208 



MULTIPLE PURPOSE RIVER DEVELOPMENT 



TABLE 38. Co7istruction, Investment, and Annual Costs of Hydroelectric 

 Development at a Willamette River Site, Assuming Federal, 

 Nonfederal Public, and Private Construction and Operation 



Nonfederal Private 



Federal public utility 



Construction costs $22,400,000 $22,400,000 $22,400,000 



Interest during Construction « 560.000 638.400 1,008.000 



Investment 22.960.000 23,038.400 23.408,000 



Capital charges: 



Interest on bonds " — — 376,869 



Dividends on preferred stock '' — — 149.226 



Dividends on common stock " — — 380.965 



Depreciation "^ — — 468,160 



Interest and amortization "^ 809.525 " 870,178 — 



Taxes: 



Federal income ' — — 681,758 



Other federal ^ — — 23,408 



State and local (or in lieu of tax 



payments) M 14.800 " 287.980 « 533,702 



Interim replacements *^ 46,816 46,816 46.816 



Insurance ^ 22,960 23,038 23.408 



Operation and maintenance « 160,000 160,000 160,000 



Administrative ^ 48,000 48.000 48,000 



Total annual costs 1.202.101 1.436.012 2.892,312 



Undistributed profits added to surplus ' 352.301 435,089 151 .567 



Total annual charges to customers ... . 1.554.402 1.871,101 3,043.879 



» Assumes interest for federal at 2.5; nonfederal public. 2.85; and private util- 

 ity, 4.5 per cent, on an average of one-half the total construction cost over a 

 two-year construction period. 



''Capitalization assumes 50 per cent in bonds bearing 3.22 per cent; 15 per 

 cent in preferred stock bearing 4.25 per cent; and 35 per cent in common stock 

 paying 4.65 per cent, but also having an earnings-price ratio of 6.5 per cent. 

 (See Electric Utility Industry in the United States, Statistical Bulletin for the 

 Year 1955, Edison Electric Institute, May 1956.) 



"^ Assumes straight line depreciation over the fifty-year license period. 



^ Assumes fifty equal annual payments, including interest at 25 per cent on 

 debt outstanding. 



" Assumes fifty equal annual payments, including interest at 2.85 per cent on 

 outstanding obligation, consistent with revenue bond rates for local public bodies 

 during 1955. 



' Assumes federal income lax of 50 per cent on $1,365,516 returns before taxes, 

 leaving an earnings-price ratio of 6.5 per cent on common stock and a preferred 

 dividend rate of 4.25. 



