SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
FORM U-3A-2
STATEMENT BY HOLDING COMPANY CLAIMING EXEMPTION UNDER RULE U-3A-2
FROM THE PROVISIONS OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
To Be Filed Annually Prior to March 1
KENTUCKY UTILITIES COMPANY
hereby files with the Securities and Exchange Commission, pursuant to
Rule 2, its statement claiming exemption as a holding company from
the provisions of the Public Utility Holding Company Act of 1935, and
submits the following information:
1. Name, State of organization, location and nature of business of claimant and every subsidiary thereof, other than any exempt wholesale generator (EWG) or foreign utility company in which claimant directly or indirectly holds an interest.
(a) The Claimant. Kentucky Utilities Company (hereinafter
called "Company") is a Kentucky and Virginia corporation, and has its
principal executive office at One Quality Street, Lexington, Kentucky
40507. The Company is a public utility engaged principally in the
production and sale of electric energy. At December 31, 1993, the
Company furnished electric service to about 409,700 retail customers
in over 600 communities and adjacent suburban and rural areas,
located in 77 counties in central, southeastern and western Kentucky
and one adjoining county in Tennessee; and also sold electric energy
at wholesale in 11 municipalities, interchanged power with two
generating and transmission cooperatives and supplied at retail the
major portion of the requirements of one other municipality. The
Company also supplied electric service to about 27,900 customers in
about 40 communities and adjacent rural areas, located in five
counties in southwestern Virginia. The territory served by the
Company has an estimated population of about 1,000,000 and includes
most of the "Bluegrass Region" of central Kentucky and parts of the
coal mining areas in southeastern and western Kentucky and
southwestern Virginia. Bituminous coal mining, automotive and
related industries, agriculture, primary metals processing, crude oil
production, pipeline transportation, and the manufacture of
electrical and other machinery and of paper and paper products, are
among the principal industries in the territory served. Reference is
made to the Company's Form 10-K for the year ended December 31, 1992,
and Form 10-Q's for the quarters ended March 31, 1993, June 30, 1993,
and September 30, 1993, for further information regarding the
business of the Company.
(b) Electric Energy, Inc. The Company owns 12,400 shares of
the common stock, par value $100 per share, of Electric Energy, Inc.
(hereinafter called "EEI"), an Illinois corporation, constituting 20%
of the outstanding voting securities of EEI. The principal executive
office of EEI is located at Joppa, Illinois. EEI owns and operates a
steam electric generating station having a capacity of about
1,000,000 kilowatts, located near Joppa, Illinois, and related
transmission facilities, for the purpose of supplying power to a
gaseous diffusion project of the Department of Energy (hereinafter
called "DOE") located near Paducah, Kentucky, under a power contract
with DOE expiring in 2005. The delivery commitment of EEI under its
power contract with DOE is 75% of the station's annual output through
December 31, 2005, subject to reduction in certain circumstances.
Under a power supply agreement between EEI and the four sponsoring
companies which own its common stock (including the Company), the
Company had agreed to purchase, through 2005, a portion of the
capacity of the station not sold to DOE and others. However, the
Company's share of the available capacity was increased to 20%
effective January 1, 1994. The Company's obligation to provide a
portion of EEI's operating expenses, taxes, and certain debt service
is based upon the amount of the Company's annual percentage of the
EEI station capacity. At December 31, 1993 EEI had outstanding long-
term indebtedness of $60,000,000.
For a description of the organization, business, financing,
and properties of EEI, reference is made to the applications and
declarations (and the amendments and exhibits thereto) relating to
EEI heretofore filed with the Securities and Exchange Commission,
under the Public Utility Holding Company Act of 1935, by EEI, the
Company, and others in File Nos. 70-2540, 70-2647, 70-2973, 70-3095,
70-3120, 70-3595, and 70-3596, and to the findings, opinions, and
orders of the Commission with respect thereto.
2. A brief description of the properties of claimant and each of its subsidiary public utility companies used for the generation, transmission, and distribution of electric energy for sale, or for the production, transmission, and distribution of natural or manufactured gas, indicating the location of principal generating plants, transmission lines, producing fields, gas manufacturing plants, and electric and gas distribution facilities, including all such properties which are outside the State in which claimant and its subsidiaries are organized and all transmission or pipelines which deliver or receive electric energy or gas at the borders of such State.
(a) At December 31, 1993, the Company owned and regularly
operated five steam electric generating stations, two hydroelectric
generating stations and three gas/oil turbine peaking units.
The name plate ratings, effective capability and location of each of
these electric generating stations is as follows:
Nameplate Effective
Rating (KW) Capability (KW)
Steam: Ghent Ghent, Ky 2,226,060 2,006,000
Green River South Carrollton, Ky 263,636 238,000
E.W. Brown Burgin, Ky 739,534 668,000
Tyrone Tyrone, Ky 137,500 135,000
Pineville Four Mike, Ky 37,500 34,000
Hydro: Dix Dam &
Lock #7 Burgin, Ky 30,297 24,000
Gas/Oil Peaking: Haefling Lexington, Ky 62,100 59,000
3,496,627 3,164,000
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At December 31, 1993, the Company also owned and operated about 4,006
pole miles of transmission lines; 87 transmission substations; 372
distribution substations; about 13,311 pole miles of distribution
lines located in or adjacent to the communities served by the
Company, in the State of Kentucky and in a small rural area in one
county in Tennessee. The Company also owned at December 31, 1993,
about 246 miles of electric transmission lines serving 10
transmission substations, 43 distribution substations and about 1,047
pole miles of distribution lines located in or adjacent to the 40
communities served by it, all located in the State of Virginia.
Kentucky Utilities has major interconnection ties with the following
companies: UTILITY LOCATION TIE VOLTAGE Ohio Power Company Kenton to Hillsboro 138 kv Kentucky Power Company Rodburn to Morehead 69 kv |
Louisville Gas & Electric Green River Steel to Cloverport138 kv Hardinsburg to Cloverport 138 kv Finchville to Middletown 69 kv
Eastwood to Shelbyville 69 kv
Tennessee Valley Authority Pocket to Phipps Bend 500 kv
Livingston to Calvert 161 kv
Livingston to Ky. Dam 161 kv
Pineville to Pineville 161 kv
KU Park to Pineville 161-69 kv
Paducah to Ky. Dam 69 kv
Paducah/Princeton to Ky. Dam 69 kv
East Kentucky RECC 41 ties in Kentucky 161-138-69 kv
Owensboro Municipal Utilities Hardin County to Smith 345 kv
Green River Steel to Smith 138 kv
Green River Steel to Smith 69 kv
Ohio Valley Electric Carrollton to Clifty 138 kv
Electric Energy Inc Grahamville to C-33A 161 kv
Public Service of Indiana Ghent to Speed 345 kv
Ghent to Batesville 345 kv
Ghent to Fairview 138 kv
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Big Rivers Rural Elect. Coop. Hardinsburg to Hardinsburg 138 kv
Reference is made to the Company's Form 10-K for the year
ended December 31, 1992 and Form 10-Q's for the quarters ended March
31, 1993, June 30, 1993, and September 30, 1993, for additional
information with respect to the properties owned by the Company.
(b) See paragraph (b) under Item 1 above and filings with the
Securities and Exchange Commission referred to therein for a
description of the properties of EEI.
3. The following information for the last calendar year with
respect to claimant and each of its subsidiary public utility
companies:
(a) Number of KWH of electric energy sold (at retail or
wholesale) and MCF of natural or manufactured gas distributed at
retail.
(b) Number of KWH of electric energy and MCF of natural or
manufactured gas distributed at retail outside of the State in which
each such company is organized.
(c) Number of KWH of electric energy and MCF of natural or
manufactured gas sold at wholesale outside of the State in which each
such company is organized, or at the State line.
(d) Number of KWH of electric energy and MCF of natural or
manufactured gas purchased outside the State in which each such
company is organized or at the State line.
The information required by this item, so far as applicable,
is included as Exhibit D. Neither the Company, nor EEI engages in
the business of selling or distributing gas.
The Company is predominantly a public utility company whose
operations as such do not extend beyond the States in which it is
organized (Kentucky and Virginia) and States contiguous thereto
(Tennessee) and, on the basis of the foregoing, is entitled to
exemption as a holding company pursuant to paragraph (2) of Section
3(a) of the Public Utility Holding Company Act of 1935 and paragraph
(a) (2) of Rule 2 of the Commission promulgated under said Act. EEI,
an Illinois corporation, owns property and operates in the State of
Illinois and supplies power to the DOE project located in Kentucky.
Reference is made to the exhibits filed herewith. In 1993, the
Company received dividends from EEI amounting to $2,557,634.72.
4. The following information for the reporting period with
respect to claimant and each interest it holds directly or indirectly
in an EWG or a foreign utility company, stating monetary amounts in
United States dollars:
(a) Name, location, business address and description of the
facilities used by the EWG or foreign utility company for the
generation, transmission and distribution of electric energy for sale
or for the distribution at retail of natural or manufactured gas.
(b) Name of each system company that holds an interest in such
EWG or foreign utility company; and description of the interest held.
(c) Type and amount of capital invested, directly or
indirectly, by the holding company claiming exemption; any direct or
indirect guarantee of the security of the EWG or foreign utility
company by the holding company claiming exemption; and any debt or
other financial obligation for which there is recourse, directly or
indirectly, to the holding company claiming exemption or another
system company, other than the EWG or foreign utility company.
(d) Capitalization and earnings of the EWG or foreign utility
company during the reporting period.
(e) Identify any service, sales or construction contract(s) between the EWG or foreign utility company and a system company, and describe the services to be rendered or goods sold and fees or revenues under such agreement(s).
The Company did not hold directly or indirectly any interest
in an EWG or a foreign utility company during the reporting period
and therefore, has no information to report under this item.
* * * * * * *
In making and filing this statement, Kentucky Utilities
Company specifically reserves the right to apply at any time in the
future to the Securities and Exchange Commission (a) pursuant to
Section 2 (a)(7) of the Public Utility Holding Company Act of 1935,
for an order declaring it is not a holding company under clause (a)
of said section by reason of its investment in EEI, and/or (b) for an
order exempting it from the provisions of the Public Utility Holding
Company Act of 1935 pursuant to Section 3(a) or any other provision
of said Act or any rule or regulation of the Commission thereunder.
Neither the making and filing of this statement nor anything
contained herein shall constitute or be construed to be an admission
that Kentucky Utilities Company is not entitled to any such order.
The above-named claimant has caused this statement to be
duly executed on its behalf by its authorized officer on this 25th
day of February, 1994.
KENTUCKY UTILITIES COMPANY
By \s\ John T. Newton
John T. Newton
Chairman and President
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(Corporate Seal)
Attest:
\s\ George S. Brooks, II George S. Brooks II, Corporate Secretary |
Names and addresses of persons to whom notices and correspondence concerning this statement should be addressed:
John T. Newton Chairman of the Board and President Kentucky Utilities Company One Quality Street Lexington, Kentucky 40507
Robert A. Yolles Jones, Day, Reavis & Pogue 77 West Wacker Chicago, Illinois 60601-1692
Exhibit A-1 Balance Sheet of Kentucky Utilities Company
as of December 31, 1993.
Exhibit A-2 Statement of Income of Kentucky Utilities Company
for the year 1993.
Exhibit A-3 Statement of Surplus of Kentucky Utilities
Company for the year 1993.
Exhibit A-4 Balance Sheet of Electric Energy, Inc., as of
December 31, 1993.
Exhibit A-5 Statement of Income and Surplus of Electric
Energy, Inc., for the year 1993.
Exhibit B Not required at this time
Exhibit C Not applicable
Exhibit D Statement showing sales and purchases of electric
energy for the calendar year 1993 by Kentucky
Utilities Company and Electric Energy, Inc.
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EXHIBIT A-1
KENTUCKY UTILITIES COMPANY
BALANCE SHEET
AS OF DECEMBER 31, 1993
(in thousands of dollars)
ASSETS
UTILITY PLANT
Original Cost of Plant in Service $2,004,688
Construction Work in Progress 158,829
Total 2,163,517
Less: Reserves for Depreciation 879,960
Total 1,283,557
INVESTMENTS AND FUNDS (1)
Ohio Valley Electric Corporation 250
Property Not Used in Operations,
less Accumulated Depreciation 4,078
Investment in Associated Companies
Electric Energy, Inc. 2,204
Lexington Utilities Co. 1
Other Investments 483
Special Funds 5,797
12,813
CURRENT ASSETS
Cash and Cash Equivalents 64,852
Accounts Receivable Less Reserve
of $923 41,383
Receivables from Associated Companies 74
Fuel, Principally Coal, at Average Cost 31,073
Materials and Supplies, at Average Cost 17,261
Prepaid Expense and Other 7,804
Accrued Utility Revenues 25,575
188,022
DEFERRED DEBITS 74,660
$1,559,052
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(1) Investments and funds are stated at cost except for Electric Energy, Inc., which is stated at equity in underlying book value.
EXHIBIT A-1
KENTUCKY UTILITIES COMPANY
BALANCE SHEET
AS OF DECEMBER 31, 1993
(in thousands of dollars)
LIABILITIES & EQUITY
CAPITALIZATION
Common Stock Equity
Common Stock $ 308,140
Retained Earnings 243,520
Unappropriated Undistributed
Subsidiary Earnings 909
Prem. on Capital Stock &
Capital Stock Expense (463)
Total Common Stock Equity 552,106
Preferred Stock 40,000
Long-Term Debt 442,045
Total Capitalization 1,034,151
CURRENT LIABILITIES
Preferred Stock and Long-Term
Debt Due Within One Year 20,021
Accounts Payable 44,006
Customers' Deposits 10,803
Accrued Taxes 4,660
Accrued Interest 7,302
Other 51,010
137,802
DEFERRED CREDITS AND OPERATING RESERVES
Investment Tax Credit, Being
Amortized Over Twenty-Five Years 42,385
Deferred Income Taxes 248,103
Regulatory Liabilities 69,689
Other 26,922
387,099
$1,559,052
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EXHIBIT A-2
KENTUCKY UTILITIES COMPANY
STATEMENT OF INCOME
AS OF DECEMBER 31, 1993
(in thousands of dollars)
ELECTRIC OPERATING REVENUES $606,588
OPERATING EXPENSES AND TAXES
Electric Power Purchased 34,711
Fuel, Materials, Labor, etc.,
Used in Operations 283,840
Maintenance of Utility Plant 59,451
Provision for Depreciation 60,800
Federal and State Income Taxes 48,178
Property and Other Taxes 14,347
Total Operating Expenses and Taxes 501,327
NET OPERATING INCOME 105,261
OTHER INCOME AND DEDUCTIONS
Allow. for Funds Used Dur. Const. 408
Interest and Other (Net) 5,735
Equity in Earnings of Subsidiary
Companies 2,596
GROSS INCOME 114,000
INTEREST CHARGES
Interest on Long-Term Debt 31,650
Other Interest Charges 1,249
Allowance for Borrowed Funds Used
During Construction (185)
Total Interest Charges 32,714
NET INCOME $ 81,286
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EXHIBIT A-3
KENTUCKY UTILITIES COMPANY
STATEMENT OF SURPLUS
AS OF DECEMBER 31, 1993
(in thousands of dollars)
EARNED SURPLUS
Balance December 31, 1992 $226,210
Add:
Net Income for 1993 81,286
Less:
Dividends:
Preferred Stock 4 3/4% 950
Preferred Stock 7.84% 1,568
Preferred Stock 6.53% 40
Common Stock 60,509
63,067
Balance December 31, 1993 $244,429
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EXHIBIT A-4
BALANCE SHEET
AS OF DECEMBER 31, 1993
(in thousands of dollars)
ASSETS AND OTHER DEBITS
UTILITY PLANT Unaudited
Utility Plant in Service $285,413
Construction Work in Progress 14,475
Total 299,888
Less: Reserves for Depreciation 209,917
Total 89,971
CURRENT AND ACCRUED ASSETS
Cash 199
Working Funds 28
Receivables:
Accounts Receivable 20,601
Receivables from Associated Companies 17,319
Total Receivables 37,920
Fuel Stock (Coal Inventory) 4,708
Materials and Supplies 5,879
Prepayments 598
Total Current and Accrued Assets 49,332
INVESTMENTS AND DEFERRED DEBITS
Investments in Associated Companies 105
Unamortized Debt Discount and Expense 377
Other Deferred Debits 16,785
Total Investments and Deferred Debits 17,267
Total Assets and Other Debits $156,570
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EXHIBIT A-4
BALANCE SHEET
AS OF DECEMBER 31, 1993
(in thousands of dollars)
LIABILITIES AND OTHER CREDITS
STOCKHOLDERS EQUITY
Common Stock $ 6,200
Retained Earnings 2,634
Total Equity Capital 8,834
LONG-TERM DEBT
Long-Term Debt 60,000
Total Long-Term Debt 60,000
CURRENT AND ACCRUED LIABILITIES
Notes Payable 40,600
Accounts Payable 26,218
Taxes Accrued 3,890
Interest Accrued 502
Payables to Associated Companies 4,293
Dividends Declared 3,002
Tax Collections Payable 102
Total Current and Accrued Liabilities 78,607
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated Deferred Income Taxes 616
Prov. for Injuries and Damages 434
Prov. for Pensions and Benefits 4,226
Other Deferred Credits 3,853
Total Deferred Credits 9,129
Total Liabilities and Other Credits $156,570
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EXHIBIT A-5
YEAR ENDED DECEMBER 31, 1993
(in thousands of dollars)
STATEMENT OF INCOME AND SURPLUS
OPERATING INCOME Unaudited
Operating Revenues
Sales to Department of Energy $ 236,198
Sales to Other Electric Utilities 39,406
Total Operating Revenues 275,604
OPERATING EXPENSES
Power Purchased 103,885
Operating Expenses 118,685
Maintenance Expenses 18,378
Depreciation 7,138
Federal and State Income Taxes 7,415
Taxes Other Than Income Taxes 1,770
Total Operating Expenses 257,271
Net Operating Income 18,333
OTHER INCOME AND DEDUCTIONS
Interest and Dividend Income 608
Gain on Disposition of Allowances 141
Miscellaneous (Net) (24)
Net Other Income and Deductions 725
INTEREST CHARGES
Other Interest Expense 6,017
Total Interest Charges 6,017
Net Income $ 13,041
Retained Earnings Beginning of Year $ 2,634
Add: Net Income 13,041
Less: Dividends Declared 13,041
Retained Earnings End of Year $ 2,634
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EXHIBIT D
SALES AND PURCHASES OF ELECTRIC ENERGY
CALENDAR YEAR 1993
Kentucky Electric
Utilities Co. Energy, Inc.
KWH Sold (at retail
or wholesale) 15,796,442,862 13,511,883,904
KWH Distributed at
retail outside of
state in which
organized 144,795 11,928,093,904 (a)
KWH Sold at wholesale
outside of state in
which organized or
at state line 581,475,000 (d) (b)
KWH Purchased outside
of state in which
organized or at
state line 245,762,000 (c)
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(a) Represents energy sold to Paducah, Kentucky, Project of Energy Research and Development Administration.
(b) In 1993 Electric Energy, Inc., sold to Kentucky Utilities Company 245,517,000 kilowatt-hours of energy, which was metered at the Joppa, Illinois, Generating Station of Electric Energy, Inc., and delivered to Kentucky Utilities Company at the Paducah, Kentucky, project of the Energy Research and Development Administration.
(c) Not including the 245,517,000 kilowatt-hours purchased from Electric Energy, Inc., delivery of which was received in Kentucky, as stated in footnote (b) above.
(d) Not including the 169,886,000 kilowatt-hours sold to Electric Energy, Inc.