738 



ECONOMICAL ASPECTS 



Annual Cost of Generating Primary Power. The following 

 items are independent of the interest rate on capital investment: 



Depreciation Reserve fund assumed to 

 earn 2 per cent interest and sufficient to 

 replace all depreciable parts every fifteen 

 years, and to refund the cost of all nearly 

 permanent structures, rock excavation, 

 concrete, etc., every fifty years (average 

 value 3 per cent) $1,500,000 . 00 



Maintenance and repairs For maintenance 

 and repairs on the turbine units, in addi- 

 tion to depreciation fund, per annum. . . $112,800.00 



Maintenance and repairs to generators and 



electrical equipment, 1 per cent 74,000.00 



Repairs to movable dam 50,000 . 00 



Painting, average of one coat per annum, 

 43,700 tons of exposed steel (total in use) 

 at $1 per ton 43,700 . 00 



Operating suction dredge to prevent possible 

 accumulation of sand bar at canal intake, 

 300 days, $100 per day 30,000.00 



Maintenance of building, replacing roof 

 every five years plus 50 per cent for other 

 repairs 2,400 . 00 



Contingent maintenance and repair expense 50,000 . 00 



Total for maintenance and repairs 362,900 . 00 



Attendance and administration 100,000 . 00 



Total annual expense exclusive of interest 



$1,962,900.00 



The rate of interest to be paid on the capital investment will 

 depend largely upon the basis of financing. To show the relation 

 of this to the annual cost of power, interest rates of 3 and 4 per cent 

 have been assumed as representing public development under dif- 

 ferent conditions. There has also been assumed a rate of 6 per 

 cent on securities originally discounted 10 per cent, plus 1 per 

 cent taxes, this basis being intended to represent approximately 

 the cost under corporate financing. The results are as follows: 

 No sinking fund has been provided, as it is not properly chargeable 

 to the cost of generation. The depreciation or amortization fund 

 would provide for keeping the project permanently in first-class 

 operating condition. A water-power property is of such unques- 

 tionably permanent value as to make it unnecessary to recover 

 the principal in a short time as with many industrial enterprises 



