ======= ======== ======= =======
FOR THE YEAR ENDED
DECEMBER 31, 1992
- --------------------------
Reserves Deducted From As-
sets In Consolidated Bal-
ance Sheet:
Reserve for nonutility
property................ $ -- $ -- $ -- $ -- $ --
======= ======= ======== ======= =======
Provision for uncollecti-
ble accounts (a)........ $ 7,400 $ 5,576 $ -- $ -- $12,976
======= ======= ======== ======= =======
Other Reserves:
Estimated Liabilities As-
sociated with
Remediation Costs and
Former Manufactured Gas
Plant Sites............. $25,000 $ -- $ -- $ (478)(c) $24,522
======= ======= ======== ======= =======
FOR THE YEAR ENDED
DECEMBER 31, 1993
- --------------------------
Reserves Deducted From As-
sets In Consolidated Bal-
ance Sheet:
Reserve for nonutility
property................ $ -- $ -- $ -- $ -- $ --
======= ======= ======== ======= =======
Provision for uncollecti-
ble accounts (a)........ $12,976 $(2,066) $ -- $ -- $10,910
======= ======= ======== ======= =======
Other Reserves:
Estimated Liabilities As-
sociated with
Remediation Costs and
Former Manufactured Gas
Plant Sites............. $24,522 $ 6,010 $ -- $(1,010)(c) $29,522
======= ======= ======== ======= =======
Notes:
(a) Bad debt losses, net of recoveries, and provisions for uncollectible
accounts were charged to operating expense and amounted to $27,541, $33,708
and $28,867 in 1991, 1992 and 1993, respectively.
(b) Transfer to Reserve for Depreciation of Electric Plant in Service.
(c) Expenditures for site investigation and cleanup costs.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
34
SCHEDULE IX
COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
SCHEDULE IX--SHORT-TERM BORROWINGS
--THOUSANDS OF DOLLARS--
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- ------------------------ ----------- -------- ----------- ----------- -----------
WEIGHTED
MAXIMUM AVERAGE AVERAGE
WEIGHTED AMOUNT AMOUNT INTEREST
AVERAGE OUTSTANDING OUTSTANDING RATE DURING
CATEGORY OF AGGREGATE BALANCE AT INTEREST DURING THE DURING THE THE YEAR
SHORT-TERM BORROWINGS END OF YEAR RATE YEAR (a) YEAR (b) (c)
- ------------------------ ----------- -------- ----------- ----------- -----------
FOR THE YEAR ENDED
DECEMBER 31, 1991
- ------------------------
Commercial paper (d).... $ -- -- % $ -- $ -- -- %
Bank loans (e).......... $2,000 6.31% $ 2,000 $ 1,855 8.22%
FOR THE YEAR ENDED
DECEMBER 31, 1992
- ------------------------
Commercial paper (d).... $ -- -- % $75,000 $15,081 4.01%
Bank loans (e).......... $5,600 5.83% $ 5,600 $ 2,416 7.05%
FOR THE YEAR ENDED
DECEMBER 31, 1993
- ------------------------
Commercial paper (d).... $ -- -- % $ -- $ -- -- %
Bank loans (e).......... $5,950 5.83% $ 5,950 $ 5,727 5.83%
Notes:
(a) Maximum amount outstanding at any month end during the year.
(b) Computed by dividing the sum of the daily ending balances by the number of
days in the year.
(c) Computed by dividing the interest expense for the year by the average
amount outstanding during the year.
(d) Unsecured promissory notes with terms of nine months or less.
(e) Unsecured promissory notes with various banks which mature within twelve
months and which can be renegotiated at maturity.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
35
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, IN THE CITY OF CHICAGO AND STATE OF ILLINOIS ON THE 28TH
DAY OF MARCH 1994.
COMMONWEALTH EDISON COMPANY
/s/ James J. O'Connor
By_____________________________
James J. O'Connor, Chairman
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF
OF THE REGISTRANT AND IN THE CAPACITIES INDICATED ON THE 28TH DAY OF
MARCH 1994.
SIGNATURE TITLE
- ---------------------------- ---------------------
/s/ James J. O'Connor
- ---------------------------- Chairman and Director
James J. O'Connor (principal executive
officer)
/s/ John C. Bukovski
- ---------------------------- Vice President (principal
John C. Bukovski financial officer)
/s/ Roger F. Kovack
- ---------------------------- Comptroller (principal
Roger F. Kovack accounting officer)
Jean Allard* Director
James W. Compton* Director
Sue L. Gin* Director
Donald P. Jacobs* Director
George E. Johnson* Director
Harvey Kapnick* Director
Byron Lee, Jr.* Director
Edward A. Mason* Director
Frank A. Olson* Director
Samuel K. Skinner* President and Director
Lando W. Zech, Jr.* Director
/s/ David A. Scholz
*By____________________________
David A. Scholz, Attorney-in-
fact
36
EXHIBIT INDEX
The following exhibits are filed herewith or incorporated herein by
reference. Documents indicated by an asterisk (*) are incorporated herein by
reference to the File No. indicated.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- --------------------------------------------------------------------------
*(3)-1 Restated Articles of Incorporation of the Company effective February 20,
1985 (File No. 1-1839, Form 10-K for the year ended December 31, 1985,
Exhibit (3)-1).
*(3)-2 Statement of Resolution Establishing Series, relating to the establishment
of a new series of preference stock known as the "$9.30 Cumulative Pref-
erence Stock," dated December 10, 1985 (File No. 1-1839, Form 10-K for
the year ended December 31, 1992, Exhibit (3)-2).
*(3)-3 Statement of Resolution Establishing Series, relating to the establishment
of a new series of preference stock known as the "$9.00 Cumulative Pref-
erence Stock," dated July 25, 1990 (File No. 1-1839, Form 10-K for the
year ended December 31, 1990, Exhibit (3)-2).
*(3)-4 Statement of Resolution Establishing Series, relating to the establishment
of a new series of preference stock known as the "$6.875 Cumulative Pref-
erence Stock," dated May 21, 1993 (File No. 1-1839, Form 8-K dated May
21, 1993, Exhibit (3)-1).
*(3)-5 By-Laws of the Company, effective September 2, 1988 (File No. 1-1839, Form
10-Q for the quarter ended September 30, 1988, Exhibit (3)).
*(3)-6 Amendment to By-Laws of the Company, effective July 1, 1989 (File No.
1-1839, Form 10-Q for the quarter ended June 30, 1989, Exhibit (3)).
*(3)-7 Amendment to By-Laws of the Company, effective February 1, 1991 (File No.
1-1839, Form 10-K for the year ended December 31, 1990, Exhibit (3)-4).
*(3)-8 Amendment to By-Laws of the Company, effective September 10, 1992 (File
No. 1-1839, Form 10-K for the year ended December 31, 1992, Exhibit (3)-
6).
*(4)-1 Mortgage of the Company to Illinois Merchants Trust Company, Trustee (Con-
tinental Illinois National Bank and Trust Company of Chicago, successor
Trustee), dated July 1, 1923, Supplemental Indenture thereto dated August
1, 1944, and amendments and supplements thereto dated, respectively, Au-
gust 1, 1946, April 1, 1953, April 1, 1966, November 1, 1966, December 1,
1966, March 31, 1967, April 1, 1967, February 1, 1968, July 1, 1968, Oc-
tober 1, 1968, February 28, 1969, May 29, 1970, January 1, 1971, June 1,
1971, May 31, 1972, June 1, 1973, June 15, 1973, October 15, 1973, May
31, 1974, July 1, 1974, June 13, 1975, May 28, 1976, January 15, 1977,
June 1, 1977 and June 3, 1977 (File No. 2-60201, Form S-7, Exhibit 2-1).
*(4)-2 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, December 1, 1977, May 17, 1978, August 31, 1978, June 18, 1979, June
20, 1980, April 16, 1981, April 30, 1982, April 15, 1983, April 13, 1984,
March 1, 1985 and April 15, 1985 (File No. 2-99665, Form S-3, Exhibit
(4)-3).
*(4)-3 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, April 15, 1986 and May 1, 1986 (File No. 33-6879, Form S-3, Exhibit
(4)-9).
*(4)-4 Supplemental Indenture to Mortgage dated July 1, 1923 dated January 12,
1987 (File No. 33-13193, Form S-3, Exhibit (4)-6).
*(4)-5 Supplemental Indenture to Mortgage dated July 1, 1923 dated June 30, 1989
(File No. 33-32929, Form S-3, Exhibit (4)-11).
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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*(4)-6 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, February 15, 1990 and June 15, 1990 (File No. 33-38232, Form S-3, Ex-
hibits (4)-11 and (4)-12).
*(4)-7 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, June 1, 1991, October 1, 1991 and October 15, 1991 (File No. 33-
44018, Form S-3, Exhibits (4)-12, (4)-13 and (4)-14).
*(4)-8 Supplemental Indenture to Mortgage dated July 1, 1923 dated February 1,
1992 (File No. 1-1839, Form 10-K for the year ended December 31, 1991,
Exhibit (4)-18).
*(4)-9 Supplemental Indenture to Mortgage dated July 1, 1923 dated May 15, 1992
(File No. 33-48542, Form S-3, Exhibit (4)-14).
*(4)-10 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, July 15, 1992, September 15, 1992 and October 1, 1992 (File No. 33-
53766, Form S-3, Exhibits (4)-13, (4)-14 and (4)-15).
*(4)-11 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, February 1, 1993 and March 1, 1993 (File No. 1-1839, Form 10-K for
the year ended December 31, 1992, Exhibits (4)-14 and (4)-15).
*(4)-12 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, April 1, 1993 and April 15, 1993 (File No. 33-64028, Form S-3, Exhib-
its (4)-12 and (4)-13).
*(4)-13 Supplemental Indentures to Mortgage dated July 1, 1923 dated, respective-
ly, June 15, 1993 and July 1, 1993 (File No. 1-1839, Form 8-K dated May
21, 1993, Exhibits (4)-1 and (4)-2).
*(4)-14 Supplemental Indenture to Mortgage dated July 1, 1923 dated July 15, 1993
(File No. 1-1839, Form 10-Q for the quarter ended June 30, 1993, Exhibit
(4)-1).
(4)-15 Supplemental Indenture to Mortgage dated July 1, 1923 dated January 15,
1994.
*(4)-16 Indentures of the Company to The First National Bank of Chicago, Trustee
(Harris Trust and Savings Bank, successor Trustee), dated April 1, 1949,
October 1, 1949, October 1, 1950, October 1, 1954, January 1, 1958, Janu-
ary 1, 1959 and December 1, 1961 (File No. 1-1839, Form 10-K for the year
ended December 31, 1982, Exhibit (4)-20).
*(4)-17 Indenture of the Company dated February 15, 1973 to The First National
Bank of Chicago, Trustee (LaSalle National Bank, successor Trustee), and
Supplemental Indenture thereto dated July 13, 1973 (File No. 2-66100,
Form S-16, Exhibit (b)-2).
*(4)-18 Indenture dated as of September 1, 1987 between the Company and Citibank,
N.A., Trustee relating to Notes (File No. 33-20619, Form S-3, Exhibit
(4)-13).
*(4)-19 Supplemental Indenture to Indenture dated September 1, 1987 dated Septem-
ber 15, 1987 (File No. 33-20619, Form S-3, Exhibit (4)-14).
*(4)-20 Supplemental Indenture to Indenture dated September 1, 1987 dated May 18,
1988 (File No. 33-23036, Form S-3, Exhibit (4)-14).
*(4)-21 Supplemental Indenture to Indenture dated September 1, 1987 dated July 14,
1989 (File No. 33-32929, Form S-3, Exhibit (4)-16).
*(4)-22 Supplemental Indenture to Indenture dated September 1, 1987 dated April 1,
1991 (File No. 33-44018, Form S-3, Exhibit (4)-21).
2
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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*(4)-23 Supplemental Indenture to Indenture dated September 1, 1987 dated April
15, 1992 (File No. 33-48542, Form S-3, Exhibit (4)-22).
*(4)-24 Supplemental Indenture to Indenture dated September 1, 1987 dated July 15,
1992 (File No. 33-53766, Form S-3, Exhibit (4)-24).
*(4)-25 Supplemental Indenture to Indenture dated September 1, 1987 dated October
15, 1993 (File No. 1-1839, Form 10-Q for the quarter ended September 30,
1993, Exhibit (4)-1).
*(4)-26 Credit Agreement dated as of October 1, 1991, among Commonwealth Edison
Company, as borrower, the Banks named therein and the other Lenders from
time to time parties thereto, and Citibank, N.A. (File No. 1-1839, Form
10-K for the year ended December 31, 1991, Exhibit (4)-27).
*(4)-27 Credit Agreement dated as of October 1, 1991, among Commonwealth Edison
Company, as borrower, the Banks named therein and the other Lenders from
time to time parties thereto, and Citibank, N.A. (File No. 1-1839, Form
10-K for the year ended December 31, 1991, Exhibit (4)-28).
(4)-28 Letter Agreement dated as of October 4, 1993, among Commonwealth Edison
Company and certain of the Banks party to the Credit Agreement dated as
of October 1, 1991.
*(4)-29 Term Loan Agreement dated as of January 7, 1992, between Commonwealth Edi-
son Company, as borrower, and The First National Bank of Chicago, indi-
vidually and as agent (File No. 1-1839, Form 10-K for the year ended De-
cember 31, 1992, Exhibit (4)-28).
*(4)-30 Term Loan Agreement dated as of January 15, 1992, between Commonwealth Ed-
ison Company, as borrower, and Westpac Banking Corporation, Chicago
Branch, individually and as agent (File No. 1-1839, Form 10-K for the
year ended December 31, 1992, Exhibit (4)-29).
*(4)-31 Term Loan Agreement dated as of January 16, 1992, between Commonwealth Ed-
ison Company, as borrower, and The Bank of New York, individually and as
agent (File No. 1-1839, Form 10-K for the year ended December 31, 1992,
Exhibit (4)-29).
(10)-1 Nuclear Fuel Lease Agreement dated as of November 23, 1993, between CommEd
Fuel Company, Inc., as Lessor, and Commonwealth Edison Company, as Les-
see.
*(10)-2 1993 Long-Term Incentive Plan (File No. 1-1839, Proxy Statement dated
March 26, 1993, Exhibit A).
(10)-3 1994 Long-Term Performance Unit Award for Executive and Group Level Em-
ployes Payable in 1995 under the 1993 Long-Term Incentive Plan.
(10)-4 1994 Long-Term Performance Unit Award for Executive and Group Level Em-
ployes Payable in 1996 under the 1993 Long-Term Incentive Plan.
(10)-5 1994 Long-Term Performance Unit Award for Executive and Group Level Em-
ployes Payable in 1997 under the 1993 Long-Term Incentive Plan.
(10)-6 1994 Variable Compensation Award for Management Employes under the 1993
Long-Term Incentive Plan.
3
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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*(10)-7 Deferred Compensation Plan (included in Exhibit (3)-1 above).
*(10)-8 Management Incentive Compensation Plan, effective January 1, 1989 (File
No. 1-1839, Form 10-K for the year ended December 31, 1988, Exhibit (10)-4).
*(10)-9 Amendments to Management Incentive Compensation Plan, dated December 14,
1989 and March 21, 1990 (File No. 1-1839, Form 10-K for the year ended
December 31, 1989, Exhibit (10)-5).
*(10)-10 Amendment to Management Incentive Compensation Plan, dated March 21, 1991
(File No. 1-1839, Form 10-K for the year ended December 31, 1991, Exhibit
(10)-6).
*(10)-11 Retirement Plan for Directors, effective January 1, 1987 (File No. 1-1839,
Form 10-K for the year ended December 31, 1988, Exhibit (10)-5).
*(10)-12 Executive Group Life Insurance Plan (File No. 1-1839, Form 10-K for the
year ended December 31, 1980, Exhibit (10)-3).
*(10)-13 Amendment to the Executive Group Life Insurance Plan (File No. 1-1839,
Form 10-K for the year ended December 31, 1981, Exhibit (10)-4).
*(10)-14 Amendment to the Executive Group Life Insurance Plan dated December 12,
1986 (File No. 1-1839, Form 10-K for the year ended December 31, 1986,
Exhibit (10)-6).
*(10)-15 Amendment of Executive Group Life Insurance Plan to implement program of
"split dollar life insurance" dated December 13, 1990 (File No. 1-1839,
Form 10-K for the year ended December 31, 1990, Exhibit (10)-10).
*(10)-16 Commonwealth Edison Company Supplemental Management Retirement Plan (File
No. 1-1839, Form 10-K for the year ended December 31, 1985, Exhibit
(10)-6).
*(10)-17 Amendment of Executive Group Life Insurance Plan to stabilize the death
benefit applicable to participants dated July 22, 1992 (File No. 1-1839,
Form 10-K for the year ended December 31, 1992, Exhibit (10)-13).
*(10)-18 Letter Agreement dated December 16, 1992 between Commonwealth Edison Com-
pany and Samuel K. Skinner (File No. 1-1839, Form 10-K for the year ended
December 31, 1992, Exhibit (10)-14).
(12) Statement re computation of ratios of earnings to fixed charges and ratios
of earnings to fixed charges and preferred and preference stock dividend
requirements.
(21) Subsidiaries of Commonwealth Edison Company.
(23) Consent of experts.
(24) Powers of attorney of Directors whose names are signed to this Form 10-K
pursuant to such powers.
(99) Commonwealth Edison Company's Current Report on Form 8-K/A-1 dated January
28, 1994.
4