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Buy Own Distribution Plant; > Seems Only Recourse oh (Continued from page 9) of 31st October, 1926, the total invest- nt in the plants and works of the Cen- iwral Ontario and Nipissing System was which the investment in the Nipissing stem was in the Central Ontario System Ab that date Renewal, Obsolescence and Contingency Reserves were available to iy against the above investment, to the ont of and if, of such amount, there was to be vetained for renewal of plant and equip- $14,780,399.90 (A 1,016,780.89 $13,763,609.01 $2,064,033.70 ment--say The investment would stand reduced to 500,000.00 1,564,033.70 ¥rom which may be deducted the amount to be realized on sale to Municipalities of the local Electric Distribution Systems less the reserve: standing thereagainst 16aving a book balance of the Power Gen- 1,419,737.68 341,022.27 1,078,715.41 . eration and Transmission Plant, the Local Gas and Water Works, the Peterbro Street Railway, the Pulp Mill and the Bruton Pulpwood Limits, of $11,120,859.90 which book value will be further reduced by: (a) The amounts to be realized on the sale of the local gas and water works, the Peterboro Street Hallway, the Pulp Mill and the Bra. ton Pulp Wood Limits, (b) The application of amortiza- tion and other reserve funds to be created as from January 1, 1927. With the reductions above men- tioned (as items. "A" and "'B") the gig remaining will represent the value to the System of the gen- oration and - transmission plant. Caloulations and estimates have been made by Engineers of the Commission apd in their opinion the' investment remaining as the value of the gen- eration and transmission plant will stand reduced to an amount where two reveues, at the 1927 power rates, will be sufficient to pay the interest and other fixed charges thereon and also the cost of operating and main- taining the system. The investment by the Province. of Ontario in the System can in all probability be reduced in the man- ner outlined in the memorandum at- tached hereto until such investment ultimately represents the value to the System of the plant and works employed in the generation and transmission of power. Clarkson, Gordon & Dilworth. Central Ontario System Investment by Province of Ontario 926 eae av we n Plant and Works of Nipissing Section In Plant and Works of Central Ontario Section Deduct: -- Securities held by Commission that reduction also -- Amount to be realized on sale of Local Electric Distribu- tion Systems ...... as at 31st October, $14,671,230.44 1,016,730.89 $13,654,499.55 could be applied in $ 1,455,104.96 $12,199,394.59 1,078,715.41 Leaving the amount iavested in Power Generation and Transmission Plant, the Local Gas and Water Works, the Peterboro Street Railway, the Pulp Mill and the Bru- ton Township Pulpwood Limits, . Which investment by the Province duced: --- $11,120,679.18 can be further re- (a) By the amounts to be realized on the sale of the Local Gas and Water Works, the Peterboro Street Railway, the Pulpmill, and the Bruton Township Pulpwood Limits, (b) The Amortization and Reserve Funds created as from January 1, 1927, Note: -- The investment by the Province of October, 1926, was ... As compared with the WOrks ......s4.. The difference of .... Having been expended out of the Reserve Fund of the System, Ontario as at 31st $14,671,230.44 14,780,339.90 $ 109,109.46 Central Ontario System comparison of average kilowatt-hour rates in the under-mentioned municipalities as averaged and compiled by engineers of the commission: Average Revenue per K.W.H. under Electric Power Co, Operation Com. Municipality Dom, Belleville Bowmanville oo =] - #00 00 90 90 TT 90 20 1 00 go OW woooosSocCooee Newburgh Newcastle Orono ,. Oshawa Pory Hope Trenton +3 00 00 90 00 TV 30 00 7 90 oo 00 XW Sooo onee 9.0 So ° 9.0 Average Revenuc Average Rev. per K.W.H, und¢r per KW. H. 1926 condi- under est'd 1927 tions (rates econds, (raies before revision) after revision) Dom. Com. 3.9 S B =) B BowNVoRREINa WN Q WRIA D EDP W WD TNE DTD gp SIO] ht hd 1 b. cus AR I ADH NDNA ND WROD N® i 3a NW WR TTTT Nea Dod NAD DO WII NT RRO ; 6.0 Tweed tomers in : antral Ontario System comparison of rates to power cus the under-mentioned municipalities as compiled by engineers of the com mission, Revenue per H.P. under Elec. Power Co. Operation 1916 26.00 Mupnjeipality Belleville Bowmanville .. Millbrook Napanee Newcastle Orono .. Oshawa Port Hope .. Trénton Tweed [afte "its receipt the Executive held jor 115. 78 oi Cobourg and gave full consideration to the report from Clarkson, Gordon & Dilworth, " Complete as was the information in the report, it was felt that further aatial facts in regard to admipis- tration as well as costs and data in reference to the advantages of muni- cipal ownership of the local apts buting - plants as compared WwW 0.4% by the Provingisl Gor e-nment should be P poe A n so as to dgment. tolligant Jidsmme therefore wrote 30 Messrs: Clarksen, Gordon - worth submitting the following ques- | 57 what way will the munici- pality or the individual property owner profit by substituting munici- pal ownership and administration of the local distributing systems for Provinelal Government ownership and- Hydro Electric Commission ad- ministration? : 2. How has the cost ef general administration been apportioned among the municipalities in the 2 3 If each municipality buys ite distributing plant how will the ad- ministration costs be apportioned jp the future? 4. Referzing to Clause 6 of the specification contract, how will the 25.00 18.12 26.00 25,00 23.00 25.00 Newburgh .... i r 20.21 27.50 17.50 23.30 Revenue per H.P. est. under 1927 Conditions 22.50 26.80 19.50 21.60 26.80 23.30 20.00 25.40 Rev. per H.P. under 1926 Conditions 21.50 24.17 19.53 21.58 23,56 23.54 21.59 25.56 16.50 37.10 26.85 22.50 21.25 22.70 16.33 37.10 23.47 22.71 20.76 22.20 amounts payable thereunger be ad- nd apportioned? fusied 23 Bois of the auditing firm who had been dealing with this matter had gone away for their mid- summer vacation when the question- naire was dispatched, it was not until Sept, 16th that the supplementary statement was received. The chairman of the association was at that time on a business tour in western Canada and it was there- for thought advisable to leave con- sideration of this supplementary re- port over until his return. On Oct. 22nd the Special Commit- tee met at Oshawa and examined the tater report and then decided to have 1 statement prepared by the Com- mittee for submission to the general association. The statement, after be- ing drafted by the secretary, was re- vised by the Committee at another session held at Cobourg on Oct. 28th and is as submitted herewith. trom the Supplementary Report: J. O. Herity, Esq. Secretary, Central Ontario Power Association, Belleville, Ontario. ear Sir;-- Re Hydro-Electric Power Commis- jon of Ontario, Central Ontario Sys- 'em. In compliance with your request The following extracts are given | Sept. 16, 1927 |N of Mr. C. A. M th, Chairman ©: the Commission, we submit hereum- der additional information apd data irelative to the Central Ontario Sys- tem. This letter supplements our re- port dated 23rd June, 1927, to you: President, Mr. F. L. Mason. The conversion of the Central On- 'tario System into one comparable ito the Niagara and other Hydro Power Systems could be brought 'about by fa) The sale to the Munieipalities of the Local Electric Distributing Systems and the execution of con- |tracts between the Commission anc the Municipalities for the supply o' electric power at cost; (b) The sale of the Local Gas anc Water Works, the Peterboro Stree. 'Railay, the Pulp Mill and the Bru ton Pulpwood Limits; $12,199.575.0F leaving in the System the plan and works employed in the genera tion and transmission of power. You Association and the several Muni | cipalities are particularly interested in the purchase by such Municipali {ties of the Local Electric Distribut ing Systems and the benefits thai would accrue to the Municipalities anid the individual property owners following such purchase. Some 0' {these benefits may be described ar i follows: : L The acquisition by the Mun. cipalities of shares or equities in the {generation and transmission system. The undertaking, properties 'pleats, rights, ete., comprising the Centfal Ontario System were pur- chased by, and are owned by, the Province of Ontario, while the ad ministration and management there of has, by Order-in-Council, bee' vested in the Hydro Electric Powe' Commisgion of Ontario. The term and provisions of the Power Com mission Act do mot in anyway appl to the vgership of, or the operatio! of. the "Central Ontario System While these conditions continue the Municipalities of the Central Ontari- System cannot, through payment o amortization funds or otherwise, ac quire shares or equities in the prop erties and plants of the System ans cannot ultimately obtain ownershor of such properties and plants, As opposed to, or different from, this plan the Hydro Power Systems-- such as the . Niagara System--are operated according to the terms and provisions of the Power Commission Act and the undertakings, proper- ties, plants, rights etc. comprising each of such Systems are held by the Commission in trust for the Municipalities within such Power System, subject of course to the re- payment to the Province of Ontario of the moneys advanced for the pur- chase and construction of the un- dertakings, properties, plants, etc. The debt of the Province of On- tario (including borrowings in. re- spect of the Hydro Power System: and the Central Ontario System) is THE OSHAWA DAILY TIMES, FRIDAY, NOVEMBER 4, 1927 Seing paid off over a period of 40 sears. Through paymept of sinking funds the Municipalities on the iydro Power Systems are contribut- pg their shares yearly and are ac- juiring equities in the properties as above set out. 2. Surpluses on operation of Local Distribution Systems retained by in- lividual Municipalities. Under existing conditions the vari- »us properties and plants comprising he Centra] Ontario System are own- xd by the Province of Ontario and he revenues from the operation hereof are employed to cover the »perating expenses of the System a: + whole. After disposition and sale »f Plants not employed in the gen ration and delivery of power and \fter purchase by the Municipalitie: f the Local Electric Bistributior ystems, power would he delivered o the Municipalities a; the cost o remeration and transmission and an: :urpluses resulting from the opera ion of the local distribution system: would become the property of the 'ndividual Municipalities and could Ye employed in moderation of loca' jower and light rates or for othe nsurposes of the Local Electric Dis 'rtbution System. The Municipalitie would also retain the profits mad on the sale of electric appliancer supplies, ete. 3. Ultimate retirement of deb! against local Distribution Systems. The local operating expenses woul include a sinking fund charge t« provide funds for the repayment © the debentures issued by each Muni cipality in conection with the pur ~hase of its Local Distribution Sys tem. Upon the retirement ultimate 'yv of these debentures each of th Municipalities would own its Loca Electric Utility free from debt. 4. Operation of Local System bh Municipal Commission under supe: vision and regulation of Hydro-Elec tric Power Commission; The Power Commission Act pro- vides for the establishment in eac' municipality under contract with th: Commission, of a Municipal Commis sion for the eantrol and managemen of the Local Electric Distribution' System but such control and manage ment is subject to regulation ans supervision by the Hydro-Electri Power Commission as regards plan onstruction, operating conditions power and light rates, disposition ¢ surpluses, system of accounts, etc. Experience indicates that th operation of such distribution Sys tems by local Commissions tends to ward greater interest and under standing of local requirements tha: is the case when managed by Central organization only--also i tends toward a closer co-operatio and understanding relative to th whole Hydro enterprise, The operation of the Local Eler tric Distribution Systems and thr supervision thereof by the Commis sion would be ideptical to that now number of years to come, the Hydro- obtaining in the Municipalities Electric Power Commission, some throughout the Niagara and other months ago, entered upon negotia- Hydro Power Systems. tions to secure a block of power Re Apportionment of the Cost of from several interests having surplus General Administration. | electric energy for sale. The salaries and expenses of the | These negotiations have been pro- resident engineers, local managers | ceeding slowly but in a most satis- and others employed in the opera- factory manner. tion of the Central Ontario System Under date of June 7, 1927, Hon. are at present being charged direct- G. A.-Magrath handed out the fol- ly to the operating costs of the Sys- {lowing report showing the progress tem. The administration expenses of (that had been made up to that the Commission (after deduction of time: certain amounts chargeable to cani-| 'The Commission is now in a posi tal construction and to other mnder- |tion to definitely arrange for a sun- takings operated by the Commis-iply of 60 cycle power in blocks fron sion) are pro-rated and apportioned the Ottawa district in conjunction against the operation and mainten- with the Rideau and St. Lawrence nce of all Power Systems operated Systems of approximately 60,000 by the Commission, including Niag- ara System, Georgian Bay System, Thunder Bay System, Central On- 'ario System, etc., etc. Such appor- 'ienment is to a large extent, made nd on each system the gemeration '0osts, transmission costs and local listribution costs are made to in- slude a proper share of the adminis- 'rative expenses. if each Municipality on the Cen- 'ral Ontario System purchased its 'ocal distributing plant, no adminis- 'rative expenses of the Commission would be charged against the opera- xcept in cases where services were ipecifically rendered to a Munici- nality. The costs of generation and 'ransmission of power on the Central Ontario System would continue to 'nclude a proportionate share of the administrative expenses of the Com- mission. Apportionment of Costs of Genera- 'ion and Transmission. Clause 6 of the specimen copy of ~ontract attached to our report to our Association dated 28rd June, 1927. reads as follows: "The Commission shall at least annually adjust and apportion the amount or amounts payable by the Municinal Corporation or Corpora- tions for such power and such in- terest, sinking fund, cost of lost nower and cost of generating, opera- ting, maintaining, repairing, renew- ing and insuring said works." The amounts payable by the Muni- ~ipal Cornorations above referred to, are substantially the generation costs and the transmission and transfor- mation costs listed in schedule 6 to our report of June 22rd, but oro- vision for sinking fund would take tion if cost contracts were entered into between the Commission and the Municipality. Clarkson, Gordon & Dilworth, Adequate Power Supply. of the Central Ontario Power As- sociation for a more adequate power supply to provide for the needs of :entral and eastern Ontario for a a pr ----------e CENTRAL ONTARIO SYSTEM: Generating Plants and Condenser Stations interconnecting Lines and "Switching Stations Transmission Lines Transformer Stations Service Buildings Total Generation and Trapsmisgion Belleville Bowmanville Neweastle Orono Brighton Cobourg Lindsay Millbreok Napanee Deseronto Newburgh Oshawa Port Hope Peterborough Trenton 69,581 Total Local Electric $4,499,647. 433,395. 369,072.17 514,093.33 $5,816,207,91 $ 798,662.00 At March 1, 1916 Additions in period At October 31, 1026 date of purchase to October 31, 1926 i Generation and Transmission Equipr.ent:-- 41 $3,274,712.23 $ 7,774,359.6 00 479,696.34 413,962.24 224,647.07 34,413.59 912,991.31 783,034.41 738,740.40 34,413.50 $4,427,331.47 $10,243,539.38 Reserves for Renewal of Plant and Equipment Reserves for Obsolescence and Contingencies $1,096,248.77 $ 236,674.39 Local Electric Distribution Systems: -- $ 143,862.00 42,377. 8,209.00 5,724.00 25,922.00 93,09). .00 9,635.00 69,538.00 16,356.00 3,916.00 98,066. 77,324. 9,124.00 110,923.00 15,106.00 $ 102,532.47 40,327.83 5,506.63 4,247.17 9,119.21 57,545.87 $0,513.12 2,725.72 20,399.99 7,289.96 4,202.72 217,908.27 30,196.96 9,124.00 40,275.67 7,413.09 $ 246,394.47 82,704.83 13,715.62 9,971.17 35,041.21 150,644.87 150,094.12 12,260.72 89,987.99 23,645.56 8,118.72 315,969.27 107,520.96 00 00 00 00 151,198.67 22,519.09 621,075.68 1,419,737.68 56,641.29 14,511.55 2,627.43 1,404.25 9,288.59 38,188.45 38,752.20 2,984.22 18,393.43 6,529.29 2,029.89 60,283.62 28,177.58 4,329.59 1,466.38 241.70 171.11 604.42 2,648.68 2,705.51 179.74 1,412.82 418.80 141.07 5,954.13 1,845.27 31,997.36 4,555.63 2,361.99 381.83 $ 24,763.04 § 316,269.23 Local Gas Works: -- Cobourg Napanee Oshawa Local Water Works: -- Cobourg Trenton $ 95,39).00 42,758.00 117,424, 151,925. § 198,641.00 24,877.00 5,719.81 8,496.34 165,104.24 = 297,303.12 A 101,118.81 34,261.66 282,528.24 449,228.12 00 00 867,136.85 $ 20,461.63 $ 1,679.34 57,808.59 79,657.79 5,184.63 8,325.74 $ 15,189.71 $ 157,828.01 $ oun $ 803.59 25877.00 a 278,444.59 $ 4,735, 52 Total Local Water Works. .$ 223,018.00 55,486.59 278,444.59 $ 4,735.52 Pulp Mill and Pulp Peterborough Street Radial..$ 288,083.00 111,187.00 56,2151; 426,061.89 844,298.17 537,248.89 $ Rural Power Districts: -- Bowmanville Campbellford Colborne Kingston Oshawa Pickering Trenton Wellington 360.00 6,969.99 7,959.45 14,227.09 35,735.92 7,430.13 352.92 « 167.84 360.09 6,969.99 7,959.45 14,227.09 35,785.93 7,430.18 352.92 167.84 Total Rural Power Districts Fy = = A 73,203.49 $ 73,203.40 = $ 27,480.67 1,204.24 Total Central Ontario System $7,644,663.91 G $6,118,945.10 $13,763,609.01 $1,781,466.80 $ 282,566.90 NIPISSING SYSTEM: Generation and Transmission Generating Stations Transmission Lines Transformer Stations Service Buildings uipment:-- $ 394,272.94 7,225.80 11,236.55 6,343.66 699,462.94 42,861.80 36,308.55 6,343.66 Total Generation § 365,898.00 $ 419,078.95 784,476.95 49,232.29 184.41 North Bay Local Electric Distribution Systems: -- $ 121,610.00 14,568.00 4,338.00 918.00 $ 84,057.98 3,787.00 2,781.65 248.31 205,667.93 18,385.00 7,064.65 1,166.31 47,843.79 3,728.57 1,457.71 243.96 3,678.1 232.90 Total Local Electric Lo. 8 141,429.00 $ 90,824.94 § 232,253.94 53,274.08 4,053.31 Total Nipissing System ..§ 506,827.00 $ 509,902.89 $ 1,016,730.89 102,506.32 4287.72 Stores, Tools, ete. .......... $ 198,509.09 $ 125,115.08 $ 823,620.07 Grand Total $8,350,000.00 $6,763,964.07 $15,103.964.07 $1,883,973.12 $ 286,804.62 'n proportion to the direct labor, | tion of such local distributing plant : the place of provision for amortiza- | | In response to the earnest requests 'horsepower. i The present source of power or the Trent System which supplies the Central Ontario System with its .. 2 capacity of 48,000 horsepower. The peak load on the System in December, 1926, was 42,500 horse- power; the present peak loads are 32,5600 horsepower, and the average increase per annum in normal power iemands in this district is 1,500 to 2,500 H.P. By November, 1928, additional power will be required to meet the 'nereasing demands of this district. The average cost of power on the Jentral Ontario System, having a 'oad of 40345.2 horsepower, is 325.27 per horsepower, not includ- ng company losses: Based upon the propositions of wddit'onal power supply that have 'een submitted to the Commigsion it s estimated that power can be sup- lied at a central point on the Cen- ral Ontario System, in conjunction vith the nower supplied to the Rid- 2au and St. Lawrence systems, at the present power requirement has a \ Amount Proposition No. " ! " \ | {From which it will be noted that the ;average cost of power on the Sys- item, with the addition of the above | mentioned supnlies, would be: 1 No. 1 $26.00 per horsepower "2 26.25 " 3 25.00 . 24.50 It will be noted from the above that the average costs show an in- | crease on the first and second pro- positions of approximately 75 cents per horsepower and on No. 3 and 4 a decrease of from 25 cents to $1.25 per horsepower which additional " | " " { u 1 " " following costs: HP. Cost $28.00 to $29.00 28.33 " 29.40 23.70 24.80 22.67 23.80 10,000 to 43,600 From " " supplies of from horsepower. June 7. 1927." Since the issuance »f that report, members of the Special Committee have been informed that as soon as certain minor details are arranged a contract is likely to be signed for n minimum of 60,000 horsepower that maw be expanded to 100,000 if necessity demands. 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