-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WAucpEDEbMuR4jG4jBvh8K9UDSJcWJT/VdE97jSbkGWeWoYSgSDERUoY5ER2pBs+ QuMGxNDXy1h0glq+H6H+kw== 0000055387-98-000002.txt : 19980225 0000055387-98-000002.hdr.sgml : 19980225 ACCESSION NUMBER: 0000055387-98-000002 CONFORMED SUBMISSION TYPE: U-3A-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980224 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KENTUCKY UTILITIES CO CENTRAL INDEX KEY: 0000055387 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 610247570 STATE OF INCORPORATION: KY FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: U-3A-2 SEC ACT: SEC FILE NUMBER: 069-00141 FILM NUMBER: 98547951 BUSINESS ADDRESS: STREET 1: ONE QUALITY ST CITY: LEXINGTON STATE: KY ZIP: 40507 BUSINESS PHONE: 6062552100 U-3A-2 1 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. On May 20, 1997, KU Energy, the parent company of the Company, and LG&E Energy Corp. entered into an Agreement and Plan of Merger as described in KU Energy's and the Company's Quarterly Reports on Form 10-Q for the quarters ended June 30, 1997 and September 30, 1997. LG&E Energy Corp. filed a Form U-1 (File No. 70-09159) January 13, 1998. The Company is a public utility engaged principally in the producing, transmitting and selling electric energy. At -1- December 31, 1997, the Company furnished electric service to about 441,200 retail customers in over 600 communities and adjacent suburban and rural areas in 77 counties in central, southeastern and western Kentucky and one adjoining county in Tennessee; and also sold electric energy at wholesale in 12 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 29,000 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. Automotive and related industries, coal mining, the manufacture of paper and paper products, electrical and other machinery and rubber and miscellaneous plastic 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, 1996, and Form 10-Q's for the quarters ended March 31, 1997, June 30, 1997, and September 30, 1997, 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 -2- 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's entitlement of the available capacity is 20%. 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, 1997, EEI had outstanding long-term indebtedness of $115,555,556. 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. -3- (a) At December 31, 1997, the Company owned and regularly operated five steam electric generating stations, two hydroelectric generating stations and two gas/oil turbine peaking stations. 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 1,997,000 Green River South Carrollton, Ky 263,636 239,000 E.W. Brown Burgin, Ky 739,534 717,000 Tyrone Tyrone, Ky 137,500 136,000 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 E.W. Brown Burgin, Ky 504,000 512,000 4,000,627 3,718,000
At December 31, 1997, the Company also owned and operated about 4,026 pole miles of transmission lines; 188 transmission substations; 489 distribution substations; about 13,405 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, 1997, about 246 pole miles of electric transmission lines serving 15 transmission substations, 54 distribution substations and about 1,036 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 -4- Louisville Gas & Electric Green River Steel to Cloverport 138 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 44 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 CINergy Ghent to Speed 345 kv Ghent to Batesville 345 kv Ghent to Fairview 138 kv Big Rivers Rural Elect. Coop. Hardinsburg to Hardinsburg 138 kv Green River to Wilson 161 kv Reference is made to the Company's Form 10-K for the year ended December 31, 1996 and Form 10-Q's for the quarters ended March 31, 1997, June 30, 1997, and September 30, 1997, 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. -5- (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 1997, the Company received dividends from EEI amounting to $2,443,621.99. 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 -6- 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. -7- * * * * * * * 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 24th day of February, 1998. KENTUCKY UTILITIES COMPANY By /s/ Michael R. Whitley Michael R. Whitley Chairman and President (Corporate Seal) Attest: /s/ George S. Brooks II George S. Brooks II, Corporate Secretary -8- Names and addresses of persons to whom notices and correspondence concerning this statement should be addressed: Michael R. Whitley Chairman and President Kentucky Utilities Company One Quality Street Lexington, Kentucky 40507 Robert A. Yolles Jones, Day, Reavis & Pogue 77 West Wacker Drive Chicago, Illinois 60601-1692 Exhibit A-1 Balance Sheet of Kentucky Utilities Company as of December 31, 1997. Exhibit A-2 Statement of Income of Kentucky Utilities Company for the year 1997. Exhibit A-3 Statement of Surplus of Kentucky Utilities Company for the year 1997. Exhibit A-4 Balance Sheet of Electric Energy, Inc., as of December 31, 1997. Exhibit A-5 Statement of Income and Surplus of Electric Energy, Inc., for the year 1997. Exhibit B Financial Data Schedule Exhibit C Not applicable Exhibit D Statement showing sales and purchases of electric energy for the calendar year 1997 by Kentucky Utilities Company and Electric Energy, Inc. -9- EXHIBIT A-1 Page 1 of 2 KENTUCKY UTILITIES COMPANY BALANCE SHEET AS OF DECEMBER 31, 1997 (in thousands of dollars) ASSETS UTILITY PLANT Original Cost of Plant in Service $ 2,552,695 Construction Work in Progress 58,939 Total 2,611,634 Less: Reserves for Depreciation 1,128,282 Total 1,483,352 INVESTMENTS AND FUNDS (1) Ohio Valley Electric Corporation 250 Property Not Used in Operations, less Accumulated Depreciation 2,642 Investment in Associated Companies Electric Energy, Inc. 2,157 Lexington Utilities Co. 1 Other Investments 551 Special Funds 7,207 12,808 CURRENT ASSETS Cash and Cash Equivalents 5,453 Accounts Receivable Less Reserve of $520 44,652 Receivables from Associated Companies 204 Fuel, Principally Coal, at Average Cost 27,799 Materials and Supplies, at Average Cost 23,648 Prepaid Expense and Other 5,769 Accrued Utility Revenues 29,668 137,193 DEFERRED DEBITS 46,527 $ 1,679,880 (1) Investments and funds are stated at cost except for Electric Energy, Inc., which is stated at equity in underlying book value. -10- EXHIBIT A-1 Page 2 of 2 KENTUCKY UTILITIES COMPANY BALANCE SHEET AS OF DECEMBER 31, 1997 (in thousands of dollars) LIABILITIES & EQUITY CAPITALIZATION Common Stock Equity Common Stock $ 308,140 Retained Earnings 303,888 Unappropriated Undistributed Subsidiary Earnings 862 Capital Stock Expense (595) Total Common Stock Equity 612,295 Preferred Stock 40,000 Long-Term Debt 546,351 Total Capitalization 1,198,646 CURRENT LIABILITIES Long-Term Debt Due Within One Year 21 Short-term Borrowings 33,600 Accounts Payable 33,386 Customers' Deposits 9,841 Accrued Taxes 7,473 Accrued Interest 8,283 Other 16,563 109,167 DEFERRED CREDITS AND OPERATING RESERVES Investment Tax Credit, Being Amortized Over Twenty-Five Years 26,131 Deferred Income Taxes 245,150 Regulatory Tax Liability 50,904 Other 49,882 372,067 $ 1,679,880 -11- EXHIBIT A-2 Page 1 of 1 KENTUCKY UTILITIES COMPANY STATEMENT OF INCOME AS OF DECEMBER 31, 1997 (in thousands of dollars) ELECTRIC OPERATING REVENUES $ 716,437 OPERATING EXPENSES AND TAXES Electric Power Purchased 72,542 Fuel, Materials, Labor, etc., Used in Operations 309,390 Maintenance of Utility Plant 64,990 Provision for Depreciation 84,111 Federal and State Income Taxes 51,690 Property and Other Taxes 15,306 Total Operating Expenses and Taxes 598,029 NET OPERATING INCOME 118,408 OTHER INCOME AND DEDUCTIONS Allow. for Funds Used Dur. Const. 49 Interest and Other (Net) 4,474 Equity in Earnings of Subsidiary Companies 2,480 GROSS INCOME 125,411 INTEREST CHARGES Interest on Long-Term Debt 37,405 Other Interest Charges 2,324 Allowance for Borrowed Funds Used During Construction (31) Total Interest Charges 39,698 NET INCOME $ 85,713 -12- EXHIBIT A-3 Page 1 of 1 KENTUCKY UTILITIES COMPANY STATEMENT OF SURPLUS AS OF DECEMBER 31, 1997 (in thousands of dollars) EARNED SURPLUS Balance December 31, 1996 $ 287,852 Add: Net Income for 1997 85,713 Less: Dividends: Preferred Stock 4-3/4% 950 Preferred Stock 6.53% 1,306 Common Stock 66,559 68,815 Balance December 31, 1997 $ 304,750 -13- EXHIBIT A-4 Page 1 of 2 ELECTRIC ENERGY, INC. BALANCE SHEET AS OF DECEMBER 31, 1997 (in thousands of dollars) ASSETS UTILITY PLANT Unaudited Utility Plant in Service $ 348,116 Construction Work in Progress 901 Total 349,017 Less: Accumulated Depreciation of Utility Plant 259,061 Total Utility Plant, Net 89,956 CURRENT ASSETS Cash 97 Working Funds 280 Temporary Cash Investments 8,333 Receivables: Accounts Receivable 21,519 Receivables from Associated Companies 4,934 Total Receivables 26,453 Fuel Inventory 4,662 Plant Materials and Supplies Inventory 4,449 Prepayments 613 Total Current Assets 44,887 OTHER ASSETS Unamortized Debt Expense 525 Other Deferred Debits 14,866 Total Other Assets 15,391 Total Assets $ 150,234 -14- EXHIBIT A-4 Page 2 of 2 ELECTRIC ENERGY, INC. BALANCE SHEET AS OF DECEMBER 31, 1997 (in thousands of dollars) STOCKHOLDERS' EQUITY AND LIABILITIES STOCKHOLDERS' EQUITY Unaudited Common Stock $ 6,200 Retained Earnings 2,634 Total Stockholders' Equity 8,834 LONG-TERM DEBT 115,556 CURRENT LIABILITIES Notes Payable, Bank - Accounts Payable 16,185 Accounts Payable to Sponsoring Companies 1,119 Accrued Interest 371 Dividends Payable 2,669 Accrued Taxes Other Than Income - Accrued Income Taxes 1,061 Total Current Liabilities 21,405 OTHER LIABILITIES Provision for Injuries and Damages 841 Postretirement Benefit Liability - Pension Liability 3,465 Deferred Taxes 133 Total Other Liabilities 4,439 Total Stockholders' Equity and Liabilities $ 150,234 -15- EXHIBIT A-5 Page 1 of 1 ELECTRIC ENERGY, INC. YEAR ENDED DECEMBER 31, 1997 (in thousands of dollars) STATEMENT OF INCOME AND SURPLUS OPERATING INCOME Unaudited Operating Revenues Sales to Department of Energy $ 167,556 Sales to Other Electric Utilities 64,140 Other Electric Revenues 333 Total Operating Revenues 232,029 OPERATING EXPENSES Purchased Power 71,152 Fuel 78,900 Operation 18,764 Maintenance 17,166 Depreciation 14,698 Income Taxes 8,609 Taxes Other Than Income Taxes 1,659 Total Operating Expenses 210,948 Income From Operations 21,081 OTHER (INCOME) AND EXPENSE Interest Income (1,066) Interest Expense 9,836 Other, (Net) (119) Total Other (Income) and Expense 8,651 Net Income $ 12,430 Retained Earnings Beginning of Year $ 2,634 Add: Net Income 12,430 Less: Dividends Declared 12,430 Retained Earnings End of Year $ 2,634 -16- EXHIBIT B Page 1 of 1 KENTUCKY UTILITIES COMPANY FINANCIAL DATA SCHEDULE FOR THE YEAR ENDED DECEMBER 31, 1997 Amount Item No. Description (in thousands) 1 Total Assets 1,679,880 2 Total Operating Revenues 716,437 3 Net Income 85,713 -17- EXHIBIT D Page 1 of 1 SALES AND PURCHASES OF ELECTRIC ENERGY CALENDAR YEAR 1997 Kentucky Electric Utilities Co. Energy, Inc. KWH Sold (at retail or wholesale) 18,625,368,930 12,435,808,864 KWH Distributed at retail outside of state in which organized 810,360,209 9,181,151,864 (a) KWH Sold at wholesale outside of state in which organized or at state line 1,615,716,000 (d) (b) KWH Purchased outside of state in which organized or at state line 60,764,000 (c) (a) Represents energy sold to Paducah, Kentucky, Project of Energy Research and Development Administration. (b) In 1997 Electric Energy, Inc., sold to Kentucky Utilities Company 1,598,130,000 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 1,598,130,000 kilowatt-hours purchased from Electric Energy, Inc., delivery of which was received in Kentucky, as stated in footnote (b) above. (d) Not including the 26,611,000 kilowatt-hours sold to Electric Energy, Inc. -18- -----END PRIVACY-ENHANCED MESSAGE-----