Document Accession Akron. Ohio 14303 MAR 23 m4 Attention: unit:- a. Daniele-I. cceptroller '2 _Gent1enen: .proviaione for depreciation and ?aeertia?aticu. ahd_ etart thereto._ ae' follows: .-T. .. - . - Electric . Accumulated Provisions Utility: for Depreciation and EL yurtiution Balance as or January 1.. 197? . 1:995:1463053 . 431:129'239 Net change: through . . Recorded a: at December 31. - a 1980 . 3.639.717.774 691.744.290 Staff adjustmenti -(37.915.386) {8.712.043) Adjusted balance as of - - December 31. 1980 I -3.?013802.383 633.032.247 19840406?0197 Filed Date: 04/06/1984 - - fin-r .. mmDOA-AB . - . pocket uo. Ohio Edison enchany . . the staff has made an audit of your Company's books and records eup-_ porting changes in the recorded coat a! electric utility plant lrca' January 1. 1976. through December ll. 1930. and re1a_ted accumulated The staff. also made a selective examination cl eccaunting policiee.'- pract_ic_ee. procedures and internal controls to teat overall 11_ance w1th the accounting _end related regulaticne of the ecu-1eeiun. A summary of the ricorded cast of electric ut1_1ity plant and lated eccuhulated provisions depreciation and amortisation. .1 .- 1/ federal inner letter directive dated July 15. 1971; 04/06/1984 19840406?0197 Filed Date: Document Accession - on attached Schedule no.1. During the couree ot- the audit the eta? . - - the Coilpany wee directed by the Connie-ion to tranate'r this aaount _regulatione of the disclosed certain accounting end report- .- schedule Ilo.? compliance enceptione are sheen on attached Sched- . 'ule llo. 3. The cornering entriea end reco-endationa made the .- f: eta? are hereby approved and directed. Ile' note your dieapreuent-s . with the in regard to a. correcting entry {Schedule no. 2, Entry Entry lo.? -7) and a colpliaiice exception (Schedule Ilo._ 3. It: No.19. .. directive an to whether the Company concent'e to the diipoeition of thie -. matter in accordance with Part Ill; accounts; Recorde 'and Hennra'nda o! the Com-ireion'a Regulations under the Federal Power Act (it can n.1, atalt examination included a review at ratee need to capitalise - allowance for lunde ueed during conutruction (AWDC). By Order Ilo. developed the toreula. . Accordindll'. any previoue or 'rhe' detaile for the above balancea ad or December 31. 1980. are ahown noted that in 1930 the Company recorded a epacial entry which capita- lieed 511,621,858 or ?one in 'ot the earl-inn aaounte allow- ab_le under proviaione o! the Couleeion'e Unitcre eyeteel or Accounte. ae .ended by Order No. 56.1. By letter order dated January 22. 1932. fro. the electric plant accounta to account hiecellaneoue deterred debite. euhject to amortization or inediat'e write-oft band on determination by the Public Utilitie'e o! Ohio of the recoverability of the amount ina rate proceeding. Other detailed correcting entriee' are net forth. on attached schedule Ilo. 2. The corrective action recon-ended by the ate? and agreed to by your Coepany i_e hereby approved and directed. . the examination of overall coeplianoe with the accounting and related ?lmtione. The detailed correcting entriea are ehown on attached Under circuletancee. the ny ie hereby requeeted to notify "the in' writing within 3 daye iron the date of thin latter et eeq). 561. rebrua'ry 2. 1911. the lederal Power aeended ire accounting regulation'a to provide a. toreula for calculating laxi? nu'n allowable erupt ratea. he review detereined that moo rated ueed by the Cmny did not reeult in the c'apitaliration of AWDC in of that which would have been at ratee. enmnte cap taliaed at tatee in of 1/2! ie hereby withdreen. 04/06/1984 19840406?0197 Filed Date: Document Accession Qh io :dieon Conpany . -3- ?i'heegreeuent with the foregoing by your Company? except for Co:- rooting nutty lo. 1 and Compliance Inception Ho. 1. has been noted. lie have also noted that the Public Utilities Connie-ion of Ohio has not objected to the loregoing. - The foregoing action in without prejudice to the right to require he?efter such adjuetlente an my be ooneidered proper Ira addi? ?onzi intonation which my tone to the attention oi: the Con- I. Me By direction'ot the Mission. Secretary Attachmente Document Accession 19840406?0197 Filed Date: 04/06/1984 - maul; Sunny at enema 0mm mm: and 001.000 -- Mid hurt-m ?amazon and, mutation - Adj?mld - am am Elam mm 101- Mania 5mm 02.400.245.420 st 0.712.043) 02.457.533.303 100 10,119,500 111,300,023) . 0.322.925 chum-0 40,23,557 - 40,213,557 107 Wimmin 1211.1 ?nal-Ir fun]. In nan-u 0! Min-- mt. main, mid-n1: I fabri- Mill-mt Imqu ?r ?it" 53) Eli/3% stln'm) 1,095,192,214 n, . 103 mud prowl-ion n! uttlibj .. - - plant. 691,574,617 3? 8,712,043) 3 ?2.862.574 ?00: amortisation: electric-outing! . - - . plant 69 613 .- - 169 613 Minter ?1016th landing mum at tho sun's audit of Pant-yum? gamma-0000mm 1982. unadul- Document Accession 19840406?0197 Filed Date: 04/06/1984 Ohio Edison Coupeny'I. . Schedule no. 2 . - - - Sheet 1 o! 3 Entries es of Deggnbe; ;900 - 3559;; 11:53 Debi; .5 gredi; . il}.1_ -Allouance for other funds - used during construction - 8 113.136 432 Allowance for borrowed Eunde used during con- struction-Credit I9.291 18: Preliminary survey and investigation charges 3,2i6,331 - 107 construction work in progress $3,449,358 to reverse Alone erroneously accrued to nearer valley pre- lisinary studies and to re- classify all such studies to 3 encount 183_ Iron Account l07; 2 I ion lecueuleted provision tor depreciation of electric - -.I '3 .- _-L_uti11ty plg?t. 1- 83?1?.0?5 ?-101l?g? Electric plant win service 3:02.- ., . 3 8,415,043.? '15 record the retire- 'eent of the ?orrelk and East Palestine generating plants rhich had been removed Bros service. 335;: 3 '186 niecelleneous deferred - dobitl 3 11,395,523 105 Electric plant held for future use 311.396.613 'uoz 53.1.6011! zulu suntan: 01:: on: a: cam aunt-un?- .41. our!" autuu: on put Juranu on: 11011051109 303 Murmur! 30 ram putt innit: 51.1on "Fin; 3 . - - saw-p puma-p smut-aw 93! carrot sum 1m hwlpaouax: zar - 9 Ina-bad Autumn In 7: WU: 'luodan m_ 31?: walnut!? u-Ii until-I 'asnu. 5pm: norms . . - _omo our; 30 Iago: nun: Ctr-I m1:- - . ?u'npv In?ll-q an: maul- 036! gzruppau 511960.16 25?} I-I I - to: 'nc'u . - I 399-19011! no: cannula-aha; . Bunny . rpq'rs?as mum-1mm: _Jtr mom Dir-I pro: on In! "lint": no"; Ill nouns: 4m" can 'c won an nun-nun 3o muons-4m on: u; auldganud Juliana umoq up.? alumina: "0131??! - :uzanu gunman-a gr; ail-Insu- "Elam; an ?3mm 0anus . . - - 2 - mun owe ?2 Document Accession 19840406?0197 Filed Date: 04/06/1984 Document Accession 19840406?0197 Filed Date: 04/06/1984 .Ohio_ldieon'conpeny - -- Iitle . Debi; Entry Hg: 6 108 Accumulated tor depre- - ciation_ o! electric utility 191: Electric plant in cervica- 'To record the unrecorded retire- ment o! ecrapped economieer.. tube: at sammie Plant Unit '00 nt 8 7 - Taxes other than income tamer. '165 . Prepay-ante 236 taxee accrued 190 - Accumulated deterred income 283 Accumulated deferred income - -3 208,019 all.l tor deterred income f; texee-Credi_t. _utili_tyi operating income; .- 4-. To adjuet the accounte to tellect the espousing o! Ohio Public Utilities lxciee Tax on current beeia. ae applicable to llnC_ juriedictional cuetcmera. an o! Beoeeher ll. 1980. The entry .. also recorde corrections of income - tax accruele. The Company dieaqreed with thie entry. (For further detail-.. :cgedule lo. 3. Compliance IBxception In. . 353;: Hg. 3 262 lnjuriee and daeagee reaerve 750.000 107 Conetruction work in 104 Clearing accounts 925 lnjuriee_and damaged To reduce Account 262 to a level supportable pureuan_t to rise 5e Schedule No. Sheet 3 otl lccountplent- $101,900.; utility operating incoee taxee .- 4-29. 395'?- Credit $297,998 - $446,739 5-9 1:90 . I: -- 921,729 - awe-.3" - 637,414 $315,000 20.000 355.000 Document Accession The Company has agreed to on _ocours. Under generally socepted_accounting principles applicable to . .unregulated enterprises. a tax which is based on gross receipts and ?hd #3 tax'elthouchFETEFTJ'T "Ii?.li?nate! business Privilege tax'by'statutei and 2) that tb.-H 'enterprise as on Guiding business will continue to do business in'the 19840406?0197 Filed Date: 04/06/1984 . . - . . Schedule No. . - - - Sheet l.of 6 3 _the following_cospliance exceptions. except as noted.? . 1. the 1g'gubjeot to on annual Ohio Utility Excise tax, . .receipta tar computed by epplyi the statutory tar r.t. to received fro: collection of util ty reVenues. :on1o statutes describe the tar as one for the privilege of doing business during a tiscel year which begins on the first of May. and ends on the last day of April or the following year._ The tax for a fiscal year is pa able in inetallsents. One each in January end larch before the beg nning of the privile year. the estisated balance in June of the'privilege year. sith a nel settlenent in Decssber of the privilege year. Unless the tax laws are repealed or amended. the only say a utility can avoid paying a tax on gross receipts is to discontinue business -. before the following lay l. the date that legal liability for the tar designated as a franchise or business privilege tax say be_recognissd 3? in the accounts of'an enterprise esse?tially by one of tee the first pethod is to accrue'en expense and a lisbility-ss the; revenues on uhich the tax rill be cosputed'ere included in the deterrin- ation of net incoIe.;L1his lethod recognisesi?;1) tax ia't= next business privilege year and therefore'peysent of the tar cennot; be avoided. In this connection, it should be noted that the of a liability for accounting purposes does not reguire_that a present legal liability esists.? The second sethod considers the tar strictly business privil tar rather than a tax on revenue. "This sethod: l) defers recognit on of a liability or charges to incose for the tax until the enterprise enters the next business privilege year: and treats paysents of the tar sade before the year_as prepaidutases: 2) upon entering the nest business privilege year. records the liability for the unpaid balance of the tar and treats the entire tar as a deferred charge: and. 3) snortises the deferred tar amount by charges against revenues recorded-during the busineea privilege year. the second sethod results in an enterprise continuously reporting: ll assetsf?? in the nature of prepay-ante or deferred charges on its balance sheet! end. 2) higher col-on equity balances.- In an ever-increasing cost of service environ-ant. the alounts recorded as prepaid or deferred charges get larger each year. Ioreover. as the amounts are asertised against revenues during the privilege period. the revenues of the privilege period generate additional gross receipts taxes will have to be charged to expense in the nest priyilege year. ,of the two hethods. staff unnI no 91Id I1. o1 I111 .193 o1) ?1111qI11 I 91m II 911191.11 I111 .. I11 3o 01.1 1.1111 - (z 3o uo11oI11oo Kq 91.1 1o; Inn 111 91Id o1 9911199 I1. 91no1.I . .1 11mm. 909mm 33I1II111 I?u19u13 I11 uo -I?u1111q IInIto tIn3 k. I: ItmuddI 1m: ?1119?! 10; 909111911! nummrpo till: 10: H's-Ila urn-rom- atlla pane; ?in! 01.1 Imam: 1I191 m1 ?9111 1111: no pun. I1 ?quot-(I I111 ?1.1 1M1. lmanooId II1 Imam 1I9un 3o 1.99111 I1.1-. Iandmo 91 an; poll! II I111 I1 ?Iaum11ooII I111 01 I111 In 51911111.? 91.1 m1?1ddI ?Ind-o: Iona Iad1IoI1 ?915 103 IauInouI ?11111111 I: ?111110101! ?113' ?II-Inuit? Imo-ud I111 . 30 191p M1I1I1I1I9 111 9m; 31I1I .. . . . . . - - - I'v-l-I- . . .. . a. 9111 1.9119 911.1 meII 13I1I I111 In: 51.111? 111 (may A'IoaItnqu ?51m on: .01 Kurd-0:1 Mn 31 pomp! mail-'- um 1-1101- 11111111;qu ?1be ?In 91.1 111111 pull?; 11.9.111-I liq 9m? 91.1 "111999 Jun-99 91.1 {9qu IatIno1I91d I1. ?1111qI11 I II Iq IaunoII 9I'9uIdI'Iun In: I. II puI Io; IquI on 11111119? I no I oIodI1 man?: I so tuoxaan I111 111: Ioptaoad IL on 811 In It on ?dist-ate pave: IItd1oI11? 011111111on I111 (q you. out; 111 '2 my. uo1ll1do 03 ?91:09va I1 9II1u?ooI1 Io3 ununom I111 ?1IIo1o 91.1 111 I1uInoInouo1d 1mm ?1 ram Wins 5611me tum? I11 51 Don"! 11191191115" 311 um u1I11Ia 19 noon. I111 191 ?ununoow . in! 0: spawns Mama? titanium 1? all-Inns In 1110; .- -II1I.1 111 I911 mom-I In 01 mo.? I1 am I noun II11 1:1 11110! I111 39 uo11Iu 01.1 lu1991ou1 3o pm Mamas: 01.1 1.1111- :Iq: 19 901.1? I Intro; am Ilium: noun 911.0 II quII o1 9161?.? :93 51:11am? 3o Imu- :qu3319 I111 N1911I1Ill3?lnaou - diuIdIoa I111 It. Milo!" 19mm? In: 911cm 91.1 _qu1 1I1oqu13 punoI I191: "9119911! .- 9 IO DOCQS 1: fan Itanuog - - . . JIIMI 116111510110 11-19116; Immoad ?119110! _bu11.InI1I.1 91.1 q11I._1uI1I1Iuoo . . ??10161 3o 1.9111?qu :9'I11119u1 6111' u?1.I ?1110 01111 3' 108 30!! ?Inc-I 193.1unooII o1 I1.1 mrnb? 91!! 91111131 an _u1 961111111 I1. 111' I1'Ioo 311 mu 111I11na 111 -. . 1o3 1.3314191 _d IozItnoII 31 11 In: on ?11111"; m1111qI11 1.1111- Document Accession 19840406?0197 Filed Date: 04/06/1984 II: art-II: I II pIInIudIInmI ?11an uma lutm?l 81110 It]: um II ImuI on man I_Inma 3am Immu Jo quIananI In nun?; IMIdlld I ulna m:I mun- In: 11:0: I 01: 81110 I113 "Olin mm I:an 5:111:15: IpIn; pIamanI I a . - :anun 113 Sula-In air: 30 .. In.? I_Inqu: Imo wanna -'1-'aila II: nor-Irlloo .t0111133? artana aria In: Ad -. 5:I1;1:p:o Illa _IIuozI;;1:p_ Iu . Ila-35 'Iq :Iu meuI - In: uuminbii Ilium In"! Bu: (5 Im II: _Jatann I Mun I I: random!? II mm :1 I;ni In: may: DIR :Ipun u: quA ?mm: II II mIqI man)!? ?31m? our?: 011: I: :1ij puI In: liq Iadzm: In: 30 manna Iptmd ?maul-I 11'1? Inn pIujlgnaIp 30 ?9133193th I. ?3111130 3' Ill?: 0N0 0'13 011: AnuI I11: 511?] 'z '03 won tag :anI 30 Isuzu" I: zudaInrpI II inc-nu} r13 am 3W3 30 II IangII': 30: I :0 Pinon '0061 :0 II I qanI 30 1 qude Ill: hum: In: - :IauI "name: In: 1?an II II puI poms? IInqu: MI II: I_aanI: II IuanIo? 0II .Inpulas - ?u'pu-I' . alt-A L'I'af. - lf?v?J: - mama and In: 30 Inna: I: II u?nIuI Inimnub?u - - mem Iq Iuanmd 3am ??11m: Iq: :Iqa In; . m1. 9.10" 33.1. It?; I till 1pm 6111:1111 ?11513? . 51,110 II: IIuImd u: no: I: (cum) Iowan-um alumna?? ?In_Kunq?t an I: :Ii:d - (uncut "105000.! I: 01; I1: mu: ?In: . I11: pip KuIdlIa -- - pquuII "0:9 IbquI. '3 II In: human?; In: . Iaumnnbu InwquaIp Mum-4!: I?ll;_ Madam! ptnIu puI mum? xtInIuIml :0 MW ?:13 In: . 1131: Ion?: Ianpoaoad mu: :Iu aooq 3o many-"309 on; can; In In: :Ilr-I _nIaI In: Ind Document Accession 19840406?0197 Filed Date: 04/06/1984 Document Accession 19840406?0'197 Filed Date: 04/06/1984 .Ohio Edu?n company 1979. the ceepany eold 164 acree of land at the Vermilion Generating station alte with an original coat of $221, 360 which wae recorded in Account 105. Electric plant held for future uee. A gain of $223. 690 -: On the eele wee recorded in Account 421. l. Gain on diepoeition of prop- erty._ The Con .ny_ did .n9t_ notify or approval to reeove the? mrty free Account 105. Electric 'plant held for future uee. The text to Account 105 atatee that the Coepany ehall notify the Coe- and at approval of journal entriee to remove euch property free Account 1 5. . The etaff noted that. ae a reeult of the previoue etaff audit. the Coepany had agreed to record future gain on ealee of future land in - Account t1l.6. Oeina fro- diepoaition of utility plant. and to approval from the remove property free Account 105. The etaff that in the future the Company notify the Collie- eicn and obtain the approval. of the accounting for_ property removed 3 fro: Account 105. 'Ip . to: 1231215; 5E5 _gd. 561 Arena re 1; go?gg1p_; The etaff noted that in the Coopeny'e proceduree for computing the arnnc rate ueing the Borhula in rec Order No. 561.? the amount_ for win the 5-;erverage balance of Account lozi Conetruction work in progreae." and Ac? . count 120.1. Nuclear fuel in of refine-ent.' convereion. enrich- uent and fabrication. nan-interaet bearing carp and except Order No. 561. providee that be the average balance of Account 101 and Account 130.1 and doee not provide for excluding any amounte o? CHIP. The etaff alao noted an inconaietency in application in that the value of I'e" wee the coat of ehort tare debt taking into account the effect of coepeneating balance require-ante while wee the' average balance of ehort terh.debt without. taking into account coepenr eating balancee. It wae the etaff'e view that the above cited a licatione departurea froa Order No. 561.. the Order eetab iehed a ceiling on the mac rate but permite departurea with prior approvel.? The Company'e proceduree could reeult in the of a higher arunc rate than pereitted depending on the amounte involved. The etaff recommended that the Ccnpany obtain prior approval for all departuree which could reeult in higher arunc. no adjuetnent of the plant accounte wee recommended ae the effecte were not coneidered to :;deignificant with reepeot- to the arunc ratea ueed during the audit per . Document Accession 19840406?0197 Filed Date: 04/06/1984 I Ohio Edison company. - .321 Schedule NoSheet 5 of . . 5. accounting i9; to; politics; .ng related The Coopeny oherged paynents for in the Jefferson County Taxpayers Association to Account 930.2. Miscellaneous genaral expenses. The Jefferson county Taxpayera Association made assessments of tax pro- posale and then informed the a ropriate taxing authority of its deci- _aion. this was a political '1t39f - the Coepany durigg the years 197s-19eo charged the salary of the Manager of Govern-ental fairs to operati expenses. The Ianager of Govern- mental Affairs was a registered loggxiet and. accordingly. the coat nun- should hive been charged to Account 26.4. tapenditures for certain civic. political and related activities. It res noted that his ealary and expenses for 1981 aere reclassified to Account 426.4 subsequent to the staff's inquiries about the accounting. the staff recon-ended that. in the future. dues paid to the Jefferson County Taxpayers Association he accounted for in Account 426.4. The staff noted that the company agreed to refile pages 304A and 305 of its 1980 lore. 'uo. to reflect the above costs in Account 426.4. with a note stating chats: -aeounte do not agree with amounts on the incoee due to certain -=Ireclaeeifications. for"hine health in! pig?s: pg?pltigp -- The company paid North American coal coepany a price for coal which in- 5L5 cluded penalties for nine health and safet violations. Penalties paid ;iW? by the Company during the period April 197 through larch i900 were-.- .,approxilate1y $350.990 at north American mines and odditional penalties were peid End deterred he duarto Ilni?o Cone-n! to b? Coepang_during the operating?phase?bf the'ouerto'eines; . for fuel adjust-ant clause purposes. the Public Utilities of Ohio disallowed the penalties paid to north hearioan and the anortisetion_;1 of deferred Ouarto penalties and the Coepany refunded enounte previously included in wholesale and retail fuel adjustments. for accounting pur- poses. the penalties eere charged to Account 501. fuel expense. The staff recon-ended that. in the future. the penalties be classified to Account 416.5. Other deductions mom? noun-03 Ilium; bufpuId It IMI pIIanIIp mm Iq: 3o nay-?9131??: an :9 13mm '?t?uxpaoow Inn? qnnI . 30 noun ma uotIuI: 103- pI on! I OutdotIAIp 30- u; 3301' It", ?I31un aIItanu puI 'pIIuItd In puI :quqInuI :0 "00m .111 ton: J'Itonl oz: aunoaav (annav: letaanzaiuno.501:np spun: 103 '3"!th P?itm? 'nm "?aw 1W (can) MIIurpm am pawn alumna: mm lama 'IaaodI: Ian-m; on In: :13qu ?t on m; '93, aunoaav 03 Iain: prqua II qI'nI on nonIaIzdaIau: mm buanIdo Janna oz Imp qnta alum: pIhIqo Jquuop I I 1 mama? ?1:.de Alan's-m I: am 90.1mm I: out? "dial-I P1030: .mm Mn 'unan; 0?13 ?mi: In; ?lawn alums-mu nun Ina; putm'; puI ?auItd :I?oq 3o IaquIaulIu 'ug aunoow u; mm ?In IadeI: o: pIupIaa IouItIq In: If": 'manau; 30 1!:an 01 IprIzIIo 'ch ?mm on ?Pun I II can u; magma -. 11-16? 30 ?Omar! '01! an 103 JWICOB I'll! . '97. 30 83110910?! S. It"! Oil: 103 ?1 uni-lama) Icarus puI nqua :1nd alumna" In: 30 caused I 8mm:- - 086 u; .903 I 9 3? 9 suing 0: Iaunoaav an Ira-?5 Imeltun In: 30 n?ntanup - PIA-I ou'ot 0961: 3? '31- 33,1". .uanI I?nqa Jam In: 'Ianan; I11: In.? 33!" m. . '5 luptaanp-p :Iuao say aunoaav- It", 30 um DUI In; IIanaxpuIQII. no pun: om Ila. qbnoaua rm: I: puma Jun; 1: Ion IJII Iona pIunau; Ina; mun ?In I .JuIdIon It?. '13, um - Iduoa In i t_0n_I1anqag__ - i. - 6130 .. Document Accession 19840406?0197 Filed Date: 04/06/1984 Document Accession #: 19840406-0197 Filed Date: 04/06/1984 Document Content(s) 14793348.TIF..............................................................1