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CENTERIOR CHAIRMAN REPORTS TO SHARE OWNERS

 CENTERIOR CHAIRMAN REPORTS TO SHARE OWNERS
 INDEPENDENCE, Ohio, April 28 /PRNewswire/ -- Share owners of


Centerior Energy (NYSE: CX) attending today's annual meeting heard from board chairman Robert J. Farling that the company is on the way to recovering its financial strength and is determined to become a top performer in the energy business.
 Centerior is the parent company of Cleveland Electric and Toledo Edison which together provide electric service to more than one million customers in Northern Ohio.
 Among major successes in the past year, Farling noted that the company had reduced operation and maintenance expenses by $62 million, or 7 percent. Of all the major electric utilities in the nation, Centerior was the only one to finish 1991 with operating and maintenance expenses lower than they were in 1988, Farling reported.
 Additionally, the quality of the company's earnings continues to improve, he said, and cash flow is better than it has been at any time in recent history. Total kilowatt-hour sales were up 1 percent in 1991 and 2 percent for the first quarter of 1992, indicating some recovery from the recession.
 He acknowledged that the company is still challenged to sustain 12-month earnings at a level to maintain adequate coverage of the dividend. Today's electric rates do not include recovery of investment and new expense incurred since the 1989 rate settlement developed in cooperation with customer representative groups and approved by The Public Utilities Commission of Ohio. Nevertheless, he said, the company is working to delay another increase in electric rates.
 "We believe the dividend is sustainable, barring unforeseen circumstances," Farling reported. "Our ultimate goal is to achieve a competitive rate of dividend increase, but first we need to recover our financial strength."
 To that end, he said, the company is continuing its cost-reduction efforts, endeavoring to enhance sales and revenues, and continuing talks with customer representative groups to enlist support for PUCO orders that more closely align accounting for operating and capital costs to the amounts recovered in rates.
 Accounting orders contributed 48 cents to the company's earnings in 1991.
 Turning to other matters, Farling expressed concern about proposed measures in pending Congressional legislation that would give unregulated wholesale power generators access to the transmission grid built by regulated utilities enabling the wholesale generators to sell power directly to big industrial users.
 "This retail activity would force higher costs on all other customers. In the end, reliability would suffer. That's why many regulatory and consumer groups have joined us in opposing these moves," Farling said. He asked share owners to write their elected representatives expressing their concerns.
 He noted that some Northern Ohio communities are considering the possibility of creating their own municipal electric systems.
 "We have met with many communities and stand ready to meet with others to demonstrate the long-term disadvantages in municipalization proposals," he explained. "Every case we've studied shows the same results. Among other problems, the cost advantage of municipal power starts to evaporate after the initial years. Also, the savings don't justify the amount of risk a community assumes when it tries to build and/or operate something as complex as an electrical system."
 He said that Centerior was meeting this competitive situation by holding the line on prices and by maintaining superior reliability and quality service.
 Farling concluded by expressing confidence in the company's future and complimenting the Centerior workforce which he termed "outstanding."
 "We are not yet the company we want to be -- a top performer in the energy market and on Wall Street. But we are on the right course and determined to reach our destination. We have a tradition of doing what we say we can do. We intend to keep that tradition."
 -0- 4/28/92
 /CONTACT: Lee Bailey of Centerior Energy, 216-447-3235 or 216-623-1060 after hours/
 (CX) CO: Centerior Energy Corporation ST: Ohio IN: UTI SU:


KK -- CL014 -- 3779 04/28/92 12:05 EDT
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Publication:PR Newswire
Date:Apr 28, 1992
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