Item 1 BUSINESS - ------ -------- GENERAL - -------
Potomac Electric Power Company (Company), which was incorporated in the District of Columbia in 1896 and in the Commonwealth of Virginia in 1949, is engaged in the generation, transmission, distribution and sale of electric energy in the Washington, D.C. metropolitan area. The Company's retail service territory includes the District of Columbia and major portions of Montgomery and Prince George's counties in suburban Maryland. The area served at retail covers approximately 640 square miles and had a population of approximately 1.9 million at the end of 1993 and 1992. The Company also sells electricity, at wholesale, to Southern Maryland Electric Cooperative Inc. (SMECO), which distributes electricity in Calvert, Charles, Prince George's and St. Mary's counties in southern Maryland. During 1993, approximately 59% of the Company's revenues were derived from Maryland sales (including wholesale) and 41% from sales in the District of Columbia. About 30% of the Company's revenues were derived from residential customers, 64% from sales to commercial and government customers and 6% from sales at wholesale. Approximately 14% and 3% of 1993 revenues were derived from sales to the U.S. and D.C. governments, respectively.
The Company holds valid franchises, permits and other rights adequate for its business in the territory it serves, and such franchises, permits and other rights contain no unduly burdensome restrictions.
The Company is a member of the Pennsylvania-New Jersey-Maryland Interconnection (PJM) pursuant to an agreement under which its generating and transmission facilities are operated on an integrated basis with those of the other PJM member utilities in Pennsylvania, New Jersey, Maryland, Delaware and a small portion of Virginia. The purpose of PJM is to improve the operating economy and reliability of the systems in the group and to provide capital economies by permitting lower reserve requirements than would be required on a system basis. The Company also has direct high voltage connections with the Potomac Edison Company and Virginia Electric and Power Company, neither of which is a member of PJM.
SALES - -----
The following data presents the Company's sales and revenue by class of service and by customer type, including data as to sales to the United States and District of Columbia governments.
1993 1992 1991 ---------- ---------- ---------- Electric Energy Sales (Thousands of Kilowatt-hours) --------------------- Kilowatt-hours Sold - Total 25,693,999 24,484,444 24,796,279 ========== ========== ========== By Class of Service - Residential service 6,739,987 6,155,793 6,503,105 General service 10,860,437 10,491,222 10,418,003 Large power service 5,232,380 5,183,560 5,261,308 Street lighting 163,827 163,739 161,577 Rapid transit 370,428 360,432 343,470 Wholesale 2,326,940 2,129,698 2,108,816
By Type of Customer - Residential 6,726,520 6,142,414 6,488,294 Commercial 11,750,542 11,391,337 11,321,344 U.S. Government 3,986,149 3,947,611 4,016,129 D.C. Government 903,848 873,384 861,696 Wholesale 2,326,940 2,129,698 2,108,816
Electric Revenue (Thousands of Dollars) ---------------- Sales of Electricity - Total* $1,696,435 $1,556,098 $1,542,571 ========== ========== ========== By Class of Service - Residential service $ 506,096 $ 433,648 $ 451,048 General service 747,237 705,178 681,182 Large power service 297,228 286,645 280,307 Street lighting 13,605 12,363 12,424 Rapid transit 24,107 22,914 20,913 Wholesale 108,162 95,350 96,697
By Type of Customer - Residential $ 505,173 $ 432,797 $ 450,103 Commercial 791,357 748,550 724,039 U.S. Government 238,192 229,586 223,723 D.C. Government 53,551 49,815 48,009 Wholesale 108,162 95,350 96,697
* Exclusive of Other Electric Revenues of $6,007 in 1993, $6,069 in 1992 and $9,495 in 1991.
The Company's sales of electric energy are seasonal, and, accordingly, rates have been designed to closely reflect the daily and seasonal variations in the cost of producing electricity, in part by raising summer rates and lowering winter rates. Mild weather during the summer billing months of June through October, when base rates are high to encourage customer conservation and peak load shifting, has an adverse effect on revenues and, conversely, hot weather during these months has a favorable effect.
Effective January 1, 1992, the Company changed its method of revenue recognition to provide for the accrual of revenue for service rendered but unbilled as of the end of the month. This change in accounting method has no significant effect on revenue over a 12-month period. It affects the timing of revenue recognition within the year, principally increasing revenues in the second quarter and decreasing revenues in the fourth quarter.
The Company includes in revenues the amounts received for sales to other utilities related to pooling and interconnection agreements. Amounts received for such interchange deliveries are a component of the Company's fuel rates.
CAPACITY PLANNING - ----------------- General - -------
During the period 1994 through 2003 the Company estimates that its peak demand will grow at a compound annual rate of approximately 1%. Based upon average weather conditions, the Company expects its compound annual growth in kilowatt-hour sales to range between 1% and 2% over the next decade. The Company's ongoing strategies to meet the increasing energy needs of its customers include conservation and energy use management programs which are designed to curb growth in peak demand. The need for new capacity has been further reduced by programs to maintain older generating units to ensure their continued efficiency over an extended life and the cost-effective purchase of capacity and energy.
Conservation and Energy Use Management Programs - -----------------------------------------------
Cost-effective conservation programs have been a major component of the Company's success in limiting the need for new construction during the past decade.
The Company's conservation and energy use management programs are designed to curb growth in demand in order to defer the need for construction of additional generating capacity and to cost-effectively increase the efficiency of energy use. The Company offers an extensive array of comprehensive conservation programs for its customers in the District of Columbia and Maryland.
The Company's programs for residential customers include various types of incentives to encourage the design of energy-efficient homes and the purchase and installation of energy-efficiency measures. These incentives include customer rebates for energy efficient appliances, bonuses to contractors who build homes that meet high energy-efficiency standards, coupons which offer significant discounts to customers who purchase energy- efficient lights and water heater conservation measures and, commencing in 1993, a program to directly install, at no cost to the customer, lighting and water heater tank wraps in single-family, apartment and condominium residences. During 1993, the Company also initiated an appliance recycling program for customers, by offering payments for inefficient, but still functioning, refrigerators, air conditioners and freezers.
The Company's programs for commercial customers offer a variety of approaches to encourage conservation, including design consultation and technical assistance at no fee, equipment rebates to developers and designers, cash incentives to customers who install energy-efficiency measures ranging from lighting to efficient motors and equipment, and, for small commercial customers, direct installation of efficient lighting and other measures at no- cost to the customer. During 1993, as part of the Custom Rebate program, the Company encouraged customers with older chillers to replace them with new high efficiency chillers. Also, the Company began offering loans on a pilot basis to commercial customers for efficiency improvements.
The Company continues to aggressively identify, design, and test additional energy efficient conservation measures and technologies.
The Company receives rate recognition for the cost of its conservation programs in its Maryland jurisdiction through a rate surcharge which permits the Company to earn a return on its conservation investment while receiving compensation for lost revenues. The cost recovery mechanism also allows the Company to earn a performance bonus for exceeding established goals. The surcharge is adjusted periodically to reflect the Company's growing conservation commitment. The District of Columbia Public Service Commission has established a framework which provides for a return on approved conservation investments and incentives for achieving demand side management goals within base rate cases.
During 1993, the Company also continued to operate and expand its energy use management programs. In 1993, approximately 134,000 customers participated in programs which cycle air conditioners and water heaters during peak periods. In addition, the Company operates a commercial load program which provides incentives to customers for reducing energy use during peak periods. Time-of-use rates have been in effect since the early 1980s and currently approximately 60% of the Company's revenues are based on time-of-use rates.
It is estimated that peak load reductions of approximately 390 megawatts have been achieved to date from conservation and energy use management programs and that additional peak load reductions of over 500 megawatts will be achieved in the next five years. The Company also estimates that energy savings of more than 450 million kilowatt-hours have been realized through operation of its conservation and energy use management programs through 1993. During the next five years, the Company plans to expend an estimated $525 million to encourage the efficient use of electric energy and to reduce the need to build new generating facilities.
Although the Company is expanding its conservation and energy use management efforts, new sources of supply will be needed to assure the future reliability of electric service to the Washington area. These new sources of supply will be provided through the Company's plans for purchases of capacity and energy and through its ongoing construction program.
Purchase of Capacity and Energy - -------------------------------
Pursuant to the Company's 1987 long-term capacity purchase agreements with Ohio Edison and Allegheny Power System, the Company is purchasing 450 megawatts of capacity and associated energy through the year 2005. In addition, the Company has a 25-year agreement with SMECO, which began in 1990, to purchase 84 megawatts of capacity supplied by a combustion turbine installed and owned by SMECO at the Company's Chalk Point Generating Station. The Company is responsible for all costs associated with operating and maintaining the facility.
The Company has been exploring other cost-effective sources of energy and has entered into contracts for two nonutility generation projects which total 270 megawatts of capacity. In 1991, the Company signed an agreement with Panda Energy Corporation for a 230-megawatt gas-fueled combined-cycle cogeneration project in Prince George's County, Maryland, which is scheduled for service in 1996. The project is currently before the Maryland Public Service Commission for issuance of a certificate of convenience and necessity. In addition, the Company has signed a contract for a 40-megawatt resource recovery facility which is now under construction in Montgomery County, Maryland. In November 1993, after failing to obtain final building permits from the District of Columbia, Dominion Energy terminated its contract to build a 56-megawatt combined-cycle cogeneration facility at Georgetown University.
CONSTRUCTION PROGRAM - --------------------
The Company carries on a continuous construction program, the nature and extent of which is determined by the Company's strategic planning process which integrates supply-side and demand-side resource options.
From January 1, 1991 to December 31, 1993, the Company made property additions, net of an Allowance for Funds Used During Construction (AFUDC), of $1 billion (of which $300 million were made in 1993) and had property retirements of $122 million (of which $40 million were made in 1993).
The Company's current construction program calls for estimated expenditures, excluding AFUDC, of $290 million in 1994, $280 million in 1995, $240 million in 1996, $210 million in 1997 and $245 million in 1998, an aggregate of $1.3 billion for the five-year period. AFUDC is estimated to be $24 million in 1994, $11 million in 1995, $14 million in 1996, $19 million in 1997 and $23 million in 1998. The 1994-1998 construction program includes approximately $618 million for generating facilities (including $203 million for Clean Air Act compliance), $66 million for transmission facilities, $558 million for distribution, service and other facilities, and $23 million associated with the Company's energy use management programs. Making use of the flexibilities in its long-term construction plan, the Company reduced projected expenditures for the five years 1994 through 1998 by a total of $315 million from amounts previously planned. The construction reductions and deferrals were associated with lower rates of projected growth in usage of electricity resulting in large part from implementing economical conservation programs. The Company plans to finance its construction program through funds provided by operations and external financing.
The construction program includes amounts for the construction of facilities that will not be completed until after 1998. Although the program includes provision for escalation of construction costs, generally at an annual rate of 4%, the aggregate budget for long lead time projects will increase or decrease depending upon the actual rates of inflation in construction costs. The program is reviewed continuously and revised as appropriate to reflect changes in projections of demand, consumption patterns and economic trends.
On June 1, 1993, the Company placed in service the second element of a combined-cycle unit, consisting of a 139-megawatt combustion turbine generating unit, at the Dickerson Generating Station located in Montgomery County, Maryland. The first 139-megawatt combustion turbine generating unit was placed in service on June 1, 1992. The total cost of the two combustion turbine units currently in service was $162 million. These generating units are primarily fueled by natural gas but can also burn No. 2 fuel oil. The Dickerson project plan provides for two combined-cycle units with the capability of adding a coal gasification facility, should future unit price differentials among coal, oil and gas make gasification economically attractive. The Company's construction schedule is flexible in order to accommodate changes in future growth and the addition of nonutility generation. Currently, no additional units are scheduled for the Dickerson combined-cycle project until after the year 2003.
The Clean Air Act Amendments of 1990 (CAA) requires utilities to reduce emissions of sulfur dioxide and nitrogen oxides in two phases, January 1995 (Phase I) and January 2000 (Phase II). The Company has developed plans for complying with the CAA to achieve prescribed standards in Phases I and II.
The Company anticipates capital expenditures totaling $203 million over the next five years pursuant to these plans. The plans call for replacement of boiler burner equipment for nitrogen oxides emissions control, the use of lower-sulfur fuel and cofiring with natural gas at selected baseload plants. The CAA allows companies to achieve required emission levels by using a market-based emission allowance trading system. If economical, emission allowances may be purchased in lieu of burning lower-sulfur fuel.
The Company owns a 9.72% undivided interest in the Conemaugh Generating Station located in western Pennsylvania. As a result of installing flue gas scrubbing equipment to meet Phase I requirements of the CAA, this station will receive additional allowances. The Company's share of these "bonus" allowances may be used to reduce the need for lower-sulfur fuel at its other plants. The Company's share of the construction cost for the flue gas scrubbing equipment is approximately $38 million.
Installation of scrubbers is not contemplated for the Company's wholly owned plants. Both the District of Columbia and Maryland commissions have approved the Company's plans for meeting Phase I requirements including cost recovery of investment and inclusion of emission allowance expenses in the Company's fuel adjustment clause.
The Company is participating in the construction of the final segments of a 500,000 volt transmission line providing further links in the transmission systems of the Company, Baltimore Gas and Electric Company and Virginia Electric and Power Company (Virginia Power). The Company's construction schedule contemplates completion of the final segments in 1994.
FUEL - ----
For customer billing purposes, all of the Company's kilowatt-hour sales are covered by separately stated fuel rates (see Item 8 - Note 2 of "Notes to Consolidated Financial Statements").
The Company's generating units burn only fossil fuels. The principal fuel is coal. The Company owns no nuclear generation facilities and none are planned. The following table sets forth the quantities of each type of fuel used by the Company in the years 1993, 1992 and 1991 and the contribution, on the basis of Btus, of each fuel to energy generated.
1993 1992 1991 -------------- -------------- -------------- % of % of % of Quantity Btu Quantity Btu Quantity Btu -------- ----- -------- ----- -------- -----
Coal (000s net tons) 6,010 79.4 5,926 82.9 6,471 81.7 Residual oil (000s barrels) 4,835 15.9 3,294 11.4 3,895 12.2 Natural gas (000s dekatherms) 6,090 3.2 8,200 4.5 9,933 4.9 No. 2 fuel oil (000s barrels) 480 1.5 376 1.2 407 1.2
The following table sets forth the average cost of each type of fuel burned, for the years shown.
1993 1992 1991 ------ ------ ------
Coal: per ton $43.69 $43.66 $45.37 per million Btu 1.72 1.72 1.78 Residual oil: per barrel 15.09 14.35 15.99 per million Btu 2.39 2.28 2.54 Natural gas: per dekatherm 2.88 2.32 2.18 per million Btu 2.88 2.32 2.18 No. 2 fuel oil: per barrel 24.98 26.70 29.07 per million Btu 4.30 4.60 5.01
The average cost of fuel burned per million Btu was $1.90 in 1993, compared with $1.85 in 1992 and $1.93 in 1991. The increase of approximately 3% in the 1993 system average unit fuel cost compared with the 1992 system average resulted from increased use of major cycling and peaking generation units which burn higher cost fuels. The Company's major cycling and certain peaking units can burn natural gas or oil, adding flexibility in selecting the most cost-effective fuel mix.
Ten of the Company's sixteen steam-electric generating units can burn only coal; two can burn only residual oil; two can burn either coal or residual oil or a combination of both and two units can burn either residual oil or natural gas. Those units capable of burning either coal or residual oil normally burn coal as their primary fuel. The Company also has combustion
turbines, some of which can burn only No. 2 fuel oil, and others which can burn natural gas or No. 2 fuel oil. During 1993, the new Dickerson combustion turbine units resulted in the displacement of generation from older, less cost-effective units. The following table provides details of the Company's generating capability from the standpoint of plant configuration as well as actual energy generation (see "Item 2
Item 3 LEGAL PROCEEDINGS - ------ -----------------
For information regarding pending environmental legal proceedings, see "Environmental Matters" under Item 1 "Business."
The Company was a defendant in employment discrimination litigation which was pending in the United States District Court for the District of Columbia. In February 1993, the parties to the case reached tentative settlement of the claims and, in April 1993, the Company paid $38.26 million into a trust fund pursuant to the terms of the agreement. The funds will be disbursed from the trust fund to certain covered classes of current and former employees and applicants for employment and to cover the plaintiffs' legal and expert fees and costs. The Court approved the settlement agreement effective July 1993. The Company received insurance payments of $13.5 million in October 1993 and $24 million in January 1994, bringing the total recovered from insurance companies to $37.5 million. At December 31, 1993, approximately $.8 million was charged to non-operating expense.
Item 4
Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------ ---------------------------------------------------
None.
Part II - ------- Item 5
Item 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER - ------ ----------------------------------------------------------------- MATTERS -------
The following table presents the dividends per share of Common Stock and the high and low of the daily Common Stock transaction prices as reported in The Wall Street Journal during each period. The New York Stock Exchange is the principal market on which the Company's Common Stock is traded. The Company's Common Stock is also traded on the Tokyo Stock Exchange.
Dividends Price Range Period Per Share High Low --------------------- --------------- -------- ---------
1993: First Quarter...... $.41 $26-1/2 $23-7/8 Second Quarter..... .41 27-3/8 25-5/8 Third Quarter...... .41 28-7/8 27-1/8 Fourth Quarter..... .41 $1.64 28-3/4 24-5/8
1992: First Quarter...... $.40 $25-1/8 $22-3/4 Second Quarter..... .40 26 23 Third Quarter...... .40 27-1/2 25-1/8 Fourth Quarter..... .40 $1.60 26-3/4 22-5/8
The number of holders of Common Stock was 98,312 at March 8, 1994 and 98,892 at December 31, 1993.
There were 117,915,691 and 117,797,652 shares of the Company's $1 par value Common Stock outstanding at March 8, 1994, and December 31, 1993, respectively. A total of 200 million shares is authorized.
At its January 1994 meeting, the Company's Board of Directors declared a quarterly dividend on Common Stock of 41 1/2 cents per share, an increase of 1/2 cent per share over the quarterly dividend of 41 cents paid during 1993. The increased dividend is payable March 31, 1994, to shareholders of record on February 25, 1994.
Item 6
Item 6 SELECTED FINANCIAL DATA - ------ -----------------------
The information required by Item 6 is incorporated herein by reference to "Selected Consolidated Financial Data" in the Financial Information of the Company's 1993 Annual Report to shareholders.
Item 7
Item 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------ --------------------------------------------------------------- RESULTS OF OPERATIONS ---------------------
The information required by Item 7 is incorporated herein by reference to the "Management's Discussion and Analysis of Consolidated Results of Operations and Financial Condition" in the Financial Information section of the Company's 1993 Annual Report to shareholders.
See "Rates" under Item 1 "Business" for an update to the discussion of the Company's base rate proceeding in the District of Columbia.
Item 8
Item 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - ------ -------------------------------------------
The consolidated financial statements, together with the report thereon of Price Waterhouse dated January 21, 1994, and supplementary data from the Company's 1993 Annual Report to shareholders are incorporated herein by reference. With the exception of the aforementioned information and the information incorporated in Items 5, 6, 7, 8 and 9, the 1993 Annual Report to Shareholders is not deemed filed as part of this Form 10-K Annual Report.
Item 9
Item 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND - ------ --------------------------------------------------------------- FINANCIAL DISCLOSURE --------------------
None.
Part III - -------- Item 10
Item 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - ------- --------------------------------------------------
The information required by Item 10 with regard to Directors of the registrant is incorporated herein by reference to the Company's Notice of Annual Meeting of Shareholders and Proxy Statement dated March 18, 1994.
Information with regard to the executive officers of the registrant as of March 8, 1994, is as follows:
Served in such position Name Position Age since - -------------------- -------------------------------- --- -------------
Edward F. Mitchell Chairman of the Board and Chief Executive Officer 62 1992 (1)
John M. Derrick Jr. President and Chief Operating Officer 53 1992 (2)
H. Lowell Davis Vice Chairman and Chief Financial Officer and Director 61 1983
Paul Dragoumis Executive Vice President 59 1989 (3)
Dennis R. Wraase Senior Vice President - Finance and Accounting 49 1992 (4)
Iraline G. Barnes Vice President - Corporate 46 1990 (5) Relations
Earl K. Chism Vice President and Treasurer 58 1989 (6)
Susann D. Felton Vice President - Materials 45 1992 (7)
William R. Gee Jr. Vice President - System Engineering 53 1991 (8)
Robert C. Grantley Vice President - Customer Services 45 1989 (9)
Anthony S. Macerollo Vice President - Human Resources 52 1989 (10)
Eddie R. Mayberry Vice President - Market Planning and Policy 46 1993 (11)
John D. McCallum Vice President - Corporate Tax 44 1992 (12)
Served in such position Name Position Age since - -------------------- -------------------------------- --- -------------
James S. Potts Vice President - Environment 48 1993 (13)
William J. Sim Vice President - Operations and Construction 49 1991 (14)
William T. Torgerson Vice President and General Counsel 49 1989 (15)
Andrew W. Williams Vice President - Energy Policy and Development 44 1989 (16)
None of the above persons has a "family relationship" with any other officer listed or with any director or nominee for director.
The term of office for each of the above persons is from April 28, 1993 to April 27, 1994.
(1) Mr. Mitchell was elected to the position of Chairman of the Board on December 21, 1992. He was elected Chief Executive Officer effective September 1, 1989. Prior to that time he held the position of President and Chief Operating Officer, since 1983.
(2) Mr. Derrick was elected to the position of President on December 21, 1992. He was elected Executive Vice President and Chief Operating Officer on July 27, 1989. Prior to that time he held the position of Vice President - Customer Services, since 1981.
(3) Mr. Dragoumis was elected to his present position on July 27, 1989. Prior to that time he held the position of Senior Vice President.
(4) Mr. Wraase was elected to his present position on April 22, 1992. He was elected Senior Vice President and Comptroller on July 27, 1989. Prior to that time he held the position of Vice President and Comptroller, since 1985.
(5) Mrs. Barnes was elected to her present position effective April 1, 1990. Prior to that time she served as Associate Judge of the Superior Court of the District of Columbia for ten years.
(6) Mr. Chism was elected to his present position on July 27, 1989. Prior to that time he held the positions of Treasurer from 1988 to 1989, and of Assistant Treasurer from 1987 to 1988.
(7) Ms. Felton was elected to her present position on April 22, 1992. Prior to that time she held the position of Manager, Materials.
(8) Mr. Gee was elected to his present position on April 24, 1991. Prior to that time he held the position of Vice President - Generating Engineering and Construction, since 1989. Prior to 1989, he held the position of Manager, Generating Engineering.
(9) Mr. Grantley was elected to his present position on July 27, 1989. Prior to that time he held the position of Manager, Customer Services, since 1987.
(10) Mr. Macerollo was elected to his present position on July 27, 1989. Prior to that time he held the position of Manager, Human Resources, since 1986.
(11) Dr. Mayberry was elected to his present position on April 28, 1993. Prior to that time he held the position of Manager, Market Planning and Policy, since 1989. Prior to 1989 he held the position of Manager, Rate and Economic Analysis.
(12) Mr. McCallum was elected to his present position on April 22, 1992. Prior to that time he held the position of Assistant Comptroller, since 1987.
(13) Mr. Potts was elected to his present position on April 28, 1993. Prior to that time he held the position of Manager, Generating Strategic Support since 1991. Prior to 1991 he held the position of Manager, Production Performance.
(14) Mr. Sim was elected to his present position on April 24, 1991. Prior to that time he was President of the American Energy division of the Company's nonutility subsidiary, Potomac Capital Investment Corporation, since 1988. Prior to 1988, he held the position of Manager, Generating Construction.
(15) Mr. Torgerson was elected to his present position effective January 1, 1989. Prior to that time he held the position of Vice President and Deputy General Counsel, since 1986.
(16) Mr. Williams was elected to his present position on July 27, 1989. Prior to that time he held the position of Manager, Financial Planning and Analysis, since 1985.
Item 11
Item 11 EXECUTIVE COMPENSATION - ------- ----------------------
The information required by Item 11 is incorporated herein by reference to the Company's Notice of Annual Meeting of Shareholders and Proxy Statement dated March 18, 1994.
Item 12
Item 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT - ------- --------------------------------------------------------------
The information required by Item 12 is incorporated herein by reference to the Company's Notice of Annual Meeting of Shareholders and Proxy Statement dated March 18, 1994.
Item 13
Item 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - ------- ----------------------------------------------
None.
Part IV - ------- Item 14
Item 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K - ------- ---------------------------------------------------------------
(a) Documents List --------------
1. Financial Statements
The following documents are filed as part of this report as incorporated herein by reference from the indicated pages of the Company's 1993 Annual Report. Reference (Page) ----------------
Form 10-K Annual Report Annual Report to Shareholders Exhibit 13 --------------- -------------
Consolidated Statements of Earnings - for the years ended December 31, 1993, 1992 and 1991 15 24
Consolidated Balance Sheets - December 31, 1993 and 1992 16-17 25-26
Consolidated Statements of Cash Flows - for the years ended December 31, 1993, 1992 and 1991 18 27
Notes to Consolidated Financial Statements 19-31 28-60
Report of Independent Accountants 14 23
2. Financial Statement Schedules
Unaudited supplementary data entitled "Quarterly Financial Summary (Unaudited)" is incorporated herein by reference in Item 8 (included in "Notes to Consolidated Financial Statements" as Note 15).
The following financial statement schedules are submitted under Item 14 (d):
Report of Independent Accountants on Consolidated Financial Statement Schedules
Schedule V - Property, Plant and Equipment
Schedule VI - Accumulated Depreciation, Depletion and Amortization of Property, Plant and Equipment
Schedule VIII - Valuation and Qualifying Accounts
Schedule IX - Short-Term Borrowings
All other schedules are omitted because they are not applicable, or the required information is presented in the financial statements.
3. Exhibits required by Securities and Exchange Commission Regulation S-K (summarized below).
Exhibit No. Description of Exhibit Reference* - ------- ---------------------- ----------
3-A Charter of the Company.............. Filed herewith.
3-B By-Laws of the Company.............. Exh. 3-B to Form 10-K, 3/26/93.
4 Mortgage and Deed of Trust dated July 1, 1936, of the Company to The Riggs National Bank of Washington, D.C., as Trustee, securing First Mortgage Bonds of the Company, and Supplemental Indenture dated July 1, 1936........................ Exh. B-4 to First Amendment, 6/19/36, to Registration Statement No. 2-2232.
Exhibit No. Description of Exhibit Reference* - ------- ---------------------- ----------
4 Supplemental Indentures, to the (cont.) aforesaid Mortgage and Deed of Trust, dated - December 1, 1939 and December 10, 1939.......................... Exhs. A & B to Form 8-K, 1/3/40. August 1, 1940...................... Exh. A to Form 8-K, 9/25/40.
July 15, 1942 and August 10, 1942................................ Exh. B-1 to Amendment No. 2, 8/24/42, and B-3 to Post- Effective Amendment, 8/31/42, to Registration Statement No. 2-5032. August 1, 1942...................... Exh. B-4 to Form 8-A, 10/8/42. October 15, 1942.................... Exh. A to Form 8-K, 12/7/42.
October 15, 1947.................... Exh. A to Form 8-K, 12/8/47.
January 1, 1948..................... Exh.7-B to Post-Effective Amendment No. 2, 1/28/48, to Registration Statement No. 2-7349. December 31, 1948................... Exh. A-2 to Form 10-K, 4/13/49. May 1, 1949......................... Exh. 7-B to Post-Effective Amendment No. 1, 5/10/49, to Registration Statement No. 2-7948. December 31, 1949................... Exh. (a)-1 to Form 8-K, 2/8/50. May 1, 1950......................... Exh. 7-B to Amendment No. 2, 5/8/50, to Registration Statement No. 2-8430. February 15, 1951................... Exh. (a) to Form 8-K, 3/9/51. March 1, 1952....................... Exh. 4-C to Post-Effective Amendment No. 1, 3/12/52, to Registration Statement No. 2-9435. February 16, 1953................... Exh. (a)-1 to Form 8-K, 3/5/53. May 15, 1953........................ Exh. 4-C to Post-Effective Amendment No. 1, 5/26/53, to Registration Statement No. 2-10246.
Exhibit No. Description of Exhibit Reference* - ------- ---------------------- ----------
4 March 15, 1954 and March 15, (cont.) 1955................................ Exh. 4-B to Registration Statement No. 2-11627, 5/2/55. May 16, 1955........................ Exh. A to Form 8-K, 7/6/55. March 15, 1956...................... Exh. C to Form 10-K, 4/4/56. June 1, 1956........................ Exh. A to Form 8-K, 7/2/56. April 1, 1957....................... Exh. 4-B to Registration Statement No. 2-13884, 2/5/58. May 1, 1958......................... Exh. 2-B to Registration Statement No. 2-14518, 11/10/58. December 1, 1958.................... Exh. A to Form 8-K, 1/2/59. May 1, 1959......................... Exh. 4-B to Amendment No. 1, 5/13/59, to Registration Statement No. 2-15027. November 16, 1959................... Exh. A to Form 8-K, 1/4/60.
May 2, 1960......................... Exh. 2-B to Registration Statement No. 2-17286, 11/9/60.
December 1, 1960 and April 3, 1961................................ Exh. A-1 to Form 10-K, 4/24/61. May 1, 1962......................... Exh. 2-B to Registration Statement No. 2-21037, 1/25/63. February 15, 1963................... Exh. A to Form 8-K, 3/4/63. May 1, 1963......................... Exh. 4-B to Registration Statement No. 2-21961, 12/19/63. April 23, 1964...................... Exh. 2-B to Registration Statement No. 2-22344, 4/24/64. May 15, 1964........................ Exh. A to Form 8-K, 6/2/64. May 3, 1965......................... Exh. 2-B to Registration Statement No. 2-24655, 3/16/66. April 1, 1966....................... Exh. A to Form 10-K, 4/21/66. June 1, 1966........................ Exh. 1 to Form 10-K, 4/11/67. April 28, 1967...................... Exh. 2-B to Post-Effective Amendment No. 1 to Registration Statement No. 2-26356, 5/3/67. May 1, 1967......................... Exh. A to Form 8-K, 6/1/67.
Exhibit No. Description of Exhibit Reference* - ------ ---------------------- ----------
4 July 3, 1967........................ Exh. 2-B to Registration (cont.) Statement No. 2-28080, 1/25/68. February 15, 1968................... Exh. II-I to Form 8-K, 3/7/68. May 1, 1968......................... Exh. 2-B to Registration Statement No. 2-31896, 2/28/69. March 15, 1969...................... Exh. A-2 to Form 8-K, 4/8/69. June 16, 1969....................... Exh. 2-B to Registration Statement No. 2-36094, 1/27/70. February 15, 1970................... Exh. A-2 to Form 8-K, 3/9/70. May 15, 1970........................ Exh. 2-B to Registration Statement No. 2-38038, 7/27/70. August 15, 1970..................... Exh. 2-D to Registration Statement No. 2-38038, 7/27/70. September 1, 1971................... Exh. 2-C to Registration Statement No. 2-45591, 9/1/72. September 15, 1972.................. Exh. 2-E to Registration Statement No. 2-45591, 9/1/72.
April 1, 1973....................... Exh. A to Form 8-K, 5/9/73. January 2, 1974..................... Exh. 2-D to Registration Statement No. 2-49803, 12/5/73. August 15, 1974..................... Exhs. 2-G and 2-H to Amendment No. 1 to Registration Statement No. 2-51698, 8/14/74. June 15, 1977....................... Exh. 4-A to Form 10-K, 3/19/81. July 1, 1979........................ Exh. 4-B to Form 10-K, 3/19/81. June 16, 1981....................... Exh. 4-A to Form 10-K, 3/19/82. June 17, 1981....................... Exh. 2 to Amendment No. 1, 6/18/81, to Form 8-A. December 1, 1981.................... Exh. 4-C to Form 10-K, 3/19/82. August 1, 1982...................... Exh. 4-C to Amendment No. 1 to Registration Statement No. 2-78731, 8/17/82. October 1, 1982..................... Exh. 4 to Form 8-K, 11/8/82. April 15, 1983...................... Exh. 4 to Form 10-K, 3/23/84. November 1, 1985.................... Exh. 2-B to Form 8-A, 11/1/85.
Exhibit No. Description of Exhibit Reference* - ------ ---------------------- ----------
4 March 1, 1986....................... Exh. 4 to Form 10-K, 3/28/86. (cont.) November 1, 1986.................... Exh. 2-B to Form 8-A, 11/5/86. March 1, 1987....................... Exh. 2-B to Form 8-A, 3/2/87. September 16, 1987.................. Exh. 4-B to Registration Statement No. 33-18229, 10/30/87. May 1, 1989......................... Exh. 4-C to Registration Statement No. 33-29382, 6/16/89. August 1, 1989...................... Exh. 4 to Form 10-K, 3/23/90. April 5, 1990....................... Exh. 4 to Form 10-K, 3/29/91. May 21, 1991........................ Exh. 4 to Form 10-K, 3/27/92. May 7, 1992......................... Exh. 4 to Form 10-K, 3/26/93. September 1, 1992................... Exh. 4 to Form 10-K, 3/26/93. November 1, 1992.................... Exh. 4 to Form 10-K, 3/26/93. March 1, 1993....................... Exh. 4 to Form 10-K, 3/26/93. March 2, 1993....................... Exh. 4 to Form 10-K, 3/26/93. July 1, 1993........................ Exh. 4.4 to Registration Statement No. 33-49973, 8/11/93. August 20, 1993..................... Exh. 4.4 to Registration Statement No. 33-50377, 9/23/93.
September 29, 1993.................. Filed herewith. September 30, 1993.................. Filed herewith. October 1, 1993..................... Filed herewith. February 10, 1994................... Filed herewith. February 11, 1994................... Filed herewith.
4-A Indenture, dated as of January 15, 1988, between the Company and Centerre Trust Company of St. Louis (now known as Boatmen's Trust Company), Trustee for the Company's $75,000,000 issue of 7% Convertible Debentures due 2018 ................ Exh. 4-A to Form 10-K, 3/25/88.
4-B Indenture, dated as of July 28, 1989, between the Company and The Bank of New York, Trustee, with respect to the Company's Medium-Term Note Program............ Exh. 4 to Form 8-K, 6/21/90.
Exhibit No. Description of Exhibit Reference* - ------ ---------------------- ----------
4C Indenture, dated as of August 15, 1992, between the Company and the Bank of New York, Trustee, for the Company's $115,000,000 issue of 5% Convertible Debentures due 2002..... Exh. 4-C to Form 10-K, 3/26/93.
10 Agreement, effective July 23, 1993, between the Company and the International Brotherhood of Electrical Workers (Local Union #1900).............................. Exh. 10 to Form 10-Q, 7/30/93.
**11 Computation of Earnings Per Common Share...................... Filed herewith.
**12 Computation of Ratios............... Filed herewith.
13 Financial Information Section of Annual Report .................... Filed herewith.
**22 Subsidiaries of the Registrant...... Filed herewith.
**24 Consent of Independent Accountants.. Filed herewith.
* The exhibits referred to in this column by specific designations and date have heretofore been filed with the Securities and Exchange Commission under such designations and are hereby incorporated herein by reference. The Forms 8-A, 8-K and 10-K referred to were filed by the Company under the Commission's File No. 1-1072 and the Registration Statements referred to are registration statements of the Company.
** These exhibits are submitted under Item 14(c).
(b) Reports on Form 8-K -------------------
None.
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 Washington, District of Columbia, on the 25th day of March, 1994.
POTOMAC ELECTRIC POWER COMPANY (Registrant)
By /s/ E. F. Mitchell -------------------------- (Edward F. Mitchell, Chairman of the Board and Chief Executive Officer)
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 and on the dates indicated:
Signature Title Date --------- ----- ----
(i) Principal Executive Officer
/s/ E. F. Mitchell --------------------------- Chairman of the Board and (Edward F. Mitchell) Chief Executive Officer
(ii) Principal Financial Officer
/s/ H. L. Davis --------------------------- Vice Chairman and Chief (H. Lowell Davis) Financial Officer and Director
(iii) Principal Accounting Officer
/s/ D. R. Wraase --------------------------- Senior Vice President (Dennis R. Wraase) Finance and Accounting
March 25, 1994
Signature Title Date --------- ----- ----
(iv) Directors:
/s/ Roger R. Blunt ------------------------- Director (Roger R. Blunt Sr.)
/s/ A. J. Clark ------------------------- Director (A. James Clark)
/s/ Richard E. Marriott ------------------------- Director (Richard E. Marriott)
/s/ David O. Maxwell ------------------------ Director (David O. Maxwell)
/s/ Floretta D. McKenzie ------------------------- Director (Floretta D. McKenzie)
/s/ Ann D. McLaughlin ------------------------- Director (Ann D. McLaughlin)
/s/ Peter F. O'Malley ------------------------- Director (Peter F. O'Malley)
/s/ Louis A. Simpson ------------------------- Director (Louis A. Simpson)
/s/ W. Reid Thompson ------------------------- Director (W. Reid Thompson)
Signature Title Date --------- ----- ----
(iv) Directors:
/s/ Charls E. Walker ------------------------- Director (Charls E. Walker)
March 25, 1994