COST OF HYDRO-ELECTRIC POWER PLANTS 739 



which are subject at any time to the necessity of complete liquida- 

 tion due to unforeseen competition. In the case of corporate 

 finance, especially, a sinking fund might, however, assist in secur- 

 ing easier terms in marketing the securities, but in any event is 

 amply covered by the 25 per cent contingent fund. A 50-year 

 sinking fund drawing 2 per cent interest would involve an annual 

 expense of $1.20 per continuous electrical horse-power. 



Three per cent basis: 



Depreciation, maintenance and repairs as above . . $1,962,900 . 00 



3 per cent interest on $50,000,000 1,500,000.00 



Total annual charges $3,462,000.00 



Annual cost per peak electrical horse-power year 



of base load (480,000 H.P.) $7.22 



Add 25 per cent 1 . 80 



Use $9.02 



Four per cent basis: 



Depreciation, maintenance and repairs as before. $1,962,900.00 



4 per cent interest on $50,000,000 2,000,000 . 00 



Total annual charges $3,962,900.00 



Per peak horse-power year 8 . 27 



Add 25 per cent 2 . 07 



Use $10.34 



Six per cent basis: 



Depreciation, etc., as before $1,962,900.00 



Add for 6 per cent on securities originally sold at 



10 per cent discount, equivalent to 6.67 per cent 3,340,000 . 00 



for taxes 1 per cent 500,000.00 



Total annual charges $5,802,900.00 



Cost of power on usual basis of private enterprise 



per peak horse-power per year 12.10 



Add 25 per cent 3 . 03 



Use $15.13 



Cost of Generation Contingent upon Sale of Surplus Power. If 

 the sale of the surplus power is to be assumed, then an additional 

 item of depeciation should be added to provide for the possibility 

 of severe runner erosion for the low-head units when operating at 



