L-80-102, Forwards General Info Section of Application for OL

Forwards General Info Section of Application for OL

ML17266A171
Person / Time
Site:	Saint Lucie
Issue date:	03/24/1980
From:	Robert E. Uhrig FLORIDA POWER & LIGHT CO.
To:	Harold Denton Office of Nuclear Reactor Regulation
Shared Package
ML17208A465	List: L-80-102, Forwards General Info Section of Application for OL ML17208A464
References
L-80-102, NUDOCS 8004220239
Download: ML17266A171 (100)

Text

FLORIDA POWER II, LIGHTCOMPANY March 24, 1980 L-80-102 Mr. Harold R. Denton, Director Office of Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission Washington, D.

C.

20555

Dear Mr. Denton:

Re:

St. Lucie Unit 2 Docket No. 50-389 Application for Operating License Final Safety Analysis Report and Environmental Re ort - 0 eratin License In accordance with the Atomic Energy Act of 1954 as

amended, and the rules and regulations issued pursuant thereto, Florida Power 5 Light Company submits the following information as required by 10 CFR 50.30, 10 CFR 50.33, 10 CFR 50.34, and 10 CFR 50.51.

Very truly yours, Robert E. Uhrig Vice President Advanced Systems 8 Technology REU/JRP/ah cc:

Harold F. Reis, Esquire PEOPLE... SERVING PEOPLE

BEFORE THE UNITED STATES NUCLEAR REGULATORY COMMISSION Docket No. 50-389 In the Matter of Florida Power R Light Company APPLICATIONFOR LICENSES V

UNDER THE ATOMICENERGY ACT OF,1954 AS AMENDED for ST. LUCIE PLANT UNIT NO. 2 March

, 1980

FLORIDA POWER 2 LIGHT COMPANY APPLICATION FOR OPERATING LICENSE AND OTHER APPROPRIATE LICENSES AS REQUIRED General Information 1)

Name of A licant Florida Power 2 Light Company 2)

Address of A licant 9250 W. Flagler Street Miami, Florida (P. O. Box 529100 Miami, Florida 33152) 3)

Descri tion of Business and Or anizationof A licant Applicant is engaged in the electric utility business in the State of Florida.

Applicant provides electric service in most of the territory along the east and lower west coasts of Florida including the Gape Canaveral area, the agricultural area around southern and eastern Lake Okeechobee, and portions of central and north central Florida (except most of the Jacksonville area, most of two other municipalities, and all of six other municipalities which have municipal systems).

1 As of December 31, 1979, Applicant served a total of 2,140,587 customers.

As of the same date, net,utility plant after depreciation was

$4,421,847,000 including nuclear fuel in process of refinement, conversion, enrichment and fabrication.

Revenues for the year ending December 1979 were $1,933,937,000.

Applicant is a corporation duly authorized and existing under the laws of the State of Florida. The names and post office addresses of its directors and principal officers, all of whom are citizens of the United States, are as follows:

NAMES AND ADDRESSES OF DIRECTORS M.-P. Anthony, President, Anthony', Inc., Post Office Box=-2886, West Palm Beach, Florida 33402 George F. Bennett, President, State Street Investment Corporation, 225 Franklin Street, Boston, Massachusetts 02110 David Blumberg, President, Planned Development Corporation, 1440 Brickell Avenue, Miami, Florida 33131 Jean McArthur Davis, President, McArthur Dairy, Inc., 6851 N.E.

2 Avenue, Miami, Florida 33138 John J. Hudiburg, President, Florida Power R Light Company, 9250 West Flagler Street, Post Office Box 529100, Miami, Florida 33152 Robert B. Knight, 220 Arvida Parkway, Coral Gables, Florida 33156 John M. McCarty, 111 Boston Avenue, Ft. Pierce, Florida 33450 Marshall McDonald, Chairman of the Board, Florida Power 2 Light Company, 9250 West Flagler Street, Post Office Box 529100, Miami, Florida 33152 Ed H. Price, Jr. President, The Price Company, Inc. (Ellis First National Bank Building of Bradenton, Suite N417),

Post Office Box 9270, Bradenton, Florida 33506 Lewis E. Wadsworth, Post Office Box 428, Bunnell, Florida 32010 Gene A.

Whiddon, President, Causeway Lumber Company, Inc., Post Office Box 21088, Ft. Lauderdale, Florida 33335 NAMES AND ADDRESSES OF OFFICERS Marshall McDonald J. J. Hudiburg E. A. Adomat H. L. Allen D. K. Baldwin E. L. Bivans M. C. Cook B. L. Dady H. J. Dager, Jr.

Tracy Danese J. H. Francis, Jr.

R. J. Gardner L. C. Hauck J. L. Howard L. C. Hunter W. M. Klein A. D. Schmidt J. G. Spencer, Jr.

R. E. Talion R. E. Uhrig R. W. WaQ, Jr.

Chairman of the Board President Executive Vice President Senior Vice President Vice President Vice President Vice President Vice President 4 Assistant Secretary Vice President

. Vice President Vice President Vice President Vice President Vice President R Treasurer Senior Vice President Vice President Vice President Senior Vice President Group Vice President Vice President Senior Vice President R Assistant Secretary

Astrid Pfeiffer H. P. Williams, Jr.

T. R. Crook, Jr.

R. A. Anderson S. P. Kemp J. E. Moore Secretary Comptroller Assistant Comptroller Assistant Treasurer Assistant Secretary Assistant Secretary The address of the above Officers is 9250 West Flagler Street, Post Office Box 529100, Miami, Florida 33152.

Applicant is not owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government, and is not acting as agent or representative of any other. persons in making this Application; The Applicant's stock transfer agent has certified that as of the close of business December 31,

1979, records indicate that 173 foreign stockholders held 68,391.81 shares of common stock.

Foreign stockholders constituted 0.48%

of total common shareholders and-foreign-held stock constituted 0.16%

of total common shares outstanding.

4)

Class and Period of License A lied for Applicant requests a class 103 operating license for a period of 40 years from date of issuance.

Applicant requests such additional source, special nuclear and by-product material licenses as may be necessary and appropriate to the operation of this facility.

5)

Descri tion of Facili and Use to Which Facilit WillBe Put Applicant proposes to operate a nuclear reactor which willsupply a turbine generator with a capability of 890 Mwe gross with associated-transformer, switchyard, supporting buildings and additional auxiliary systems and facilities as required for a Unit No. 2 output of 802 Mwe net.

The nuclear steam supply system is a pressurized water reactor whose maximum output is 2700 Mwt. The design of the'balance of plant and related facilities will be such as to accommodate the maximum

thermal output of the nuclear steam supply system, consequently the major systems and components which bear significantly on the acceptability of the site, includin'g the engineered safeguards systems and the containment, have been evaluated for operation at a power level of 2700 Mwt. This project willbe located on Hutchinson Island on the east coast of Florida. The project, (Units,1 R 2) and possible future additions will occupy approximately 100 acres of the site:

the remainder willbe set aside for a conservation development program.

Attached hereto and made a part hereof is a Final Safety Analysis Report and an Environmental Report - Operating License which contain a description of the site and the facility; an analysis and evaluation of structures, systems, and components; and other material in accordance with the requirements of Sections 50.34 and 51.21 of the regulations of the Nuclear Regulatory Commission.

The proposed power plant is a

necessary part of Applicant's continuing expansion of its facilities to provide for a steadily increasing demand for electric power by its customers.

6)

Financial Qualifications Applicant's 1979 Annual Report and Financial 4 Statistical Repor t are set forth in attached Exhibit I.

The entire cost of the Applicant's share of the project willbe paid for by Applicant from funds available from normal and regular sources for construction of additions to all types of its utilityproperties.

Such funds're (1) treasury funds on hand; (2) funds available from internal

sources, principally retained

earnings, deferred taxes, investment tax credits - net and provisions for depreciation; (3) short term bank loans

and commercial paper; and (4) the sale of permanent securities when and as required.

Attached hereto as Exhibit II is a tabulation of the estimated cost of operating the facility.

At the end of the plant's useful lifetime, FPL will prepare a

proposed decommissioning plan based on the available information and requirements.

FPL has given serious consideration to the matter to date and estimates a

decommissioning cost of approximately

$100,000,000.

However, in order to maintain some degree of flexibility among the various decommissioning options, no specific plan has been chosen.

Applicant is able to borrow on a short term basis at the prime rate of interest or less.

Bond issues sold since 1974 have been rated A by Moody's Investors Service and A+ by Standard dc Poor's Corporation (A since 1971, A+ since 1978).

Applicant will obtain appropriate property and liability insurance for this project and its fuel.

The above demonstrates Florida Power R Light Company's ability to obtain the funds necessary to cover the estimated costs of operation plus the estimated costs to safely decommission the facility.

V)

Technical Qualifications Applicant has in operation two nuclear power units of 666 Mwe capacity

each, known as Turkey Point Units No.

3 and No. 4, one nuclear power unit of VVV Mwe capacity known as St. Lucie Unit No. 1.

The extensive training program for engineering-and operating personnel for the Turkey Point Project and St. Lucie Unit 01 has been. expanded and continued as required to train personnel for St. Lucie Plant Unit 02.

Applicant has contracted with Combustion Engineering Corporation to design and fabricate the nuclear steam supply system.

The turbine generator will be supplied by Westinghouse Electric Corporation.

Ebasco Services Incorporated willprovide engineering and procurement services for the majority of items not furnished by Combustion Engineering and Westinghouse.

Florida Power R

Light will be responsible for construction services and. the administration of the Ebasco, Combustion Engineering and Westinghouse Contracts.

Combustion Engineering will supply the initial core (Batches A, B, and C) as well as Batches D, E, and F.

The technical qualifications of Combustion Engineering and Ebasco are summarized in Exhibit IIIattached.

The fuel load date of this unit is estimated to be October,30, 1982; the expected commercial operation date is estimated to be May 30, 1983.

The regulatory agencies having jurisdiction over the rates and services incident to the proposed activity is:

Federal Energy Regulatory Commission 825 North Capitol Street, ¹E.

Washington, D.C.

20426 Florida Public Service Commission 101 East Gaines Street Tallahassee, Florida 32304

10) Publications Circulated in the Area (a)

Trade Publications:

ELECTRIC LIGHT R POWER 1301 South Grove Avenue Barrington, Illinois 60010 ELECTRICAL SOUTH 1760 Peachtree Road, N.W.

Atlanta, Georgia 30309 ELECTRICAL WORLD 1221 Avenue of the Americas New York, New York 10020 (b)

Daily News Publications:

COMMERCIALRECORD 416 Clematis St.

West Palm Beach, Florida 33402 NEWS TRIBUNE P. O. Box 69 Fort Pierce, Florida 33450 PALM BEACH DAILYNEWS 265 Royal Poncianna Palm Beach, Florida 33480 PALM BEACH POST 2V51 South Dixie Highway West Palm Beach, Florida 33402 PALM BEACH TIMES 2V51 South Dixie Highway West Palm Beach, Florida 33402 MELBOURNE TIMES 2015 South Waverly Place Melbourne, Florida 32901 THE MIAMIHERALD 1 Herald Plaza Miami, Florida 33101 BOCA RATON NEWS P.O. Box 580 Boca Raton, Florida 33432

(c)

Weekly News Publications:

COURIER HIGHLIGHTS P.O. Box 1486 Jupiter, Florida 33458 JENSEN BEACH MIRROR P.O. Box 787 Jensen Beach, Florida 33457 VERO BEACH PRESS-JOURNAL P.O. Box 1268 Vero Beach, Florida 32960

11) Restricted Data Pursuant to Section 50.37, Applicant agrees not to permit any individual to have access to Restricted Data until the Civil Service Commission shall have made an investigation and report to the Commission on the character, associations, and loyalty of such individual, and the Commission shall have determined =that permitting such person to have access to Restricted Data will not endanger the common defense and security.

12)

Communications All communications to Applicant pertaining to this Application should be sent to Dr. R. E. Uhrig, Vice President, Florida Power dc Light

Company, P.O. Box 529100, Miami, Florida 33152, with a copy to Mr.

Harold Reis of Lowenstein,

Newman, Reis, Axelrad 4 Toll, 1025

'onnecticut Avenue, N.W., Washington, D.C. 20036.

FLORIDA POWER Bc LIGHT COMPANY By R. E. Uhrig

STATE OF FLORIDA )

)

SS COUNTY OF DADE

)

R. E. Uhrig, being first duly sworn, deposes and says:

That he is Vice President of.FLORIDA POWER dc LIGHT COMPANY, the Applicant herein; and that the statements made in this Application are true and correct to the best of his knowledge, information and belief; and that he is authorized to execute the Application on behalf of said Applicant.

DATED: This 25th day of March, 1980.

Signed Subscribed and sworn to before me this 25th day of March, 1980.

Notary Public in and for the County of Dade, State of Florida IIOTAIIY PVBUC STATE OP FLORIOA et LAIIGC MY COMMISSIOII EXPIRES AUQVST 24, My Commission expires

EXHIBIT I 1979 Annual Report from the People of Florida Power &LightCompany FPL: Generating Faith in the Future.,

About Our Business Of Our Future Florida Power &Light Company (FPL) has been engaged in the electric utility business since Dec. 28, 1925, the date of its incorporation under laws ofthe State of Florida. The formation brought under one banner an unlikely grouping of small businesses electric generating plants, ice houses, street car systems, a steam laundry and even an ice cream factory.

A crazy-quilt realm of 58 assorted enterprises, the new firmbegan delivering electricity that first year to some 86,500 scattered customers. At the time, total generating capacity was 156 Megawatts (Mw), and average price for residential service was 8.01 cents per KilowattHour (KwH).

From that modest beginning, FPL has emerged as one of Ainerica's foremost investor-owned electric utilities.

Today, the Company supplies service to more than 2.1 millioncustomers who live and work in FPL's 27,650-square-mile service area. Total capability ofthe 10 operating plants and two plants on reserve is 11,328 Mw. The average price per KWHfor residential service in 1979 was 4.66 cents, indicative ofmany economies introduced over the years.

It is this demonstrable effort to provide the public with the best possible service at the lowest feasible cost that keeps FPL ahvays on the lookout for better and more efficient ways to produce electricity in the decades ahead.

Ifthis briefhistory shows anything at all, it is that the 1980s, once they arrive, are apt to be as different from the '70s as the Depression-ridden '30s were from the Roaring '20s. Maybe better, maybe worse, but certainly not without challenge and opportunity.

There is a saying in the electric utility industry: "Today's power is yesterday' foresight."

With lead times for the planning and construction ofnew generating facilities running up to 12 years, with regulation and inflation making new capacity almost prohibitively expensive and with fuel sources a matter ofgrowing worldwide concern, that statement never has been more axiomatic than it is right now.

Amidthat backdrop ofunpleasant current events, FPL is pressing foward in its public responsibility ofanticipating and meeting tomorrow's energy needs.

To this visionary task, FPL pledges its continuing investment ofthe time, the talents and the energies ofthe Company's employees, officers and directors. For more about these concerted efforts, please turn to page 4.

In Our Report 2 Chairman's Letter 4 Preview: FPL Enters the Eighties 8 Review: The Year 1979 17 Five-Year Summary of Operations 18 Discussion of Operating Results 19 Opinion ofAccountants 19 Financial Section Contents 36 Information for Investors Corporate Leadership inside back cover Concerning Our Photography Throughout this report, the Corporate character of FPL is embodied in the theme, "Generating Faith in the Future." To illustrate the magnitude ofthe building done in the past by those who created our present, photos ofeach plant in the Company's generating system are presented on pages 8-15.

Then, to augment that pictorial series, another set ofphotos on pages 5 and 7 shows some ofthe groundwork being laid at FPL today by those who are planning and building our future.

On Our Cover A splendid new day dawns over Fort Mycrs Power Plant on the Caloosahatchec River in Florida's prospering southwest region.

Here's Our Address Florida Power &Light Company 9250 tv. Flagler St.

P.O. Box 529100 Miami, Fla. 33152 Telephone: 305/552-3552 Network of FPL Generating Plants

~ Division Offices

~ Generating Plants Northeastern Division

~ Putna

~ Palalka Sanford I

a Manatee Western Division Sarasota Fort Myors Daytona Beach apo Canaveral 0

Southern Dlvfsion

~ Port r

Eve rgfados Cutler rkoy Point Pastern St.i.ucio DivisIon n

Martin qiviora 0

West Palm Beach

'outheastern s audordalo For Lauderdale Division

Financial Highlights (Thousands Except Per Share Data)

Operating Revenues Fuel Expenses Total Operating Expenses..............

Operating Income Net Income Common Shares Outstanding Average..

Earnings Per Share.........

Dividends Paid Per Share..............

Total UtilityPlant Capital Expenditures External Funds Book Value Per Share Market Price Per Share (High)..........

Market Price Per Share (Low)..........

Statistical Highlights Cost of Oil Burned (Per Barrel).........

Customers Year End.

KwHSales (Thousands)...............

KwH Use Per Customer Residential...

Revenue per KwHResidential (Cents)

Employees Year End.

Mw Capability at Time ofSummer Peak..

Mw Peak LoadSummer.............

Mw Peak LoadWinter..............

Percentage OilGeneration.............

Percentage Nuclear Generation.........

Percentage Natural Gas Generation.....

1979

$1,933,937

$812,898

$1,632,133

$301,804

$204)668 40,524

$4.22

$2.32

$5,458,513

$574,825

$249,220

$34.31 28 7/8 24 1/8

$17.47 2,140,587 41,965,810 11,354 4.GG 10,337 10,957 8,G50 8,791 55.2 26.0 18.8 1978

$1,647,226

$551,376

$1,328,529

$318,697

$211,241 40,120

$4.54

$2.00

$4,983,794

$472,830

$151,866

$32.49 29 3/8 23 5/8

$12.33 2,032,298 40,602,076 11,790 4.10 9,750 10,886 8,345 8,617 50.8 29.9 19.3 Percentage Change 17 47 23 (5)

(3) 1 (7) 16 10 22 64 6

42 5

3 (4) 14 6

1 4

2 1979 The FPL Dollar / Where It Comes From 1978 Reeideedel 664 51ir Residential Commercial35'5ir Commercial IeduelIIel 64 Other 9e h

6ir Industrial 8ir Other The FPL Dollar / Where It Goes Fuel 411!

Taxes 15it Payroll and Benefits 11S Depreciation 8'nterest 7'ividends6ir Retained Earnings 4rr Other art tge Taxes 12ir Payroll and Benefits gs Depreciation art Interest 6e Dividends 6e Retained Earnings 7e Other 1/FPL

My Fellow Investors Looking back on 1979, we can see ample evidence that FPL continued to operate soundly and the Florida economy remained healthy. That's the good news.

However, there is bad news too. The present fuel adjustment clause prevents our Company from recovering millions of dollars offuel price increases. This is largely due to the lag in application ofthe fuel adjustment. In theory, recovery would come with a corresponding decline in fuel costs to pre-1979 levels. But I haven't heard one rational observer predict such a decline.

You willfind details ofour stewardship over your investment in the following pages ofthis 1979 Annual Report. But as you read, remember that your Company's operations and results are often more greatly influenced by political opportunists and bureaucratic diAtat than by management analysis and decision. In your own enlightened self-interest you should participate actively with us in the political process.

Nowhere is this need for cooperative and coordinated activity greater than in the political processes that affect fuel decisions. Last year we reported fuel costs that represented about one-third of the outgoing FPL dollar. Today that figure is over 40 percent.

In the past, FPL's fuel planning was generally dictated by geography and our desire to ho!d down the rates paid by customers.

Geography precluded coal.

And since imported oil used to be a bargain, itwas economical for us to build for imported oil as our primary fuel.

Economics and foresight also led to our diversified fuel mix. Currently we use 55 percent oil, 26 percent nuclear and 19 percent natural gas. This has consistently produced for our residential customers electric rates that run at or below the national average. Compared with other Florida utilities, our rates have consistently ranked among the lowest one-third.

Now, however, circumstances threaten the adequate, reliable and economical electric service we'e long delivered to our customers. These circumstances are largely political, statutory and regulatory. And they seem to penalize us for the very same policies we adopted to benefit our customers.

For example, we could have had national legislation to encourage exploration for and production of domestic oil. Instead, we have legislation the so-called "windfallprofits tax" that willactually strengthen OPEC.

We could have had legislation and regulation designed to expedite the approval and construction ofnuclear plants. Instead, we have legislation that encourages frivolous intervenor delays by offering to pay the intervenors'xpenses out oftaxpayer money. And we have Administration spokesmen w~

damn the nuclear option with faintprai~

No wonder construction ofadditional nuclear plants is considered an unacceptable financial risk by almost all American utilities today.

This brings us to coal. And we are told U.S. coal resources may equal a 400-year supply. We at FPL have planned that plants we start in the 1980s willbe coal-fired. But there are several major concerns about heavy reliance on coal.

~ First, the Administration is a house divided. While DOE pushes forward on coal, EPA and OSHA hold back.

Excessively restricting safety and environmental regulations hobble the increased use ofcoal.

~ Between coal in the ground and coal in the hopper car comes the miner.

And a union tom by charges of past FFL Chairman Marshall McDonald taking firsthand look at fhmpa Electric Company's Big Bend coal plant.

Special credit is extended to Tampa Electric Co.

for its cooperation.

2/FPL

ption and present weakness.

ildcat" strikes have been commonplace. And in dealing with labor, the Washington Administration has shown little sign ofspine.

~ Ifthe coal does get mined, it must be transported on railroad facilities and equipment that are already creaking and groaning. Can railroads raise capital needed for construction and improvement? Can they do itin time?

~ Coal can be burned only under environmental restrictions so excessive that they cause staggering increases in capital and operating costs. These increases fuel inflation and swell bills paid by ultimate customers.

~ These same excessive requirements raise physical and chemical obstacles, too. As a result, new coal plants are often available for service less than 60 percent ofthe time

~ There is opposition to coal-fired plants that is just as well organized and unreasoning as the opposition to nuclear plants. Itusually involves the very same people. Their obvious 1 isn't really a "dean-energy" ion; their goal is a "no-energy" ation, to match their no-growth, back-to-the-1800s philosophy.

~ The Interstate Commerce Commission indicates that railroad tariffs should make the delivered cost ofcoal equal the delivered cost ofoil at the same destination. Add the cost ofover-regulation and coal won't give utilitycustomers any bargains.

The very nature ofthe utilitybusiness and today's fuel crises underscore the importance ofcareful planning. But the government, which should be facilitating the process, keeps getting in the way of sound planning and productive action.

One recent Administration proposal would have forced utilities like FPL to reduce our oiluse 50 percent by 1990.

Otherwise we would have faced a harsh choice: generate less electricity than our customers need, or use more oil than the limit. The firstcourse would leave many customers out of work and in the dark.

The second would incur hundreds of millions of dollars in penalties, an added cost that would burden customers with much higher bills.

We must plan with the possibility ever before us that such proposals can become law. How, for example, could we meet this 1990 deadline? Must we just write offsomething like $1.5 billionof undepreciated investment in oil-fired plants? Must we rush to build new coal units at an estimated cost of$10 billion?

When we consider Florida's growth, the linkbetween electricity and living standards, and the capital and resource requirements for such a program, itis only honest to say, "Wejust can't get there from here."

Still, we must do what we can. We'e rising to the challenge in several innovative ways. One way is by testing a technology to modify our oil-burning units to burn a mixture offinely powdered coal suspended in oil. We'e pioneering with coal-oil proportions well beyond those tried before. We'l invest more than $14 millionon this test, but it could save our customers as much as $87 millionper year. And our dependence on imported oil could be reduced by 16 miHion barrels a year.

One way the customer can help is energy conservation. Our campaigns directed at builders and customers are showing measurable effects. We hope to achieve a sufficient reduction by 1990 to equal the production of two generating plants. By not having to build those plants, the company's capital burdens will be eased... and so willour customers'uture bills.

However, we must not delude ourselves into thinking our countryor our state can conserve its way out of the energy crisis. Population grows.

Demand grows. Declining oil supplies willactually increase demand for electricity. Voluntary conservation can only moderate the increasing need.

Mandatory conservation might do somewhat better. But the price would be an intolerable erosion of personal liberty, and a cruel drop in the quality oflife.

Allthis clearly indicates that our nation'till does not have what it really needs-a policy that focuses on energy production. A policy that coordinates regulatory actions, and measures them by cost/benefit standards. A policy that replaces exotic energy fantasies with the here-and-now realities ofcoal and nuclear energy. A policy that allows Americans to make their own free choices in a market environment, where energy prices truly reflect energy costs.

How can we get such a positive policy?

The answer lies in one fortunate fact:

this is a national election year.

This gives you, as an individual, an opportunity to move our government toward a sane energy policy.

You can demand ofincumbent officeholders that"oppressive and costly restrictions which hobble energy production be removed.

You can ask each candidate for office how he stands on energy matters. Press for specifics. Don't swallow the usual campaign generalities. Listen forkey words and phrases that simply camouflage new taxes, new regulations,

~ new subsidies and new bureaucracies to administer them.

Then, vote your convictions. Ifenergy is not important enough to your personal life, to your economic well-being, for you to express concern about itto candidates for office, you can only expect more of the muddle-headed fumbling thus far displayed by our political establishment.

Marshall McDonald Chairman of the Board February 8, 1980 e

FPL/3

Charting a Course into the Eighties had done years earlier along a succession of westward-moving frontiers, they succeeded in turning those Great American dreams ofa better tomorrow into a self-fulfillingprophecy.

Sure, there were to be problems along the way. There ahvays are. And solutions would be neither easy nor painless. They never are.

Yet, through it all, the fruitofthose labors still endures today, as does the FPL goalunchanged after 54 years-of finding improved ways to produce electricity for a growing population.

Only the times somehow have changed.

Many Challenges Remain While we still face challenges plenty ofthem, in factwe as a people seem to have lost sight of how "pioneering spirit" once coped with adversity.

Essentially, the farsighted vision America had of its future at one time has been reduced to tunnel vision, a view narrow enough to reveal just that which is politicallyfashionable and expedient for the short term.

For example, it has become politically chic for businesses, FPL among them, to be attacked for being "too profitable."

What's overlooked is that profit remains after all expenses are paid. Itnot only is the return to those who invest money in the Company, but also provides the means for modernizing and expanding facilities, investing in new technology and equipment and, ultimately, providing more jobs and ensuring greater future productivity.

Buildingfor the future is a ticklish business.

It ahvays has been and probably ahvays willbe.

Because it takes foresight and fortitudetwo decidedly uncommon virtues, rarely found in combination plus lots of planning, a little luck and, usually, a substantial bit ofteamwork.

Together, these are what have made America click.

Certainly, it took just such a mixture to get FPL humming back in 1925 when the new Company unified a collection of properties described by one observer as "held together with wire and rust."

The venture entailed obvious risk.

Uncertainty, then as now, was imposing; know-how, lacking; lights, flickering; and the work itself, as mind-boggling as it was back-breaking.

Still, the outlook was considered downright promising. An air ofoptimism overshadowed everything else.

Manifest Destiny Afterall, wasn't the purpose of the new Company to provide reliable power and light service to an area so geographically blessed that its destiny was manifest?

Itwas precisely the kind ofchallenge which would lead America to become the most productive nation on earth and Americans to enjoy the highest standard oflivinganywhere in the world.

Driven by hopes for brighter days ahead, the early-day FPL pioneers persisted in dreaming their impossible dreams. And, just as waves of settlers Customers Average (MiBions) 2.65 2.40 2.17 2.07 i.80'88 1.74

'969

'75

'76

'77

'78 79

'80

'83

'86

'89 4/FPL iVIoreover, the wise use ofbusiness profits benefits everyone in American societystockholders, employees, consumers, producers and, yes, even government by providing income for pension and insurance funds and tax revenue for-our Federal Government.

For all the criticism of profit nowadays, the country needs more, not less, because more profit means more employment and more productivity which, in turn, means less inflation.

As all ofus know only too well, there' an enormous inflation problem in our land. President Carter acknowledged that in his 1979 economic message to

Congress, saying, "The corrosive effects ofinflatioeat away at the ties that bind us together as a people."

That notwithstanding, itremains in high political style for the American citizenry, stung by progressively bigger bites ofinflation, to demand greater governmental "safeguards" and for government to respond by passing regulations to "protect" general welfare.

The regulatory decrees which invariably follow, inevitably take money which otherwise could be spent on new plants, on new research and, in the long run, on the creation ofnew jobs.

Or, on building for the future....

Costly Tradeoff This tradeoff has not been beneficial.

Owing largely to such exercises in political expediency, a major portion of what we as a nation save and invest in the future has been lost. And with it, many ofour ambitions and aspirations.

KwHSales (Biliions)

49. 27 50 43.71 40.60

37. 53 34'3 40 1969 75

'76

'77

'78

'79

'80

'83

'86

'89

Management's Discussion and Analysis of Operating Results President John J. Hudiburg Despite substantial underrecovery of fuel costs in 1979, earnings per share were $4.22, as compared to $4.54 for 1978. Growth in KwHsales and the rate relief granted in 1977 were primarily responsible for the improved earnings in 1978. The followingdiscussion focuses on factors that have significantly affected the Company's results ofoperations for 1979 and 1978 when compared to the preceding year.

KwHsales Fuel adjustment and rate changes Other Total 13.9 4.2 0.1 0.1 17.4%

12.5%

KwHsales increased primarily as a result ofgrowth in the number of customers of5.4% in 1979 and 4.9% in 1978. KwHusage per customer declined 2.1% in 1979, reflecting conservation efforts ofcustomers, followinga 3. 3%

increase in per customer usage in 1978.

Residential customers used 3. 7% less energy in 1979.

Fuel adjustment revenues in 1979 were $260.9 million, up $224.1 million, or over 600% ofthe 1978 total of$36.8 million. These increases accounted for 18/FPL Operating Revenues Increases in operating revenues are due to the followingfactors:

% Increase in Operating Revenues 1979 1978 3.4%

8.2%

13.5% ofthe increase in 1979 operating revenues and reflect the rapid escalation in fuel costs in 1979.

Average revenue per KwH, including fuel adjustment revenue, for total customers rose to 4.57 cents in 1979.

This compares to 4.02 cents in 1978, the first fullyear the present rates were in effect, and to 3.87 cents in 1977.

Operating Expenses Total operating expenses increased by

$304 million, or 23%, in 1979 and by

$163 million, or 14%, in 1978. The increases were primarily in fuel, other production including net interchange, maintenance, depreciation and other tax expenses.

Fuel Expense The greater use ofmore expensive oil-fired generation to meet the growing system demand and to replace generation during the refueling outages ofthe Company's three nuclear units resulted in a 47.4% increase in fuel expense in 1979 followingan 11%

increase in 1978.

The oil portion of fuel expense increased by $241.6 million, or 53.8%, in 1979. A 3.1 millionbarrel (8.5%)

increase in consumption accounted for

$38.4 millionofthis increase, while

$203.2 million was due to a 41.6%

increase in the average price of oil burned. In 1978 the oil portion of fuel expense was $39 millionhigher than in 1977. The amount ofoil consumed was up 4.7 millionbarrels (15%), but was partially offset by a temporary drop in the price ofoil burned.

Higher unit prices for natural gas added $13.3 millionand $ 12 million, respectively, to fuel expense in 1979 and 1978. A new interruptible natural gas supply contract was entered into in April 1979 at rates substantially higher than those under an expired contract, but less than equivalent oil prices.

The monthly fuel adjustment charge is based on the cost offuel used for generation in the second previous month. This mismatch led to an underrecovery of fuel costs of $47.5 million($0.60 per share) in 1979, as compared to $3. 9 millionin 1978.

Other Operation and 111aintenance Expenses These expenses increased due to higher payroll and related employee benefits costs, increases in the number of customers and the amount ofelectricity generated, and the maintenance of new property additions. The increase in maintenance expense in 1978 reflects the first annual refueling, overhaul and inspection ofSt. Lucie Unit No. l. An extended outage to repair the turbine rotor at Turkey Point Unit No. 3 and additional expenditures for safety reviews, investigations and regulations resulting from the Three Mile Island incident are reflected in 1979 expenses.

Net interchange power purchases wer'e

$4.2 millionin 1979, while in 1978 interchange deliveries, which are recorded as a reduction ofother production expenses, were $18.6 million.

Depreciation Increases in depreciation expense reflect new properties placed in service.

Depreciation expense in 1979 and 1978 includes $4. 6 millionand $5.8 million, respectively, ofamortization ofthe cancelled South Dade project costs described in Note 6Construction Program.

Ihxes Fluctuations in total income taxes are generally related to changes in income excluding income taxes and the allowance for other funds used during construction. Income tax provisions were also affected by the reduction in the federal corporate income tax rate from 48% to 46% effective in 1979. Taxes other than income taxes have increased primarily as a result of increased revenues and additions to property.

Allowance for Funds Used During Construction (AFUDC)

Total AFUDC increased in 1979 and 1978 as a result of higher amounts of construction work in progress (CWIP).

AtDecember 31, 1979 the investment in St. Lucie Unit No. 2 and Martin Units Nos.1 and 2 included in CWIP aggregated

$932 million, up $256 millionover a year ago. In addition, beginning in 1978 AFUDC was capitalized on nuclear fuel.

Interest Charges and Preferred Dividend Requirements Sales oflong-term debt and preferred stock in 1979 and 1978, to finance a portion ofthe Company's construction program, resulted in higher interest expense and preferred dividend requirements, portions of which were capitalized through AFUDC. Interest charges in 1977, 1978 and 1979 were affected by a change in the method of recording AFUDC.

Florida Power & Light Company and Subsidiaries Consolidated Summary of Operations, The Past Five Years (Thousands of Dollars Except Per Share Data) 1979 1978 1977 1976 1975 OPERATING REVENUES OPERATING EXPENSES:

Fuel.

Other Operation.

Maintenance Depreciation Income Taxes Taxes Other Than Income Taxes..............

Total Operating Expenses.................

OPERATING INCOME OTHER INCOME (DEDUCTIONS):

Allowance for Funds Used During Construction..

Allowance for Other Funds Used During Construction Income Taxes OtherNet Other IncomeNet....

INCOME BEFORE INTEREST CHARGES......

INTEREST CHARGES:

Interest Expense Allowance for Borrowed Funds Used During Construction Interest Charges Net.

ET INCOME.

REFERRED DIVIDENDREQUIREMENTS....

ET INCOMEAPPLICABLETO COMMON STOCK Average Number ofCommon Shares Outstanding (in Thousands)

Earnings Per Share of Common Stock...........

Common Stock Data Shares Outstanding, Year EndThousands....

Dividends Paid Per Share Dividend Rate Year End.

Dividend Payout Percentage Price/Earnings RatioYear End.............

Book Value Per Share Year End.............

Operating and Financial Statistics KwHSales Thousands Customers Year End Revenue per KwHResidential.............

KwHper Customer Residential............

Net Warm Weather Capability, Kw-Year End Peak Load, Summer, Kw60-minute Peak Load, Winter, Kw60-minute..........

Reserve Capability Percentage-at Time ofSummer Peak Nuclear Generation, KwHThousands.......

Total UtilityPlantThousands..............

Capital Expenditures (including nuclear fuel and AFUDC)Thousands.

t External Funds Thousands................

Employees Year End

$1,933 987

$1.647.226

$1,464,584

$1.189,680

$1,182,644 812,898 263,732 99,490 150,195 156,044 149,774 551,376 216,653 85,865 144,267 198,163 132,205 497,015 187,011 67,579 125,166 171,098 117,807 482,347 178,127 67,062 88,591 85,368 96,972 461,335 160,151 59,646 82,322 114,822 87,558 1 682 138 1.328,529 1,165,676 301 804 318,697 298,908 998,467 191,213 65,497 965,834 216,810 48,486 30,006 (34) 1 209 31,181 382 085 157,158 (28,841) 128 817 204,668 33 711 20,319 827 3,382 24,528 343,225 146,096 (14,112) 131,984 211,241 29,138 16,009 (1,558)

(1,731) 12,720 311,628 144,083 (12,893) 131,190 180,438 27,653 (298) 1,005 66.204 257,417 140,572 140,572 116,845 22,378 5,350 (850) 52,986 269,796 124,575 124,575 145,221 20,066 170,957 182,103 152,785 94,467-125,155 40,524

$4.22 40,819

$2.32

$2.40 55.0 5.9

$34.31 40, 120

$4.54 40,315

$2.00

$2.08 44.1 5.8

$32.49 40,050

$3.81 40,050

$1.66

$1.76 43.6 7.1

$29.97 39,542

$2.39 40,050

$1.56

$1.56 65.3 11.6

$27.81 35,940

$3.48 37,050

$1.435

$1.46 41.2 7.7

$27.21 10,957,000 8,650,000 8,791,000 26.7 11,615,095

$5,458,513

$574,825

$249,220 10,337 10,941,000 8,345,000 8,617,000 30.4 13,273,383

$4,983,794

$472,830

$151,866 9,750 10,644,000 7,841,000 8,606,000 23.0 13,452,276

$4,525,916

$375,360

$33,240 9,415 9,740,000 7,598,000 7,287,000 13.8 8,647,474

$4,181,839

$469,750

$272,540 9,865 8,927,000 7,076,000 5,807,000 27.4 8,369,810

$3,724,270

$497,233

$418,925 9,911 41,965,810 40,602,076 37,529,397 34,929,541 34,110,898 2,140,587 2,032,298 1,927,668 1,840,043 1,772,304 4.66>

4. 10<

3.96'.50/

3.53>

11,354 11,790 11,370 10,968 11,127 FPL/17

service with only brieflimitations placed on output due to the steam generators.

To date, 19.4 percentof the tubes in Unit No. 3 and 20.6 percent of the tubes in Unit No. 4 have been plugged. The Company has been authorized to plug up to 25 percent ofthe tubes in each unit.

The Company has established a planning date oflate 1980 to begin making permanent repairs to Unit No. 4, although no firmdecision has been made.

Replacement parts for one unit are already on site. Parts for the other unit are scheduled for delivery in the first quarter of 1980. The work willtake an estimated 6-9 months and cost $61 millionper unit. Amendments to the operating licenses willbe required.

In 1979, the Nuclear Regulatory Commission (NRC) allowed a petition for intervention by one individual in the matter ofsteam generator repairs.

Hearings willbe held but have not been scheduled yet.

A suit for damages was filed in 1978 against Westinghouse, the supplier of the steam generators.

As a result ofthe accident at Three Mile Island Plant in Pennsylvania and consequent NRC safety reviews, investigations and regulations, FPL is making certain modifications to its nuclear units, increasing personnel and intensifying personnel training.

In Retrospect...

It was a trying year...

...and a year of trying...

...a year of tackling problems head on...

...a year oftrying to increase efficiency by working...

...by working smarter, using time more wisely and improving ways of doing things...

...so that brighter days may lie ahead in the decade before us.

That's important. Because, historically, big challenges have resulted in big progress.

Overcoming our present problems will do no less.

The afternoon sun sinks behind Manatee Plant (L628 Mw), 17 miles northeast of Bradenton.

The plant has two fossil units (1976, 1977),

and the man.made reservoir in the foreground covers 4,400 acres at an average depth of 12 feet.

16/FPL

ere 100 percent thereafter. The balance ofresidual oilrequirements was obtained on the open market.

In order to burn the higher sulfur oil in, some plants, it was necessary to obtain authorization from regulatory authorities to exceed emission standards.

In August, the Florida Environmental Regulatory Commission approved a petition by the Florida Electric Power Coordinating Group, ofwhich the Company is a member, to permanently relax the State's opacity standards. FPL also was granted a variance from existing opacity, particulate and sulfur dioxide emission standards.

In both cases, public health standards were unaffected.

Both the change in opacity standards and the variance must be approved by the Environmental Protection Agency (EPA). Unless or until EPA approval is obtained, the Company may be unable to use higher sulfur oil and comply with emission standards at certain units at certain times, and unless the Company is able to obtain adequate supplies oflow iifuroil, it willhave to remove these its from service for indefinite periods time or be subjected to substantial civil and criminal penalties.

New oil burners which, because of their greater efficiency, reduce opacity and particulate emissions are already in place on seven units at four plants.

In the year ahead, more high-efficiency burners are scheduled for installation at 1brkey Point, Port Everglades, and Riviera plants.

FPL's contract with Belcher Oil Co. for 7

distillate fuel oil for the gas turbine units expired in February 1980. A substantial portion of distillate requirements wil!be supplied under provisions ofthe residual oil contract with Exxon.

Remaining oil requirements willbe acquired through competitive open-market purchases or new contracts.

Natural Gas Deliveries Gas, a sulfur-free and clean-burning fuel, is playing an important role in Company efforts to reduce oil consumption and to increase reliance on domestic resources.

The primary source for natural gas is a contract with Amoco Production Co. that is providing 200 millioncubic feet (MMCF)per day of firmgas delivery.

Ofparticular significance to FPL in 1979 was a 10-year interruptible gas supply contract signed with Florida Gas Transmission Co. followingexpiration ofthe Company's firmcontract with Sun Oil Co.

Under the new pact, deliveries averaging 51 MMCFper day were made in the last half of 1979 on an interruptible basis.

The Company in December 1979 began receiving natural gas under an interruptible contract with Consumers Power Co. Under the contract, deliveries are subject to gas and pipeline availability and continuance of Federal permits.

The Company has obtained exemptions under the Fuel Use Act which allow the burning ofnatural gas in gas turbine units; however, exemptions sought for fossil units are pending.

Jl'fl~Qil

. ':, hei +,lynil:

Nuclear Fueled Power In 1979, a portion ofa lawsuit was settled with Westinghouse Electric Corp. in connection with the fuel supply and escalation portions of a contract for both Turkey Point nuclear units. Under the settlement, Westinghouse paid FPL

$26 millionin cash and agreed to provide goods and services on favorable terms through 1994. The compensation ultimately willbe passed on to customers in the form oflower costs.

FPL's dispute with Westinghouse over spent fuel removal from 1brkey Point has been tried and a decision ofthe court is pending.

The first and second nuclear fuel cores (approximately a 5-year fuel supply through the 1981 reload) for St. Lucie Unit No. 1 are under contract with Combustion Engineering Inc. The Company is negotiating with Combustion Engineering for a nuclear fuel contract for St. Lucie UnitNo. 2.

Additionally, there are uranium contracts with three other suppliers International Minerals and Chemical Corp. (which willprovide uranium extracted from phosphates),

United States Steel Corp. and Caithness Corp.

The Company also has a lease arrangement for a portion ofthe nuclear fuel for St. Lucie Unit No. l.

Atyear end, the Company's inventory ofuranium was approximately 800,000 poullds.

The 1brkey Point steam generators have been experiencing problems. A program ofpreventative plugging ofthe steam generators has kept the units in Opposite Page: Being maintained on cold standby status is Cutler Plant (264 Mw)which, when built, had only trees for neighbors. Now located in the heart of suburbia about 15 miles south ofdowntown Miami, the plant's three fossil units (1952, 1954, 1955) have been painted shades of blue and green to blend esthetically with natural surroundings.

This Page: Union gunboats once plied the St. John' River in the vicinityof Palatka Plant (107 Mw) where FPL also is holding two fossil units (1951 ~

1956) on reserve. Itis directly across the highway from Putnam Plant.

FPL/15

10 operational plants stood at 10,957 Mw.

Another 371 Mwwas available at two plants on cold standby status. Should circumstances warrant and necessary permits be obtained, they could be activated in 6-12 months.

System capability is expected to rise to 11,732 Mwby year-end 1980 with completion of Martin Unit No. 1.

Construction Construction aimed at providing additional generation to meet anticipated demand in the early 1980s is proceeding at Martin Plant and on the Company's fourth nuclear unit, St. Lucie No. 2.

The Martin project consists oftwo oil-burning units of 775 Mweach with planned in-service dates oflate-1980 and mid-1981.

A rupture in the bank, ofthe 6,700-acre reservoir at the site in October resulted in loss ofthe cooling water. Cause ofthe break is not definitely known. Resulting design modifications, repair ofthe dike and refillingthe lake have delayed by several months the planned in-service date ofthe first unit.

Cost ofboth Martin units is estimated to be $645 million, including necessary design modifications to the reservoir.

AtSt. Lucie, estimated cost ofthe 802 Mwnuclear unit scheduled for 1983 has been revised upward from $925 million to $1.1 billion. The new cost figure reflects escalation and "scope" changes.

There are continuing negotiations with various municipal utilities and cooperatives over the sale of a portion of the unit. An approximate 13 percent interest in the unit is the minimum expected to be sold.

The Nuclear Regulatory Commission has held hearings on grid stability and indicated it willconduct hearings on antitrust:issues related to the unit.

Parti'j'ys'a result ofrevised growth projecfiohs, the Company has amended its construction plans, deferring for two years scheduled completion dates for twin 700 Mwcoal units planned for the Martin Plant site. They now are scheduled for 1987 and 1989.

Another factor in the deferral was a contract signed with Tampa Electric Co.

to purchase output from a coal unit now under construction at Tampa's Big Bend Plant. The agreement covers purchase of292 Mw, 208 Mwand 104 Mw in 1985, 1986 and 1987, respectively.

Also, discussions are proceeding with the Jacksonville Electric Authority concerning jointownership oftwo coal units in northeast Florida with a possible in-service date in the late 1980s.

Thus, plans are to introduce coal into the FPL generation mix in three ways-via purchase, partnership and sole ownership. Perhaps four ways....

The Company also is experimenting with a mixture ofoil and coal (see Chairman's Letter, pages 2-3). Ifthe testing at Sanford Plant goes well, the mixture, consisting of perhaps as much as 50 percent pulverized coal, might be suitable for use in other units. That would enable the Company to substitute coal for expensive imported oil.

In another area, FPL has begun preliminary discussions with Georgia Power Co. regarding possible purchase ofup to a 200 Mwinterest in each oftwo nuclear units that firm has under construction at the Vogtle Plant near EVaynesboro, Ga. The units are scheduled to be in commercial operation by 1984 and 1987.

Construction Budget The Company estimates expenditures under its 1980-82 construction program willapproximate $2 billion, excluding amounts related to the discussions with Georgia Power Co. which stillare in an early stage. Capital expenditures are budgeted for $620 millionin 1980.

In 1979, $575 millionwas invested in new facilities.

As with all forecasts, the construction budget is subject to continuing scrutiny and adjustment.

Financing Throughout the course of 1979, $188.5 millionwas raised through the issuance ofnew securities. Involved were 30-year first mortgage bonds with 12'/s percent interest rate ($75 million), a privately placed issue of8.70 percent preferred stock ($50 million), a 3-year term loan from three major New York banks ($50 million)and issuance ofcommon stock in connection with employee benefit plans

($13. 5 million).

In addition, approximately $61 million was received from sale ofnuclear fuel to the St. Lucie Fuel Co. to implement a lease arrangement providing nuclear fuel for St. Lucie Unit No. l.

In the period 1975-79, 62 percent of funds needed for construction were derived from operations.

External financing needs willincrease sharply in 1980. FPL estimates such needs to be $450 million, including the repayment of$32 millionofshort-term debt outstanding at year end 1979 and the retirement ofa $50 million8i/s percent bond issue maturing in August 1980.

A portion of 1980 financing will involve the planned sale of$125 millionof first mortgage bonds in early March.

The Company also intends to raise equity capital by issuing common stock in connection with employee benefit plans.

Oil Supplies The Company has a contract with Exxon Co. U.S.A. that is intended to provide a substantial portion ofresidual oil requirements through 1981. The contract continues year-to-year thereafter, until cancelled by either party. Ifeither party elects to cancel by giving notice in 1980 or in any later year, the contract would continue at fullquantity through the subsequent calendar year and then be phased out over a 3-year period at reduced quantities.

As a result ofthe worldwide oil situation, Exxon in March 1979 began allocating deliveries oflow sulfur residual oil. From Aprilthrough July, Exxon also allocated total deliveries.

During the year, allocations oflow sulfur oil ranged from 53-65 percent of contract quantity. Total deliveries, including higher sulfur oil delivered in lieu oflow sulfur oil, ranged between 93 and 95 percent from Aprilthrough July and 14/FPL

Above: Cape Canaveral Plant (729 Mw), situated across the Indian River from the Kennedy Space Center where America raced to the stars, has a pair of fossil units (1965, 1969). Below: Stacks of Port Everglades Plant (1,58L5 Mw)dwarf a commercial jetliner taking offfrom nearby Fort Lauderdale-Ilollywood International Airport. The plant ~ named after its homesite at Florida's largest deepwater port, has four fossil units (1960, 1961 ~

1964, 1965) and 12 gas turbines (1971). Opposite Page: Four miles inland from Port Everglades is Lauderdale Plant (1, 126 Iiiw)where two fossil units (1957, 1958) and 24 gas turbines (1970, 1972) are in operation. The enclosed portion ofthe plant dates back to 1926.

FPL/13

identified as being "not directly affected by customer growth or mandated by a legal requirement."

Management Several key management changes were made in the past year.

In January 1979, directors named Marshall McDonald as Chairman ofthe Board and Chief Executive Officer. At the same time, John J. Hudiburg, an FPL veteran of 28 years, was elected President, Chief Operating Officer and member ofthe Board.

With the election of Hudiburg and Gene A. Whiddon, Fort Lauderdale business executive, Board membership grew to lldirectors, all but one of whom live in the FPL service area.

In May, Vice President R.E. Talion was elected Group Vice President.

In June, Executive Vice President F.E. "Gene" Autrey left FPL after accepting the position of President of Middle South Utilities Inc., a major electric utilityholding company based in New Orleans.

Also in June, McDonald began a year-long term as Vice Chairman of Edison Electric Institute (EEI), the association ofAmerica's investor-owned electric utilities whose officers act as industry spokesmen on subjects of national importance.

In October, B.L. Dady was named Vice President of Management Control and Services and Assistant Secretary.

Promoted to Vice President-Treasurer in December was J.L. Howard, who also was named the Company's Chief Financial Officer.

At the Board of Directors meeting in January 1980, L.C. Hauck was elected Vice President, Legal Affairs.

Service Area Economy One constant in the changing economic scene is Florida's appeal as a place to call home. Another is its desirability as a tourist destination.

In 1979, people continued to move into, and to tour, the State in significant numbers.

Tourism, long a staple in the Florida economy, registered a gain of 4 percent.

State tourism officials placed the number ofarrivals at 35. 5 million.

The oil situation had an impact on tourism, especially arrivals by car, but there was an increase in the number of tourists arriving by air.

Per-capita spending rose, as well, and the South Florida area, particularly,

~ benefited from a heavy influxof Latin American visitors.

Southeast Florida continues to gain stature as an international trade center.

Miaminow has a Free Trade Zone in operation which is expected to generate substantial overseas business.

For new residents, there were more job opportunities. Light manufacturing and agriculture two other major segments ofthe state economy continued to make strong contributions.

Population ofthe state increased to 9.25 million, a gain of3.1 percent over'1978.

Meanwhile, estimated population of FPL's service territory climbed to 4.8 million, a hike of4.5 percent over 1978.

Accompanying the increase in new residents was stepped-up demand for housing. Florida housing starts were running 21 percent ahead oflast year.

Florida currently appears to be in much better position to weather bad times than it was when substantial speculation and overbuilding led to the Florida recession of 1974-75. That situation does not exist today, because the hobsing construction industry has been much more cautious and construction appears to be in line with the healthy demand.

Thus, itappears any slowdown Florida might experience willbe prompted by national events, not by problems within the Florida construction industry.

Peak Demand Because ofheavy air-conditioning requirements, FPL continues to build for summer peak projections.

Last summer, peak demand of8,650 Mw was reached July 19. It was 3.7 percent greater than the 1978 summer peak of8,345 iVIw.

, A record peak, a wintertime demand of9,217 Mw, was established on Feb. 4, 1980.

Load Forecast In its forecasting, FPL projects growth rates in high, low and most probable ranges.

In November 1979, these figures were revised downward slightly.

In terms ofthe "most probable,"

summer peak load through 1990 is expected to grow at a compound annual rate of3.8 percent, compared to previous estimates of4.1 percent.

The reduction indicates the Company's various energy conservation programs are contributing to increased saturation ofenergy-efficient homes and appliances.

Growth projections for customers and KwHsales remain about the same as before 3.2 percent for customers and 3.6 percent for sales.

Energy Conservation A major aspect ofthe Company's program to lessen oil dependence is the promotion ofconservation. Simply put, what the Company does not have to generate avoids the use of fuel oil.

Activities initiated by FPL in load management and energy conservation include promotion of Watt-Wise Living

homes, new efficient "energy code" homes, homes "retrofitted" through an FPL energy audit and energy-efficient appliances.

The Company estimates that most major appliances such as air conditioners and water heaters are replaced every 10 years. With mandatory federal efficiency codes taking effect, replacement appliances, even at the lower end of the price scale, willbe higher in efficiency than the appliances being replaced.

In another conservation venture, FP in 1979 introduced its energy van, a mobile unit showing people many things they can do to save energy.

The goal ofall these conservation efforts is to reduce growth in energy demand, thereby lessening the nation's dependence on foreign oil and delaying the need to build new power plants.

Generating Capacity Atyear's end, system capability of FPL's 12/FPL

ngthening its financial base.

Capitalization ratios at year's end were 50 percent long-term debt, 38 percent common equity, 3 percent preferred stock with sinking funds and 9 percent preferred stock without sinking funds.

FPL's long-term goal is a mix of50-52 percent long-term debt, 38-42 percent common equity and approximately 10 percent preferred stock.

While not wishing to publicly sell common stock at current below-hook market prices, the Company is, in President Hudiburg's words, "looking at the question with more open-mindedness." The decision willbe influenced by market conditions, by interest rates and by capital requirements.

Operating Revenues Revenues passed the $L9 billionmark in 1979, rising 17 percent over the preceding year. Ofthe increase, about 13.5 percent could be traced to increased fuel adjustment revenue and 3.4 percent to increased sales resulting primarily from new customers.

Energy Sales KwHsales rose to 41.97 billion in 1979.

The increase resulted from a 5 percent increase in the total number of customers and a 2 percent decline in use per customer. Use per residential customer declined 4 percent to 11,354 KwH, compared to last year's 11,790.

Customers More Floridians than ever before are being served by FPL. The Company added over 108,000 customers in 1979, bringing the total to 2.1 million.

Employees Atyear end 1979, the Company was serving 367,000 more customers with approximately the same number of employees as in mid-1976. Total employment was 10,337, about 40 percent ofwhom were represented by the International Brotherhood of Electrical Workers (IBEW).

A new collective bargaining agreement with the IBEW was ratified by the member-ship on February 15, 1980. The two-year agreement, effective November 1, 1979, calls for increased wages and improved benefits.

In the year ahead, overall employment is expected to rise slightly in response to government regulation and to the service needs ofmore customers.

Included among Corporate objectives for 1980 is a limitin the net growth of certain staff positions which have been

pace withcurrent fuel expenses.

In 1979, this mismatch led to unrecovered fuel costs of $47.5 million.

The Florida Public Service Commission (FPSC) has scheduled hearings in February 1980 for consideration ofits proposed revisions to the fuel adjustment clause. Under the proposed revisions, the monthly fuel adjustment charge would be based on 6-month projections, contain an incentive factor based on generating performance and include a "true-up" feature to eliminate the over-or under-recovery of fuel expense. FPL has supported similar concepts in past hearings before the FPSC and is hopeful a new method can be implemented soon.

Fuel Expense Fuel expense climbed to $813 million, a figure representing one-half oftotal operating expenses.

Primary culprit was increased cost ofoil, coupled with greater use ofoil to meet growing system demand and to replace nuclear generation during refueling and maintenance outages ofnuclear units.

On Dec. 31, 1979, contract price at Port Everglades Terminal for low sulfur residual oil was $26.69 per barrel.

Higher sulfur oil was $21.21. The corresponding amounts one year earlier were $14.13 and $11.06. Prices on February 1, 1980 were $28.40 for low sulfur oil and $22.02 for higher sulfur oil.

One relatively bright spot in this otherwise bleak fuel picture was the performance ofthe Company's nuclear units, which generated 11.6 billion IGvH.

Above: Riviera Plant (653 Mw), on the western shore of Lake Worth in suburban West Palm Beach, has four fossil units (1946, 1953, 1962. 1963).

Below: Putnam Plant (446 Mw), the Company's newest, is in a heavily wooded area flanking U.S.

Highway 17 near Palatka. The plant features twin combined. cycle fossil units (1977, 1978). Opposite Page: Day breaks over the Fort hfyers Plant (1, 176 Mw)with two fossil units (1958, 1969) and 12 gas turbines (1974) on the Caloosahatchee River eight miles east ofFort Myers.

It would have taken 18 millionbarrels of oil at an increased cost of$284 millionto produce an equivalent amount ofpower.

Still, the proportion ofnuclear generation fell to 26 percent from 30 percent the year before, a figure reflective ofrefueling and maintenance schedules.

Oil provided 55 percent of generation; natural gas, 19 percent.

Since FPL first began nuclear generation in 1972, fuel savings of$1.2 billionhave been realized through nuclear contributions.

Regulation Retail rates, which provide approximately 96 percent of FPL

revenues, are regulated by the FPSC which on Jan. 2, 1979, was expanded to five members and became an appointed, rather than elected, panel. The commissioners have staggered terms of office. The term ofone member expires in January 1981, two terms expire in January 1982 and two in January 1983.

FPL does not have a request for a rate increase pending before the FPSC.

In looking at future needs for rate increases, the Company willstrive to achieve its long-term goal ofkeeping increases in base rates at or below the rate ofinflation.

The timing of FPL's next rate case hinges on such factors as KwHsales growth, inflation and the in-service date ofthe first unit at Martin Plant.

Dividends Dividends on common stock were raised to a quarterly rate of60 cents per share from 52 cents (an effective annual rate of

$2.40, from $2.08), commencing with the June 15, 1979, quarterly payment.

Total dividend payments were $2.32 per share in 1979, compared tvith $2.00 the previous year.

For the past 5-and 10-year periods, the Company's dividend growth rate ranks among the fastest in the industry.

FPL's dividend increases in 1978 and 1979 recognize the growing investment by common shareholders through the reinvestment ofa large portion of earnings. Increases not only provide a return on this additional investment, but also reflect the Company's desire to move closer to the industry ratio of dividends to earnings.

Financial Strategy An attractive dividend policy and a sound capital structure are key elements in the Company's long-range plans for further V

~

g t

, ~

~

~ ",!

%y 10/FPL

Applying Finishing Touches to the Seventies e ability to face problems and still function effectively requires a positive attitude. Without it, there'd be little alternative but to quit.

With Iran, Soviet adventurism and over-a-dollar-a-gallon gasoline dominating news headlines, it would be understandable for people simply to give up out offrustration.

But that's not'the way most people work. Most people keep on trying.

Within FPL ranks, at least, that is considered the acceptable way to deal with problems.

FPL President John J. Hudiburg said as much in his inaugural address to stockholders at the Company's 1979 Annual Meeting.

"For us, coming to work is like going to the supermarket," he noted. "Every time you do it, you encounter a whole new set ofhigher prices. It becomes more and more difficultto find new places to save."

Still, he assured the audience, "FPL never stops trying."

Those words not only heralded FPL's ntry into the 1980s, as described on es 4-7, but also set the tone for the sing ofthe '70s, a chapter in American iistory dominated by economic uncertainties and shrunken dreams.

Performance Goals In keeping with the perpetual quest to enhance the Company's business capabilities and the value ofits services to the public, Corporate objectives for 1979 were three-fold:

~ to keep increases, ifany, in cost of service per customer in line with increases in the Consumer Price Index...

~ to avoid having to sell common stock under unfavorable market conditions...

~ and to show a measurable increase in the number ofcustomers who regard FPL responsive to their service needs.

Year-end performance appraisal showed progress was made on all three fronts. Strict limitations on spending satisfied the first two objectives, while customers responding to a random attitude survey adjudged FPL service to be "good" on the whole.

Responsiveness FPL had its work cut out for it in 1979 as torrential rains, a major hurricane and a flood tested the Company's ability to respond in emergencies.

The firststern test came on April25 when record rains fellover extensive portions ofSouth Florida, including 17 inches in Miami within a 24-hour period.

Some 125 FPL workers from as far away as Sarasota were rushed to the storm-stricken area to assist local crews, and virtually all service was restored by the next morning.

Hurricane David's trek up the peninsula over the Labor Day weekend was no less challenging. During the storm, more than 300,000 customers were without service in the Company's four East Coast divisions. In order to repair damage and restore service, FPL called in every available crew from the unaffected Western Division and then added 370 workers from neighboring utilities and 290 more from local contractors. Despite the prolonged period ofthe storm's impact, felt along all 375 miles of Florida's Atlantic Coast, most outages were restored within 12-24 hours and virtuallyall but the most serious shortly thereafter.

FPL employees again worked around the clock to aid families displaced from their homes October 31 when water pouring from a break in the Martin Plant reservoir flooded portions ofthe surrounding countryside. In addition to providing emergency financial aid, the Company undertook efforts to provide medicine, to replace lost or broken eyeglasses, to make special garbage pickups, to provide sanitary facilities and, in general, to settle damage claims promptly and courteously.

FPL affirmed its commitment to serve in numerous little ways, as well.

For example, when Ward Robinson, a Delray Beach customer, said he could not read a portion ofhis electric billand suggested the use ofdarker lettering, FPL listened. As things turned out, the light lettering had been required by computer billingequipment which would have been "confused" by bold lettering.

But new equipment had been installed, and it could accommodate the change. As a result, it was no problem to institute the change and make bills more readable.

Another example ofthe Company's readiness to respond to customer needs was seen in the elimination ofthe service charge for changing a name following marriage or divorce.

While these particular changes may seem minor, their underlying meaning is of major significance, for they offer a solid demonstration of FPL's goal to increase responsiveness.

Earnings The dramatic increase in the price ofoil had a pronounced negative effect on earnings per share in 1979. Earnings per share slipped 7 percent to $4.22 from

$4.54 in 1978.

Although increased fuel costs are reflected in the Company's fuel adjustment charge, there is a 2-month lag between the use ofincreasingly expensive fuel and the Company's ability to recover costs from consumers.

Fuel adjustment revenues thus fail to keep FPL/9

1 FPL at work recapturing visions ofyesterday which paved pathways ofprogress to the present.

Photos throughout this section feature each of FPL's generating plants, caHing attention to the adage, "Today's power is yesterday's foresight."

Above: Sanford Plant (861 Mw) has three fossil units (1959, 1972, 1973) located along the St. John' River five miles northwest ofthe City of Sanford.

Below: St. Lucio Plant (777 Mw)rises above the mangrove swamps of Hutchinson Island midway between Fort Pierce and Stuart. Itconsists of Nuclear Unit No. 1(1976) and a second unit (right) under construction. Opposite Page: lhrkey Point Plant (2,079.5 Mw)with its two fossil units (1967, 1968) and two nuclear units (1972, 1973) is silhouetted by the early-morning sun over Biscayne Bay 25 miles south of Miami.

8/FPL

ium extracted from phosphates as ie by-product of a fertilizer-processing plant at Mulberry, Fla....

~ announcing plans to build two coal-fired units, scheduled for 1987 and 1989 completion, at Martin Plant...

~ undertaking experiments aimed at finding the most economical way to use coal, including a test project at Sanford Plant to determine ifitis economical and technically feasible to use a high proportion ofpulverized coal mixed with oil as boiler fuel in generating station units designed to burn oil...

~ conducting research into a number of other energy sources, including solar and wind. ~

~

~ contracting to buy coal power from Tampa Electric Co., starting in 1985...

~ discussing, with the Jacksonville Electric Authority, possible joint ownership oftwo coal units planned for late in the decade...

~ exchanging power through the Company's first direct interconnection with Georgia...

~ utilizinga new System Operations Control Facility, a nerve center employing the latest computer technology to monitor and maximize generation, transmission and distribution economies...

~ using all the natural gas available to the Company...

~ cooperating with Dade County, in the development ofa solid waste disposal facilitywhich, when completed in 1981, willsave money for taxpayers by furnishing steam for electricity production at competitive costs without subsidization...

~ obtaining electricity produced as a secondary product ofsugar cane refining operations of United States Sugar Corp.

in south central Florida under a co-generation agreement believed to be the firstofits kind in the state...

~ maintaining a leadership role in industry-wide efforts to encourage the conscious, conscientious and widespread practice ofconservation...

~ and showing, in the process, that the energy dilemma has answers.

Because there must be. Othenvise, there'd be no future to build for.

Yes, FPL is working... and working hard... not only to continue to provide dependable electric power, but also to manage the course ofchange in such a manner that it willinstillconfidence in those whose lives we touch.

Generating faith in the future, we call it.

Clearly, our nation desperately needs to reverse the tide ofinflation, to re-establish "the ties that bind us together as a people," to refresh our downtrodden spirits and to revive the American vision ofgreat expectations.

Somewhere along the line since FPL's founding in 1925, self-fulfillingdreams have been shunted out ofthe mainstream ofAmerican thought, only to be replaced by near-gleeful forecasts of gloom Every day, itseems, someone else conducts a survey, predicts a downturn in the economy and then proudly announces that the public is losing faith in the future.

A self defeating activity, ifever there were one....

Problems are ofthe Mind As The Hearst Corp., paying all due respect to the profession ofeconomic forecasting, recently pointed out, "We'e notfacing a recession. We'e creating one.

"Sure we have an energy problem.

And solving it is going to take a lotof work and more than a little pain.

"Sure we have an inflation problem.

And there's no way to lickitwithout giving up something. But we don't have to give up anything really important....

Allwe really have to give up is wasting, whether it's in overheated homes, overcomplicated regulations or overblown bureaucracies.

"Our problems are not the soul-searing ones that beset so much of mankind: the ravages of war, starvation, homelessness, lack ofbasic resources.

Ours are mostly in the mind: timidityand an uncertain sense ofnational purpose."

What's needed, the Hearst publishing organization contends and FPL concurs, is for us Americans to stop wringing our hands and instead concentrate on all the things we have going for us. Because, plainly, we must, as a nation, restore our perspective and, with it, our confidence in the future.

The sooner, the better!

Positive Look at '80s So, for a refreshing change, let' examine a few of FPL's many positive points as the brand new decade ofthe Eighties dawns.

A representative sampling might include:

~ a modern, integrated system of electric generation, transmission and distribution facilities, including 10 power plants in service and two others on reserve...

~ a construction program supported by internal cash generation which helps avoid excessive reliance on capital markets...

~ a service territory universally perceived as a desirable place to be...

~ a growing base ofcustomers...

~ a declining pattern ofper-capita energy consumption, a sign that residential customers are responding to the Company's 9-year conservation program...

~ a generating capacity ample to meet peak demand which is growing at a rate slower than previously anticipated, again indicating that consumers are conserving energy...

~ a diversity offuelsresidual oil, distillate oil, natural gas and nuclear about to be bolstered by the addition ofcoal...

~ a management fullycommitted to sound fiscal policy and guided by objectives for which accountability is maintained by a governing Board of Directors...

~ a Corporate reputation for financial integrity, backed by investment grade bond ratings...

~ a level ofoperating performance which has generated dividend growth...

~ a healthy, and thus far productive, involvement in research and development aimed at expanding and optimizing energy resources...

~ a determination to solve problems, thereby creating opportunity for stockholders and economical energy for customers...

~ a verifiable flairfor innovation in the never-ending search forbetter ways to do things...

~ and human resources that won't quit!

Add to these assets some ofour many other blessings as a nation, and any rational person has to wonder what all the crying is about.

Obviously, what's needed is for us to~

stop singing the blues and get on witht~

work at hand.

And that's exactly what we'e doing at FPL.

Take the monumental oil problem in our country, for instance.

FPL is trying to help solve the problem, working to cut down on the use ofoil, by:

~ completing the Company's fourth nuclear unit, St. Lucie No. 2...

+ purchasing, beginning in 1980, Opposite Page: The shimmery moon offers a poignant reminder ofthe ebb and flowoffuel cycles. These two oil units at Martin Plant east of Lake Okeechobee near indiantown were started in 1973 and willadd1,550 Mwofcapability when they enter service in 1980 and 1981. However, FPL has a commitment to coal that is destined to take shape in the form oftwo coal-fired units to be built adjacent to the nearly completed oilunits.

Scheduled for 1987and 1989, the coal units willbe in the 700 Mwsize range.

MwCapabilityYear End (Thousands) 15 51 15 10 13.45 13.25 ih73 tcs 10.gi 97 10.64 Mw Peak LoadSummer (Thousands) 15 10 11.33 12.61 5

J.

6/FPL 1969 75 76

'77

'78

'79

'80

'83

'86

'89 1969

'75 76

'77

'78 79

'80

'83

'86

'89

FPL at work generating faith in the future. Above:

In the futuristic setting of FPL's System Control Center, which became operational late in 1979, power dispatchers have at their fingertips mstantaneous control ofthe Company's electrical system. The center's computerized energy management system promises to increase the economy ofoperations by optimizing operating efticiency. Below: Bird'-eye vievv ofprogress on St. Lucie Nuclear Unit No. 2. When completed in 1983, the 802 Mwunit on Hutchinson Island will produce additional fuel cost savings and further reduce FPL's oildependency.

Special credit is extended to The Hearst Corp. for sharing copyrighted materials used in this section.

FPL/5

Florida Power 8 Light Company Financial Statements

$5 gs Per Share 8381 Contents 20 Balance Sheets 22 Statements of Capitalization 23 Statements of Income 24 Statements of Retained Earnings 25 Statements of Changes in Financial Position 2

$ 1.85 1969

'75

'76 "l7

'78

'79 Dividends Paid Per Share 26 Schedule of Taxes 28 Schedule of Allowance for Funds Used During Construction 29 Notes to Consolidated Financial Statements The Consolidated 5-Year Summary ofOperations appears on page 17, immediately preceding Management's Discussion and Analysis of Operating Results.

$0.955

$ 1.435

$ 1.66 Opinion of Independent Certified Public Accountants 1969 75

'76 77

'78 79 To the Board of Directors and Shareholders, Florida Power &Light Company:

Fuel Expense (5)illion8) 750 600 450 4 $497.0

$461.3

$482.3

$812,9 We have examined the consolidated balance sheets and statements ofcapitalization of Florida Power &Light Company and subsidiaries as of December 31, 1979 and 1978 and the related consolidated statements ofincome, retained earnings and changes in financial position for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests ofthe accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, such consolidated financial statements present fairlythe financial position of the Company and its subsidiaries as of December 31, 1979 and 1978 and the results oftheir operations and the changes in their financial position for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis.

150

$72.9 1969

'75

'76 77

'78

'79 DELOITTEHASKINS&SELLS Miami, Florida February 8, 1980 FPL/19

Florida Power & Light Company and Subsidiaries Consolidated Balance Sheets, December 31, 1979 and 1978 (Thousands ofDollars)

Assets ELECTRIC UTILITYPLANT(Notes 1 and 6):

Atoriginal cost Less accumulated depreciation Net Construction work in progress Nuclear fuel (less accumulated amortization of $33,300 at December 31, 1979 and $21,673 at December 31, 1978) (Note 7)

Electric utilityplantnet INVESTMENTS:

Storm and property insurance reserve fund (Note 1)

Other.

~I Total investments CURRENT ASSETS:

Cash(Note3)

Temporary investments (at cost, which approximates market).

Accounts receivable:

Customers (less allowance for uncollectible accounts of $3,978 at December 31, 1979 and $3,478 at December 31, 1978)

, Employees and miscellaneous Materials and supplies at average cost.

Fossil fuel stockat average cost Prepaid expenses Other Total current assets DEFERRED DEBITS:

Unamortized cancelled project costs (Note 6).

Accumulated deferred income taxes (Note 1).

Unamortized debt expense and loss on reacquired debt Other 1979

$4,237,288 1 008 365 3,233,923 1,119,820 68 104 4 421 847 9,562 2 499 12 061 6,663 109,552 20,640 74,906 142,681 20,864 5 846 381 152 10,275 8,808 5,402 7 987 1978

$4,025,649 869,887 3,155,762 806,471 130,001 4,092,234 15,099 6,354 21,453 4,952 28,701 93,454 6,838 61,765 85,145 21,471 14,742 317,068 14,842 7,997 5,653 898 Total deferred debits.

Total 82 472 29,390

$ 4 847 532

$4.460,145 The accompanying Schedules and Notes to Consolidated Financial Statements are an integral part ofthese statements.

20/FPL

Florida Power 8 Light Company and Subsidiaries Consolidated Balance Sheets, December 31, 1979 and 1978 (Thousands of Dollars)

Liabilities CAPITALIZATION(See Statements of Capitalization):

Common shareholders'quity Preferred stock without sinking fund requirements.

Preferred stock with sinking fund requirements Long-term debt Total capitalization.

CURRENT LIABILITIES:

Current maturities oflong-term debt and preferred stock Notes payable commercial paper (Note 3)

Accounts payable trade Customers'eposits Income taxes (Notes 1 and 6).

Other taxes Interest accrued Pension cost accrued (Note 1)

Tax collections payable Other Total current liabilities.

EFERRED CREDITS:

Accumulated deferred income taxes (Note 1)

Unamortized investment tax credit (Note 1)..

Other Total deferred credits RESERVES:

Storm and property insurance (Note 1)

Injuries and damages and other Total reserves COMMITMENTSANDCONTINGENCIES (Notes 6 and 7) 1979

$1,400,395 311,250 12i,250 1,838,426 3,671,321 55,200 32,000 G2,761 89,98G 12,623 72,700 40,520 27,6G6 15,533 54,626 4G3,615 448,215 229,608 18 854 G91,177 9,562 11 857 21,419 1978

$1,309,862 311,250 75,000 1,766,861 3,462,973 62,618 46,480 79,120 57,257 35,118 39,055 31,919 13,882 44,753 410,202 370,329 176,883 14,939 562,151 15,099 9,720 24,819 Total.

$4,847,532

$4,460, 145 The accompanying Schedules and Notes to Consolidated Financial Statements are an integral part ofthese statements.

FPL/21

Florida Power & Light Company and Subsidiaries Consolidated Statements of Capitalization, December 31, 1979 and 1978 (Thousands of Dollars)

Redemption Price

$ 10LOO 101.00 101.00 103.00 103.50 102.00 106.57 106.23 107.00 109.85 109.84 111.50 108.70 LONG-TERMDEBT (Notes 1 and 4):

First Mortgage Bonds:

Maturing through 1984 3% Due June 1979 82/s% Due August 1980.

3/s% Due November 1981 8/s% Due May 1982...........................

3/s% Due April1983 9'/s% Due May 1984 32/s% Due November 1984 Maturing 1985 through 19943'/s% to 5%

Maturing 1995 through 2004 4s/s% to 82/a%

Maturing 2005 through 2009 93/s% to 12'%

Pollution Control Series A, 6.10% Due January 2008 10a/4% Notes Due November 1981 Note, 1% over Prime Due February 1982..

Bank Notes (under term loan agreement) Due March 1982 Bank Notes (under term loan agreement) Due June 1979 Installment Purchase and Security Contracts 5.40% to 6.15% due 2004 through 2007..

Promissory Notes 6% to 82/4% Due Various to September 1987 Unamortized Premium and Discount Promissory Notes ofSubsidiaries 7'%o 92/s% Due Various to December 1995......

Total long-term debt Less current maturities.

Long-term debt excluding current maturities Total capitalization COMMONSHAREHOLDERS'QUITY:

Common Stock, no par, authorized 100,000,000shares in1979and 50,000,000 shares in 1978; outstanding 40,819,178 shares in 1979 and 40,314,552 shares in 1978 (Note 4).........

Capital stock premium and expense Retained earnings Total common shareholders'quity PREFERRED STOCK$100 Par Value, authorized December 31, 1979 5,000,000 shares (Note 4):

Shares Outstanding Preferred stock without sinking fund requirements:

4'A% Series 100,000 4152% Series A.....................

50,000 42/2% Series 8 50,000 4122% Series C 62,500 4.32% Series D.............................

50,000 4.35% Series E....................................

50,000 7.28% Series F 600,000 7.40% Series G 400,000 9.25% Series H 500,000 8.70% Series K 750,000 8.84% Series L 500,000 Total Preferred stock with sinking fund requirements:

10.08% SeriesJ 744,000 8.70% Series M 500,000 Less current maturities Total 1979 770,350 (4,038) 634,083 1,400,395 10,000 5,000 5,000 6,250 5,000 5,000 60,000 40,000 50,000 75,000 50,000 311,250 74,100 50,000 (3,150) 121 250 50,000 10,000 100,000 15,000 100,000 10,000 150,000 765,000 386,289 19,400 125,000 4,536 50,000 92,090 3,294 3,464 G,403 1,890,47G (52,050) 1,838 526 88,671 321 1978 756,841 (3,751) 556,772 1,309,862 10,000 5,000 5,000 6,250 5,000 5,000 60,000 40,000 50,000 75,000 50.000 311,250 75,000 75,000 10,000 50,000 10,000 100,000 15,000 100,000 10,000 150,000 765,000 311,289 19,400 125,000 6,048 50,000 92,090 4,145 4,922 6.585 1,829,479 (62,618 1,766,861

$3,462,973 22/FPL The accompanying Schedules and Notes to Consolidated Financial Statements are an integral part ofthese statements.

Florida Power & Light Company and Subsidiaries Consolidated Statements of Income forthe years ended Oecember 31, 1979 and 1978 (Thousands of Dollars, except per share amounts) 1979 1978 OPERATING REVENUES (Notes 1 and 5)

$1,933,937

$1,647,226 OPERATING EXPENSES:

Operations:

Fuel Other production including net interchange..

Transmission and distribution Customers Administrative and general Maintenance Depreciation (Notes 1 and 6)

Income taxes (Note 1)

Taxes other than income taxes Total operating expenses OPERATING INCOME.

812,898 47,134 50,910 49,660 116,028 99,490 150,195 15G,044 149,774 1,632,133 301,804 551,376 17,031 46,176 42,839 110,607 85,865 144,267 198,163 132,205 1,328,529 318,697 OTHER INCOME (DEDUCTIONS):

Allowance for other funds used during construction (Note 1)

Income taxes (Note 1)

Othernet Other incomenet COME BEFORE INTEREST CHARGES NTEREST CHARGES:

Interest on first mortgage bonds Interest on other long-term debt Other interest Allowance for borrowed funds used during construction (Note 1)

Interest charges net NET INCOME.

PREFERRED DIVIDENDREQUIREMENTS NET INCOMEAPPLICABLETO COMMONSTOCK 30,006 (34) 1,209 31,181 332,985 20,319 827 3,382 24,528 343,225 117,715 27,1G3 12,280 (28,841) 128,317 204,G68 33,711 116,446 24,031 5,619 (14,112) 131,984 211,241 29,138 170,957 182,103 Average number ofcommon shares outstanding (in thousands)

Earnings per share of Common Stock Dividends per share of Common Stock 40,524

$4.22

$2.32 40,120

$4.54

$2.00 The accompanying Schedules and Notes to Consolidated Financial Statements are an integral part ofthese statements.

FPL/23

Florida Power & Light Company and Subsidiaries Consolidated Statements of Retained Earnings forthe years ended December 31, 1979 and 1978 (Thousands of Dollars)

BALANCEATBEGINNINGOF YEAR NET INCOME Total DEDUCT:

Cash dividends:

Preferred stock:

4'Mo Series ($4.50 a share) 4V2% Series A ($4. 50 a share) 4'A% Series B ($4.50 a share) 4'%eries C ($4.50 a share) 4.32% Series D ($4.32 a share) 4.35% Series E ($4.35 a share) 7.28% Series F ($7.28 a share) 7.40% Series G ($7.40 a share) 9.25% Series H ($9.25 a share) 10.08% Series J ($10.08 a share) 8.70% Series K ($8.70 a share) 8.84% Series L ($8.84 a share) 8.70% Series M ($2.562 a share)

Common stock Total dividends.

Preferred stock redemption costs BALANCEAT END OF YEAR 1979

$556,772 204,668 761 440 450 225 225 281 216 218 4,368 2,960 4,625 7,560 6,525 4,420 1,281 94,002 127,356

$634,083 i978

$454,529 211,241 665,770 450 225 225 281 216 218 4,368 2,960 4,625 7,560 6,525 1,117 80,228 108,998

$556,772 Dividend Restrictions The Charter, Mortgage and Deed of Trust and 10'/4% Note Indenture contain provisions which, under certain conditions, restrict the payment ofdividends and other distributions to common shareholders.

Under the most restrictive of these provisions approximately $532 million of retained earnings was available for payment of dividends on Common Stock at December 31, 1979. In the event that the Company should be in arrears on its sinking fund obligations, commencing in 1980 for the 10.08% Series J Preferred Stock and in 1985 for the 8.70% Series M Preferred Stock, the Company may not pay dividends on Common Stock.

The accompanying Schedules and Notes to Consolidated Financial Statements are an integral part ofthese statements.

Florida Power & Light Company and Subsidiaries Consolidated Statements of Changes in Financial Position forthe years ended December 31, 1979 and 1978 (Thousands of Dollars)

SOURCE OF FUNDS:

Current operations:

Net income Depreciation Amortization ofnuclear fuel assemblies Deferred investment tax creditnet Deferred income taxes Allowance for other funds used during construction Total Sale offirst mortgage bonds Reimbursement by trustee from pollution control and industrial development financings for construction expenditures Issuance ofother long-term debt Issuance of common stock Sale ofpreferred stock Proceeds from nuclear fuel suit Sale ofnuclear fuel Other sources Decrease in working capital Total APPLICATIONOF FUNDS:

Construction expenditures*

Nuclear fuel*

Retirement, redemption and current maturity oflong-term debt and preferred stock Dividends.

Other applications Increase in working capital Total CHANGE IN WORKINGCAPITALEFFECTED BY:

Increase (Decrease) in current assets:

Cash and temporary investments Accounts receivable Fossil fuel stock.

Other changes net Decrease (Increase) in current liabilities:

Notes payable and current maturities oflong-term debt and preferred stock Accounts payable Customers'eposits Income taxes Other changes net INCREASE (DECREASE) IN WORKINGCAPITAL.

1979

$204,668 150,195 11,992 52,725 77,075 (30,006) 466,649 73,895 50,081 13,508 49,825 26,000 60,712 22,462

$763,132

$509,627 35,556 55,810 127,356 24,112 10 671

$763,132

$ (26,990) 29,900 57,536 3,638 (24,582)

(16,281)

(10,866) 44,634 (46 818) 10,671 1978

$211,241 144,267 11,081 35,646 67,695 (20,319) 449,611 75,202 18,476 7,466 50, 134 20,825 14,164

$635,878

$432,586 19,925 71,617 108,998 2,752

$635,878

$ 29,829 13,990 19,063 17,107 (49,925)

(6,972) 5,387 (12,383)

(30,260)

$ (14,164)

• Excluding Allowance for other funds used during construction.

fhe accompanying Schedules and Notes to Consolidated Financial Statements are an integral part of these statements.

FPL/25

Florida Power & Light Company and Subsidiaries Schedule ofTaxes forthe years ended December 31, 1979 and 1978 (Thousands of Dollars)

Income Taxes FEDERAL:

Charged to operating expenses:

Current Deferred Accelerated depreciation Debt component ofAFUDC Repair allowance Estimated revenue refunds.

Other Deferred in prior years Accelerated depreciation Debt component ofAFUDC Repair allowance Estimated revenue refunds.

Other.......

Deferred investment tax credit Amortization ofinvestment tax credit Total Charged to other income:

Current Deferrednet Total federal.

STATE:

Charged to operating expenses:

Current Deferred Accelerated depreciation Debt component ofAFUDC.

Repair allowance Estimated revenue refunds...

Other Deferred in prior years Accelerated depreciation Debt component ofAFUDC.

Repair allowance Estimated revenue refunds Other Total Charged to other income:

Current Deferrednet Total state Total income taxes.

1979 8,887 52,429 10,276 4,863 (188) 6,915 (2,879)

(770)

(1,078) 765 (1,428) 66,790 (5,291) 139,291 (33) 42 139,300 8,629 6,113 1,176 561 (22) 784 (310)

(86)

(119) 84 (57) 16,753 21 4

16 778

$ 156,078 1978

$ 73,659 53,220 6,405 5,117 (854)

(763)

(1,934)

(662)

(931) 2,002 47,535 (4,695) 178,099 (212)

(585) 177,302 13,320 5,835 702 561 (94)

(84)

(198)

(73)

(102) 197 20,064 34 (64) 20,034

$197,336 26/FPL

Florida Power & Light Company and Subsidiaries SChedule Of TaXeS (Concluded) e Total income taxes differfrom the amount computed by applying the statutory federal income tax rate to income before income taxes. The reasons for the differences are as follows:

Computed at statutory rate Increases (Reductions) in income taxes resulting from:

Allowance for other funds used during construction......

State income taxes net of federal income tax benefits...

Othernet Total income taxes 1979 Amount

$1G5,943 (IG,252) 9,0GO (2,673) 8155 078 4/4 Of Pre-tax Income 46.0%%uo (4.5) 2.5 (0.7) 43 3o/o Amount

$ 196,117 (9,753) 10,418 554

$197,336 1978 4/4 Of Pre-tax Income 48.0%%uo (2.4) 2.6 0.1 48.3%%uo Other Taxes Taxes other than federal and state income taxes:

Federal and state payroll Real and personal property State gross receipts Franchise charges.

Miscellaneous Total other taxes.

1979

$ 13,928 41,705 2?,981 G6,86G 17 220

$167,709 1978'11,343 41,308 23,955 55,862 14,907

$147,375 Charged to:

Operating expenses other taxes Utilityplant and other accounts Total.

$149,774 17,935

$167,709

$132,205 15,170

$ 147,375 FPL/27

Florida Power & Light Company and Subsidiaries Schedule of Allowance for Funds Used During Construction (AFUDC) forthe years ended December 31, 1979 and 1978 (Millionsof Dollars) 1979 1978 Monthly average Construction work in progress (CWIP).

Less:

Fixed amount included in rate base AFUDC previously capitalized and included in monthly average CWIP Other CWIP base for computing AFUDC Nuclear fuel base for computing AFUDC.

Total base for computing AFUDC Capitalization rate (1)

Total AFUDC charged to CWIP and nuclear fuel Amounts credited to interest charges (2)

Amounts credited to other income (2)

$970.1 200.0 97.9 53.2 619.0 30.5 649.5 9.06%%uo 58.8 28.8

$ 30.0

$669.9 200.0 60.9 76.9 332.1 46.3 378.4 9.10%%uo 34.4 14.1

$ 20.3 (1) The AFUDC rate is determined by a formula set by the Florida Public Service Commission (FPSC). The rate is calculated by applying the capital ratio of each component of capital to its current embedded cost, except common equity, for which the rate allowed in the Company's last retail rate case is used as its embedded cost. The debt component is not reduced by the applicable income taxes. A formula is also provided by the Federal Energy Regulatory Commission (FERC) for computing the maximum AFUDC rate. The rate used by the Company to compute AFUDC does not exceed the maximum established by FERC.

(2) In 1978 the allocation oftotal AFUDC between borrowed funds and other funds was based on the respective proportions ofthe borrowed funds component and the other funds component ofthe total AFUDCamount determined by using the formula set by the FPSC. In 1979, as a result of a FERC directive, the Company began allocating total AFUDC between borrowed funds an other funds by computing the borrowed funds component using the FERC formula, with the residual AFUDCbeing reported a the other funds portion; thus, while the FPSC formula is still utilized to compute the total amount of AFUDC, the borrowed funds portion in 1979 is identical to that which would be reported ifthe FERC formula were being used. The FERC formula differs from the FPSC formula in that itincludes short-term borrowings and assumes that such borrowings are the firstsource of funds for construction, but excludes accumulated deferred income taxes. The Company has continued to provide deferred income taxes on the borrowed funds portion of AFUDC determined by the FPSC formula.

28/FPL

Florida Power &Light Company and Subsidiaries Notes to Consolidated Financial Statements or the years ended December 31, 1979 and1978

~ Summary of Significant Accounting and Reporting Policies Regulation: Accounting and reporting policies ofthe Company are subject to regulation by the Florida Public Service Commission (FPSC) and the Federal Energy Regulatory Commission (FERC). The followingsummarizes the more significant ofthese policies.

Basis ofConsolidation: The consolidated financial statements include the accounts ofthe Company and its wholly-owned subsidiaries. Allsignificant intercompany balances and transactions have been eliminated.

3. 2%-4. 6%

3.2%-6.2%

5.0%-6.5%

l.5'7o-3. 3%

2. 0%-6. 6%

2. 1%-7. 8%

9.0%

Rates and Revenues: Revenues are recognized based on monthly cycle billings to c>>stomers.

Retail and wholesale rate schedules are approved by the FPSC and the FERC, respectively. The rate schedules contain a fuel adjustment clause which gives effect to changes in efficiency, the cost of el as well as the fuel component of urchased power, the total energy cost ofeconomy interchange and the generation mix of fossil and nuclear fuels.

Generally, the changes are reflected in customer billings about two months after they occur.

Electric UtilityPlant and Depreciation: The cost ofadditions, replacements and renewals ofunits of property is added to utilityplant. The cost (estimated, ifnot known) of units of property retired, less net salvage, is charged to accumulated depreciation.

Maintenance and repairs ofproperty, and replacements and renewals ofitems determined to be less than units of property, are charged to operating expenses maintenance.

Book depreciation is provided on a straight-line service-life basis by primary accounts as directed by the FPSC using the followingrates:

Steam production plant.......

Nuclear production plant......

ther production plant........

ansmission plant...........

Distributionplant............

General plant...............

Transportation equipment.....

The weighted annual composite depreciation rate was approximately 3.7% in 1979. The nuclear production plant rates include estimated negative net salvage values ofapproximately 20%

for certain components, reflecting estimated decommissioning costs. The transmission and distribution plant rates include negative net salvage values.

Substantially all utilityplant is subject to the lien ofthe Mortgage and Deed of Trust (as supplemented) securing the First Mortgage Bonds.

Amortization ofNuclear Fuel: The cost ofnuclear fuel is amortized to fuel expense on a unit ofproduction method.

No provision for estimated future spent fuel storage or disposal costs is presently included in fuel expense. The suppliers ofthe nuclear fuel are under contract to provide spent fuel removal. The suppliers have refused to honor their commitments. The Company has expanded its spent nuclear fuel storage facilities and has adequate facilities for storage ofspent fuel until the mid-1980's under normal refueling conditions.

Allowance for Funds Used During Construction: The Company capitalizes as an additional cost of property an allowance for funds used during construction (a non-cash item) which represents the allowed cost of capital used to finance a portion of CWIP and nuclear fuel. The portion ofAFUDC attributable to borrowed funds is recorded as a reduction of Interest charges and the portion attributable to other funds as Other income. See the Schedule ofAFUDC for detailed information.

Storm and Property Insurance Reserve and Related Fund: The storm and property insurance reserve fund is maintained at an amount equivalent to the reserve. The reserve provides coverage ofstorm damage costs and possible public liabilitylosses stemming from a nuclear incident.

Earnings from the fund, net oftaxes, are reinvested in the fund. Securities held in the fund are recorded at cost which approximates market value.

Storm damage and service restoration costs related to Hurricane David aggregating $6.8 millionwere paid from the fund in 1979 and charged to the reserve. Income tax benefits related to the costs willbe restored to the fund when realized.

Employee Benefit Plans: The Company has a non-contributory employees'ension plan covering substantially all employees. The Company's policy is to fund each year' accrued pension costs, including amortization ofthe estimated unfunded prior service costs. Pension costs for 1979 and 1978 were $27.7 millionand

$26.2 million, respectively. The estimated unfunded prior service cost of the pension plan at January 1, 1979 was approximately $91.5 millionusing the entry age normal cost method. There was no excess ofvested benefits over the fund balance as ofJanuary 1, 1979.

The Employee ThriftPlan provides for basic contributions by eligible employees of up to 6% oftheir base salaries, which are matched 50% by the Company.

Supplemental contributions by employees may be made up to an additional 6%. The Company matching contributions for 1979 and 1978 were

$2.1 millionand $2.0 million, respectively.

In 1976 an Employee Stock Ownership Plan (ESOP) was adopted pursuant to the TaxReductionActof1975. TheAct permits the Company to claim an additional 1% investment tax credit, provided that the entire amount ofthe credit is contributed to an employee stock ownership plan and invested in Company Common Stock for the benefit ofemployees. In 1978 the Board of Directors amended the ESOP to enable the Company to claim a further investment tax credit up to Vi% to the extent that the Vi'focredit is matched by voluntary contributions by participating employees pursuant to the Tax Reform Actof 1976. Since the payments to the FPL/29

Florida Power & Light Company and Subsidiaries Notes to Consolidated Financial Statements (continued)

Plan are in lieu ofincome tax payments, there is no effect on net income.

Provisions for Company contributions to the ESOP were $8.8 millionand $7.2 millionin 1979 and 1978, respectively.

Income Taxes: Deferred income taxes are provided on all significant book-tax timing differences as permitted for rate-making purposes by the FPSC.

Investment tax credits used to reduce current federal income taxes are deferred and amortized to income at a rate approximating the lives ofthe related property. See the Schedule of Taxes.

2. Subsidiaries The Company's wholly-owned subsidiaries, Fuel Supply Service, Inc.

(FSS) and Land Resources Investment Co. (LRIC), are engaged in activities complementary to those ofthe Company. FSS is engaged in fuel exploration ventures and proprietary fuel research and development projects. FSS is not subject to regulation by the FPSC or FERC. LRIC holds real properties used or to be used by the Company in its utilityoperations for the purpose of increasing financing options beyond those permitted by the Company's Mortgage and Deed ofTrust.

4. Capitalization Shares Amount Balances, January 1, 1978..

Sales in 1979.............

Current maturity in 1979....

Bahnces, December 31, 1979 500 Common Stock: The Company has reserved 1 millionshares of Common Stock for issuance in connection with the Employee ThriftPlan and Employee Stock Ownership Plan. In 1979 the Company issued 152,900 shares for $4.1 million under the ThriftPlan and 351,726 shares for $9.4 millionunder the ESOP. In 1978 the Company issued 49,600 shares for $1.4 millionunder the ThriftPlan and

'14,952 shares for $6.1 millionunder the ESOP.

In April1979 the number ofauthorized shares was increased from 50 million shares to 100 millionshares.

Preferred Stock AVithSinking Fund Requirements: The 10.08% Series J Preferred Stock is entitled to a sinking fund to retire beginning April1, 1980 through April1, 1999 a minimum of37,500 shares and a maximum of75,000 shares annually at $101.50 per share, plus accrued dividends.

The 8.70% Series M Preferred Stock is entitled to a sinking fund to retire beginning April1, 1985 through April1, 1999 a minimum of18,000 shares and a maximum of45,000 shares annually, and beginning April1, 2000 through April1, 2004 a minimum of46,000 shares and a maximum of115,000 shares annually at

$100 per share, plus accrued dividends.

Minimum annual sinking fund requirements are approximately $3.8 millionfor each ofthe next five years. In 1979, 6,000 shares ofthe 10.08% Series J Preferred Stock were purchased and retired in anticipation ofthe 1980 sinking fund requirement.

The changes in each series of Preferred Stock With Sinking Fund Requirements for 1978 and 1979 are shown below (in thousands):

10.08% Series J

~

8.70% Series M Shares Amount 750

$75,000 500

$50,000 (37)

(3.750) 713

$71 250

$50,000

3. Short-Term Debt Average aggregate borrowings Maximum month-end bahnces Weighted daily average interest rate Weighted average interest rate on amounts outstanding at end ofyear...

Maximum combined borrowings at any month-end 13.5%

$199,050

$37.300 Unused available bank credit aggregated approximately $227.3 millionat December 31, 1979, and is based on informal arrangements which are subject to cancellation without notice. Compensating balances maintained in connection with these credits arise in the normal course ofbusiness and are not material to the Company's financial position and borrowing costs.

Additional information regarding short-term borrowing for the years ended December 31, 1979 and 1978 is shown below:

1979 1978 (Thousands of Dollars)

Commercial Bank Commercial Bank Paper Borrowiaaa

~Pa r

Borrowio24

$ 45.527

$20.405

$ 4,566

$ 300

$107,050

$92,000

$37.300 10.7%

11.7%

7.7%

7a6%

Long-'Ibrm Debt: Certain series ofthe Company's First Mortgage Bonds have sinking fund requirements through 1995 which may be satisfied by certification of property additions at the rate of 167% of such requirements. Such requirements are approximately $4 millionfor each of the next five years. Annual maturities of long-term debt are approximately $52 miHion in 1980, $137 millionin 1981,

$152 millionin 1982, $16 millionin 1983 and $111 millionin 1984.

Interest on the Bank Notes due June 1979 was based on the current commercial loan interest rate up to a maximum average interest rate of 774%

over the term ofthe loan. Interest on the Bank Notes due March 1982 is based on the current commercial loan interest rat 30/ FPL

nges in Capital Accounts: The changes in Common Stock, Preferred Stock Without Sinking Fund Requirements and Capital Stock Premium and Expense for 1978 and 1979 are shown below (in thousands):

Preferred Stock tvithout Sinking Fund Common Stock Requirements Shares Amount Shares Amount Capital Stock Premium and Expense Balances, January 1, 1978.....

Sales in 1978 Issued to benefit plans in 1978..

Balances, December 31, 1978..

Sales in 1979 Issued to benefit plans in 1979..

Preferred stock redemption....

Balances, December 31, 1979..

40,050 265 40,315 40,819

$749,375 7,466 756,841 13,509 2,612 500 3,112

$261,250 50,000 311,250

$(3,715)

(30)

(6)

(3,751)

(287)

(1) 1

$770,350 3,112

$311.250

$(4.038)

5. Revenues Arequest for a rate increase on sales to istomers for resale filed with FERC in was placed in effect March 1, 1978 ect to refund with interest. Arate settlement with the Company's wholesale customers has been approved by FERC, under which the Company will receive increased annual revenues of approximately $3.7 million. Adequate provision has been made for refunds which are required to effect final settlement.

6. Commitments and Contingencies Construction Program:

Commitments in connection with the construction program for electric utility plants, generating units and related facilities were estimated at approximately $1.3 billionat December 31, 1979 including $350 millionfor nuclear fueL These estimates are based on the presently proposed construction program and are not necessarily contractual obligations. Certain ofthese commitments are also subject to ation for increases in labor, services and material costs.

In 1977 the Company cancelled the two nuclear units previously proposed for a South Dade Site and deferred the costs, including cancellation penalties, of the project ofapproximately $14.9 million before income taxes. The Company obtained authorization from the FPSC to amortize these amounts over a five-year period. In 1978 an additional $7.9 million ofcosts related to the project were determined to be not recoverable. These costs were added to the original amount ofcancelled project costs and are being amortized over the same five-year amortization period. Depreciation expense in 1979 and 1978 includes $4.6 millionand $5.8 million, respectively, of amortization'of these costs.

Rental and Nuclear Fuel Expense:

The annual lease expense and the minimum rental commitments under real property and equipment leases are not material.

The Company has various contracts for supplies offuel including a contract for nuclear fuel services for its two Turkey Point Plant nuclear units. Expenses under the nuclear fuel services contract for 1979 and 1978 which were charged to The Company's Charter authorizes the issuance of10 millionshares of Preferred Stock, no par value, and 5 millionshares ofSubordinated Preferred Stock, no par value, to be known as "Preference Stock." None ofthese shares is outstanding.

operating expenses were $14. 9 million and $15.4 million, respectively. The Company is committed to pay a minimum annual charge per nuclear unit of

$1,260,000 under the 11trkey Point nuclear fuel services contract; however, annual charges on a usage basis may be substantially in excess ofthe minimum charge and are subject to escalation for increases in certain costs to the supplier.

The present value ofthe minimum lease commitments, including the nuclear fuel services contract, and the impact on net income ifcertain leases and the nuclear fuel services contract had been capitalized, are not material and, therefore, not presented.

In June 1979 the Company completed a lease arrangement with a non-affiliated lessor to provide a portion ofthe nuclear fuel for St. Lucie Unit No. 1. Atthe commencement ofthis arrangement the Company sold to the lessor and subsequently leased back $27.4 millionof nuclear fuel loaded in the spring 1979 refueling ofthis unit. In the second halfof 1979 the Company sold to the lessor an additional $33.3 millionofnuclear fuel in various stages ofenrichment for eventual leaseback to the Company. The FPSC has approved classification ofthis lease as an operating lease for financial accounting purposes. Ifthe lease had

- been treated as a capital lease the Company's balance sheet at December'1, 1979 would have reflected additional nuclear fuel ofapproximately $24 million witha corresponding capitalized lease obligation. Quarterly lease payments consist ofa burn-up factor computed on the basis ofenergy production plus the lessor's financing costs and certain administrative expenses.

The Company willcontinue to have fullresponsibility for management ofthe fuel and will maintain property and liabilityinsurance.

The lease arrangement expires in 2029 but may be terminated earlier by the lessor upon the occurrence ofcertain events and, upon three years prior notice, may be terminated in 1984 or in any later year. The Company may FPL/31

Florida Power &Light Company and Subsidiaries Notes to Consolidated Financial Statements (continued) terminate the lease arrangement at any time. Under certain conditions of termination, the Company willbe required to purchase, within 270 days, all nuclear fuel (in whatever form) then existing under the lease arrangement at a price that willallow the lessor to recover its net investment cost (approximately $65 millionat December 31, 1979).

Nuclear Insurance: The Company is a member ofNuclear Mutual Limited, which provides insurance coverage against property damage to members'uclear generating facilities. The Company could be subject to a maximum assessment ofapproximately $58 million, based on current premiums, in the event losses occur at a nuclear plant ofa member utility, and is self-insured for any such loss at any one ofits nuclear plants in excess of$300 million.

The Company maintains private insurance and agreements ofindemnity with the Nuclear Regulatory Commission (NRC) to cover third-party liabilityarising from a nuclear incident which might occur at the Company's nuclear power plants. In the event a public liabilityloss arising from a nuclear incident at a facilitycurrently covered by government indemnification exceeds

$160 million, under the Price-Anderson Act the Company willbe obligated to pay a deferred premium of up to $5 million per incident for each ofits three licensed reactors but not more than $10 millionin a calendar year for each ofits three licensed reactors. The Company could be assessed up to approximately $30 millionin a year.

Nuclear Units:

Turkey Point Units Nos. 8 and 4Atits Turkey Point Plant the Company has been experiencing for several years and continues to experience problems with the steam generators in its two nuclear units, Units Nos. 3 and 4, and has had to plug approximately 19.4% of the pressurized water circulation tubes in the steam generators in Unit No. 3 and approximately 20.6% in Unit No. 4. The Company has NRC approval to plug up to 25% ofthe tubes in each unit without reducing their output. However, pending a reevaluation ofthe emergency core cooling systems, output may be limited for brief periods from time to time to 93% and 94% ofcapacity for Units Nos.

3 and 4, respectively. Unless an extension is granted, each unit is required to be shut down and the steam generators inspected once every six months. NRC approval must be obtained before the unit may be returned to service followingeach inspection. Unit No. 4's next inspection is required by late March 1980, unless a request for an extension to April1980, the unit's next scheduled outage, is approved and Unit No. 3's is required by July 1980. Ifa significant pattern ofleaks occurs in a steam generator ofeither unit, an inspection must be performed. Unit No.

3's next scheduled refueling date is early 1981 and Unit No. 4's is late 1980.

The Company has contracted for new steam generator tube bundles. Delivery ofnew tube bundles for one unit was made in July 1979, with delivery of tube bundles for the other unit anticipated in the first quarter of1980. The new steam generator tube bundles incorporate different materials and design which the Company anticipates willprevent a recurrence of the present problems. The planning date for the repair of Unit No. 4 is late 1980, but no firmdecision has been made as to the timing of the repair. The cost to replace the tube bundles is estimated at approximately

$61 millionper unit ofwhich an aggregate of$37 million has been expended through December 31, 1979. The balance of these costs has been included in the construction program commitments.

Repair ofthe steam generators will require each unit to be out ofservice for about six to nine months and the NRC has stated that amendments to the operating license for each of the Turkey Point units willbe required. An environmental impact statement could also be required. In August 1979 the NRC allowed a petition for interventi by one individual and indicated that public hearings would be held. It is impossible to determine the length ofthese hearings. Power resources could be inadequate and the southern part ofthe Company's system could be without adequate power from time to time during any period that both units were simultaneously out ofservice. The Company's financial position could be adversely affected.

In May 1978 the Company filed suit for damages in the U.S. District Court for the Southern Districtof Florida against Westinghouse Electric Corporation (Westinghouse),

the supplier ofthe above steam generators.

Westinghouse's motion to discuss the suit was denied.

The matter is pending.

St. Lucie No. IDuring routine inspection at the spring 1978 refueling of this unit, corrosion was detected in the steam generators.

During the spring 1979 refueling outage work was done minimize future corrosion. The Comp has approved an expenditure of$15 millionfor a program designed to mitigate the corrosion. Portions ofthis work are scheduled to be performed at the unit's next refueling outage scheduled for spring 1980.

St. LucieNo. 2The Company has undertaken to sell, under certain conditions, to certain cooperatives and municipalities a minimum of 13% ofSt.

Lucie Unit No. 2. Other municipalities have demanded the right to purchase a significant portion ofthis unit.

Spent Nuclear Fuel: Currently, there are no spent nuclear fuel reprocessing plants in commercial operation in the United States. The President ofthe United States has announced that the Administration proposes that commercial reprocessing be deferred indefinitely. In a separate announcement the Department of Energy has proposed that the U.S. government take title to and possession ofspent nuclear fuel for a 32/FPL

he event the government's plan does not materialize, the Company willbe forced to seek other arrangements for long-term storage ofspent nuclear fuel.

Federal Income 'Ihxes: The Internal Revenue Service (IRS) has examined the Company's income tax returns for 1971, 1972 and 1973 and has proposed additional income taxes aggregating

$22.1 million, exclusive ofinterest. The principal issue is the taxability of customer deposits. Ifthe Company is unable to reach a favorable settlement with the Appellate Division of the IRS, the Company willpursue all administrative and legal remedies. These include paying taxes and interest aggregating approximately $27.5 million, filinga claim for refund and, ifsuch claim is rejected, filinga lawsuit seeking recovery ofthe amounts paid. In the opinion oflegal counsel, customer deposits are not includable in taxable income and it is probable that a decision his effect willbe obtained in federal rt.

7. Legal Proceedings Nuclear Fuel Suit: In November 1979 a settlement between the Company and Westinghouse resolved the uranium supply and escalation issues that had been the subject ofa suit related to the Company's nuclear fuel services contract for its two Turkey Point nuclear units. A cash payment of $26 millionwas received in December 1979 and applied as a reduction ofthe Company's investment in nuclear fuel. The Company's dispute with Westinghouse over spent fuel removal has been tried but the trial court has not yet made a decision.

Gainesville Antitrust Suit: A treble damage suit was brought in 1968 against the Company, seeking damages of approximately $12 million, before trebling. The case was tried in 1975 and resulted in a jury verdict for the Company. Plaintiffs appealed to the U.S.

urt ofAppeals for the Fifth Circuit. In y 1978 the Court ofAppeals ruled that certain matters pertaining to the case should be re-tried by the District Court.

Atissue in the case on remand is whether an agreement, understanding or concert ofaction, to which the Court of Appeals found the Company was a party, was a substantial factor in plaintiffs'ailure to obtain an interconnection. Ifthe jury should find in favor ofplaintiffs, it willthen have to assess what damages, if any, plaintiffs sustained.

The Company has been advised by its counsel that it is impossible to predict the outcome ofthis litigation at the present time because, among other things, ofthe ambiguities in the opinion ofthe Court ofAppeals and the uncertainty as to how the trialjudge wiH interpret the law in charging the jury.

However, based on the facts as itknows them at this time and on its discussions with its counsel, the Company does not believe that it willincur a liabilitythat will be material in relation to its consolidated financial position.

Alleged Antitrust Violations: On October 31, 1979 fifteen Florida municipalities filed a suit against the Company in the United States District Court for the Southern Districtof Florida, alleging violation ofthe antitrust laws and certain other laws. The complaint seeks damages in amounts not yet determined, but in excess of $1 millionand $15,000 per municipality, and additionally seeks various forms of equitable relief, including access to the Company's nuclear units. The Company is unable to predict the ultimate outcome ofthis matter but believes that ithas acted in compliance withthe law, and intends to defend this action vigorously.

Based on its discussions withits various counsel, the Company is ofthe opinion that the ultimate outcome ofthis matter willnot have a material adverse effect on its consolidated financial position.

8. Quarterly Data (Unaudited)

For the periods shown below, the Operating Revenues, Operating Income, Net Income and Earnings per share of Common Stock (after dividend requirements on Preferred Stock) are as follows:

Quarter Ended March 31, 1978.....

June30, 1978.......

September 30, 1978 December 31, 1978..

March 31, 1979.....

June 30, 1979.......

September 30, 1979 December 31, 1979..

Operating Revenues

$371,901 371,185 496,785 407,355 377,089 440,003 614,964 501,881 Operating Income (Thousands of Dollars)

$ 74,555 57,241 104,304 82,597 62,445 41,966 109,678 87,715 Net Income

$48,679 29,594 76,774 56,194 39,261 17,062 84,208 64,137 Earnings per share of Common Stock

$ 1.04 0.57

1. 73 1.20 0.77 0.22 1.87 1.35 In the opinion ofthe Company all adjustments (consisting ofonly normal recurring accruals) necessary to present a fair statement of such amounts for such periods have been made.

The Company is ofthe opinion that quarterly comparisons may not give a true indication ofoverall trends and changes in the Company's operations and may be misleading to an understanding ofthe results ofoperations as the revenues and expenses ofthe Company are subject to periodic fluctuations due to changes in weather conditions, customer usage, number ofcustomers and the proportion of generation by various fuels.

FPL/33

Florida Power & Light Company and Subsidiaries NOteS to COnSOlidated FinanCial StatementS (Concluded)

9. Effects of Changing Prices (Unaudited)

The Company has estimated the effects of changing prices on its operations on the basis prescribed in Financial Accounting Standards Board Statement No. 33, "Financial Reporting and Changing Prices" (Statement).

The two different methods prescribed by the Statement for measuring the effects ofchanging prices were used in calculating the information which follows.

The first method provides data adjusted for"general inflation"using the Consumer Price Index forAllUrban Consumers as the broad-based measure of the general inflation rate. The objective ofthis approach is to provide financial information in dollars of equivalent value or purchasing power (constant dollars). Financial data are made more comparable by reporting the amounts in terms of a common unit of measure ofpurchasing power.

The second method of measurement adjusts for "changes in specific prices."

The objective ofthis method is to reflect the effects ofchanges in the specific prices (also referred to as "current costs") of the resources actually used in the Company's operations. Measures of these resources and their consumption reflect the current cost of replacing these resources, rather than the historical cost amounts actually expended to acquire them.

Both ofthese methods inherently involve the use ofassumptions, approximations, and estimates, and therefore, the resulting measurements should be viewed in that context and not as precise indicators ofthe effects of inflation.

Fuel inventories, the cost of fuel used in generation, and materials and supplies have not been restated from their historical cost in nominal dollars.

Regulation limits the recovery offuel costs to actual costs. Materials and supplies are not held for sale and do not give rise to a cost ofgoods sold, but are used principally in utilityplant construction. For these reasons inventories were treated as monetary assets.

The supplementary data below are presented in response to the Statement and are not intended to replace historical cost information.

SUPPLEMENTARYSTATEMENTOF INCOMEADJUSTED FOR EFFECTS OF CHANGINGPRICES For the year ended December 31, 1979 (Thousands ofDollars)

Constant Current Conventional Dollar Cost Historical (Average (Average Cost 1979 Dollars) 1979 Dollars)

Operating revenues Operating expenses excluding depreciation Depreciation Operating income.

Other incomenet Interest charges net Income (loss) from continuing operations (excluding reduction to net recoverable amount)

Reduction to net recoverable amount...

Increase in current cost ofelectric utilityplant during 1979"..........

Effect ofincrease in general price level..

Excess ofincrease in general price level over increase in current cost....

Gain from decline in purchasing power ofnet amounts owed.

Net.

$1,933,937 C$ 1,933,937 C$ 1,933,937 1,481,938 150,195 301,804 31,181 128,317 1,481,938 262,899 189,100 31,181 128,317 1,481,938 387,838 64,161 31,181~

128,317~

204.668 CS 91,964 '$

(32,975)

C$

(415,350)

C$

563,'380 (1,085,824)

(522,444) 363.104 363.104 C$

(52,246)

C$

(159,340)

C$ = average 1979 dollars.

'Including the reduction to net recoverable amount, the loss from continuing operations on a constant dollar basis would have been $323,386 for 1979.

"AtDecember 31, 1979, current cost ofelectric utilityplant, net ofaccumulated depreciation, was $8,994,000, while historical cost recoverable through depreciation was $4,422,000.

I 34/FPL

1979 1978 1977 1976 1975 Historical cost information adjusted for general intlation:

Operating revenues........

C$ 1,933,937 C$ 1,828,421 C$ 1.757,501 C$ 1.510.894 C$ 1 ~ 596,569 Income from continuing operations (excluding reduction to nct recoverable amount)................

C$

91,964 Income per common share (excluding reduction to net recoverable amount)......

C$ 1.44 Net assets at year-end at net recoverable amount.......

C$ 1,324,254 Current cost information:

Income (loss) from continuing operations..............

CS (32.975)

Income (loss) per common share.................

C$(1.65)

Excess ofincrease in general price level over increase in rrent cost.............

CS 522.444 ssets at year-end at net recoverable amount.......

C$ 1.324,254 General information:

Gain from dedine in purchasing power ofnet amounts owed C$

363, 104 Cash dividends per common share..................

C$2.32 C$2.22 C$ 1.99 C$ 1.98 CS1.94 Market price per common share at year-end.......

C$24'h CS29 C$32t4 C$35 CS20~/s Average consumer price index 217.4 CS ~ average 1979 dollars.

195.4 181.5 170.5 161.2 Substantially all electric utilityplant (which consists ofelectric utilityplant in service and construction work in progress, including land and intangibles, and nuclear fuel) was restated to dollars having equal purchasing power (constant dollars) using the Consumer Price Index for'AllUrban Consumers applied to the historical cost ofplant by vintage year.

Current cost ofelectric utilityplant was restated by applying the Handy Whitman Index ofPublic UtilityConstruction Costs or other appropriate indexes to substantially all electric utilityplant excluding production plant. Current cost ofproduction plant was restated by applying. the estimated construction cost per megawatt ofeach fuel type of IVE-YEARCOMPARISON OF SELECTED SUPPLEMENTARY FINANCIALDATA ADJUSTED FOR EFFECTS OF CHANGINGPRICES (Thousands ofAverage 1979 Dollars, except per share amounts)

Years ended December 31 ~

production facilities to the number of megawatts ofeach fuel type in the Company's present generation mix.

Under both methods the adjustment for depreciation was calculated by applying the rates and methods used for computing book depreciation to the restated plant amounts.

The rate regulatory process limits the Company to recovery ofthe historical cost ofelectric utilityplant. Therefore, the excess ofrestated value ofelectric utilityplant over historical cost is not presently recoverable in rates as depreciation, and is reflected as the reduction to net recoverable amount.

As prescribed by the Statement, income taxes were not adjusted.

The gain from the decline in purchasing power ofnet amounts owed represents the net effect on the Company ofholding monetary assets and liabilities. During periods ofinflation monetary assets such as cash and claims to cash lose purchasing power because they willbe able to purchase less at a future date; while monetary liabilities, primarily long-term debt, willbe paid with dollars having less purchasing power. Since the Company has more monetary liabilities than monetary assets it has a net monetary gain. This gain is not realizable by the Company but is simply an estimate ofthe effect on the Company ofholding monetary items.

The primary effect ofgeneral inflation on the Company is reflected in the rapidly increasing cost ofconstructing electric plant. This negative effect is offset by the fact that the Company will pay its long-term debt with dollars having declining purchasing power and relatively less ofthe Company's resources willbe required in future years to retire long-term debt.

FPL/35

Information for Investors Annual Meeting The 1980 Annual Meeting of FPL shareholders willbe in Fort Myers, Fla.,

on Tues., April15. Formal notice ofthe meeting, together with a proxy statement and form ofproxy, willbe mailed to shareholders on or about March 13, at which time proxies willbe requested by management.

The 1979 session at Sandpiper Bay Conference Center in Port St. Lucie attracted an estimated 500 persons, the largest turnout in a decade. During the meeting, stockholders elected the 11 directors currently serving, ratified the appointment of Deloitte Haskins &Sells as auditors, approved a charter amendment doubling to 100 millionthe authorized shares ofcommon stock and defeated a shareholder proposal on cumulative voting.

More than 86 percent ofoutstanding shares ofcommon stock were voted.

F~orm 10-K for 1979 A copy of FPL's Annual Report on Form 10-K filed with the Securities and Exchange Commission is available, without charge, to interested stockholders. Requests must be in writingand should be addressed to J.E.

Moore, Director ofStockholder Information, Florida Power &Light Company, P.O. Box 529100, Miami, Fla.

33152.

Company Ownership Atthe end of 1979, the Company had 40,819,178 shares ofcommon stock outstanding, owned by 35,425 holders of record. These shareholders include individuals and institutions, such as foundations, insurance companies and pension funds, which in turn hold large blocks ofstock on behalf of still more individuals.

Through acquisition of shares in the FPL Thriftand Employee Stock Ownership Plans, virtuallyall employees maintain ownership in, and therefore have direct interest in, the Company.

Common Stock Data Principal market for FPL common stock is the New York Stock Exchange. Ticker symbol is FPL. Newspaper listings generally use FlaPL.

The followingtable indicates the range (high/low) of trading prices for the past vo years 1979 1978 First Quarter 287/8/26i/s 27N/23%

Second Quarter 28K/26 27~/e/24Vi Third Quarter 28'/s/2578 29%/26/8 Fourth Quarter 26'A/24'/>>

28Vi/25%

36/FPL Transfer Agent Transfer agent, registrar and dividend disbursing agent for FPL stock is:

The First National Bank of Boston Shareholder Services Division P.O. Box 644 Boston, Mass. 02102 Telephone 617/434-6562 Dividends On Feb. 11, 1980, the Board of Directors declared a regular quarterly dividend of60 cents, the Company's 137th consecutive quarterly dividend. It is payable March 17 to holders ofrecord as of February 29.

The followingtable indicates dividends paid previously on common stock:

1978

$0.44

$0.52

$0.52

$0.52 1979 First Quarter

$0.52 Second Quarter

$0.60 Third Quarter

$0.GO Fourth Quarter

$0.60 Dividend Reinvestment Plan Shareholders may elect to have their dividends automatically reinvested in additional FPL shares through a low-cost Automatic Dividend Reinvestment Service offered by The First National Bank of Boston. Participants in the plan also have the option ofmaking supplemental cash deposits ofup to

$3,000 per quarter for investment.

Shareholders, using this convenient method ofincreasing their FPL holdings, invested an additional $629,000 during the past year.

Information and enrollment cards may be obtained by writingthe bank's Automatic Dividend Reinvestment and Cash Stock Purchase Plan, P.O. Box 1681, Boston, Mass. 02102.

Investor Communications Florida Hi-Lig/its, a newsletter prepared especially for holders ofcommon and preferred stock, is published several times each year.

A similar publication is sent periodically to bondholders.

Also, a Financial and Statistical Report containing comprehensive data for the years 1969-79 is distributed to professionals in the investment community and is available to others as a supplement to this report.

Inquiries concerning the Company's activities and requests for publications, including Quarterly Consolidated Financial Statements, should be directed to the FPL Stockholder Information Dept. (Telephone 305/552-4046) in care ofthe Principal Company Offices.

Auditors Deloitte Ilaskins &Sells Certified Public Accountants 1 Southeast Third Ave.

Miami, Fla. 33131 General Counsel Steel Hector &Davis Southeast First National Bank Building Miami, Fla. 33131 Principal Company Offices Florida Power &Light Company 9250 lV. Flagler St.

P.O. Box 529100 Miami, Fla. 33152 Telephone 305/552-3552

~,

Sandpiper Bay Conference Center at Port St. Lucie was site ofthe 1979 Annual Meeting of Stockholders. Aftcnvard, stockholders took a sightseeing tour of FPL's St. Lucie Plant, which is visible on the horizon.

Annual Report The Company's 1978 Annual Report to Stockholders was adjudged to be the best among investor-owned electric utilities having operating revenues in excess of $600 millionannually. The competition, sponsored by Reddy Communications Inc., cited FPL for "covering all the bases in a clear and concise manner" and for producing the report "at a unit cost about half the national average for all industry."

Principal Officers Directors rshall McDonald hairman ofthe Board and Chief Executive Officer John J. Hudiburg President and Chief Operating Officer E.A. Adomat Executive Vice President H.L. Allen Senior Vice President L.C. Hunter Senior Vice President J.G. Spencer Jr.

Senior Vice President R.lV. IUallJr.

Senior Vice President and Assistant Secretary R.E. Mlon Group Vice President D.K. Baldwin Vice President, Corporate Services E.L. Bivans Vice President, System Planning ill.C. Cook Vice President, Fuel Resources and Corporate Development B.L. Dady Vice President, Management Control and Services, and Assistant Secretary

.J. Dager Jr.

e President, Engineering, Projects and nstruction

'I'.E. Danese Vice President, Public Affairs J.H. Francis Jr.

Vice President, Corporate Communications R.J. Gardner Vice President, Strategic Planning L.C. Hauck Vice President, Legal Affairs J.L. Howard Vice President-Treasurer, Financial IV.ill.Klein Vice President, Economic Development A. D. Schmidt Vice President, Power Resources R. E. Uhrig Vice President, Advanced Systems and Teclmology Astrid E. Pfeiffer Secretary H.P. williams Jr.

Comptroller I.

II

• M.P. Anthony EUest Palm Beach, Fla. President, Anthony's Inc., a chain ofladies apparel retail stores. Serving since 1977.

tGeorge F. Bennett Boston, Mass. President and Chief Executive OfficerofState Street Investment Corp. and of Federal Street Fund Inc., investment companies; Managing Partner ofState Street Research and Management Co.; Chairman, Managing General Partner, State Street Exchange Fund. Serving since 1970.

'David Blumberg Miami, Fla. President, Planned Development Corp., a building and development firm. Serving since 1973.

Jean MeArthur Davis Miami, Fla. President, McArthur Dairy Inc. and McArthurFarms Inc., engaged in the production and distribution of dairy products. Serving since 1977.

tJohn J. Hudiburg Miami, Fla. President ofthe Company since Jan. 15, 1979. Formerly Executive Vice President, Finance. Serving since January 1979.

Robert B. Knight Coral Gables, Fla. Chairman, National Food Services Inc., a restaurant management company. Serving since 1977.

John M. McCarty Fort Pierce, Fla. Attorney. Serving since 1973.

tMnrshall McDonald Miami, Fla. Chairman of the Board of Directors ofthe Company since Jan. 15, 1979. Formerly President and Chairman of Meetings ofthe Board. Serving since 1971.

'Edgar H. Price Jr.

Bradenton, Fla. Chairman ofthe Board and President ofThe Price Co. Inc., a consulting firm. Serving since 1972.

tLewis E. Wadsworth Bunnell, Fla. Engaged in timber and cattle businesses.

Serving since 1970.

Gene A. 1Vhiddon Fort Lauderdale, Fla. President, Causeway Lumber Co. Inc., engaged in the sale of lumber and building materials.

Serving since January 1979.

tExecutive Committee

'Audit Committee Pictured recently at a regular monthly meeting of the Florida Power 8: Light Coinpany Board of Directors were (clockwise, from foreground) Chairman McDonald and Directors Davis, Knight, tvhiddon, McCariy, Hudiburg, tVadsworth, Price, Anthony, Blumberg and Bennett.

FLORIOA POWER d LIGHTCOMPANY 9250 lV. Flagler St.

P.O. Box 529100 Miami, Fla. 33152 Telephone 305/552-3552 BULKRATE U.S. POSTAGE PAID MIAMI,FL PERMIT NO. 75

Consolidated Statement of Income OPERATING REVENUES 1979 1978 1977 1976 (Thousands of Dollars) 1975 1974 1969 Revenue from electric energy sales.......

Other revenues Total operating revenues.........

OPERATING EXPENSES:

FuelOil..

FuelGas FuelNuclear Total fuel Other productionoperation.............

Interchange powernet.................

Transmission operation................

Distributionoperation..................

Customers Administrative and general......

~

~ " ~

~

Provision for uncollectible accounts.......

Maintenance Total operation and maintenance..

Depreciation Income taxes Taxes other than income taxes............

Total operating expenses........

OPERATING INCOME

$1,918,713 15,224 1,933,937 691,043 88,666 33,189 812,898 42,891 4,243 6,725 44,185 44,907 116,028 4,753 99,490 1 ~176,120 150,195 156,044 149,774 1,632,133 301.804

$1,634,111

'1,453,502

$1,181,093

$ 1,174,365

$943,297 13,115 11,082 8,587 8.279 7,758

$367,794 1,716 449,420 75,457 26,499 410,394 60,259 26,362 403,115 391,770 338,695 61,487 53,731 47,748 17,745 15,834 13,672 35,111 37,797 551,376 35,628 (18,597) 6,169 40,007 38,729 110,607 4,110 85,865 497,015 28,480 (13,771) 4,978 37,975 33,738 91,267 4,344 67,579 482,347 26,116 (10,110) 4,662 40,739 31,055 79,753 5,912 67,062 461,335 20,641 (1,803) 3,943 32,356 29,705 66,828 8,481 59,646 400,115 20,725 (4,215) 3,982 30,844 26,837 52,351 6,998 57,472 72,908 6,280 (1,051) 2,042 17,851 16,057 25,462 689 23,476 853,894 144,267 198,163 132,205 751,605 727,536 681

~132 595,109 125,166 88,591 82,322 74,775 171,098 85,368 114,822 51,306 117,807 96,972 87,558 71,241 163,714 38,247 50,847 31,365 1,328,529 1 ~165,676 998,467 965,834 792,431 318,697 298,908 191,213 216,810 158,624 284,173 85,337 1,647,226 1,464,584 1,189,680 1,182,644 951.055 369.510 OTHER INCOME (DEDUCTIONS):

Allowance for funds used during construction Allowance for other funds used during construction Income taxes Othernet Other incomenet............

INCOME BEFORE INTEREST CHARGES..

30,006 (34) 1,209 31,181 332,985 65,497 48,486 39,907 20,319 827 3,382 16,009 (1,558)

(1,731) 11,676 (1,734)

(298) 5,350 1,005 ~(850 52,986 49,849 24,528 12.720 66,204 343,225 311,628 257,417 269,796 208,473 (547) 1,160 613 85,950 INTEREST CHARGES:

Interest on first mortgage bonds....

Interest on other long-term debt.....

Other interest Allowance for borrowed funds used during construction Interest charges net.....

NET INCOME Preferred dividend requirements....

NET INCOMEAPPLICABLETO COMMON STOCK.

117,715 27,163 12,280 (28,841) 128,317 204,668 33,711 170,957 116,446 24,031

.6,619 113,530 22,947 7,606 110,637 22,261 7,674 96,161 22,271 6,143 78,723 9,892 14,384 30,359 248 1,916 (14,112) ~((2,893 131,984 131,190 140,572 124,575 102,999 211,241 180,438 116,845 145,221 105,474 29,138 27,653, 22,378 20,066 11,654 32,523 53,427 1,615 182,103 152,785 94,467 125,155

$ 93,820

$ 51,812 AVERAGE NUMBEROF COMMON SHARES OUTSTANDING(000)...

EARNINGS PER SHARE OF COMMON STOCK DIVIDENDSPER SHARE OF COMMONSTOCK.

40,524

$4.22

$2.32 40,120

$4.54

$2.00 40,050

$3.81

$ 1.66 I

39,542

$2.39

$ 1.56 35,940 34,050

$3.48

$2.76

$1.435

$1.325 27,876

$ 1.86

$0.955 13

Consolidated Statement of Changes in'Financial Position 1979 1978 1977 1976 1975 (Thousands of Dollars)

Total 1975-1979 Total 1970-1979 SOURCE OF FUNDS:

Current operations:

Net income.

Depreciation......

Amortization of nuclear fuel assemblies.....

Deferred investment tax creditnet........

Deferred income taxes Allowance for funds used during construction'otal.

Sale of first mortgage bonds.................

Reimbursement by trustee'from'pollution control and industrial development financings for construction expendituies......'...........

Issuance of other long-teim debt.............

Issuance of common stock Sale of preferred stock...,..........,.........

Sale of nuclear fuel.

'roceeds froin nuclear fuelsuit...............

Other sources Decrease in'working capital Total....:........................

. )

$204>668 150,195 1'1,992 52,725 77,075

, (30,006) 466,649 73,895 50,081 13,508 49,825 60,712 26,000 22,462

$763,132

$211,241 144,267 11,081 35,646 67,695 (20,319) 449,611 75,202

$ 180,438 125,166 49,487 35,513 91,660 (16,009) 426,255

$116,845 88,591 1,105 48,144 85,438 (65,497) 274,626 125,950

$145,221 82,322 10,332 44,527 (48,486) 233,916 276,146 858,413 590,541 33,665 182,360 366,395 (180,317) 1,851,057 551,193 18,4)6 7,466 506134 32,291 9,000 1,894 200 72,543 75,000 16,284 5,314 62,925 75,000 68,945 64,595 156,442 249,959 60,712 26,000 71,552 73,870

, 20,825 14,164 6,911 8,830 12,524 59.706

$635,878

$539,776

$557,124

$678,415

$3,174,325

$ 1,300,490 872,551 33,665 213,205 427,110 (294,681) 2,552,340 1,197,960 117,856 267,778 321,106 400,051 60,712 26,000 103,683 263,652

$5,311,138 APPLICATIONOF FUNDS:

Construction expenditures (excluding AFUDC)'...

Nuclear fuel (excluding AFUDC)'.................

Retirement,'edemption and current maturity of long-term debt and preferred stock...........

Dividends Other applications.

Increase in working capital Total.

$509,627 35,556

$432,586 19,925 71,617 108,998 2,752

$316,434 42,917

$372,870 31,384

$2,053,668 160,923

$422,151 31,141 11,687 83,142 6,001 52.040 55,810 127,356 24,112 10,671 76,405 94,136 9,884 70,032 71,589 867 82,635 285,551 485,221 43,616 145,346

$763,132

$635,878

$539,776

$557,124

$678,415

$3,174.325

$3,841,634 184,774 344,178 689,205 67,271 184,076

$5,311

~138 CHANGE IN WORKING CAPITALEFFECTED BY:

Increase (Decrease) in current assets:

Cash and temporary investments...............

Accounts receivable Fossil fuel stock Other changes net.

Decrease (Increase) in current liabilities:

Notes payable and current maturities of long.term debt and preferred stock...........

Accounts payable Customers'eposits Income taxes Estimated revenue refunds....................

Other changes net.

INCREASE (DECREASE) IN WORKING CAPITAL...

$ (26,990) 29,900 57,536 3,638

$ 29,829 (4,824)

(3,807) 9,482 3,690 13,990 (29,687) 45,068 3,968 63,239 197063 12,545 13,952 1,664 104,760 17,107 (4,929)

(1,370) 13,051 27,497 (49,925)

(6,972) 5,387 (12,383)

~(30,260 (24,582)

(16,281)

(10,866) 44,634

~(46,318 19,029 (8,208)

(13,563)

(37,064) 24,558

~((7,563 108,853 56,865 9,644 (27,539)

(9,051)

(39,153)

(42,640),

(6,387)

~((2,336

~(((,496) 3,490 (5,722)

(11,060) 41,066 (24,558)

(5,019) 8 10,671

~$ '((4,(64

$ (59.706)

S 52.040

$ 82,635 8

71,476 (20,105) 105,924 139,329 67,829 (86,768)

(53,162)

(57,753) 721 (175,591)

(79.576)

'Effective January 1, 1977 the Company adopted the policy of deducting only the portion of AFUDCincluded in Other income from funds provided from Current operations and from Construction expenditures and, commencing In 1978, Nuclear fuel. The Company had previously deducted total AFUDC.

14

0

~j. ~g. Qjjg~

~i~

11

Consolidated Balance Sheet (Year End) 1979 1978 1977 1976 1975 (Thousands of Dollars) 1974 1969 ASSETS:

Electric UtilityPlant (at original cost):

In service...........

Held for future use....................

Less accumulated depreciation.........

Net Construction work in progress..........

Nuclear fuel.

Less accumulated amortization.........

Electric utilityplantnet.........

Investments:

Storm and property insurance reserve fund....................

Construction funds held by trustee......

Other Total investments...............

Current Assets:

Cash Temporary investments................

Accounts receivable:

Customers, less allowance...........

Employees and miscellaneous.......

Incometaxrefunds.................

Materials and supplies at average cost.

Fossil fuel stockat average cost......

Other Total current assets.............

Deferred Debits Total

$4,126,955 110,333 1,003,365 3,233,923 1,119,820 101,404 33,300 4,421,847 9,562 2,499 12,061 6,663 109,552 20,640 74,906 142,681 26,710 381,152 32,472

$4.847,532

$3,917,301 108,348 869,887 3,155,762 806,471 151,674 21,673 4.092,234 15,099 858 5.496 21,453 4,952 28,701 93,454 6,838 61,765 85,145 36,213 317,068 29,390

$4,460,145

$3,710,825 110,984 741,862 3,079,947 574,813 129,294 10,592 3,773.462 14,406 232 7,893 22,531 3,824 80,130 4,496 1,676 66,662 66,082 14.209 237,079 38,230

$4,071,302

$3,447,151 45,831 625,102 2,867,880 602,481 86,376 1,105 3,555,632 13,838 743 5,480 20,061 4,648 4,000 69,428 6,232 40,329 68,211 53,537 17,589 263,974 26,326

$3,865,993

$2,622,669 52,528 544,440 2,130,757 994,081 54,992 3,179,830 13,838 2,637 1,556 18,031 2,543 9,912 67,409 3,512 68,851 39,585 18,320 210,132 8,945

$3,416,938

$2,461,325 51,481 486,212 2,026,594 715,740 23,851 2,766,185 13,838 18,921 2,651 35,410 2,972 63,127 3,826 60,852 37,921 13,268 181,966 8,869

$2,992,430

$ 1,268,966 12,701 266,393 1,015,274 148,256 1,163,530 11,268 475 11,743 6,920 19,847 21,655 2,612 29,914 3,352 3,875 88,175 625

$ 1,264,073 LIABILITIES:

Common stock Capital stock premium and expense....,..

Retained earnings Total common shareholders'quity....

Preferred stock without sinking fund.......

Preferred stock with sinking fund..........

Long-term debt Total capitalizqtion..............

Current Liabilities:

Current maturities of long.term debt and preferred stock.................

Notes payabie Accounts payable trade..............

Customers'eposits..................

Income taxes Othertaxes Interest accrued Estimated revenue refunds............

Other Total current liabilities...........

Deferred Credits:

Accumulated deferred income taxes.....

Unamortized investment tax credit......

Other Total deferred credits............

Reserves:

Storm and property insurance..........

Injuries and damages and other........

Total reserves..................

Contributions in aid of construction........

Total 770,350 (4,038) 634,083 1,400,395 311,250 121,250 1,838.426 3,671,321 55,200 32,000 62,761 89,986 12,623 72,700 40,520 97,825 463,615 448,215 229,608 13,354 691,177 9,562 11,857 21,419

$4,847,532 756,841 (3,751) 556,772 1,309,862 311,250 75,000 1,766,861 3,462,973 62,618 46,480 79,120 57,257 35,118 39,055 90,554 410,202 370,329 176,883 14,939 562,151 15,099 9,720 24,819

$4,460,145 749,375 (3,715) 454,529 1,200,189 261,250 75,000 1,744,243 3,280,682 12,693 39,508 84,507 44,874 33,485 34,405 66,577 316,049 299,722 141,237 11,040 451,999 14,406 8,166 22,572

$4,071,302 749,375 (3,612) 368,227 1,113,990 261,250 75,000 1,779,771 3,230,011 11,687 20,035 31,300 70,945

'7,810 28,618 34,943 24,558 53,342 283,238 219,733 105,724 6,784 332,241 13,838 6,665 20,503

$3,865,993 676,832 (3,393) 334,524 1,007,963 186,250 75,000 1,665,698 2,934,911 1,713 33,500 25,578 59,884 48,876 28,976 34,266 48,643 281,436 118,240 57,580 6,927 182,747 13,838 4,006 17,844

$3,416,938 613,907 (3,090) 260,892 871.709 186,250 1,454,591 2,512,550 11,597 132,469 35,222 50,833 6,236 30,666 31,086 37,796 335,905 73,009 47,248 7,854 128,111 13,838 2.026 15,864

$2,992,430 299,242 (2,039) 172,800 470,003 36,250 600,926 1 ~107,179 36 10,008 32,233 13,344 10,781 5,746 18,914 91.062 12,296 16,864 13,107 42,267 11,268 2,184 13,452 10,113

$ 1,264,073 12

Q Capital Expenditures 1980-1984 Estimated 5 Mtttona 707 375 97 470 375 575 250

,251 In 1979 the Company entered into a nuclear fuel lease arrangement with St.

Lucie Fuel Company. a non-affiliated corporation, for a portion ofthe nuclear fuel for St. Lucie Unit No. 1. Under the lease arrangement.

St. Lucie Fuel Company purchased. in 1979, approximately $61 millionofnuclear fuel from FPL foreventual lease back to the Company. Nuclear fuel expenditures by St. Lucie Fuel Company in 1980 are estimated at $51 million.

Under the terms ofa contract signed in 1978, International Minerals and, Chemical Corporation willbe a major supplier ofthe Company's nuclear fuel requirements. In 1980, IMCwillprovide 500.000 pounds ofuranium as a by-product ofa phosphate fertilizer operation. In 1981 through 1992, one millionpounds willbe supplied annually.

Initialdeliveries are anticipated in April 1980.

The first and second nuclear fuel cores (approximately a 5-year supply through 1981) for St. Lucie Unit No. I are under contract with Combustion Engineering Inc. A similar contract is being negotiated for St. Lucfe Unit No. 2.

There are two additional contracts for uranium supply. The Company will receive 300,000 pounds ofuranium annuaHy from United States Steel Corporation, under a five-year contract which commenced in June 1979. A five-year contract with Caithness Corporation specifies deliveries of 200.000 pounds of uranium annually.

In 1975 FPL filed suit against Westinghouse Electric Corporation concerning its contract for the nuclear fuel requirements and related services, including removal ofspent fuel. for the

'Ibrkey Point Units. With respect to the uranium issue, a settlement was reached in late 1979. Under the terms ofthe settlement. FPL received $26 millionin cash from Westinghouse and willbe provided goods and services on favorable terms through 1994. The Company's dispute with Westinghouse over spent fuel removal has been tried and is awaiting a decision by the court.

Florida Public Service Commission (FPSC)

The FPSC became an appointed commission in January 1979. Its five members have staggered terms ofoffice.

The term ofWilliamT. Mayo expires in January 1981, and the Governor' appointment to fillthis position is likely during late 1980. The five Commissioners are:

70 71 72 73 74 75 78 77 78 79 80 81 82 83 84 Nate: tndudee nudeet lect end csee ence tte tunas used dulna~

Joseph P. Cresse (term expires January I, 1983)

Gerald L. Gunter (term expires January

1. 1983)

Robert T. Mann, Chairman (term expires January I, 1982)

John R. Marks, III (term expires January

1. 1982)

WilliamT. Mayo (term expires January I, 1981)

Under provisions of Florida's Sunset Legislation. the statutory authority ofthe FPSC is being reviewed by the state legislature. The legislature must re-enact the FPSCS authority before July I, 1980.

The legislature is expected to complete its review during the regular session in the Spring.

In early March, 1980 the Florida Public Service Commission approved changes to the fuel adjustment clause for Florida utilities. Effective AprilI, 1980 the fuel adjustment factor willbe a levelized amount and willbe based on six-month projections of fuel costs and KWH sales.

The six-month periods willrun April-September and October-March.

A true-up ofunder or over recoveries resulting from the difference between actual and projections willbe made. The true-up amount from the previous six months willbe determined in the second month and willbe collected or refunded during the last four months ofeach succeeding six-month projected period.

Under or over recoveries during the period willbe deferred. Carrying charges, based on the commercial paper rate. will be applied to under or over recoveries.

There is no change in the types offuel costs to be Included in the clause. The Commission has provided for "special" hearings to deal with unusual situations by considering whether modification of the approved charges should be made.

A transition adjustment willtake into consideration the fuel expense that was incurred in February and March but will not have been recovered as a result ofthe two-month lag in the old clause. This amount willbe based on the difference between the fuel expenses for February and March and the fuel costs incorporated in the base rates. This total amount willbe spread over a twelve.month period beginning April1.

1980.

The fuel adjustment dause to be implemented April 1 willnot indude an "incentive" feature. The companies and the Commission'8 staff are directed to develop incentive proposals for consideration by the Commission prior to May 1, 1980. Unless an incentive feature is adopted and incorporated into the new clause at a future date, the Commission has indicated itwill reinstate the present fuel adjustment dause.

Future Rate Relief Needs The Company expects that future rate relief needs willbe In line with FPL's goal to keep increases in base rates over time at or below the rate ofinflation.

The timing ofthe Company's next rate case depends on several factors. These factors indude the growth In KWHsales.

the rate ofinflation, and the in-service dates ofMartin Units Nos. 1and 2. Based on budgeted costs and FPLs present allowed rate of return. the revenue requirements are $77 millionfor Martin No. 1 and 440 millionfor Martin No. 2.

The FPSC historically has disallowed unrecovered fuel in setting base rates, taking the position that recovery of fuel costs should be accomplished through the fuel adjustment dause. Afterbeing adjusted for unrecovered fuel, FPL's 1979 rate ofreturn was 8.78'Yo only slightly below its authorized rate of9.08.9.24/o.

The test year on which the rates are based was 1976.

Federal Energy Regulatory Commission (FERC)

A request for rate increase on sales to customers for resale filed with FERC in 1977 was placed in effect March 1, 1978 subject to refund with interest. Arate settlement with the Company's wholesale customers has been approved by FERC, under which the Company will receive increased annual revenues of approximately $3.7 million.Adequate provision has been made for refunds which are required to effect final settlement.

Rate Increase History FPSC Amount Granted Effective Date of Increase Test Year Date Filed Amount Requested Interim Increase:

Granted Effective Rate of Return Allowed-%

Return on Equity Allowed %

1977

$ 195.5 Million(1)

July 8, 1977 1976 October 1976

$335 Million

$87.9 Million March 14, 1977 9.08-9.24 13.50-14.00 1975

$107 Million(2)

May 1, 1975 1974 August 1974

$143 Million

$69 Million(3)

January 28, 1975 9.04-9.20 13.50-14.00 1973

$14.6 Million

$40.1 Million

$ 6.2 Million January 31

~ 1973 May 10, 1973 November 30, 1973 1971 1972 December 1971

$ 79.9 Million 8.57-8.76 12.75-1 3.25 (1) Orders allowed S200 million of CWIP in rate base with no AFUDC charged, normalization of current book tax timing differences. and included higher depreciation rates and annuaiizatlon of depreciation and certain fixed costs for St. Lucio No. 1.

(2) Order allowed $200 millionot CWIP In rate base with no AFUDC charged and full normalization of current book tax timingdifferences. Includes soparato collection of franchise fees equal to approxlmatoly $30 million.

(3) Portion was refunded following a Florida Supremo Court order ln December 1976.

Plants Under Construction or Planned Plant FuelType-Scheduled Completion Date Net Warm Weather Capability MW Martin Plant Unit No. 1 Unit No. 2 Unit No. 3 Unit No. 4 St. Lucie Plant Unit No. 2 Dade County Resource Recovery Jacksonville Electric Authority Unit No. 1 Unit No. 2 Oil Oil Coal Coai Nucleary Coal Coal 1980 1981 1987 1989 1983 1981 1987 1989 775 775 700 700 802(')

40 300('I 300(')

(1) Includes approximately 13/o which Is the minimum expected to be sold to various cooperatives and munldpaiities.

(2) FPL's share ofoutput from proposed units to be Jointly owned withJacksonville Electric Authority.'Combination ofjoint ownership and firmpower purchases.

Dates shown are for planning purposes. Contract between JEA and their architect-engineer specifies in service dates of 1986 and 1987.

Also planned for late in the decade are two coal-fired units to be Jointly owned with the Jacksonville Electric Authority (JEA). The contract between JEA and their architect-engineer specifies in-service dates of 1986 and 1987; however. In.service dates of 1987 and 1989 are used for FPL's planning purposes. Discussions are continuing withJEA regarding the two-unit plantv which willlikelybe located in northeast Florida. The output ofeach 600 MWunit is expected to be shared on a 50/50 basis composed ofpart ownership and firm power purchases.

Other sources ofgeneration for the 1980's include Dade County's Resource Recovery Fadlity, which willpr9vide steam to FPL forelectrical generation.

Completion of the 40 MW, two-unit plant is scheduled for 1981. The Company also has a co.generation agreement with U.S.

Sugar Corporation to purchase power produced from the waste residue ofthe sugar cane plant. In addition. FPL has 371 MWoffossil-fired capacity on cold stand. by status which can be reactivated.

Reactivation would require six months to a year and obtaining certain required permits. Current plans call for reactivation of264 MWin 1988.

Load Management As part ofits planning to meet increasing demand for electricity, FPL is analyzing energy consumption by its customers and the use ofvarious load management techniques. Time-of-day rates and utilityload control are two techniques under consideration as methods of shifting electricity usage from peak periods to off-peak periods.

The Company is conducting a load control test jointlywith Florida Power Corporation. The two.year test, which began in May 1979, utilizes a bi-directional communication system.

Presently 120 customers are participating in the test by permitting FPL to control water heaters and air conditioning systems. The Company is analyzing test results to determine possible demand reduction during peak periods.

An additional test is scheduled for implementation in late 1980. A bi.directional telephone system willbe used to test customers on a time-of-day rate, a demand rate, and load control.

One thousand customers willparticipate in the two-year program.

Capital Expenditures and Finandng The Company expects expenditures under Its 1980-1984 construction program to total approximately $3.25 billion.External financing in 1980 Is expected to total $450 mIHIon. This total includes repayment of$32 millionof short-term debt outstanding at year-end and $50 millionof8.V89o first mortgage bonds maturing in August 1980. The February 1980 sale of$ 125 millionof 15'irst mortgage bonds initiated the 1980 financing program.

FPL's long-term capitalization ratio goals are 50.5Zlo long term debt. 8-Ilo preferred stock. and 38-42% common equity.

OilSupplies Acontract with Exxon Company.

U.S.A. is intended to provide a substantial portion ofthe Company's residual oil requirements through 1981.

After 1981 the Exxon contract will

" continue year to year until canceHed by either party. Ifeither party elects to cancel. the contract willcontinue at full quantity through the subsequent calendar year and then willbe phased out over a three year period at reduced quantities. The Company's contract for a substantial portion of its distillate fuel requirements expired in February 1980.

Under the terms of the residual oil contract. Exxon is now FPL's supplier of distiHate oil. Additional fuel supply contracts are currently under negotiation.

Anyoilin excess ofcontract amounts needed to meet system demand willbe acquired on the open market.

,On March 1, 1980, contract prices at Port Everglades were $27.49 per barrel for L% sulfur oQ and $20.36 per barrel for higher sulfur oiL As a result ofthe worldwide shortage ofcrude oil, Exxon notified its customers in February 1979 that itwould aHocate deliveries oflow sulfur residual oiluntil further notice. The allocation program was continued through the year.

Allocations of 1% sulfur oil ranged from 53% to 65% during 1979, while total deliveries. including deliveries ofhigher sulfur oilin lieu of 1% sulfur oil. ranged between 93% and 95% from Aprilto July 1979. Total deliveries were 100%

thereafter.

FPL normally burns gas and low sulfur oilin most of its fossil-fired units in order to comply with air quality standards. In seven ofits units the Company has installed new oilburners which. because oftheir greater efficiency, reduce opacity and particulate emissions.

Installation of new burners in four additional units is scheduled for 1980.

In order to burn higher sulfur oil in some ofthe plants itwas necessary to obtain authorization from regulatory authorities to exceed emission standards.

The Company sought and obtained temporary relaxation ofthe state rules limitingstack emissions. Longer-term

'elief has also been obtained. State regulatory authorities approved permanent relaxation ofthe State' opacity standards. In addition, State authorities and the EPA have approved a variance for FPL from current opacity, particulate and sulfur dioxide emission standards.

Natural Gas Supplies Natural gas is supplied under a contract withAmoco Production Company for a firm200,000 mcfper day to June 1983. Thereafter gas supplied to June 1988 willbe limited to gas from certain wells, which are supplying gas to the Company in June 1983. but no greater than 200,000 mcf per day. Transportation ofthe gas is provided by Florida Gas

'Bansmission Company under a firm contract covering the period of the supply contract. In April1979 FPL signed a ten-year contract with Florida Gas for interruptible supplies of natural gas.

Deliveries under this contract averaged 51,000 mcf per day in the second half of 1979. In December 1979 deliveries of natural gas began under an interruptible contract with Consumers Power Company. Under the contract, deliveries are subJect to gas and pipeline availability and continuance of federal permits.

Nuclear Fuel Supply FPL's operating nudear units require approximately one milBon pounds of uranium per year. Uranium inventory at year-end was approximately 800,000 pounds.

Nudear fuel expenditures in 1980 are budgeted at $38 miHion. During the period 1980 through 1984, the Company estimates that nuclear fuel purchases will total $395 million,exduding purchases by St. Lucie Fuel Company.

~ Coal

~ Nuclear I,:..:t Natural Gas

~ Oil Generation by Fuel Type Percent 1980.1989 Projected 7.. t 58 I'13 26 28 21 22 31 30 28 27

,'4 22

,'9 I 19 l 15

17 t14

13

'3

)

i 12, 47 51 57 64 57 58 57 59 75 78 77 78 79 80 81 82 83 84 85 88 87 88 89 Nolo: Assumes o<nsns<e rsoslrs ot 7<story point stssrn esrerstors In test sr<4 Iese<

Various conservation efforts, including the Watt-Wise'and Home Energy Audit programs, account for a substantial reduction in the projected 1989 summer peak. The projected 1989 summer peak has been lowered by a total of 1,705 MW due to conservation.

Generation Expansion Plan Several changes were made in 1979 in the generation expansion plan for the next decade. During the year the Company also began preparing for a test project that may provide another means of introducing coal to its system.

In the Spring of 1980. the Company willbegin experimenting with a fuel mixture of finely pulverized coal suspended in oil. The coal/oil mixture (COM) wiHbe tested as a boiler fuel in Sanford Unit No. 4, which is designed to burn oiL This willbe the first test conducted to determine the effects of using COM in a boiler designed to burn oil. Other utilities have tested COM in oilers originally designed to burn coal.

Since there are no commercial manufacturers ofCOM who can supply its needs. FPL is constructing a fuel preparation plant at Sanford. Certain modifications to Unit No. 4 willalso be required for the test. The coal willbe transported to the site from Virginiaby rail. Itwillthen be pulverized to the consistency oftalcum powder and mixed with oil.

Manufacturing Employment Rorida hoUsaad9 IA cO n

oo ro c9 rf 69 70 7r 73 73 74 76 76 77 78 79 Sooroo: forao Depaneow or~

The test willbe conducted for 120 "full power burn" days. The program could last as long as one year ifmultiple test periods are utilized. The Company has received approvals from the State' environmental authorities to conduct the test. The application to obtain EPA approval is in process. Inclusion ofthe project's operating and capital costs in the calculation of the monthly fuel adjustment charge has been approved by the Florida Public Service Commission.

Should the experiment prove financially and technically feasible, a coal/oil mixture may be used in certain other oil-burning units. thus reducing FPL's dependency on oil. However, the Company is unable to predict what capital expenditures may be required to satisfy environmental requirements before the mixture could be used as a fuel in its plants.

Construction continues on the two oil-burning units at the Martin Plant.

with completion ofUnit No. 1 expected in late 1980 and Unit No. 2 In mid-1981.

The cost of the plant is now estimated at

$645 million. Both units have been classified as "existing" facilities pursuant to the Revised Interim Rules under the Power Plant and Industrial Fuel Use Act, and willbe allowed to burn oil as a boiler fuel.

Late in 1979 a break occurred in the embankment ofthe cooling reservoir at the Martin Plant, resulting in the loss of the cooling water and flooding of surrounding areas. Soil erosion may have been the cause of the break, but the cause ofthe erosion has not been definitely determined. Design modifications to the reservoir are estimated to cost about $37 million.The planned in-service date for Unit No. 1 will be delayed from June to late 1980. Based on the projected 1980 summer peak of 8.990 MW. system reserves for the summer should be adequate.

The second nuclear unit at St. Lucie Is scheduled for completion in 1983. Unit No. 2 has a net waim weather capacity of 802 MW,ofwhich approximately 139's the minimum expected to be sold. under certain conditions, to various cooperatives and municipalities. The total cost of the unit is now estimated at

$ 1.1 billion, up from $925 million. This increase reflects escalation and scope changes. The Atomic Safety and Licensing Appeal Board held a public hearing to consider grid stability in late 1979, and a decision is pending.

Number ofTourists VisitingFlorida Mririaas lA O

O CV rl 69 70 77 73 73 74 76 78 77 78 79 Sooroo: Rccido Dooorooool or~

r979 9rorewary FPL has signed a contract with Tampa Electric Company to purchase power from one ofits coal-fired units so called "coal by wire". Big Bend No. 4 is scheduled to be in commercial operation in the second quarter of 1985. The Company anticipates receiving 292 MW, 208 MW,and 104 MWin the years 1985-1987. respectively.

Due to the revised load forecast and to the contract forpower from Tampa Electric, FPL has been able to defer the completion dates ofits planned coal units. The two 700 MWunits were planned for the Martin site in 1985 and 1987. but are now scheduled for 1987 and 1989. The estimated cost of the first coal unit has been revised to $ 1.1 billion to reflect the later completion date.

MW 17,000 16,000 Net Capability<< ) and Peak Load Megawatts n

C3 Purchase power from Tampa Electric Company O

CA 15,000 14,000 13,000 12,000 11,000

~ 60 Minute Net Peak Load 1980-1990 Projected Mid-Point ot Forecast Band cu CV co O

cu JEA No. 2 Martin No. 4 Cutler(2)

JEA No.1 Martin No. 3 St. Ludo No. 2 Martin No. 2 and Dade County Resource Recovery Martin No. 1 10,000 9,000 8,000 7,000 6,000 I 5,000 4,000 3,000 2,000 1,000 O~ O n

CA CA co CA r 9 cu CA g zm cr)

IA n

Crt

c. I~

Crr co@A CA Summer Peak Load MW 60 Minute Net 1980.1990 Projected 19694,329 19705,001 1971 5,378 19126,011 19736,894 19747,235 19757,076 19767,598 19777,841 19788,345 19798,650 19808,990 1981 9,250-9,490 19829)520 - 10,015 19839,795-10,575 198410,080 - 11,160 198510,370- 11,780 198610,670- 12,435 198710,980 - 13,125 198811,300- 13,885 198911,575 - 14,305 199011,850- 14,775 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 (1) Rated at continuous capability beeinntne 197B.

(2) Reactivation trout cold-standby status.

+ Winter peak 9,732 MW March 1980

Residual Fuel Oil Cost per Barret-Port Bverelades Month End Prico ep>>,

Mpr.

June Sept Op>>.

78 78 78 7Q 78 Nptp; Epecpvp pup>>pry 21, 1140 prlpl por p<<lpr

<<pi32748rpr trrplpp>>12042rpr2rnppa Allowance for Funds Used During Construction (AFUDC)

Total AFUDC increased in 1979 due to igher amounts ofconstruction work in progress (CWIP). Total CWIP at year-end was $1.1billion, an increase of $313 millionover 1978. Atyear-end the Company's investment in St. Lucie Unit No. 2 and Martin Units Nos. 1 and 2 totaled $932 million. up $256 million from the 1978 figure.

Dividends The Company's quarterly dividends on common stock were increased in 1979 to 60(7 per share. The 15/o increase brought the effective annual rate to $2AO. This action reflects FPL's goal of moving closer to the industry ratio of dividends to earnings. Dividends have grown at a compound annual rate of IP/o since 1974.

Financing and Capital Expenditures External financing for the year totaled

$188.5 million. Included in this total were a $50 millionbank term loan. $50 millionof 8.70% preferred stock. $75 millionof 12-1/8% first mortgage bonds.

and $ 13.5 millionraised through the issuance ofcommon stock in connection with employee benefit plans. In addition.

approximately $61 millionwas received

~ from the sale of nuclear fuel to the St.

Lucie Fuel Company in connection with the implementation of a nuclear fuel lease for a portion ofthe fuel for St. Lucie nuclear Unit No. 1.

Atyear-end, the Company's capitalization was 50.1% debt. 11.8%o preferred stock and 38.1%o common equity. Short-term debt outstanding totaled $32 million.Capital expenditures for the year totaled $575 million.

Operating Nuclear Units FPL's three operating nuclear units,

'Itirkey Point Units Nos. 3 and 4 and St.

Lucie Unit No. 1. provided 26% of total generation for the year. As a result of the accident at Three Mile Island. the Company has made certain modifications to its units and increased personnel. and intensified personnel training.

Capitalization Ratios Percent 63 70 71 72 73 74 7S 78 77 78 The Company has been experiencing problems with the steam generators in the two 'IiirkeyPoint Units. and has plugged certain ofthe pressurized water circulation tubes. Aprogram of preventive plugging has kept the units in service, with no leaks between refueling outages for several years. Currently, 19.4%

of the tubes in Unit No. 3 and 20.6% of the tubes in Unit No. 4 have been plugged. The Company has Nuclear Regulatory Commission (NRC) approval to plug up to 25% ofthe tubes in each unit without reducing output.

New steam generator tube bundles.

which are needed forpermanent repairs.

were delivered for one unit in 1979.

Delivery of tube bundles for the other unit is anticipated in the first quarter of 1980. The Company has set a planning date oflate 1980 for the repair ofUnit No. 4. but no firmdecision has been made. The repairs are expected to take six to nine months per unit. The cost of the repairs is estimated at $61 millionper unit.

UtilityPlant Investment 55 50 45 40 35 2.5 2.0 0.$

0 68 70 71 72 73 74 7578 77

'78 78 Amendments to the operating licenses are required. During 1979 the NRC allowed a petition for late intervention by one individual. Public hearings are required but hearing dates have not been set.

Minorcorrosion in the steam generators of St. Lucfe No. 1 had been detected in 1978. During the Spring 1979 refueling outage, work was done to minimize future corrosion. A $ 15 million program to further mitigate corrosion has been approved. and portions ofthis program willbe done during the Spring 1980 refueling outage.

The Economy The nineteen. seventies was a decade ofextremes for the Florida economy.

Auspicious beginnings were reversed by 1975, when Florfda experfenced one of its worst recessions ever. 7ypfcaHy, the Florida economy tracks the U.S. economy withapproximately a one. year lag on the downside. Thus, the bottom ofthe last sertous recession felt at the national level fn 1974 was not experienced in Florida until one year later.

Recovery began in 1976. Population growth, tn.migratIon. a strong tourist industry, industrial growth and a healthy real estate market have all come together to aHow the Florida economy to close out the decade on a strong note.

Florida's strong population growth conttnues to be the keystone that provfdes the fundamental strength to the economy. In 1970 the state population stood at 6.8 million.Atthe close of this decade population stood at 9.3 million.

This is a compound annual growth rate of 3.5%o which compares to an annual rate of 0.8% at the national level. During the next two decades, Florida's population is expected to continue growing at a rate 1%

to 2% above the national rate.

In 197g the tourist industry contributed an estimated $ 16 billionto

. the Florfda economy. Hotel/motel occupancy rates have recovered from the slowdown brought on by fuel shortages fn the spring of 1979, while afr travel and internatfonal tourism continue to thrive.

Total employment reached 3.399.200 at the end of 197g, an increase of 4.9%o over 1978, while manufacturing employment grew 5.2%, reaching a level of465.600. Manufacturing continued its ever-growing role in creating jobs. In 1979 one out ofevery seven new Jobs fn the state was fn manufacturing.

The construction industry experienced strong growth in 1979. especially the housing industry in south Florida. Total residential housing starts for the state were 196,000 which was 22.1% greater than fn 1978. The speculatton and overbulldfng characteristic of the 1975 recession do not exist today, because builders have been much more cautious and construction appears to be in line with the healthy demand.

Construction Contracts Let Numtter Of DWelrrntt Unttd State ol Rorkta Tttotrdanrtd 69 70 7t 72 76 76 7$

76 77 76 76 dourea McGraw NILF,W, oooto Dhlsion Most professional forecasters are caHtng for a national recesston fn 1980 with a variety ofvfewpoints as to the length and severity ofany such downturn. FPL forecasts that the Florida economy willexperience a slowdown during the first two quarters of 1980 but a recession will,fn all likelihood, be averted. Most indicators show the Florida economy continuing to expand but at a decreasing rate.

Load Forecast FPL continues to study the economic.

demographic. technologfcal and soctal factors which influence the demand for electricity. As part of this continuing study, the Company's forecasts of customers. sales and peak load were reviewed during the year. The peak load forecast was revised downward slightly.

Summer peak load through 1990 is now projected to grow at a compound annual rate of 3.8%, compared to the previously projected rate of 4.1%o. The downward reviston reflects various energy conservation measures. including an expected greater saturation ofenergy efffctent homes and appliances. A record summer peak of8,650 MWoccurred on July 19, 1979, a 3.7/o increase over the 1978 summer peak. FPL's highest peak to date was a winter peak of 9,732 MW, set on March 3, 1980.

The ten-year forecast ofcustomer and sales growth remains about the same as last year's forecast, with the most probable compound annual growth rates at 3.2% and 3.6%o. respectively.

In late 1979 the Company completed its first direct interconnection with Georgia Power Company. vfa a 240 kv transmission line. The intertfe will enable FPL and Georgia Power to exchange power during emergencies.

thus improving the reliability ofeach system. In addition. FPL has been purchasing economy power from Georgia Power since the interconnection was completed.

Forecast ofSummer Peak Load'ompound Annual Growth Rate Most Low Probable

~Ht h Five Year Rate (1979-1984) 3.1 3.9 5.2 Ten Year Rate (1979-1989) 3.0 3.8 5.2 Fifteen Year Rate (1979-1994) 2.8 3.6 4.5

• The possible addition ofcertain new major wholesale customers fs not included in the forecast.

FPL fs continuing fts nine-year program to promote energy conservatfon.

An increasing number ofbuilding Jurisdictions throughout FPL's service area are considering incorporating the Company's Watt-Wise'program as an equivalent to the state's energy effictency code. The Company anticipates that 35%o ofnew single-family homes added to fts system fn 1989 willbe Watt-Wise' homes. The proJected 1989 summer peak has been reduced 155 MWdue to the impact ofthe Watt-Wise'program.

The Company also expects 1.5/o of tts residential customers, in the years 1980 through 1985, willtake advantage, of fts Home Energy Auditprogram. A 75%o foHow-up rate is expected. The impact of the audit program on the projected 1989 summer peak has been a reduction ofthe projected peak by an addittonal 50 MW.

l

G@g$ 93 1979 1978 1979 vs 1978 Percent Change Compound Annual Growth Rates Percent 5 Year 10 Year Earnings Per Share ividends Paid Operating Revenues (000)

Net Income (000)

$4.22

$4,54

$2.32

$2.00

$204.668

$211,241

$ 1,933.937

$ 1,647,226 (70) 89 8 5 16.0 11.9 9 3 17A 15.3 18 0 (3. I) 14.2 14A Customers Year End (000) 2.141 2,032 53 45 58 KWHSales (millions) 41,966 40.602 34 5.1 7.5 Use Per Residential Customer KWH-11354 11,790 (3.7) 0.2 1.5 Revenue Per KWHResidential 4.66<

4.10/

13.7 9.6 Book Value Per Common Share Capital Expenditures (millions)

External Funds (millions)

$34.31

$32A9 5.6

$575

$473 21.6

$249

$ 152 638 6.0 7.9 Utility Plant Investment (000)

Net Warm Weather Capability at

'IIme of Summer Pea+ MW 10,957 10.886 0.7

$5.458,513

$4,983.794 9 5 10.9 4.0 14.3 8.0 immer Peak Load MW (60 minute net) 8.650 8,345 7.2

Customers and Sales During 1979 FPL added 108,289 customers. Atyear-end the Company was serving 2.140.587 customers, a 5.3/0 increase over 1978. This increase in the number ofcustomers. along with a 2%

decline in use per customer, resulted in a 3 4/0 increase in KWHsales for the year.

FPL's residential customers reduced consumption in 1979. Average use per residential customer was 11.354 KWH.

some 3.7/0 less than the corresponding figure for 1978.

New Customers Added Thousands 115

~ 108 87 88 69 70 71 72 73 76 75 76 77 78 79 Revenue The growth in KWH sales was reflected ln increased revenues for the year, as were higher fuel adjustment revenues. For 1979, operating revenues increased 17.4'r $287 millionover 1978. Much of the increase was due to fuel adjustment revenues, which were

$224 millionhigher than those recorded for 1978.

3 Per Snrre Earnings per Share and Dividends Paid per Share NINGS DENOS 69 70 71 72 73 76 75 78 77 78 79 Earnings Earnings per share were $4.22, down 7/0 from $454 in 1978. Net income was

$204.7 million, a decrease of 3/0 from the previous year. The primary reason for the decline in earnings ls the two month lag in the Company's fuel adjustment clause, which resulted in underrecovery of fuel costs. (See FPSC. Page 9)

Fuel Expense Oilprices rose dramatically during 1979. The contract price for low sulfur oil: which was $ 14.13 per barrel at the beginning of 1979, had dlmbed to $26.69 per barrel by year.end.

Natural gas prices also increased during the year. An interruptlble contract for natural gas was signed in April1979.

FPL's contract with Sun Gas Company expired in June. Unit prices under the new contract are substantially higher than those under the expired contract.

but still less than equivalent oilprices.

An additional lnterruptlble contract for natural gas was signed and deliveries began in December. (See Natural Gas Supplies). Despite these actions, it was necessary to burn more oilto meet increasing system demand and to replace nudear generation during refueling and maintenance outages. Oilusage increased by 3;1 millionbarrels.

Sources of Funds forConstruction Percent 60 79 25 38 40 21 69 70 71 72 73 76 75 76 77 78 79 The increased fuel prices and the greater use ofoil impacted the Company's fuel expense. Fuel expense increased 47A/0 or $261.5 millionover 1978. Fuel expenses are reflected ln revenues, after a two month lag. through the fuel adjustment clause. Because of this lag, underrecovery of fuel costs for the year totaled $47.5 million($0.60 per share) compared to $3.9 millionln 1978.

Other Operation and Maintenance Expenses These expenses reflect increases in the number ofcustomers served and the amount ofelectricity generated. higher payroH and related employee benefit costs. and the maintenance ofproperty.

In addition, expenditures for safety reviews and response to increased regulations resulting from the accident at Three MlleIsland in Pennsylvania are included ln these expenses.

Apart ofthe increase ln expenses ls due to net interchange. In 1978 interchange deliveries, which are recorded as a reduction ofother production expense. were $18.6 million.

In 1979 net interchange power purchases were $4.2 million.This resulted in a

$22.8 milliondifference between the two years.

(thz93i Page F&ORCA POWER &UGHT COMPANY Principal Offices:

9250 West Flagler Street. Miami Math PO. Box 529100 Miami. Florida 33152 Phone: 305/552.4073 This booklet has been prepared primarily for the tnformatton of security analysts and Institutional investors and is avatlable to other interested persons. It Is not tntended for use In connection wtth any sale. or offer for sale.

or soltcttatton of an offer to buy any securities.

Allfinancial statements shown should be considered tn con]unction with notes in the Company's annual reports.

Review of 1979 Economy Load Forecast Generation Expansion Plan...........

Capital Expenditures and Financing Fuel Supply Regulation Balance Sheet Statement ofIncome.

Statement ofChanges in Financial Position Retained Earnings Statement.........

Quarterly Information Coverage Ratios Long.term Debt Schedule ofPreferred Stock..........

Capitalization Ratios Common Stock Statistics Schedule of Income 'Ihxes Schedule ofOther Ttxes Schedule ofAFUDC Financial Statistics UtilityPlant Statistics Customers. Sales and Revenue........

Generating Statistics Capability and Load Substations and Miles ofLine.........

Fuel Statistics Payroll Statistics Summary of Significant Accounting and Reporting Policies...

Officers Directors System Map.

2

• c 4

4 5

Er 12 13 14 15 15 15 16 17 17 17 18 19 19 20 21 22 24 24 2&

('I 270

Florida Poser R Light Company Financial R Statistical Report Supplement to 1979 Annual Report

Retained Earnings, Quarterly Financial Information, and Coverage Statistics CONSOLIDATEDSTATEMENTOF ETAINEDEARNINGS Balance at beginning ofyear Net income.

Total.

Deduct:

Cash Dividends:

Preferred stock:

4.50% (all series) 4.32% series D 4.35% series E 7.28% series F 7.40% series G 9.25% series H 10.08% series J 8.70% series K 8.84% series L 8.70% series M Total preferred stock Common stock Total dividends.........

Preferred stock redemption costs..

Balance at end ofyear 1979

$556,772 204,668 761,440 1,181 216 218

'4,368 2,960 4,625 7,560 6,525 4,420 1,281 33,354 94,002 127,356

$634,083 665,770 548,665 451,369 406,113 317,581 1,181 216 218 4,368 2,960 4,625 7,560 6,525 1117 1,181 216 218 4,368 2,960 4,625 7,560 6,525 1,181 216 218 4,368 2,960 4,625 7,560 706 1,181 216 218 4,368 2,960 4,625 5,875 1 ~181 216 218 4,368 3,264 2,326 28,770 27,653 80,228 66,483 108,998 94,136 21,834 61,308 83,142 19,443 11,573 52,146 45,116 71,589 56,689

$556,772

$454,529

$368,227

$334,524

$260,892 1978 1977 1976 1975 1974 (Thousands of Dollars)

$454,529

$368,227

$334,524

$260,892

$212,107 211,241 180,438 116,845 145,221 105,474 1969

$ 147,537 53,427 200,064 1,181 216 218 1,615 26,549 28,164

$172,800 Dividend Restrictions The Charter, Mortgage and Deed of Trust and,f074% Note Indenture contain provisions which, under certain conditions, restrict the payment of dividends and other distributions to common shareholders.

Under the most restrictive of these provisions $532 millionof retained earnings is available for payment of dividends on Common Stock at December 31, 1979. In the event the Company should be in arrears on its sinking fund obligations, commencing in 1980 forthe 10.08% Series J Preferred Stock and in 1985 forthe 8.70% Series M Preferred Stock, the Company may not pay dividends on Common Stock.

QUARTERLYINFORMATION OPERATING REVENUES First quarter Second quarter Third quarter Fourth quarter NET INCOME First quarter Second quarter Third quarter, Fourth quarter

~.

$377,089 440,003 614,964 501,881

$ 39,261 17,062 84,208 64,137

$371,901 371,185 496,785 407,355

$ 48,679 29,594 76,774 56,194

$334,590 307,517 468,099 354,378 S 42,907 16,599 73,108 47,824

$273,555 265,935 357,742 292,448

$235,009 285,864 365,355 296,416

$ 36,644 S 34,819 16,650 18,799 41,004 56,519 22,547 35,084

$183,848 223,704 285,970 257)533

$ 19,842 20,460 29,808 35,364

$ 81,121 85,137 109,234 94,019 S 11,273 10,981 18,204 12,969 EARNINGS PER SHARE'irst quarter Second quarter Third quarter Fourth quarter

'May not add to total foryear due to rounding.

$0.77 0.22 1.87 1.35

$ 1.04 0.57 1.73 1.20

$0.90 0.24 1.65 1.02

$0.83 0.28 0.89 0.40

$0.90 0.38 1.38 0.80

$0.52

'0.52 0.78 0.94

$0.39 0.38 0.64 0.45 TIMES INTEREST EARNED Before Taxes Interest onmortgage bonds Interest on long term debt Total interest charges AfterTaxes Interest on mortgage bonds Interest on long-term debt Total interest charges FIXEDCHARGE COVERAGE (SEC basis)..

4.2 3.4 3.1 2.8 2.3 2.1 3.24 4.6 3.8 3.7 2.9 2.4 2.3 3.75 4.3 3.5 3.4 2.7 2.3 2.2 3.40 3.1 2.6 2.4 2.3 1.9 1.8 2.41 3.9 3.2 3.0 2.8 2.3 2.2 2.99 3.2 2.8 2.4 2.6 2.4 2.0 2.37 4.5 4.5 4.2 2.8 2.8 2.6 4.17 TIMES INTEREST AND PREFERRED DIVIDENDSEARNED (AfterTaxes).

MBEDDEDCOST OF LONG-TERM DEBT

(%).YEAR END EMBEDDEDCOST OF PREFERRED STOCK (%).YEAR END 1.7 8.08 8.38 2.0 1.8 8.33 8.27 7.72 7.64 1.6 7.72 8.27 1.9 1.8 8.14 7.33 7.61 7.27 2.5 5.36 4.49 15

Long-Term Debt December 31, 1979 (Thousands of Dollars)

Series Florida Power & Light Company:

First Mortgage Bonds (1):

8Ve%

3'%r/e%.

3'/e%

9'/s%

3'/s%

3'%

4Vs 4e/s%

4'/s%

5%

4V 4'%'%

6%

6e/4%

7%.

8%.

Ye%.

7%%.

7Vs%.

8Ve%

10'/s%

9;85%

9 9Vs%...................................

~

~

~

~

Pollution Control Series A, 6.10% (2) 12Vs%.

Total first mortgage bonds 10e/4% Notes Note, 1% over prime Bank Notes (under term loan agreemont) (3)..

Installment Purchase and Security Contracts:

Dade County, 5.40%

St. Lucio County, 6%.......,.................

St. Lucie County, 6.15%

Manatee County, 5.90%

Putnam County Development Authority, 5.90/o Promissory Notes:

6%-8V4%

Unamortized premium and discount Promissory Notes of Subsidiaries:

71/2%-9Vs%.

Total long-term debt Less current maturities (4)

Long.term debt excluding current maturities Due August 1980 November 1981 May 1982 April1983 May 1984 November 1984 April1986 December 1986 May 1987 April1988 June 1989 August 1992 April1994 March 1995 December 1995 December 1996 December 1997 June 1998 December 1998 June 1999 January2001 September 2001 June 2002 January 2003 January2004 March 2005 November 2005 June 2006 January2008 January2008 November 2009 November 1981 February 1982 March 1982 October 2007 January2004 January2007 September 2007 September 2007 Various to September 1987 Various to December 1995 Principal Amount S

50,000 10,000 100,000 15,000 100,000 10,000 15,000 15,000 15,000 20,000 25,000 25,000 35,000 40,000 40,000 40,000 60,000 60,000 50,000 50,000 80,000 100,000 50,000 70,000 125,000 61,289 50,000 125,000 75,000 19,400 75,000 1,605,689 125,000 4,536 50,000 33,850 25,000 10,250 17,510 5,480 3,294 3,464 6,403 1,890,476 52,050

$1,838,426 (1) Certain series ofthe Company's First Mortgage Bonds have sinking fundrequirements through1995whichmay be satisfiedby certification of property additions at the rate of 167% of such requirements. Such requirements are approximately $4 million for each of the next five years.

(2) Concurrently with tho execution by tho Company of an installment purchase contract relating to the financing of certain pollution control facilitios, the Company issued and pledged Pollution Control Series A First Mortgage Bonds as security for payment of pollution control revenue bonds issued by Martin County, Florida, to provide the pollution control financing to the Company.

(3) Interest is based on the current commercial loan interest rate.

(4) Annual maturities af long;term debt aro approximately $52 millionin 1980, $137 millionin 1981, $152 millionin 1982, $16 millionin 1983, and $ 1 11 million in 1984.

16

Schedule of Preferred Stock, Capitalization Percentages and Common Stock Statistics S CHEDULE OF PREFERRED STOCK, DECEMBER 31, 1979

($100 PAR VALUE,5,000,000 SHARES AUTHORIZED)

Series Preferred stock without sinking fund requirements:

4.50% (including A, B, C).

4.32% D 4 35% E 7.28% F 7.40% G 9.25% H 8.70% K 884%L Total Preferred stock with sinking fund requirements:

10.08% J 8.70% M Less current maturities Total.

Total preferred stock Shares Outstanding 262,500 50,000 50,000 600,000 400,000 500,000 750,000 500,000 3,112,500 744,000 500,000

~(3(.500 1,212,500 4,325,000 Amount'Thousands)

$ 26,250 5,000 5,000 60,000 40,000 50,000 75,000 50,000 311,250 74,400 50,000

~(3.(50 121,250

$432,500 The 10 08% Series J Preferred Stock is entitled to a sinking fund to retire beginning April1 ~ 1980 through April1, 1999 a minimum of37 500 shares and a maximum of 75,000 shares annually at $101.50 per share, plus accrued dividends.

The 8.70% Series MPreferred Stock is entitled to a sinking fund to retire beginning April1, 1985 through April1,1999 a minimum of 18,000 shares and a maximum of 45,000 shares annually, and beginning April 1, 2000 through April 1, 2004 a minimum of 46,000 shares and a maximum of 115,000 shares annually at $100 per share, plus accrued dividends.

Minimumannual sinking fund requirements are approximately $3.8 millionforeach ofthe next fiveyears. In 1979, 6 000 shares ofthe 10 08% Series J Preferred Stock were purchased and retired in anticipation of the 1980 sinking fund requirement.

I The Company's Charter authorizes the issuance of10 millionshares of Preferred Stock, no par value, and 5 millionshares of Subordinated Preferred tock, no par value, to be known as "Preference Stock." None of these shares is outstanding.

1979 1978 1977 1976 1975 1974 1969 CAPITALIZATIONPERCENTAGES YEAR END Long-term debt (excluding current portion)......

Preferred stock (excluding current portion)......

Common equity COMMON SHARES OUTSTANDING Shares year end (000)

Shares weighted average (000)

DIVIDENDS Dividends paid per share

%change Dividend payout,%

Dividend rate at year end

%change MARKETVALUE(NYSE)

High Low Close PRICE EARNINGS RATIO(CLOSE)

BOOK VALUEEND OF YEAR NUMBEROF SHAREHOLDERS 50.1 11.8 38.1 40,819 40,524

$2.32 16.0 55.0

$2.40 15.4 28r/s 24'/s 25 5.9

$34.31 35,425 51.0 53,2 55.1 56.8 57.9 11.2 10.2 10.4 8.9 7.4 37.8 36.6 34.5 34.3 34.7 40,315 40,120 40,050 40,050 40,050 39,542 37,050 35,940 34,050 34,050

$2.00 20.5 44.1

$2.08 18.2

$ 1.66 6.4 43.6

$ 1.76 12.8

$1.56 8.7 65.3

$ 1.56 6.8

$1.435 8.3 41.2

$ 1.46 7.4

$ 1.325 14.2 48.1

$1.36 11.5 29Vs 23Ys 26'/s 5.8 28Ve 21'/e 26r/e 7.1 28r/s 20s/3 27%

11.6 27%

15%i 263/e 7.7 29'/3 13t/s 15'/e 5.6

$32.49

$29.97

$27.81

$27.21

$25.60 32,089 31,264 31,975 31,047 30,297 54.3 3.3 42.4 29,200 27,876

$0.955 6.7 51.3

$ 1.00 6.4 38y4 32ye 34 18.3

$ 16.10 27,096 EXTERNALFUNDS$ MILLIONS INTERNALGENERATION OF FUNDS FOR CONSTRUCTION%

$249 62

$152

$33

$273 75 92 47

$419

$425 36 21

$94 44 17

Schedule of Income Taxes 1979 1978 1977 1976 1975 (Thousands of Dollars) 1974 1969

)

credit FEDERAL:

Charged to operating expenses:

Current Deferred:

Accelerated depreciation.........

Debt component of AFUDC.......

-Repair allowance.

Estimated revenue refunds.......

Other Deferred in prior years:

Accelerated depreciation.........

Debt component of AFUDC.......

Repair allowance.

Estimated revenue refunds.......

Other Charge equivalent to the investment tax Amortization of investment tax credit....

Total Charged to other income:

Current Deferred net Totalfederal 8,887 52,429 10,276 4,863 (188) 6,915 (2,879)

(770)

(1,078) 765 (1,428) 66,790

~5.291 139,291 (33) 42 139,300 53,220 6,405 5,117 (854)

(763) 46,521 5,983 8,913 2,583 53,375 13,357 20,472 (11,198) 1,628 29,437 7,691 4,956 22,960 3,701 (3,078)

(526)

(709) 11,198 2,371 46,628 (3,655)

(1,934)

(662)

(931) 2,002 47,535 (4,695) 178,099 153,802 (862)

(54)

(764) 902 51,230

~2.139 (628)

(1,426) 12,527 2,19 76,573 103,073 (886) 9,254

~(I,78 45,978 (923) 3,024

~640(

50,847 (7,878) 9,247'212)

(585) 177,302 155,171 245 76,818 (4,849) 98,224 (10,539) 35,439 51,394

$ 73,659

$ 37,573

$ (49,374)

$ 52,711

$12,736

$49,386 STATE:

Charged to operating expenses:

Current Deferred:

Accelerated depreciation....

Debt component of AFUDC..

Repair allowance.

Estimated revenue refunds..

Other Deferred in prior years:

Accelerated depreciation....

Debt component of AFUDC..

Repair allowance.

Estimated revenue refunds..

Other Total Charged to other income:

Current Deferred net

'otal state TOTALINCOMETAXES 8,629 6,113 1,i176 561 (22) 784 (310)

(86)

(119) 84 (6tl 16,753 21 4

16,778

$156,078 (198)

(73)

(102) 197 20,064 (332)

(58)

(78) 1,228 356 17,296 (53)

(6)

(84) 196 8,795

'69)

(60) 11,749 34 (825)

~64

'.014'0,034 17,485

$197,336

$172,656 (501) 8.848 11,248

$ 85,666

$109,472 13,320 9,155 212 7,252 5,835 5,099 5,851 3,228 702 665 1,484 855 561 977 2,245 (94)

(1,228)

(84) 284 178 543 2,405 2,518 405 5,328 (1,137) 4,191

$39,630

~

$51,394

'Deferred federal and state income tax provisions charged to Other income in 1977 related to cancelled project costs.

INCOMETAXES (as percent of pre-tax income)

Computed at statutory rate.

Increases (Reductions) in Income tax resulting from:

Pension costs and taxes capitalized......

Allowance for funds used during construction Depreciation State income taxes net of federal income tax benefits............

Othernet Total income taxes 46.tP/o (4.5) 2.5 joO 43.3%

48 00/0 (2.4) 2.6 0.1 48.3%

48 0'/0 (2.2) 2.6 0.5 48.90/o 48'/0 (8.6) 2.3 0.6 42.3%

(6.0)

(0.1) 2.3 (1.2) 43.0%

(3.3)

(13.2)

(3.5)

~ 1.5 (2 2) 27.3%

48 tP/0 48.0 /o 52.8%

(0.4)

(1.6)

Schedules of Other Taxes and Allowance for Funds Used During Construction (AFUDC)

SCHEDULE OF OTHER TAXES axes other than Federal and State income taxes:

Federal and State payroll....

Real and personal property..

State gross receipts........

Franchise charges..........

Miscellaneous.............

Total other taxes......

Charged to:

Operating expenses other taxes...

Utilityplant and other accounts......

Total.....................

1979

$ 13,928 41,705 27,981 66,866 17,229

$ 167,709

$149,774 17,935

$ 167,709 1978

$ 11,343 41,308 23,955 55,862 14,907

$ 147,375

$132,205 15,170

$ 147,375 9,506 38,848 21,125 47,967 7,929

$ 125,375

$ 117,807 7,568

$125,375 8,888 30,272 18,040 40,650 8,532

$106,382

$ 96,972 9,410

$ 106,382 7,366 24,864 16,832 38,748 12,450

$100,260

$ 87,558 12,702

$ 100,260 1977 1976 1975 (Thousands of Dollars) 1974

$ 6,971 20,939 13,949 30,022 15,230

$87,111

$71,241 15,870

$87,111 1969

$ 2,283 14,1 12 5,427 10,045 2,843

$34,710

$31,365 3,345

$34,710 SCHEDULE OF AFUDC 1979 1978 1977 1976 1975 (Dollars in Millions) 1974 1969(5)

Monthly Average Construction Work in Progress (CWIP).

Less:

Fixed amount included in rate base (1)......

Pollution control projects AFUDC previously capitalized and includedinmonthlyaverageCWIP.......

Other CWIP base used for computing AFUDC.........

Nuclear fuel base for computing AFUDC(3)......

Total base for computing AFUDC Capitalization rate (2)

Total.

Interest on pollution control revenue bonds charged to specific projects t

Total AFUDC charged to CWIP and nuclear fuel..

mount credited to interest charges (3)..........

Amount credited to other income (3)............

Tax effect of debt portion of AFUDC(4):

(1) charged to operating expenses (current provision for income taxes) and credited to other income (taxes on other income)..

(2) for which deferred taxes have been provided..

AFUDC RATIOS:

Net AFUDCper share (included in earnings per share)

Percent of Net income Applicable to Common from AFUDC%.

$970.1 200.0 97.9 53.2 619.0 30.5 649.5 9.06%

58.8 58.8 28.8

$30.0

$11.5

$1.17 27.7

$669.9

$625.2

$ 1,068.0

$854.3

$608.8 200.0 60.9 76.9 332.1 46.3 378.4 9.1IP/o 34.4 34.4 14.1

$20.3 200.0 60.3 53.4 311.5 311.5 9.28'/o 28.9 28.9 12.9

$ 16.0 200.0 23.2 126.7 31.1 687.0 687.0 9.33%

64.1 1.4 65.5

$65.5 150.0 25.9 91.9 65.5 521.0 521.0 9.04%

47.1 1.4 48.5

$48.5 9.3 52.9 50.3 496.3 496.3 8.00/o 39.7 2

39.9

$39.9

$4.6

$ 10.8

$7.1

$6.6

$14.8

$8.5

$0.68

$0.56

$1.28

$ 1.11

$ 1.17 15.0 14.6 53.6 31.9 42.5 (1) Commencing April1, 1975 the Company has included $200 millionof CWIP in its rate base as permitted by the FPSC in the 1975 and 1977 rate orders.

(2) The AFUDCrate is determined by a formula set by the FPSC. The rate priorto March 31, 1975 was based upon the actual capital ratios at the beginning of each year for each component of capital applied td its cost ratio with the Interest component being reduced by the applicable income taxes and common equity being based on a reasonable estimate. Effective April1,1975 the rate is calculated by applying the capital ratio of eaclicomponent of capital to its current embedded cost, except common equity, forwhich the rate allowed in the Company's last retail rate case is used as its embedded cost. The debt component is not reduced by the applicable income taxes. A formula is also provided by FERC for computing the maximum AFUDC rate. The rate used by the Company to compute AFUDC does not exceed the maximum established by FERC.

(3) The Uniform System of Accounts was revised effective January 1, 1977 to require recording the portion ofAFUDCattributable to borrowed funds as a reduction of interest charges and the portion attributable to other funds as Other income. The order did not require retroactive reclassification of AFUDC.

Commencing in 1978 the Company, with FPSC approval, capitalized AFUDC on its investment in nuclear fuel in excess of the amount in the Company's rate base.

In 1977 and1978 the allocation oftotal AFUDCbetween borrowed funds and other funds was based on the respective proportions ofthe borrowed funds component and the other funds component ofthe total AFUDCamount determined by using the formula set by the FPSC. In1979, as a result ofa FERC directive, the Company began allocating total AFUDC between borrowed funds and other funds by computing the borrowed funds component using the FERC formula, withthe residual AFUDCbeing reported as the other funds portion; thus, while the FPSC formula is stillutilized to compute the total amount of AFUDC, the borrowed funds portion in 1979 is identical to that which would be reported Ifthe FERC formula were being used. The FERC formula differs from the FPSC formula in that it assumes short-term borrowings are the first source of funds for construction, but excludes accumulated deferred income taxes. The Company has continued to provide deferred income taxes on the borrowed funds portion of AFUDC determined by the FPSC formula.

(4) Allowed by the FPSC as an operating expense for rate making purposes.

(5) Effective May 1, 1971, the Company commenced capitalization of AFUDC.

19

Financial Statistics DISTRIBUTIONOF INCOME BEFORE INTERESTPERCENT Interest charges net Preferred dividend requirements........

Net income applicable to common stock 1979 38.5 10.1 51.4 1978 38.4 8.5 53.1 1977 42.1 8.9 49.0 1976 54.6 8.7 36.7 1975 46.2 7.4 46.4 1974 49.4 5.6 45.0 1969 37.8 60.3 PERCENT OF OPERATING REVENUE Operating Expenses Fueloil.

Fuel-gas Fuelnuclear Total fuel Other generation expenses 8 interchange..

Transmission operation................

Distributionoperation Customers and administrative

&general operation Maintenance Depreciation Taxes other than income taxes............

Income taxes Total operating expenses..........

Operating income Other incomenet Income before interest Interest charges net Net income Preferred dividend requirements............

Net income applicable to common stock.....

35.7 4.6 1.7 42.0 2.4

.4 2.3 8.6 5.1 7.8 7.7 8.1 84.4 15.6 1.6 17.2 6.6 10.6 1.8 8.8 27.3 4.6 1.6 33.5 1.0

,4 2.4 9.3 5.2 8.8 8.0 12.1 80.7 19.3 1.5 20.8 8.0 12.8 1.8 11.0 28.0 4.1 1.8 33.9 1.0

.4 2.6 8.8 4.6 8.6 8.0 11.7 79.6 20.4

.9 21.3 9.0 12.3 1.9 10.4 33.9 5.1 1.5 40.5 1.3

.4 3.4 9.8 5.6 7.5 8.2 72 83.9 16.1 5.5 21.6 11.8 9.8 1.9 7.9 33.1 4.6 1.3 39.0 1.6

.3 2.7 8.9 5.1 7.0 7.4 9.7 81.7 18.3 4.5 22.8 10.5 12.3 1.7 10.6 35.6 5.0 1.5 42.1 1.7

.4 3.2 9.1 6.0 7.9 7.5 5.4 83.3 16.7 5.2 21.9 10.8 11.1 1.2 9.9 9.5 10.2 19.7 1.4

.6 4.8 11.4 6.4 10.3 8.5 13.8 76.9 23.1

.2 23.3 8.8 14.5

.4 14.1 OPERATING REVENUE, EXPENSES AND INCOMEMILLSPER KWHSOLD Revenue Revenue from energy sales...............

Other revenue Total operating revenue.............

Operating expenses Fueloil Fuelgas Fuel-nuclear Total fuel Other generation expense and Interchange..

Transmission operation.................

Distributionoperation.

Customers and administrative

&general operation..................

Maintenance Total operation and maintenance.....

Depreciation Taxes other than Income taxes.............

Income taxes Total operating expenses...........

Operating income Other incomenet Income before interest Interest charges net Net income Preferred dividend requirements.............

Net income applicab'ie to common...........

45.7

.4 46.1 16.5 2.1

.8 19.4 1.1

.2 1.0 3.9 2.4 28.0 3.6 3.6 37 38.9 72

.7 7.9 3.0 4.9

.8 4.1 40.3 3

40.6 11.1 1.8

.7 13.6

.4

.1 1.0 3.8 2.1 21.0 3.5 3.3 4,9 327 7.9

.6 8.5 3.3 5.2

.7 4.5 38.7 3

39.0 10.9 1.6

.7 13.2

.4

.1 1.0 3.5 1.8 20.0 3.3 3.1 4.6 31.0 8.0

.3 8.3 3.5 4.8

.7 4.1 33.8 3

34.1 11.5 1.8

.5 13.8

.5

.1 1.2 3.3 1.9 20.8 2.5 2.8 2.5 28.6 5.5 1.9 7.4 4.1 3.3

.6 2.7 34.4 3

34.7 11.5 1.6

.4 13.5

.5

.1 1.0 3.1 1.8 20.0 2.4 2.5 3.4 28.3 6.4 1.5 7.9 3.6 4.3

.6 37 28.9 2

29.1 10.3 1.5

.4 12.2

.5

.1

.9 2.6 1.8 18.1 2.3 2.2 1.6 24.2 4.9 1.5 6.4 3.1 3.3

.4 2.9 18.1 1.7 1.8 3.5

.3

.1

.9 2.1 1.1 8.0 1.9 1.5 2.5 13.9 4.2 4.2 1.6 2.6

.1 2.5 20

UtilityPlant Statistics DETAILOF UTILITYPLANTIN SERVICE (000) YEAR END Production Steam Nuclear.

Gas turbines and combined cycle.....

Total production..............

Transmission Distribution.

General and other Contributions in aid of construction Unclassified Total plant in service..........

DEPRECIABLE PLANT 1979 1978 1977

'1976 1975 1974 839,487 784,195 273,469 1,897,151 620,601 1,445,882 163,321 834,932 811,163 747,522 528,908 542,408 768,752 754,028 726,073 244,361 235,512 272,507 227,871 171,797 170,973 166,236 1,876,191 1,793,062 1,645,392 944,242 944,156 554,175 535,962 491,497 435,053 407,754 1,331,319 1,233,060 1,165,586 1,104,132 1,053,394 155,616 148,741 144,676 139,242 85,973 (29,952)

$4,126,955

$3,917,301

$3,710,825

$3,447,151

$2,622,669

$2,461,325

$4,079,644

$3,871,282

$3,665,367

$3,367,053

$2,552,434

$2,400,306 1969 S

423,437 423,437 240,399 559,628 45,502

$1,268,966

$1,235,825 CAPITALEXPENDITURES (000)'roduction Transmission Distribution.

General and other Total construction......

Nuclear fuel Total

'Includes AFUDC

SUMMARY

OF NET CHANGE IN PLANT(000)

Nuclear fuel'ross additions (net of transfers)...........

Contributions in aid of construction.........

Total...

Less plant retired or sold..................

Net change in total plant...........

S 297,738 109,346

'26,449 4,848 S

272,697 S

213,363 S

329,179 323,599 S

362,858 61,680 34,130 35,567 38,342 67,322 102,113 75,029 65,900 80,283 131,467 13,960 9,921 7,720 23,868 43,156 538,381 36,444 450,450 22,380 332,443 42,917 438,366 466,092 604,803 31,384 31

~141 143 (50,269) 551,726 (9,073) 22,380 S

42,917 S

31,384 31,142 143 458,391 317,613 442,153 471,719 607,239 (7,424) ~(4,390 (3.515) ~2.435 (3,041) 500,423 28,550 604,341 15,889 470,022 12,453 356,140 12,064 473,347 15,469 492,384 17,665 474,719 457,878 344,076 457,569 471,873 588,452 574,825 472,830 375.360 S

469,750 497,233 604,946 67,586 12,410 62,932 6,302 149,230 149,230 S

149,197 149,197 7,915 141,282

'Reflects sale of nuclear fuel and proceeds from nuclear fuel suit.

PLANTRATIOS (all at Year End)

Composite depreciation rate...............

Depreciation expense as a percent of average depreciable plant...............

Accumulated depreciation as a percent of-Total plant (excluding nuclear fuel)........

Plant in service Depreciabie plant Plant in service per-Dollar of revenue Thousand KWHsold....................

KWofcapacity Customer Percentage of mortgage debt'o-Total utilityplant (excluding nuclear fuel)...

Net utilityplant (excluding nuclear fuel)....

Percentage of long.term debt'o-Total utilityplant Net utilityplant CWIP as a percent of net utilityplant (exc!uding nuclear fuel).................

Operating income as a percent of net utilityplant

'Excluding current portion of long-term debt.

3.7 3.8 3.7 3.4 3.4 3.78 18.7 24.3 24.6 2.13 98.34 376.65 1,927.96 29.0 35.7 33.7 41.6

'25.7 6.8 3.83 18.0 22.2 22.5 3.56 16.9 20.0 20.2 3.32 14.6 20.8 21.3 15.3 18.1 18.6 2.38 2.53 S

2.90 S

2.22 96.48 98.88 98.69 76.89 358.04 348.63 353.92 293.79 1,927.52 1,925.03 1,873.41 1,479.81 31.7 38.6 36.6 44.6 20.4 7.8 32.9 39.6 3L5 46.2 15.7 7.9 37.1 43.8 42.6 50.1 17.4 5.4 38.5 45.2 44.7 52.4 31.8 6.8 3.3

,3.29 15.1 19.8 20.3 2.59 75.24 273.03 1,429.47 37.2 43.8 44.7 52.6 26.1

~ 5.7 3.3 3.'26 18.6 21.0 21.6 3.43 62.07 249.65 1,039.16 41.5 51.0 42.0 51.6 12.7 7.3

Customers, Sales and Revenue Statistics

, (See notes below forvarious reclassifications of customers.)

CUSTOMERSYEAR END Residential Commercial Industrial Other Sales To Public Authorities Other Electric Utilities...........

Total 1979 1,916,615 206,977 15,005 1,946 44 2,140,587 1977 1978 1976 1975 1974 1,818,468 197,278 14,660 1,849 43 1,725,117 187,808 12,900 1,803 40 1,541,861 169,222 9,090 1,628 40 1,647,632 179,914 10,736 1,718 43 1,587,709 173,346 9,525 1,684 40 2,032,298 1,927,668, 1,840,043 1,772,304 1,721,841 1969 1,086,360 118,420 5,002 11,340 29 1,221

~151 CUSTOMERSYEAR END PERCENTAGE CHANGE FROM PREVIOUS YEAR Residential Commercial Industrial.

Other Sales To Public Authorities Other Electric Utilities...........

Total 5.4 4.9 2.4 5.2 2.3 5.3 5.4 5.0 13.6 2.6 7.5 5.4 4.7 4.4 20.2 4.9 (7.0) 4.8 3.8 3.8 12.7 2.0 7.5 3.8 3.0 2.4 4.8 3.4 2.9 5.6

.9 77.2 3.7 (7 0) 5.3 6.6 5.8 5.3 8.0 7.4 6.5 CUSTOMERSAVERAGE Residential Commercial Industrial.

Other Sales To Public Authorities Other Electric Utilities...........

Total 1,854,884 202,673 14,837 1,903 43 2,074,340 1,758,838 192,850 13,799 1,834 43 1,498,262 168,991 7,147 1,596 39 1,677,532 184,676 11,796 1,777 44 1,607,015 177,046 9,994 1,700 42 1,555,834 171,575 8,977 1,653 40 1,967,364 1.875.825 1,795,797 1,738,079 1,676,035 1,045,744 115,712 4,924 10,938 29 1,177,347 KWHSALES (000)

Residential Commercial Industrial.

Other Sales To Public Authorities Sub-totalRetail...........

Other Electric Utilities...........

Total 21,059,710 14,374,287 3,147,448 821,581 39,403,026 2,562,784 41,96S,810 20,736,196 19,073,675 17,625,344 17,312,499 16,802,406 13,748,346 12,885,079 12,117,063 11,850,752 11,041,205 2,992,722 2,756,289 2,596,480 2,534,485 2,645,724 820,909 802,571 789,869 809,421 746,990 33,128,756 32,507,157 31,236,325 1,800,785 1,603,741 1,474,811 35,517,614 2,011,783 38,298,173 2,303,903 40,602,076 37,529,397 34,929,541 34,110,898 32,711,136 10,277,902 5,689,152 1,813,880 2,015,657 19,796,591 648,581 20,445,172 KWHSALESPERCENT Residential Commercial Industrial......................

Other Sales To Public Authorities Other Electric Utilities...........

Total 50.2 34.2 7.5 2.0 6.1 100.0 51.0 33.9 7.4 2.0 5.7 100.0 50.8 34.3 7.4 2.1 5.4 100.0 50.5 34.7 7.4 2.3 5.1 100.0 50.8 34.7

'.4 2.4 4.7 100.0 51.4 33.7 8.1 2.3 4.5 100.0 50.3 27.8 8.9 9.8 32 100.0 KWHSALESPERCENT CHANGE FROM PREVIOUS YEAR Residential Commercial Industrial.

Other Sales To Public Authorities...

Other Electric Utilities.............

Total.

1.6 4.6 5.2 0.1 11.2 3.4 8.7 6.7 8.6 2.3 14.5 8.2 8.2 6.3 6.2 1.6 11.7 7.4 1.8 2.2 2.4 (2.4) 12.3 2.4 3.0 7.3 (4 2) 8.4 8.7 4.3 (1) 8.5 (4.0)

(45.0) 9.2

.8 19.0 8.3 (18.2) 77.5 28.0 15.2 During May and June, 1973, approximately 12,600 customers were transferred from Other Sales To Public Authorities as follows:

7,000 to Residential; 5,600 to Commercial.

During 1974, customers previously being classified as Residential and Commercial were transferred to Industrial.

NASA and USAF at Cape Kennedy transferred from Industrial to Other Sales To Public Authorities effective November 1968.

22

Customers, Sales and Revenue Statistics (See notes on previous page forvarious reclassifications of customers.)

1979 1978 1977 1976 1975 1974 1969 EVENUE FROM ENERGY SALES (000)

Residential Commercial Industrial Other Sales To Public Authorities.......

Other Electric Utilities.................

Total 981,323 696,739 121,341 41,215 78,095

$1,918,713 610,952 426,191 73,790 27,958 35,474 496,307 333,062 63,301 21,457 29,170 849,465 587,208 101,806 36,419 59,213 755,538 616,794 523,711 426,737 89,564 73,070 33,432 28,161 51,257 36,331

$1,634,111

$1,453,502

$1,181,093

$ 1,174,365 943,297 196,009 114,566 23,786 27,912 5,521 367,794 REVENUE FROM ENERGY SALES (%)

Residential Commercial Industrial Other Sales To Public Authorities......

Other Electric Utilities................

Total 51.1 36.3 6.3 2.2 4.1 100.0 52.0 36.0 6.2 2.2 3.6 100.0 52.0 36.0 6.2 2.3 3.5 100.0 52.2 36.1 6.2 2.4 3.1 100.0 52.0 36.3 6.3 2.4 3.0 100.0 52.6 35.3 6.7 2.3 3.1 100.0 53.3 31.1 6.5 7.6 1.5 100.0 REVENUE FROM ENERGY SALES PERCENT CHANGE FROM PREVIOUS YEAR Residential Commercial Industrial Other Sales To Public Authorities..

Other Electrfc Utilities............

Total 15.5 18.7 19.2 13.2 31.9 17.4 12.4 12.1 13.7 8.9 15.5 12.4 22.5 22.7 22.6 18.7 41.1 23.1 1.0 0.1 (1.0) 0.7 2.4 0.6 23.1 28.0 16.6 30.3 21.6 24.5 29.9 39.4 35.9 (16.9) 78.4 32.9 16.4 9.5 (10.5) 44.4 27.6 13.8 EVENUE FROM ENERGY SALES

~ PER KWH Residential Commercial Industrial Other Sales To Pubgc Authorities..

Other Electric Utilities............

Total 4.66 4;85 3.86 5.02 3.05 4.57 4.10 4.27 3.40 4.44 2.57 4.02 3.96 4.06 3.25 4.17 2.55 3.87 3.50 3.52 2.81 3.57 2.02 3.38 3.53 2.95 3.60 3.02 2.91 2.39 3.45,2.87 2.21 1.98 3.44 2.88 1.91 2.01 1.31 1.38

.85 1.80 REVENUE FROM ENERGY SALES PER CUSTOMER Residential Commercial Industrial.

Total.................

529.05 3,437.75 8,178.28 924.97 482.97 450.39 383.81 392.68 331.26 3,044.89 2,835.83 2,4'I0.32 2,483.99 1,970.89 7,377.78 7,592.74 7,311.42 8,219.91 8,856.98 830.61 774.86 657.70 675.67 562.81 187.43 990.10 4,830.69 312.39 KWHSALES PER CUSTOMER Residential Commercial Industdal Total.

11,354 70,924 212,135 20,231 11,790 11,370 71,290 69,771 2'I6,880 233,633 20,638 20,007 10,968 68,440 259,804 19,451 11

~127 69,070 282,331 19,626

,11,215 65,336 370,187 19,517 9,828 49,166 368,375 17,365 DEGREE DAYS (Miami)

Cooling-Residential..............

CoolingCommercial.............

Heating (October ofprevious year to Aprilof current year).............

4,942 6,025 156 4,990 6,036 310 4,978 6,143 252 4,689 5,787 5,443 6,430 5,413 6,592's 188 59 119.

5,073 5,880

Generating and Other Statistics KWHGENERATED.INTERCHANGED (000)

Steam residual oil.

Steam gas Total steam...............

Gas turbinedistillate...........

Gas turbinegas...............

Total gas turbines..........

Nuclear Combined cycleoil.............

Generated net.

Interchanged-net..............

Company use andlosses.........

Energysold...............

1979 23,869,279 7,818,746 31,688,025 248,205 576,176 824,381 11,615,095 622,485 44,749,986 582,594 3,366,770 41,965,810 1978 21,776,179 8.100,194 29,876,373 232,044 479.765 711,809 13,273.383 569,943 44,431,508 (726,630) 3,102,802 40,602,076 1977 18,842,476 7,781,943 26,624,419 421,627 311

~146 732,773 13,452,276 367,047 41,176,515 (465,827) 3,181,291 37,529,397 1976 20,535,424 8,277,336 28,812,760 655,225 198,553 853,778 8,647,474 87,050 38,401.062 (376,303) 3,095,218 34,929,541 1975 1974 18,832,184 17,745,767 8,835,555 9,154,695 27,667,739 26,900,462 971,553 683l554 174,925 161,524 1,146,478 845,078 8,369,810 7,877,326 37,184,027 35,622,866 (32,627)

(157,812) 3,040,502 2,753,918 34,110,898 32,711

~136 1969~

11,980,81~

10,383,050 22,363,866 22,363,866 (145,802) 1,772,892 20,445,172 GENERATION BY.FUEL TYPE (%)

Residual Oil Natural Gas Distillate oil Nuclear Combined cycleoil..........

53.3 18.8 0.5 26.0 1.4 49.0 19.3 0.5 29.9 1.3 45.7 19.7 1.0 32.7 0.9 53.4 22.1 1.7 22.5 0.3 50.6 24.3 2.6 22.5 49.8 26.2 1.9 22.1 53.6 46.4 NET CAPABILITYKW(year end)

Lauderdale Riviera.

Miami.

Cutler.

Sanford Pylatka Ft. Myers.

Port Everglades Cape Canaveral Manatee.......

St. Lucie Turkey Point Putnam Total.

1,126,000 653,000 861,000 1 ~176,000 1,581,500 729,000 1,528,000 777,000 2,079,500 446,000 10,957,000 1,126,000 653,000 861,000 1,176,000 1,581,500 729,000 1,528,000 777,000 2,079,500 430,000 10,941,000 1,126,000 544,000 861,000 1,176,000 1,581,500 729,000 1,528,000 777,000 2,079,500 242,000 10,644,000 1,162,000 544,000 873,000 1,176,000 1,599,500 729,000 775,000 802,000 2,079,500 9,740,000 1,183,000 692,000 287,000 918,000 113,000 1,207,000 1,657,500 762,000 1,183,000 692,000 45,000 330,000 918,000 113,000 1,207,000 1,657,500 762,000 2,107,500 2,107,500 8,927,000 9,015,000 290,000 694,000 45,000 327,000 145,000 114,000 556,000 1,254,500 822,00 835,500 5,083,000 Rated at continuous capability beginning 1976.

An additional five units with a total of 371 MWof installed capability are on extended cold standby.

CAPABILITYATTHE TIME OFSUMMERPEAKMW

%change SUMMER PEAK DEMAND MW(60 minute-net)....

%change'.

RESERVE CAPABILITY-

%attimeofsummerpeak WINTER PEAK DEMAND MW(60minutenet)....

% change LOADFACTOR-(60 minute)...

SUBSTATIONS Number CapacityMVA MILESOF ELECTRIC LINES Transmission Distribution Total 10,957 0.7 8,650 3.7 26.7 8,791 2.0 59 418 58,595 4,079 36,124 40,203 10,886 12.9 8,345 6.4 30.4 8,617 0.1 58 404 57,280 3,974 34,715 38,689 9,644 11.5 7,841 3.2 23.0 8,606 18.1 54 393 56,152 3,939 33,628 37,567 8,646 (4.1) 7,598 7.4 13.8 7,287 25.5 57 374 51,116 3,933 32,677 36,610 9,015 7,076 (2.2) 27.4 5,807 (7.2) 60 347 47,047 3,819 31,755 35,574 9,015 8.5 7,235 5.0 24.6 6,258 6.9 56 319 44,518

. 3,700 30,453 34,153 5,083 18.3 4,329 14.3 17.4 3,751 13.1 59 261 29,467 3 223 24,050 27,273 24

Fuel and Payroll Statistics EL USED Barrels oil (000)

%change MCF natural gas (000)

%change Equiva!ent barrels-natural gas (000)..

Nuclear fuel consumed (MmBtu) (000)..

% change Equivalent barrels nuclear (000).....

Total barrel equivalent (000)...........

%change 1979 39,567 8.5 92,034 (0.2) 13,945 132,701 (12.3) 20,997 74,509 0.2 1978 36,452 14.9 92,197 6.0 13,969 151,371 (0.3) 23,951 74,372 7.9 1977 31,717 (8.6) 86,976 (5.6) 13,178 151,791 53.8 24,018 68,913 7.2

, 1976 34,696 7.4 92,152 (5 1) 13,962 98,699 3.8 15,617 64,275 3.6 1975 32,302 7.5 97,155 (3.3) 14,720 95,043 9.9 15,038 62,060 5.2 1974 30,058 (13.3) 100,495 (4 9) 15,227 86,512 77.1 13,689 58,974 1.0 1969 18,687 (0.2) 108,634 40.4 16,460 35,147 15.4 FUEL COST Cost per barrelresidual oil...........

%change Cost per barreldistillate oil...........

%change Cost per MCF-natural gas............

% change Cost per equivalent barrelnatural gas..

Cost per MmBtunuclear.............

% change Cost per equivalent barrelnuclear.....

Cost per equivalent barrelall fuels.....

%change

$17.26 41.1

$23.17 58.5

$0.963 17.7

'6.36

$0.250 42.9

$1.58

$10.91 47.2

$ 12.23 (4.9)

$ 14.62 2.5

$0.818 18.0

$5.40

$0.175 0.6

$1.11

$7.41 2.8

$ 12.86 11.5

$ 14.26 6.7

$0.693 3.9

$4.57

$0.174

$ 11.53 (4 9)

$ 13.36 9.9

$0.667 20.6

$4.40

$0.180 (3.3) 7.8

$1.10

$ 1.14

$7.21

$7.50 (3.9) 0.9

$12.13 7.7

$12.16 5.7

$0.553 16.4

$3.65

$0.167 5.7

$1.05

$7.43 9.6

$11.26 155.3

$ 11.50 109.9

$0.475 16.1

$3.14

$0.158 (0.6)

$1.00

$6.78 93.7

$1.88 (6.0)

$0.348 2.1

$2.30

$2.07 (1 0)

FUEL COST PER MILLIONBTU Steam residual oil Steam gas Gas turbines distillate oil.....

Gas turbinesgas Combined cycleoil Nuclear Allfuels KWHPER BARRELEQUIVALENT..

276.2'6.0>>

398.9>>

99.5'53.0'5.0>>

172.5'01 197.8>>

81.6>>

252.3>>

84.0>>

248.9>>

17.2'17.7>>

597 208.0'9.7>>

246.4>>

63.2>>

254.4>>

17.4>>

114.5>>

598 1 86.7>>

66.6>>

231.3>>

68.9>>

236.3>>

18.0'19.2>>

597 1 96.5>>

55.2>>

209.7'7.9'6.7>>

118.1>>

599 183.6>>

47.5'98.1>>

47.7>>

15.8>>

107.9>>

604 29.9'4.8>>

32.2>>

HEAT RATE (BTU PER KWH)

Steam fossil Gas turbines Combined cycle Nuclear System 10,054 16,102 10,914 11,425 10,533 10,030 15,859 10,562 11,404 10,541 10,060 14,843 10,107 11,284 10,545 10,161 14,199 10,382 11,414 10,533 10,098 14,194 11,355 10,507 10,125 14,063 10,968 10,408 10,112 10,112 FUEL COSTMILLSPER KWH Steam residual oil Steam gas'as turbines'ombined cycle Nuclear Allfuels

%change

'Distillate oil and natural gas 27.33 10.12 29.46 38.53 2.86.

18.17 46.4 19.57 8.49 21.15 26.29 2.00 12.41 2.8 20.53 7.33 23.69 25.72 1.96 12.07 (3.9) 18.54 7.15 26.40 24.53 2.05 12.56 1.2 19.32 5.89 25.83 1.89 12.41 10.5 18.06 5.07 23.01 1.74 11.23 94.0 2.93 3.64 3.26 (1.2)

PAYROLLSTATISTICS Number of employees (year end).........

Payroll and Benefits (000)

Charged to construction...............

Charged to operation and maintenance..

Charged to clearing, tax expense and other accounts.................

Total 10,337

$ 61,345 207,463

'21,950

$290,758 9,750

$ 52,014 186,377 14,608 9,415

$ 45,998 162,364 13,034 9,865

$ 46,994 149,270 12,480 9,911

$ 43,749 127,538 9,391 9,769

$ 39,553 113,153 8,724 6;588

$ 15,013 60,332 3,507

$252,999

$221,396

$208,744

$ 180,678

$161,430

$ 78.852 Percent of operation &maintenance expenses from payroll and benefits..

Number of customers per employee (year end) 17.6 207 21.8 208 21.6 205 20.5 187 18.7 179 19.0 176 36.9 185 25

Summary ofSignificant Accounting and Reporting Policies (AllFinancial Statements shown should be considered ln con) unctton with Notes ln the Company's Annual reports forappropriate years.)

R~eulatlon Accounting and reporting policies ofthe Company are sub)ect to regulation by the Florida Public Service Commission (FPSC) and the Federal Energy Regulatory Commission (FERC). The followingsummarizes the more stgnlftcant ofthese pollctes.

Basis ofConsolidation The consolidated flnanctal statements include the accounts of the Company and its wholly owned subsidiaries. Allsignificant intercompany balances and transactions have been eliminated.

Rates and Revenues Revenues are recognized based on monthly cycle billings'o customers. Retail and wholesale rate schedules are approved by the FPSC and the FERC. respe<<tlvely. The rate schedules contain a fuel adJustment clause whtch gives effect to changes ln efftclency, the cost offuel as well as the fuel component of purchased power. the total energy cost of economy interchange and the generation mix of fossil and nuclear fuels. Generally, the changes are reflected ln customer billings about two months after they occur.

Electric Utlllt Plant and De rectatlon The cost ofaddlttons, replacements. and renewals ofunits ofproperty ts added to utllttyplant. The cost (estimated. Ifnot known) ofunits ofproperty retired. less net salvage. Is charged to accumulated depredation. Maintenance and repairs of property. and replacements and renewals of items determined to be less than units of property. are charged to operating expenses maintenance.

Book depreciation ts provided on a straight-line service.life basis by primary accounts as directed by the FPSC using the followln rates:

g Steam production plant.........

3.2'Yo.4.6'uclear production plant........

3.2%.6.29'ther production plant..........

5.0%.6.5'Yo

'Iiansmlsston plant.............

1.5%-3.3'Yo Distribution plant..............

2.0'.6,6'Vo General plant.........

~

~

~

~.

~.

~

~ 2.1'Vo 7.8/o Transportation equipment...

~

~

~

~ 9.Mo The weighted annual composite depreciation rate was approximately 3.7% In 1979. The nudear production plant rates include estimated negative net salvage values ofapproximately 20M for certain components.

reflectin estimated decommissioning costs.

The transmission and dlstrtbutlon plant rates include negative net salvage values.

Substantially all uttlltyplant ls sub)ect to the lien of the Mortgage and Deed ofTrust(as supplemented) securing the First Mortgage Bonds.

Amortization ofNuclear Fuel The cost of nuclear fuel.wtth a provision for zero net salvage. ls amortized to fuel expense on a unit ofproduction method. No provision for estimated future spent fuel storage or disposal costs ls presently included In fuel expense. The suppliers of the nuclear fuel are under contract to provide spent fuel removal.

The suppliers have refused to honor their commitments. The Company has expanded its spent nudear fuel storage facilities and has adequate fadlltles for storage ofspent fuel until the mtd-1980's under normal refueling conditions.

Allowance for Funds Used Durln Constiuct ton The Company capltaltzes as an additional cost ofproperty an allowance for funds used during construct ton (a non.cash item) which represents the allowed cost ofcapital used to finance a portton ofCWIP and nuclear fuel.

The portion ofAFUDCattributable to borrowed funds ls recorded as a reduction of Interest charges and the portion attributable to other funds as Other income. See the Schedule ofAFUDC for detailed information.

StormandPro ert InsuranceReserveand Related Fund The storm and property insurance reserve fund ls maintained at an amount equivalent to the reserve. The reserve provides coverage ofstorm damage costs and possible public liabilitylosses stemming from a nuclear incident. Earnings from the fund. net of taxes.

are relnvested tn the fund. Securities held ln the fund are recorded at cost which approximates market value.

Storm damage and service restoration costs related to Hurricane Davtd aggregating $6.8 millionwere paid from the fund ln 1979 and charged to the reserve. Income tax benefits related to the costs willbe restored to the fund when realized.

Em lo ee Benefit Plans The Company has a non.contributory employees'ension plan covering substantially all employees. The Company's policy ls to fund each year's accrued pension costs. Including amortlzatton of the estimated unfunded prior service costs. Pension costs for 1979 and 1978 were $27.7 millionand

$26.2 million. respectively. The estimated unfunded prior service cost of the pension plan at January

1. 1979 was approximately

$91.5 millionusing the entry age normal cost method. There was no excess ofvested benefits over the fund balance as ofJanuary I, 1979.

The Employee Thrift Plan provides for baste contrlbuttons by eligible employees of up to 6% oftheir base salaries. which are matched 50% by the Company. Supplemental contrlbuttons by employees may be made up to an additional 6'. The Company matching contributions for Ig7g and 1978 were $2.1 millionand $2.0 million. respectively.

In 1976 an Employee Stock Ownership Plan (ESOP) was adopted pursuant to the Tax Reduction Act of 1975. The Act permits the Company 'to claim an additional 1%

investment tax credit. provided that the entire amount of the credit Is contrtbuted to an employee stock ownership plan and invested ln Company Common Stock for the benefit ofemployees. In 1978 the Board of Directors amended the ESOP to enable the Company to claim a further investment tax credit up to Vi% to the extent that the Vi'/o credit ls matched by voluntary contrtbutlons by participating employees pursuant to the Tax Reform Act of 1976. Since the payments to the Plan are In Iteu of income tax payments. there ls no effect on net tncome.

Provisions for Company contrlbuttons to the ESOP were $8.8 millionand $7.2 millionln 1979 and 1978. respectively.

Income Taxes Deferred income taxes are provided on all significant book.tax timing dtfferences as permitted for rate.making purposes by the FPSC. Investment tax credits used to reduce current federal income taxes are deferred and amortized to income at a rate approximating the lives of the related property. See the Scheduleof Income Taxes.

0 26

TRACY DANESE VICE PRESIDENT PUBLICAFFAIRS MARSHALLMcDONALD CHAIRMANOF THE BOARD and CHIEF EXECUTIVE OFFICER H.L. ALLEN SENIOR VICE PRESIDENT R.J.GARDNER VICE PRESIDENT STRATEGIC PLANNING B.L. OAOY VICE PRESIDENT MANAGEMENTCONTROL and SERVICES and ASSISTANT SECRETARY J.J. HUDIBURG PRESIDENT and CHIEF OPERATING OFFICER R.W. WALL,JR.

SENIOR VICE PRESIDENT and ASSISTANT SECRETARY L.C. HAUCK VICE PRESIDENT LEGALAFFAIRS D.K. BALDWIN VICE PRESIDENT CORPORATE SERVICES L.C. HUNTER SENIOR VICE PRESIDENT PERSONNELand INDUSTRIALRELATIONS E.A. ADOMAT EXECUTIVEVICE PRESIDENT J.L. HOWARD VICE PRESIDENT TREASURER FINANCIAL J.H. FRANCIS, JR.

VICE PRESIDENT CORPORATE COMMUNICATIONS E.L. BIVANS VICE PRESIDENT SYSTEM PLANNING R.A. ANDERSON ASSISTANT TREASURER R.E. TALLON GROUP VICE PRESIDENT MICHAELC. COOK VICE PRESIDENT FUEL RESOURCES and CORPORATE DEVELOPMENT J.E. MOORE ASSISTANT SECRETARY J.G. SPENCER, JR.

SENIOR VICE PRESIDENT DIVISIONS H.J. DAGER, JR.

VICE PRESIDENT ENGINEERING PROJECTS and CONSTRUCTION H.P. WILLIAMS,JR.

COMPTROLLER W.M. KLEIN VICE PRESIDENT ECONOMIC DEVELOPMENT A. D. SCHMIDT VICE PRESIDENT POWER RESOURCES T.R.CROOK ASSISTANT COMPTROLLER R.E. UHRIG VICE PRESIDENT ADVANCEDSYSTEMS andTECHNOLOGY S.P. KEMP ASSISTANT SECRETARY ASTRID PFEIFFER CORPORATE SECRETARY 27

Directors

• M. P. Anthony West Palm Beach. Fla. President. Anthony' Inc.. a chain of ladies apparel retail stores. Serving since 1977.

tGeorge F. Bennett Boston, Mass. President and Chief Executive Officer of State Street Investment Corp.

and of Federal Street Fund Inc. investment companies: Managing Partner of State Street Research and Management Co.:

Chairman. Managing General Partner, State Street Exchange Fund. Serving since 1970.

'David Blumberg Miamb Fla. President. Planned Development Corp.. a building and development firm.

Serving since 1973.

Jean McArthur Davis Miami. Fla. President McArthur Dairy Inc. and McArthur Farms Inc.. engaged in the production and distribution of dairy products. Serving since 1977.

tJohn J. Hudiburg Miami. Fla. President of the Company since Jan.

15, 1979. Formerly Executive Vice President.

Finance. Serving since January 1979.

Robert B. Knight Coral Gables. Fla. Chairman. National Food Services Inc., a restaurant management company. Serving since 1977.

John M. McCarty Fort Pierce. Fla. Attorney. Serving since 1973.

marshall McDonald Miami. Fla. Chairman of the Board of Directors of the Company since Jan.

15, 1979. Formerly President and Chairman of Meetings of'the Board. Serving since 1971.

'Edgar H. Price Jr.

Bradenton. Fla. Chairman of the Board and President of The Price Co. Inc.,

a consulting firm. Serving since 1972.

lewis E. Wadsworth Bunnell. Fla. Engaged in timber and cattle businesses.

Serving since 1970.

Gene A. Whiddon Fort Lauderdale.

Fla. President, Causeway Lumber Co. Inc., engaged in the sale of lumber and building materials. Serving since January 1979.

tExecutive Committee

'Audit Committee 28

GEORGIA TO PANAMACITY FT, WALTONB PE CACCIA

~ AWt\\ I L

0 TALLAHASSEE LWI~II P 00<<rr TIWOI r>EATII JACIPONVI E

TAL CC ENN

~ MA I

II ro

~

~ ST. AUGUSTINE IP ~ I O GA ESVI E

PAIATKA

~ PUTNAM DAYTONA BEACH Il ~

~ S ORD WMTC~

OPA W DISNEY WORLD LLE CANAVERAL A

Artl~

~ ~0LWTI PUNTA GORDA CLEAAWATE)

TAMPA

&~C LLW LLIOWWW ST. PETERSBUR MANATE PALMETT

~ LC~Tlt BRACE~0~<<

SARASOTA<<

t I

WWtt OE BOTCHES<<ARCADIA WEWITC VENI trt ~I till I~rl ELBOURNE SEBASTIAN CW 0

EWW ST LUCIS ST. LUCIE OKEECHOSEE S

ART MARTIN FT. MYERS PAHOKEE BELLE GLADE

~IIM WPC RIVIERA WEST PALM BEACH DELRAY BEACH LEGEND

~ FLORIDAPOWER S LIGHTBUSINESS OFFICES

~ FLORIDAPOWER C MGHT POWER PLANTS (Inclvding pl<<nl<<<<ll cOIO.<<I<<nOROT)

EI POWER PLANTS UNDER CONSTRUCTION AND FUTURE PlANTSITES

~AREASERVED BY FPI JANUARYI, 1080 NAPLES IOLME~

BOCA RATON L

FT. lAUDERDALEWEPT ~

LAUDERDALE POMPANO BEACH PORT EVERGLADES

. LAUDERDALE OLLYWOOD NATIONAL PARK HIALEAH<< ~

MIAMI BEACH

~

M/AMI L GABLES

~

TLER II

~ TUtIKEY POINT UTH DADE EVERGLADES ORTH DADE b 1~0 KEY @ST~gME <<Qr 29

~g5Q FLOAIOAPOWLA ALIGHTCOMPANY

EXHIBIT II Page 1 of 1 FLORIDA PONER

& LIGHT CO~iPAHY ST.

LUCIE UNIT 2 COST OF OPERATION Item Avera e Annual Cost Fuel.

Payroll.

Other 0+8 Expenses.

Capital Costs Depreciation.

Taxes

& Insurance..

r

~

~

~

$ 50,584,000.00 5,200,000.00 15,200,000.00 93,000~000.00 1,900,000.00 77,900,000.00 TOTAL ANNUAL COSTS 8243,784,000.00 Estimated average annual cost for operation of project over five (5) year period, based on unit generation of 5.0584 billion kilowatt hours of electrical energy annually.

All dollar values given are discounted 1983 dollars.

EXHIBIT III Page 1 of 12 FLORIDA POWER 6 LIGHT COMPANY ST. LUCIE UNIT 2 Technical ualifications of Contractors EBASCO SERVICES INCORPORATED As the engineering and construction subsidiary of -Ensearch Corporation, Ebasco Services Incorporated is internationally recognized as a leading force in the development and practical application of new methods and technologies associated with systems for power production and other related energy systems.

Ebasco's present staff totals more than 6000 persons engaged in all phases of engineering design, construction, purchasing, inspection and expediting of material, qua1ity assurance.

and consultation on utility operating matters.

Since its founding in 1905, Ebasco has provided engineering and related services for utility, industrial and government clients in more than sixty nations.

These clients have selected Ebasco to provide services required for the successful completion of more than 900 electric genera-ting units'having'a".cotal installed capacity exceeding 120,000 MW and for more than 25,000 miles of transmission and distribution lines.

Ebasco provides a fully integrated, single responsibility oriented, engineering constructor organization with all the combined capabilities necessary for the successful completion of a power plant project.

The scope of Ebasco's capabilities encompasses all phases of an energy pro)ect from its inception ',. through the acceptance of the facility for commercial operation-, including technical;and economic feasibility studies; environ-mental and licensing services through Envirosphere Company, our environ-mental services division; detailed engineering and design; construction and installation; component and system testing; start-up and tri.al operation; and acceptance testing.

To assure technical excellence, Ebasco also provides a wide range of in-house consulting engineering services to support and assist the project, engineering, and construction organization in the detailed execution of each project.,

Ebasco's nuclear experience includes engineering stu4ies, the evaluation of reactor systems, selection of the nuclear sites, ha'zards evaluations, detailed engineering design, construction and start-up and testing of nuclear power facilities as described below:

a.

Nuclear Power Project, Unit Nos.

1 and 2 National Power Corporation, (NAPOCOR) Philippine Islands Ebasco was selected by the Philippine National Power Corporation to provide consulting services associated with the NAPOCOR project consisting of two - 600 MWe Westinghouse PWR's.

Ebasco's scope includes assistance to NAPOCOR in evaluation of offers to supply power plants including completeness, commercial terms and conditions,.

EXHIBITIII Page 2 of 12 delivery and construction schedule, assistance in design engineering and construction managemerit outside the supplier scope, and review of designs and specifications, including engineering analysis.

Commercial operation is expected in July 1982.

Angra Unit No.

1 (PWR), Furnas Centrais Electricas S.A., Brazil Ebasco's scope is review of designs and specifications to be supplied by turnkey NSSS vendor, Westinghouse for general arrangement drawings and mechanical, electrical and instrumentation equipment.

Commercial operation is scheduled to be attained in 1980.

WPPSS Nuclear Power Project Nos.

3 and 5 - Washington Public Power Supply System Ebasco is performing engineering,

design, construction management, site selection, licensing, quality assurance, and related service for Washington Public Power Supply System's (WPPSS)

Nuclear Power Project Nos.

3 and 5 near Grays Harbor, Washington.

Each unit will use the latest, Series 80, Combustion Engineering Corporation, 3800 MW(t), pressurized water nuclear steam supply system.

Construction of WPPSS Nos.

3 and 5 is phased by 18 months and commercial operation of the initial unit scheduled for May 1983.

Aliens Creek Unit No.

1 Houston Lighting & Power Company Ebasco is performing engineering,

design, construction, licensing, start-up and testing and related services for Houston Lighting &

Power Company's Aliens Creek Unit No. 1 Nuclear Generating Station.

This unit will use the, latest General Electric'BWR-6, boiling water, nuclear steam supply system and the Mark III vapor suppression concept.

Commercial operation of Unit No.

1 is scheduled for March 1985.

Shearon Harris Unit Nos. 1,, 2, 3 and 4 - Carolina Power

& Light Company Ebasco is currently performing engineering, design, site selection, licensing, start-up and testing, and related services for Carolina Power

& Light Company's Shearon Harris Unit Nos.

1 through 4 at Whiteoak Creek.

The Westinghouse pressurized water nuclear steam systems are the three loop-type producing 2785 MW(t).

Engineering and design work for this project, began in 1970 and commercial operation is scheduled for April 1984,

1986, 1988 and 1990.

Waterford Unit No.

3 - Louisiana Power

& Light Company Ebasco is currently performing engineering, design licensing, construc-tion management, start-up and testing,'nd related services for Lousiana Power

& Light Company's Waterford Unit No.

3 Nuclear Power Plant.

The plant utilizes a 3580 MW(t) Combustion Engineering pressurized water nuclear steam supply system.

Commercial operation is scheduled for April 1981.

EXHIBIT III Page 3 of 12 Tokai Unit No.

2 Japan Atomic Power Company Ebasco worked as subcontractor to GE and provided engineering, design and liaison services for the 1100 MW(e), Unit No.

2 of the Tokai Nuclear Power Station.

This station is owned and operated by the Japan Atomic Power Company.

Ebasco's responsibility included site studies, licensing assistance, engineering and design, and start-up and testing services.

Commercial operation was attained in 1976.

Chin-Shan Unit Nos.

1 and 2 Taiwan Power Company Ebasco performed engineering, design and construction advisory services for the Taiwan Power Company for a two-unit 636 MW(e)

General Electric BWR nuclear power plant.

Commercial operation was attained in 1976 and 1977.

Fort St. Vrain Unit No.

1 Public Service Company of Colorado Ebasco was engag d by Gulf General Atomic Incorporated (predecessor of General Atomic Inc.) to construct and provide Quality Compliance Services for a 300 MW(e) nuclear power plant utilizing a high temperature gas-cooled reactor (HTGR).

The plant is owned and operated by Public Service Company of Colorado with partial funding by the U.S. Atomic Energy Commission under the Power Demonstration Program.

Commercial operation was attained in 1973.

Millstone Unit No. 1 The Millstone Point Company Northeast Utilities I

Ebasco contracted with General Electric Company to perform site selection, licensing, engineering,

design, construction, start-up and test services for The Millstone Point Company's Millstone Unit No. 1.

General Electric supplied the 2011 MW(t) boiling water nuclear steam supply system.

Commercial operation was attained in 1970.

k.

Vermont. Yankee Urd;t No. 1 Vermont Yankee Power Corporation

Ebasco, acting as agent of the Vermont Yankee Nuclear Power Corporation, had total responsibility for the engineering, design and construction of the Vermont Yankee Nuclear Power Station.

This plant utilizes a

. General Electric single-cycle forced circulation boiling water reactor (BWR-4), which operates at a thermal power level of 1593 (MW(t) and produces 540 MW(e) output.

Commercial operation was attained in.

1971.

H. B. Robinson Unit No.

2 Carolina Power

&. Light Company

Ebasco, working as subcontractor to Westinghouse Electric Corporation and separately as agent of the Owner, provided site selection,

~

licensing, engineering,

design, procurement, construction, start-up.

and testing and related services for Carolina Power

& Light Company's

EXHIBITIII Page 4 of 12 H. B. Robinson Unit No. 2.

Hestinghouse supplied the 2200 Mf(t) pressurized water nuclear steam supply system.

Commercial operation was attained in 1970.

Fukushima Unit Nos.',

2, 3 and 6 Tokyo Electric Power Company, Inc.

Ebasco was subcontractor to General Electric, providing design engineering and inspection of construction services on the 440 ET(e)

Unit No. 1, 790 MN(e) Unit No.

2 and 1100 E4(e) Unit No.

6 of the Fukushima Nuclear Electric Station.

This station is owned and operated by the Tokyo Electric Power Company, Inc. Ebasco's work included engineering, detailed design, and management of construction.

On Unit 3 (780 MNe), Ebasco provided engineering consulting services to Toshiba (prime contractor).

Commercial operation of Unit Nos. 1, 2,

3 and 6 was attained in 1970,

1973, 1975 and 1976, respectively.

Shimane Unit No.

1 Chugoku Electric Power Company Ebasco was the consultant to Hitachi and provided engineering consulting services for the 460 MN(e) Unit No. 1 of the Shimane Nuclear Power Station.

This station is owned and operated by the Chugoku Electric Power Company in Japan.

Ebasco's responsibility included the review and comment on Hitachi's design of the plant.

Commercial operation was attained in 1973.

Tsuruga Unit No.

1 - Japan Atomic Power Company Ebasco was a subcontractor to GE. forengineering, design and inspection of construction. of the 350. MW(e) Tsuruga Nuclear Power Plant.

The plant utilizes a GE boiling water nuclear steam supply system.

Com-mercial operation was attained in 1970.

Nuclenor Unit No. 1 Centrales Nuclenor del Norte (Spain)

Ebasco was a subcontractor to GE, the prime contractor, for the engineering, design and construction management of a 440 i~M(e) nuclear power plant.

The plant utilizes a General Electric boiling water nuclear steam supply system.

Commercial operation was attained in 1970.

Senn. Unit No. 1 Societa Elettronucleare Nazionale Senn (Italy)

Ebasco performed engineering, design and construction management for the 150 KC(e) (upgraded to 180 Mf(e)) nuclear power plant for the Societa Elettronucleare Nazionale (SENN) in Italy.,'ommercial operation was attained in 1963.

Laguna Verde Nuclear Station, Unit Nos.

1 and 2 Comision Federal de Electricidad (Mexico)

Ebasco contracted with Comision Federal de Electricidad Mexico to perform engineering, construction management, project management, quality compliance, procurement, scheduling and start-up and test

EXHIBITIII Page 5 of 12.

services for Laguna Verde Unit Nos.

1 and 2.

GE will furnish the boiling, water reactors (BWR-5) rated at 1931 Mwt.

The scheduled date for trial operation for Unit Nos.

1 and 2 is 1981 and 1982, respectively.

s.

St. Lucie Unit 1 - Florida Power

& Light Company I

Ebasco performed engineering,

design, construction, procurement, licensing, quality assurance, start-up and testing, and related services for Florida Power

& Light Company's St. Lucie Nuclear Power Station Unit 1.

The plant utilizes a Combustion Engineering pressurized water nuclear steam supply system rated at 2570 MW(t)

~~ output.

Ebasco pioneered the procedures for post weld heat treat-ment on St. Lucia 1's freestanding steel containment which is the largest field stress relieved pressure vessel in the. world.

Commercial operation was attained in 1976.

\\

COMBUSTION ENGINEERING NUCLEAR EXPERIENCE NUCLEAR DEVELOPMENT Combustion Engineering (C-E) has been actively involved in the power generation aspects'f nuclear.energy for over thirty years.

As early as

1946, C>>E had commenced studies to investigate the feasibility of power production from nuclear fuels.

The results of these studies, coupled with experience in fabrication of large welded pressure vessels,,

led to C-E's development as a major supplier of nuclear components.

In

1954, C-E was awarded the contract to provide the reactor vessel for Shippingport, the world's first commercial-size nuclear electric generating station.

C-E's achievements continued with the contract award for the design and fabrication of the reactor vessel for the world's first commercial sodium fast breeder'eactor plant, Enrico Fermi. Unit 1.

This vessel is still considered one of the most complex stainless steel vessels ever built.

In 1958, C-E began preliminary and detailed analyses of the High Flux Beam Reactor for the Brookhaven National Laboratory.

This effort was followed by an Atomic Energy Commission contract for the design, analysis and economic evaluation of a 250 MWe. pressurized water reactor plant.

As a result of C-E's acquisition of General Nuclear Engineering Company in 1959, it assumed the responsibility for the nuclear.design, startup, and initial operation of the BONUS (Boiling Water Superheat) plant.

This was the first U.S. nuclear plant to operate with an integral super-heating core.

By 1963, C-E had decided to conc ntrate on the development of the pressurized water reactor design for large commercial nuclear plant applications.

This decision led to several years of intensive research and development to define the optimum physical plant arrangement, to develop design criteria balancing safety and economics,.

to establish auxiliary systems designs and reactor=core designs and to perform exhaustive testing of components.

During this same period, C-E remained active in new designs and concepts including the Heavy Water Organic Cooled Reactor and the Liquid Metal Fast Breeder Reactor programs.

EXHIBITIII Page 6 of 12 In 1966, C-E sold the first non-turnkey nuclear steam supply system, the Palisades plant, to Consumers Power Company.

Six additional orders were rhceived within the next year, thereby rapidly establishing C-E as not only a nuclear component manufacturer, but also a major vendor of nuclear steam supply systems.

In response to a demand for larger nuclear units, C-E's nuclear, designs gradually evolved from these smaller units (all less" than 900 MWe outp'ut) through a series of 1100 MWe units, to the present 1300 MWe System 80 offerings.

This entire progression was a smooth evolution and not a series of experiments with unproven design concepts.'he end result of this marketing effort is that today C-E has eight (8) nuclear units in operation, and an additional 19 units under construction or on order.

Tables 1 and.

g list C-E's nuclear steam supply systems sold to date.

NUCLEAR FACILITIES The successful completion of a nuclear steam'upply system project: requires the close coordination of a variety of separate and distinct activities, from the development of design computer codes to the fabrication of heavy

• pressure vessels.

The following paragraphs describe the functions and capabilities of C-E's nuclear facilities which contribute to the success-of each nuclear project.

GENERAL OFFICES (WINDSOR, CONNECTICUT)

C-E Nuclear Power Systems Division general offices are located on a 500 acre site in Windsor; Connecticut.

Approximately 4000 people are employed at this facility where nuclear engineering,

design, physics and research and development are conducted.

NUCLEAR COMPONENT MANUFACTURE (Chattanooga, Tennessee)

Few facilities anywhere in the world compare with C-E's Chattanooga manu-facturing plant in sheer scope and size.

C-E's major manufacturing facility's capabilities include fabrication of nuclear and fossil steam generators and heavy thick-walled pressure vessels.

Over 1200 engineers, technicians and 'production workers staff the Chattanooga nuclear operations where C-E fabricates nuclear reactor vessels, steam generators, pressurizers.

and reactor c'oolant piping assemblies.

In addition to fabricating the first commercial-reactor vessel for the Shippingport plant, the first sodium cooled fast breeder 'reactor vessel for, the Fermi unit, and the

= vessel, head and guard vessel for the U.S. Fast Flux Test Facility, C-E has supplied nuclear components for both Westinghouse and General Electric.

As such, C-E has shipped or has on order 54 reactor vessels and 2 steam generators for Westinghouse and 17 reactor vessels for General Electric.

Table 3 displays C-E's major component manufacturing experience and backlog.

C-E has recently accomplished two significant shipping achievements.

In the first, all primary system components for an 1100 MWe unit were shipped

EXHIBITIII Page 7 of 12 from Chattanooga on a single ocean-going barge to the plant site in San Onofre, California.

The total shipment consisting of the reactor vessel and closure head.(420 tons),

two steam generators (620 tons each),

the pressurizer and other system components.

weighed 2,040 tons.

This record shipment has since been broken by the August, 1978 shipment of 2200 tons of nuclear components for Unit 1 of the Palo Verde nuclear station.

Bound for the Arizona Public Service Company's site, this shipment consisted of a C-E System 80 reactor vessel and head, and two steam generators, all mounted on one ocean-going barge.

REACTOR INTERNALS (Newington, New Hampshire)

Reactor Vessel internals are fabricated at tne C-E Avery facility in Newington, New Hampshire.

Skilled fabrication of stainless

steels, heavy thickness weldments, and other non-standard welding processes are C-E Avery specialties.

A modern machine complex gives C-E Avery the capability of machining the smallest parts on the largest'ssemblies to exacting tolerances.

All reactor internals undergo a rigid fit-up check at 'the facility, to 'ensure trouble-free assembly when installed in the reactor vessel.

C-E Avery can also manufacture high capacity spent fuel racks for the on-site storage of expended nuclear fuel by individual utilities...

REACTOR COOLANT PViPS (Newington, New Hampshire)

The System 80 reactor coolant pumps are designed, fabricated, assembled and tested by the CE/KSB Pump Company, also located-in Newington, New Hampshire.

Conceived as a.)oint venture between C-E and the West German firm of Klein-Schanzlin and Becker, the facilitywill manufacture reactor coolant pumps and subcritical boiler water circulating pumps.

Each reactor coolant pump is tested at full operating conditions in a specially designed flow test loop at the facility.

Based on C-E contracts

alone, the facility will have to produce 68 reactor coolant pumps.

FUEL FABRICATION (Windsor, Connecticut)

C-E's nuclear fuel fabrication facility is also located on the Windsor site.

C-E's nuclear fuel experience began in the early 1960's with the design and fabrication of several experimental fuel elements and cores, including the BONUS reactor core.

The Windsor facility was established in 1968 specifically for the manufacture of initial fuel cores and reload fuel batches for commercial reactor systems..

Here,'slightly enriched uranium powder is made into pellets, which are inserted into Zircaloy-4 fuel rods, which are then assembled into fuel bundles.

The" bundles are then cleaned, inspected and packaged for shipment to the reactor site.

C-E has. fabricated approximately 2400 fuel bundles, and has over 10,000 fuel bundles on order.

EXHIBIT III Page 8 of 12 URANIUM CONVERSION (Hematite, Missouri)

Prior to nuclear fuel pellet fabrication, a uranium conversion process must occur.

The C-E Hematite facility, operating on the steam-hydrogen

method, converts uranium hexafluoride to uranium dioxide powder, which is then shipped to Windsor for fuel fabrication.

This facility has been in operation by C-E since 1974.

CONTROL ELEMENT DRIVE MECHANISMS (East Windsor, Connecticut)

C-E established this plant in 1970 to manufacture control element drive mechanisms, control element assemblies and extension shaft assemblies, and other related components for the C-E nuclear steam supply system.

The creation of this plant was coincident with the development of the C-E electro-magnetic

)ack-type control element drive mechanism.

ELECTRICAL CONTROLS (Windsor, Connecticut)

C-E Controls Facility primarily manufactures electrical control systems and related products utilized in various heavy industrial equipment markets.

Both analog and digital components and systems can be assembled and tested at this facility.

PRESSURIZED WATER REACTOR SIMULATOR TRAINING (Windsor, Connecticut)

Simulator training is conducted at C-E's nuclear training facility on the Windsor site.

The C-E simulator duplicates the control room of an 845 MWe pressurized water reactor'lant for training of utility executives, engineers or plant operators.

Students receive simulator orientation lectures, as well as actual experience in dealing with operational transients.

The response characteristics of the simulator are programmed to represent actual plant design conditions.

KREISINGER DEVELOPMENT LABORATORY (Windsor, Connecticut)

This laboratory conducts research, development and testing of major technological areas associated with power plant equipment and systems development.

Included in this scope are activities 'in the areas of heat transfer, fluid mechanics, solid mechanics, combustion, corrosion, corrosion prevention, control systems, and chemical process development.

Recent nuclear projects include a Primary Pump Test to investigate hydraulic and mechanical pump performance following a loss of coolant

accident, and a nuclear reactor water.treatment evaluation program.

METALLURGICALAND MATERIALS LABORATORY (Chattanooga, Tennessee)

Located adjacent to C-E's manufacturing plant, this facility is custom designed for metallurgical research and development concerned with materials performance, metallurgical fabrication processes,

welding, joining, and forming, as well as primary metal processing, nondestructive testing te'ethnology and supporting metallurgical services.

In addition

EXHIBITIII Page 9 of 12 to its own activities, C-E has actively participated in U.S.

government and industry research programs on topics such as advanced fuel cladding design and fracture toughness of nuclear component materials.

NUCLEAR LABORATORY (Windsor, Connecticut)

This laboratory provides research, development and testing support for the overall design and construction of C-E supplied nuclear components and equipment.

One such facility is the nuclear components test loop which tests under operating condi,tions, nuclear'system components such as fuel assemblies, control element assemblies and control element drive mechanisms.

Seismic testing of reactor-components is performed with various shakers at the facility.

C-E also has the capability to perform full chemical analysis and chemistry control testing in either hot or cold test loops or model boilers.

COMPUTER CENTER (Windsor,- Connecticut)

This multi-million dollar facility has two IBM 370 computers with a total of five million storage positions, a Control Data Corporation 6400 and a new Control Data Corporation 7600 computer system to support the scientific calculations related to nuclear design.

This center is directly linked with the various manufacturing facilities and is easily accessible to C-E personnel via remote terminals and direct communications.

TABLE 1 EXHIBIT III Page 10 of 12 COMBUSTION ENGINEERING NUCLEAR STEAM SUPPLY SYSTEMS 0 eratin Units Unit Palisades MaineYankee Fort Calhoun 1

Calvert Cliffs 1 Millstone Point 2 St. Lucie 1 Calvert Cliffs 2 Arkansas Nuclear One, Unit 2

~Utflit Consumers Power Company MaineYankee Atomic Power Co.

Omaha Public Power District Baltimore Gas

& Electric Co.

Northeast Utilities Florida Power

& Light Co.

Baltimore Gas and Electric Go.

Arkansas Power and Light Co.

Commercial

~0'rato'on 12/71 12/72 9/73 5/75 12/75 12/76 4/77 1980

, Net Output MWe 740 830 457 845 830 802 845 912 Pre-S stem 80 Units Unit San Onofre 2

San Onofre 3

Waterford 3

St. Lucie 2

Forked River Pilgrim 2 Southern California Edison Co.

Southern California Edison Co.

Louisiana Power and Light Co.

Florida Power

& Light Co.

Jersey Central Power

& Light Co.

Boston Edison Company 1981 1981 1981 1983 1986 1100 1100 1165 802 1120 1180

TABLE 2 EXHIBIT III Page ll of 12 COMBUSTION ENGINEERING NUCLEAR STEAM SUPPLY SYSTEMS 0

S stem 80 Units Unit Palo Verde 1

Palo Verde 2

Palo Verde 3

Perkins 1

Perkins 2

Perkins 3

Cherokee 1

Cherokee 2

Cherokee 3

Washington Nuclear Prospect 3

Washington Nuclear Project 5 Yellow Creek 1 Yellow Creek 2*

~Uttlit Arizona Public Service Co.

Arizona Public Service Co.

Arizona Public Service Co.

Duke Power Company Duke Power Company Duke Power Company Duke Power Company Duke Power Company Duke Power Company Washington Public Power Supply System Washington Public Power Supply System Tennessee Valley Authority Tennessee Valley Authority

-Commercial UUetatton 1982 1984 1986 1993 1995 1997 1987 1989 1991 1984 1985 1983 1984 Net Output Kfe 1300 1300 1300 1300 1300 1300 1300 1300 1300 1300 1300 1300 1300

TABLE 3 EXHIBIT III Page 12 of 12 C-E Nuclear Manufacturing Experience Number

~Shf aed Number In Process Reactor Vessels*

110 36 Stean Generators Pressurizers Primary Piping Sets 86 46 14 36 17 17 Reactor Internals 13 18 Fuel Batches 41 133

• (Data includes the Fast Flux Test Facility vessel, head and guard

vessel, also fabricated by C-E.)

SL2-FSAR TABLE 2.4-3 UMMARY OF LOOPING STALLED AND INTENSE HURRICANE PARAMETERS LOOPING AND STALLED HURRICANES Average 10 Min Wind (Knots)

CPI (MB)

T (Knots)

Storm Direction (De rees from North)

Vx (Knots)

Lowest Pressure (MB)

No.

Name and Date Loop Duration

~d 24 Hr Before

~Loo During

~Leo 24 Hr After

~Loo 24 Hr 24 Hr Before During After

~Loo

~Leo

~Loo 24 Hr Before

~Loo During

~Loo 24 Hr After

~Loo 24 Hr 24 Hr Before During After

~Loo 10 Min Wind Time Re

~dd ~L CPI Time Re

~d ~L

~Rnm Distance of Loo from Coast Inga, 9/21-10/14, 1969 Carol, 9/16-10/1, 1965 Flora, 9/26-10/13, 1963 Loop Loop Hairpin 120 100 80 33 56 91 65 53 69 81 60 79 992 985 996 987 980 987 987 972 975 12 5.5 2.5 10 17 340 clockwise 070 350 c-clockwise 040 320 Hairpin 60 104 24 hr after Iu 67 37 hr before 74 14 hr after 122 24 hr before loop

'64 24 hr after 974 57 hr before 936 24 hr before loop 40 1000 mi E of Fla East Coast 1700 mi E of NC 50-150 mi SE of Georgia Coast Betsy, 9/2-9/12, 1961 Cusp 48 81 75 76 954 978 17 320 90 Cusp 060 105 3 days before 945 2 days before 600 mi E of NC Daisy, 8/24-8/31, 1958 Stall 60 41 100 108 1004 956 935 19 5

14 300 L to R bend 360 108 24 hr after 935 24 hr after 50W E Cuba, 140 nm E of Fla Coast Alice, 5/25-6/6, 1953 Loop 1

Loop 2

72 40 M

M 35 M

M M

M M

997 9

5 12 4

10 7

350 c-clockwise 340 330 c-clockwise 060 48 47 48 hr after 997 48 hr after Over E Coast of Honduras 260 nm SE of S tip of Fla, Cape Hatteras Easy, 9/1-9/7, 1950 Charlie, 8/27-9/4, 1950 2 Loops treat as one Loop followed by Stall 48 24 48

>56 94 40

>56 74 958 M

979 M

10 10 340 c-clockwise 90 360 clockwise 270 90 during 86 24 hr after 958 during M

M 15 21 during loop 60 mi NW of W Coast of Florida Western Atlantic 10 12 13 1944 10/13-10/21

1943, 9/15-9/19 1942, 8/25-9/2

1941, 10/3-10/14

1935, 10/30-11/6 Stall Loop Loop Loop Hairpin 96 42 144 60 M

47 40

>56 31-56 dis 75 (56 53

>56 32-56 dis (56 64 90 M

984 96/

M M

1010 M

M dis M

M M

1008 dis dis 15 dis 360 R angle 360 turn 104 48 hr after during 060 clockwise dis 130 clockwise 100 250 clockwise dis U-turn

>56 M

92 78

>3 days before 24 hr before 350 c-clockwise 030 '7 949 48 hr after 1010 24 hr after M

M 964 )3 days before 972 24 hr before 27 18 200 mi NW S of Cuba, Florida Keys 130 mi E of S tip of Texas 800 mi E of NC Coast 150 mi off W Coast of Florida 15 16 1934', ll/20-11/28 1934, 6/8-6/18

1910, 10/11-10/23 Loop Loop 1

Loop 2

Loop 56 72 48 48 (56

>56

>56

<56

<56 (56 (56 (56 M

82 M

M M

1000 1000 970 M

941 989 12 5

12 12 6

12 290 200 350 c-clockwise 020 counter-200 290 clockwise 360 92 60 82 24 hr after during 955 M

965 941 during M

37 16 Over Gulf of Honduras 400 nm S of S tip of Texas

SL2-FSAR TABLE 2,4-3 (Cont'd)

LOOPING HURRICANES ALONG EAST COAST OF FLORIDA Average 10 Min Wind Knots)

CPI MB)

T Knots)

Storm Direction (De rees from North Fx (Knots)

Lowest Pressure (MB No.

17 Name and Date

Ines, 9/21-10/11, 1966 Half Loop Hairpin Turn Loop Duration

~B 18 24 Hr Before

~LOO 52 During

~LO0 65 24 Hr After

~LO0 60 999 985 990 24 Hr 24 Hr Before During After

~LO0

~LOO

~LO0 24 Hr 24 Hr Before During After

~LOO

~Loo

~Loo 10 24 Hr 24 Hr Before During After

~LL LB

~LO0 030 170 turn 250 10 Min Wind Time Re

~dd ~L 122 5 days before loop CPI Time Re

~BB ~L 927 5 days before loop 6.5 on 9-28 Distance of Loo from Coast 50 mi S of southern tip of Florida 18 Betsy, 8/27-9/10, 1965 Loop 1

Loop 2

18 30 55 100 63 92 66 85 1000 943 994 987 958 968 10 7

3 1

12 6

330 c-clockwise 250 330 Figure 8

210 112 10 days after 112 4 days after 941 11 days after 941 5 days after 30 at 300 mi E of Fla E Coast time of 350 mi E of Fla E Coast max wind 19 20 21 Ginny, 10/16-10/30, 1963

Gracie, 9/22-9/29, 1959 Jig, 10/15-10/20, 1951 Loop 1

Loop 2

Loop Loop 30 132 60 60 44 M

57 70 66 77 61 90 79 103 (56 (56 1000 986 983 986 972 955 M

M M

M 12 8

5 9

8 20 290 clockwise 220 clockwise 038 060 clockwise 280 030 clockwise 130 90 24 hr after 103 2-1/2 days after 70 24 hr before 955 24 hr after 950 2-1/2 days after 100 mi SE of Cape Hatteras 150 mi E of 'Fla E Coast 200 mi E of Fla E Coast 240 nm SE of Cape Hatteras 22 Able, 5/15-5/24, 1951 Loop 108 (56 73 73 M

M M

20 10 15 270 c-clockwise 50 74 during 17 160 mi off E Fla Coast 23 24

1941, 9/16-9/25 1908, 7/25-8/2 9/21-10/7 Loop Loop Loop 60 96 24 (56

<56 75 M

M 985

< 56 (56

)56 M

M M

v 56

>56 v56 M

M M

10 3

9 7

5 15 9

9 240 clockwise 300 070 clockwise 360 090 c-clockwise 050 79 72 hr after

)56 24 hr after

>56 M

970 72 hr after B

988 24 hr after M

M 21 M

M 230 nm S La Coast 210 nm SW of Fla Coast 160 nm E of Fla Coast 550 nm E of Fla Coast 25 26 27 Camille 8/5-8/22, 1969 Beulah, 9/5-9/22, 1967 Carla, 9/8"9/12, 1961 Intense Intense Intense (Cyclodial) 905 923 INTENSE HURRICANES 12 340 330 320 320 142 121 129 905 923. 1 930.9 13-18 18 (9/10) 2.4-99

SL2-FSAR TABLE 2.4-3 (Cont'd)

INTENSE HURRICANES (Cont'd)

No, 28 Name and Date Donna, 8/29-9/13, 1960

~1 Intense Loop Duration

~d Average 10 Min Wind Knots 24 Hr 24 Hr Before During After

~Leo

~Leo

~Leo CPI MB 24 Hr 24 Hr Before During After

~Leo

~Leo

~Leo T

Knots 24 Hr 24 Hr Before During After

~Loo

~Loo

~Loo Storm Direction De rees from North 24 Hr 24 Hr Before During After

~L

~L

~Leo x

Knots 10 Min Wind Time Re

~dd ~L 121 Lowest Pressure MB CPI Time Re

~ME ~L 930 R

nm 33 (2 days after max wind)

Distance of Loo from Coast 29 1938 9/10 9/17d Intense 140 56 140 112 943 892 Very fast translational speed adding to storm winds caused unprecedented damage 30 1935, 8/29-9/10, (Laboratory Hurricane)

Intense

- NCAA Tech Report NWS 15 uSome Characteristics of Hurricanes and Tropical Storms, Gulf and East Coasts of the US,"

by Ho, Schweult, and Goodyear (Ref 2.4.5.1. 2-3)

B - As reported by the Monthly Weather Review (Ref 2.4.5.1.2-41)

M Missing data dis - dissipated 2.4-100

SL2-FEAR TABLE 2.4-15

SUMMARY

OF HURRICANE AND STORM DATA Author Shuyakly, Y.D.

Location/Year Baltic Sea Russia 1967 Storm or Hurricanes Great Storm Peak Surge Hei ht 2 in above pre-dicted tide Duration of Sur e 13-15 hrs Alternating 2 5m 24-40m headlands and to embayments20-25m 50-55 m/sec Height Important Cliff Reported 6.0-6.5m retreat 24,000 m /km 258 ft /ft 3

3 (calculated)

Beach Width Importances Manner in Which Maximum Dune in Wind Speed of Littoral Erosion Erosion was Erosion Erosion Ph sio ra h Hei ht Area Eroded max. )

Wave Hei ht Currents Mechanism Determined Determined (ft'/ft)

Grove, A.T.

Norfolk England 1953 Great Storm Northeaster 1953 6-8 ft above predicted tide 2 days Coastal beach 25 ft

'?

100-110 mph Height 8.0 ft (estimated)

Important Benching Measured from profile 2,640 ft /ft 2.640 ft /ft Williams, W.W.

Suffolk Coast England 1953 Great Storm Northeaster 1953 6-8 ft above predicted tide 2 days Coastal beach 100-110 mph Height 8.0 ft (estimated)

Important Cliff Reported retreat 1,600 ft /ft 1,600 ft /ft

Dolan, R.

North Carolina 1971 Hurricane Ginger 2.5m above M.S.L Barrier Island 2-4m 75-100 mph Height 4-5m Foreshore retreat Benching Measured from profile 450 ft /ft 350 ft /ft 550 ft /ft 350 ft /ft

Hayes, M.O.

Texas Gulf Coast Hurricane 5-10 ft 1961 Carla above pre-dicted tide 2 days Barrier Island 10 to 50 ft 50-75 ft

)

75 mph 150 mph (max)

Benching Reported 3,000 ft /ft 3,000 ft /ft Nichols, R.L. and Marston, H.Z.

Rhode Island 1938 Unnamed Hurricane

13. 75 above M.H.W.

12 hours1.388889e-4 days <br />0.00333 hours <br />1.984127e-5 weeks <br />4.566e-6 months <br /> Barrier Island 25 to 30 ft 50-100 ft 121 mph (max)

Cjiff retreat Benching Reported 1,500 ft /ft 1,500 ft /ft 3

3 1,240 ft /ft 1,250 ft /ft Warnke, D.A.,

et al.

Florida 1965 Hurricane Betsy

.76m above predicted tide 18 hours2.083333e-4 days <br />0.005 hours <br />2.97619e-5 weeks <br />6.849e-6 months <br /> Sand spit 4-5m 15-20m Benching Measured from profile 3

21 jm 225 ft /ft Bretschneider, C.L.

New England 1962 High 5 Storm 5-10 ft above 2-3 days Barrier Northeaster predicted tide Island Up to 100-150f t 60-80 mph 20 ft

-12 ft Foreshore Measured from retreat profile 1,400 ft /ft 1,400 ft /ft Caldwell, J.M.

Virginia 1948 Northeaster 6.8 ft above 2 days Barrier M.L.W.

Island

?

200 ft Foreshore retreat Measured from profile 1,450 ft /ft 1,450 ft /ft