COST OF HYDRO-ELECTRIC POWER PLANTS 741 



Based upon 4 per cent interest: 



Former annual charge $3,962,900.00 



Add for runner depreciation 75,000 . 00 



Total $4,037,900.00 



Add 25 per cent 1,009,500.00 



Use $5,047,400.00 



Cost per primary horse-power 7 . 58 



Cost per 11 mo. surplus H.P 6.06 



Cost per 10 mo. surplus H.P. . 4 . 55 



Cost per 8 mo. surplus 2 . 27 



Based upon 6 per cent interest on securities sold at 90: 



Former annual charge $5,802,900.00 



Add for runner depreciation 75,000,00 



Total $5,877,900.00 



Add 25 per cent 1,469,500.00 



Use $7,347,400.00 



Cost per primary horse-power $1 1 . 02 



Cost per 11 mo. surplus H.P 8.82 



Cost per 10 mo. surplus H.P 6.62 



Cost per 8 mo. surplus H.P 3.31 



The computations for the capital cost and cost of power for the 

 case in which a period of ten years was allowed for building up the 

 load, were made by starting with the initial investment necessary 

 to deliver one-tenth of the power, and then progressively adding 

 for each year the deficit, or difference between interest on the pre- 

 viously accumulated investment, operating expenses, etc., and 

 the earnings of the year in question, to the investment of the pre- 

 vious year. It was necessary first to assume a price of power and 

 after computing the transactions of the ten-year period, to then 

 correct this assumption by a process of successive approximations 

 until an assumption was made which provided the desired 25 per 

 cent margin at the end of the ten-year period. 



