Puerto Rico Water Resources Authority (Jan. 1958)

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A Special Report on Puerto Rico

Water Resources Authority

Government Development Bank For Puerto Rico

ASTRA PER ASPERA

JANUARY 1958

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Commonwealth of Puerto Rico

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COMMONWEALTH OF PUERTO RICO

Puerto Rico Water Resources Authority GOVERNING BOARD

Chairman: Hon. Luis Munoz MarIn, Govenior of the Commonwealth of Puerto Rico

Vice Chairman: Hon. Roberto Sanchez Vilella, Secretary of Public Works Member: Hon. Luis Rivera Santos, Secretary of Agriculture and Commerce OFFICERS Executive Director: S. L. Descartes

Head, Power Division: Rafael R. Ramirez

Chief Engineer: Miguel A. Quinones Head, Water Service Division: Harold Toro Acting Head, Power Utilization Division: Victor M. Cataldo Controller: Antonio E. Lebr6n

Personnel Officer: Fernando Torrent General Counsel: Gabriel Guerra-Mondrag6n

Head, Purchasing and Stores Division: Feldc Cordova Diaz Treasurer: Eduardo Lube Power Economist: Walton Seymour

TRUSTEE The First National City Bank of New York

CONSULTING ENGINEERS

Jackson & Moreland, Inc. AUDITORS Arthur Andersen & Co.

BOND COUNSEL

Mitchell, Pershing, Shetterly & Mitchell

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ELECTRIC POWER IN PUERTO RICO

S. L. Descartes, Executive Director, Puerto Rico Water Resources Authority.

Puerto Rico Water Resources Authority

Growth and Deuelopment The extraordinary economic development which in less than two decades has transformed Puerto Rico from an agricul

tural area dominated by sugar into a modern diversified economy with industrial income surpassing farm output is due in large part to the utilization of electric power resources.

Virtually all Puerto Rico is now served by a single inte grated electric system under the administration of the Puerto Rico Water Resources Authority. Generation of power has risen more than sevenfold since its creation in 1941. Over 450

new industrial plants established during that period are now in operation. The rhythm of Puerto Rico's dynamic growth, however, is by no means slowing down.

The story of electricity in Puerto Rico is the story of the Water Resources Authority — a public corporation gov

erned by a Board consisting of the Governor of Puerto Rico, the Secretary of Public Works, and the Secretary of Agricul ture and Commerce. This Board appoints an Executive Director, who selects all other officers and is charged with full authority and responsibility for the development, man

agement. and operation of the electric system. What has already been done and what is planned by the Authority is briefly told in the following pages.

Manacillo Transmission Center, one of the largest instal

lotions of the Puerto Rico Water Resources Authority

Historical Background The origin of the Authority may be traced back to 1908, when a Public Irriga tion Law was approved providing for the construction of an irrigation service in southeastern Puerto Rico. In 1915 this Puerto Rico Irrigation Service built its first small hydroelectric plant and this was followed by a second unit placed in operation in 1922.

The demand for electric energy continued to grow rapidly, and in 1925 a new agency was created within the Puerto Rican Department of the In terior, to which was entrusted all hydroelectric development and the admin istration of the Puerto Rico Irrigation Service. This organization, known as

Utilization of Water Resources, operated until 1941, at which time its prop erties and duties were transferred by law to the newly created Puerto Rico Water Resources Authority.

In 1944 the Authority acquired by purchase the private utilities serving two principal areas. By these acquisitions practically the entire electric system of Puerto Rico was integrated. Remaining separate were the electric systems of two irrigation services and a number of small municipal and private plants which (with a single exception) have since been acquired by the Authority.

Since 1941, when the Authority as such was created, very substantial changes have taken place in its organization and essential character. During recent years hydroelectric generating facilities have been surpassed in im portance by thermal-electric facilities, transmission voltages have been stand

ardized and the entire plant has been modernized. Changes in the type of service rendered in order to meet modern industrial demands have also been

effected. These progressive measures have produced corresponding modifica

tions of the Authority's organizational and administrative structure. Today the Puerto Rico Water Resources Authority is recognized as being among the most progressive and modern as well as one of the largest publicly owned electric utilities in the United States.

PUERTO RICO WATER RESOURCES AUTHORITY

ELECTRIC SYSTEM NOVEMBER

90,1957 SAN JUAN STEAM plant

ISABCLA H.C.

11 5ANTURCE STEAM PLANT

plant

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COMEBlO M E. PLANTS^, RIO Blanco MAYACUCZ STEAM

plant

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plant

CARZAS ^ E PLANTS

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PLANTS

cuayanilla steam Plant

(under construction) L

EGEND

HYDRO ELECTRIC plants-CAPACITY 20.000 TO 25.000 KVA

STEAM PLANT - CAPACITY

STEAM PLANT

hydro-electric Plants-capacity HYDRO-ELECTRIC plants - CAPACITY

5.000 to lo.ooo kva 2.500 TO 5.000 KVA

hydro-ElECTRic Plants - capacity

iooo to 2.500 kva

MYDRO-ELECTBlC PLANTS - CAPACITY

500 TO lOOO KVA

^ RESERVOIRS

CAPACITY

STEAM Plant - capacity

lOO.OOO TO 200.000 KVA

30.000 TO lOO.OOO KVA io.ooo to 30.000 kva

" electric distribution lines

, 38 KV electric transmission lines

C9 1 .5KV ELECTRIC TRANSMISSION LINES (uNDEP CONSTRUCTION) SP existing 115 KV ELECTRIC TRANSMISSION LINES

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The Antonio Liicchetti Dam, dedicated in 1954, was the second of five ittajor dams connected with the Southwestern Puerto Rico Project. This project extends

over an area of 250 square miles. Part of the project involves diversion of water through the mountain divide of nearly eight miles of tunnels.

Management and Staff The remarkable record of the Authority is due in large measure to the foresight and vision of its first Executive Director, Antonio Lucchetti, who conceived the over-all plan and secured the cooperation of executive and legislative leaders in bringing it to reality. Subsequent events have amply demonstrated the wisdom of those who foresaw the role which the development of electric power would play in the social and economic progress of Puerto Rico.

The present Executive Director of the Authority, S. L. Descartes, is a

graduate of Cornell University and of the University of Puerto Rico. Mr. Descartes was Treasurer of Puerto Rico from January, 1949 to July, 1952, at which time he became the fi rst Secretary of the Treasury when that office was created by the Constitution of the Commonwealth of Puerto Rico.

The Authority has now over 3,300 regular employees including construction

personnel. The eight principal executive officers in charge of engineering, power system management, construction, accounting, and administration have served with the Authority for an average of twenty years each.

As consulting engineers the Authority retains the firm of Jackson & Moreland, Inc., of Boston; Arthur Andersen & Co. is retained as account

ants and auditors. A review and general appraisal of the Authority s insurance

program was made this year by Commonwealth Services Inc.. of New York, retained for that purpose and for periodic reviews. Resource Development Corp. advises the Authority on some policy matters.

The Area Served The relations of the Commonwealth of Puerto Rico with the Federal Gov

ernment are defined in an Act of Congress known as the Puerto Rican Federal Relations Act. This Act, Public Law 600, is "in the nature of a

compact," which became effective upon approval by the people ol Pueito

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Rico. Over internal affairs, the Commonwealth has virtually the same control as does each of the forty-eight states over its own. The currency, postal, and military services of Puerto Rico are identical with those of the United States.

The Commonwealth Constitution provides for an elected Governor and a bicameral legislature exercising distinct powers. The judiciary is independent, and is headed by a Supreme Court whose members are appointed for life.

Appeals may be carried to Federal courts, including the Supreme Court of the United States.

The Authority supplies electric service throughout Puerto Rico, covering an area of 3,423 square miles and having a population currently estimated at 2,287,000. Only the town of Cayey and the small outlying islands of Vieques and Culebra, representing less than one per cent of Puerto Rico's electric power consumption, lie outside the present system of the Authority.

The Capital of Puerto Rico is the City of San Juan, located on an excellent natural harbor in the northeastern section and served by a modern airport which handles over 900,000 passengers and 6,000,000 pounds of freight per year. Industrial development in the San Juan Metropolitan Area, which includes several cities adjoining the Capital and has a present population of approximately 600,000, has advanced rapidly; San Juan is also the site of the University of Puerto Rico and the center of Commonwealth and Federal gov ernment offices. On the south coast the principal industrial city is Ponce, noted particularly for the production of sugar products, cement, and rum. West of Ponce are important chemical and oil refinery operations. Other leading cities include Mayaguez on the western coast and Arecibo in the northwest, both important for food processing and apparel production.

The central portions of Puerto Rico are mountainous, providing oppor tunities for hydroelectric power production jointly with the collection and conservation of tropical rainfalls for irrigation use on the coastal plains.

A statistical summary of the economic growth and balancing of the economy during the past two decades is presented in the table at the end of this report.

PUERTO

RICO

WATER

RESOURCES AUTHORITY

Total Revenues,Balance, Available for Debt Servicing and Service Requirements DOLLARS

35,000,000 -

LEGEND

30,000,000 â&#x20AC;&#x201D;

TOTAL REVENUES BALANCE AFTER CURRENT EXPENSES

25,000,000 -

DEBT SERVICE REQUIREMENT

20,000,000

15,000,000

10,000,000

5,000,000

FISCAL

FISCAL

1950-51 ÂŤ APPROVED BUDGET SOURCE PRWRA FINANCIAL

FISCAL

1952-53 REPORT

FISCAL 1953-54

FISCAL

FISCAL

FISCAL

1954-55

1955-56

1956-57

FISCAL

1957-58 *-

Electric System Total power production in Puerto Rico in the twelve months ending No vember, 1957, stood at 1,471 million kilowatt hours compared with 166 million in 1940 â&#x20AC;&#x201D; more than an eightfold growth. The number of consumers had risen about three and one-half times during the same period, from 100,492 to 346,264. The very large net increase in electric consumption per consumer was primarily the result of two factors â&#x20AC;&#x201D; rapid growth of industrial

power consumption, and the sharp rise in standard of living as reflected by the constant installation of more electric appliances.

Total installed generating capacity of the Authority at the end of Novem ber, 1957 had a name plate rating of 310,280kw. The physical plant presently consists of 23 generating stations, of which 19 are hydroelectric and four are

steam plants. Thermal-electric facilities, rated at 201,000kw, now supply approximately 88 per cent of electric energy generated.

The Authority's transmission system consists of 1,057 miles of 115kv and 38kv lines, controlled and sectionalized at fifty transmission substations

located at suitable points throughout the system to insure stability of service and provide appropriate voltage to metered serviees in 75 cities and towns as well as a large number of rural areas.

Distribution facilities include 109 substations with a capacity of 242,755kva.

Rural Electrification In 1941, the Authority started a general program of rural electrification with

funds provided jointly by the Commonwealth Legislature and the Authority.

San Juan Steam-Electric Station â&#x20AC;&#x201D; 168,000kw. Built in 1951 with originally 2-20,000kw units it now has 4-20,000kw and 2-40,000kw turbo-generators.

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PUERTO RICO WATER RESOURCES AUTHORITY

Condensed Balance Sheet AS OF NOVEMBER 30, 1957

ASSETS UTILITY PLANT

$208,531,838

OTHER PHYSICAL PROPERTY AND MORTGAGE RECEIVABLE

991,837

BOND REDEMPTION, RESERVE AND CONSTRUCTION FUNDS

18,194,231

CURRENT ASSETS:

Funds and working advances

$ 7,721,022

Accounts receivable

4,485,202

Materials and supplies

6,459,443

Prepayments, special deposits and other

1,084,293

19,749,960

DEFERRED DEBITS:

Debt discount and expense in process of amortization Other

$ 3,275,257 143,916

TOTAL ASSETS

3,419,173 $250,887,039

LIABILITIES CONTRIBUTED CAPITAL

$ 28,516,094

UNAPPROPRIATED NET REVENUES

18,628,064

LONG TERM DEBT (Including notes payable pending long-term financing)

155,586,000

CURRENT LIABILITIES:

Accounts payable Customers' deposits and accrued interest Accrued interest on Electric Revenue Bonds Accrued contributions in lieu of taxes Other

$ 2,022,266 1,194,274 1,765,974 1,527,547 3,073,240

DEFERRED CREDITS

9,583,301 335,176

RESERVES:

Depreciation Self-insurance

Hydro-production equalization

$27,805,034 1,819,099

39,657

Revenue stabilization

1,626,496

Appropriated sinking fund

6,593,975

Other

354,143 TOTAL LIABILITIES

38,238,404 $250,887,039

PUERTO RICO WATER RESOURCES AUTHORITY

Condensed Statements of Revenues and Expenses (For Revenue Fund Purposes per Trust Indenture) TWELVE MONTHS ENDING June 30 1955

June 30 1956

June 30 1957

November 30 1957

$31,169,835

REVENUES:

Sales of electric energy

$19,799,240

$25,215,538

$28,693,447

309,090

479,415

531,419

604,566

$20,108,330 203,360

$25,694,953 271,765

$29,224,866 635,436

$31,774,401

$20,311,690

$25,966,718

$29,860,302

$32,733,1 10

$ 3,292,301 5,734,877 1,682,166 171,660

$ 4,417,223 7,100,514 2,245,124 429,689

$ 5,702,454 8,095,091 2,928,220 404,484

$ 7,113,248 8,354,087 3,134,784 433,296

$10,881,004

$14,192,550

$17,130,249

$19,035,415

$ 9,430,686

$11,774,168

$12,730,053

$13,697,695

$ 2,731,879 1,533,601 104,295

$ 3,056,773 1,653,516 210,069

$ 2,955,274 1,781,532 321,517

$ 3,192,276 1,827,491

Total sinking fund payments

$ 4,369,775

$ 4,920,358

$ 5,058,323

$ 5,419,793

Balance

$ 5,060,911

$ 6,853,810

$ 7,671,730

$ 8,277,902

$

$

$

$

Other operating revenue

Total operating revenues Other income Total revenues

958,709

CURRENT EXPENSES:

Operation —

Fuel purchased Other operation expenses Maintenance

Other current expenses

Total current expenses Balance of revenues after current

expenses (per Trust Indenture).

SINKING FUND PAYMENTS:

Interest account (exclusive of interest

charged to construction) Bond redemption account Reserve account

400,026

TRANSFERS TO:

General reserve fund — provision for selfinsurance

Total transfers

.

200,545 2,438,951

248,818 3,048,874

$ 2,639,496

Renewal and replacement fund

289,789

302,917

3,574,557

3,696,139

$ 3,297,692

$ 3,864,346

$ 3,999,056

$ 2,421,415

$ 3,556,1 18

$ 3,807,384

$ 4,278,846

2,093,697

2,753,228

3,140,048

3,41 1,493

Balance available for contribution

in lieu of taxes, etc PROVISION FOR CONTRIBUTION IN LIEU OF TAXES

$

327,718

$

802,890

$

667,336

$

867,353

Transfer to sinking fund reserve account $

163,859

$

401,445 39,066

$

333,668

$

433,676

$

163,859

$

440,511

$

333,668

$

433,677

$

163,859

$

362,379

$

333,668

$

433,677

Balance PROVISION FOR:

Revenue stabilization Total

Balance transferred to unappropri ated net revenues

7

Growth of the Annual Load of the System Since 1940 Total Fiscal Year

(June 30) 1940-41 1941-42

1942-43 1943-44 1944-45

1945-46 1946-47 1947-48 1948-49 1949-50

1950-51 1951-52 1952-53 1953-54

1954-55 1955-56

1956-57 1957-58-

Revenue

r

Sales of

Electric Energy

$ 3,610,373 4,162,985 4,456,299 4,959,850 5,186,618 5,764,058 7,285,346 9,280,474 10,338,403 11,170,252 13,005,874 14,879,793 16,114,935 17,825,369 19,799,240 25,215,538 28,693,447 32,205,240

Kwhrs.

Sold

138,960,072 176,174,675 183,788,983 211,574,477 225,520,917 258,594,948 296,661,918 344,694,360 371,051,833 411,726,648 488,243,234 565,103,630 625,274,634 699,920,609 774,933,164 930,829,350 1,078,420,562 1,242,391,950

Average Customers

100,492 106,762 109,352 112,147 117,101 124,959 132,492 144,207 162,133 176,642

185,090 195,061 211,567 228,205 245,058 314,853 338,685 356,639

Maximum

Average

Kilowatt

per

Peak Load Kilowatts

Load Kilowatts

Hours per

Kilowatt

per

Customer

Hour

Customer

17,960 18,350 46,800 51,490 54,060

9,220 11,000 27,550 31,772 33,464 39,147 44,602 51,364 54,647 59,248 68,694 76,911 87,089 97,124 108,717 129,325 153,153 190,500

1,383 1,650 1,681 1,887 1,926 2,069 2,239 2,390 2,289 2,419 2,638 2,897 2,955 3,067 3,162 2,956 3,184 3,484

$.0260

$35.93

62,900 70,410 80,060 87,900 98,180 109,040 122,330 139,870 154,520 178,160 209,740 248,938 293,000

* Approved Budget.

In June, 1952, arrangements were made by the Authority with the Rural Electrification Administration of the Federal Government to continue the pro

gram for raising standards of living in the rural areas. The contract with REA was for $6,376,000 to be loaned in amounts of $2,000,000 per year through the purchase by REA of 2 per cent special revenue bonds. This contract was amended in 1955 to bring the total loan to $13,000,000. The Legislature of Puerto Rico acted to reimburse the Authority for differences between the cost

of furnishing electric service in rural areas and revenues collected from con sumers served in those areas.

The REA program consists primarily of distribution lines and substations in rural areas. The number of rural customers on June 30, 1957 was 136,957.

Service for approximately 32,000 families included in this total has been pro vided under the REA financed program, and for the balance either by the

Authority directly or under the legislative program mentioned previously, in 1957 a further amendment to the loan contract was made, providing for an additional $10,900,000. This further REA loan was to provide generating and transmission facilities serving rural areas. j (coi inn 000

Up to November 30, 1957, the Authority had borrowed $_1,100,00 at 2 per cent from REA.

Financing The Program

The Authority has broad powers under the legislation by which it was created, including the power to borrow money and tssue revenue bonds for any of its corporate purposes and to secure the payment of such bonds under a Trust Indenture, ft has full authority to set and collect rates and other

Revenue

.0236

38.99

.0242

40.75

.0234

44.23

.0230

44.29

.0223

46.13

.0246

54.99

.0269

64.36

.0279

63.76

.0271

65.64

.0266

70.27

.0263

76.28

.0258

76.17

.0255

78.11

.0255

80.79

.0271

80.08

.0266

84.72

.0259

90.30

charges for the use of its facilities, as well as having complete control and supervision over its properties and activities. Properties may be acquired by the Authority by any lawful means, including the power of eminent domain.

For many years the Authority has pursued a policy of obtaining short-term bank borrowings for the purpose of constructing facilities under its Capital Improvement Program; from time to time, issues of revenue bonds are sold for the repayment of such loans and the continuance of construction. In this way the facilities producing income for the support of long-term obligations are to a large extent already in operation by the time such obligations are issued.

Bonds outstanding, including the 2 per cent REA issues, totaled $136,486,000 as of November 30, 1957.

In addition, a substantial amount of the Capital Improvement Program has been financed directly from revenues of the Authority. In the period from May 1, 1947 to November 30, 1957, a total of $167,089,220 was

invested in capital improvements; of this amount, $128,865,989 had been pro vided from bank borrowings of the proceeds of bond issues and $38,223,231,

Bonded Debt Now Outstanding GENERAL MARKET ISSUES Amount

Coupon by Maturity Range

Price

Outstanding Nov. 30, 1957

Jan. 1/50

104%

$38,500,000

July 1/53

104%

21,839,000

1,325,000 2,020,000 1,555,000 15,825,000

July 1/58

105%

20,805,000

5.00% 3.00% 3.25% 3%%

120,000 980,000 2,490,000 8,850,000

Jan. 1/60

103%

12,440,000

3.00% 3.25% 3.40% 3.50% 3.60% 3.70% 3.75%

335,000 245,000

July 1/61

104%

22,000,000

Original Issue

Date

From

To

Int. Rate

Amount

$50,000,000

Jan. 1/47

Jan. 1/58 Jan. 1/66 Jan. 1/74

July 1/65 July 1/73 July 1/77

2.75% 2.50% 2.70%

$13,055,000 16,087,000 9,358,000

Jan. 1/58 Jan. 1/81

July 1/80 July 1/84

2.75% 2.80%

11,414,000 10,425,000

Jan. 1/58 Jan. 1/59 Jan. 1/71 Jan. 1/81 Jan. 1/84

July 1/58 July 1/70 July 1/80 July 1/83 July 1/88

4.75% 4.30% 4.60% 3.75% 4.75%

Jan. 1/58

Jan. 1/83

July July July July

1/59 1/69 1/82 1/90

July July July July July July July

July 1/62 July 1/65 July 1/70 July 1/75 July 1/81 July 1/89 July 1/93

25,000,000 21,000,000

12,500,000

July 1/50 July 1/53

Jan. 1/55

Jan. 1/60 Jan. 1/70

22,000,000

July 1/56

1/58 1/63 1/66 1/71 1/76 1/82 1/90

First Call Date

80,000

485,000

560,000 975,000 1,845,000

17,555,000

RURAL ELECTRIFICATION ADMINISTRATION ISSUES 1,000,000 2,000,000 2,000,000 2,000,000 2,400,000 2,500,000

July 1/52 July 1/53 July 1/54 July 1/55 July 1/56 July 1/57

9,200,000

July 1/57

Jan. 1/58 Jan. 1/58 Jan. 1/58 Jan. 1/58 Jan. 1/59 Jan. 1/60 Jan. 1/60

July July July July July July July

1/87 1/88 1/89 1/90 1/91 1/92 1/92

2.00%

934,000 1,912,000 1,956,000 2,000,000 2,400,000 2,500,000

2.00%

9,200,000

2.00% 2.00%

2.00%

2.00% 2.00%

$

Any time Any time Any time Any time Any time Any time Any time

100% 100%

934,000 1,912,000

100%

1,956,000

100%

2,000,000 2,400,000

100% 100%

2,500,000

100%

9,200,000 $136,486,000

or about 23 per cent, had come mainly from net revenues of the Authority.

On November 30,1957,total assets amounted to $250,887,039,operating and appropriated reserves were $38,238,404, net contributed capital and unappro priated earnings were $47,144,158, and current debt was $19,100,000.

Total revenues for the twelve months ended November 30, 1957 were

$32,733,110. Operating and maintenance expenses for the same period were $19,035,415, leaving $13,697,695 to meet debt service requirements. The maximum debt service for any future year on outstanding issues was $6,550,180, indicating a coverage of 1.98 times. Payments to the Commonwealth and municipal governments in lieu of taxes amounted to $3,140,048 in the fiscal year 1956-57.

During the rapid expansion of facilities and improvement of service over the past decade, the Authority's rates have not been raised; constant increases

in demand have consistently provided adequate yearly growth in revenues and substantial reserves. On the basis of continuing rate-planning studies, it is not expected at present that any general increase in electric power rates will be necessary in order to carry out the extensive Capital Improvement Program described below.

In January, 1958, the Authority will issue $25,000,000 par value of elec tric revenue bonds, from which all current bank borrowings will be retired and about $5,000,000 will be made available for new construction.

Security of Bonds Bonds issued by the Authority under the Trust Indenture are payable from the Puerto Rico Water Resources Authority Sinking Fund, into which Fund

South Coast Steam-Electric Station

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PUERTO

RICO WATER RESOURCES AUTHORITY

REVENUES FROM SALES OF ELECTRICITY

i RESIDENTIAL TOTAL

MILLIONS OF DOLLARS

FISCAL 1946 YEARS

1947

1948

1949

â&#x2122;Ś APPROVED BUDGET SOURCE: PRWRA FINANCIAL

1950

1951

1952

1953

REPORT

the Authority has covenanted to deposit a sufficient amount of its revenues, after expenses for maintenance and operation of its electric properties, to pay the principal of and the interest oh all bonds issued as they become due, as well as to create reserves for such purposes.

The Authority further covenants to fix reasonable rates and charges suffi cient for the payment of maintenance, and operating expenses and bond prin cipal and interest, and to create certain reserves. In addition the rates must provide for the making of deposits required by the Trust Indenture to the credit of the General Reserve Fund and the Renewal and Replacement Fund,

and for payments in lieu of taxes to the Commonwealth and the municipalities it serves.

In order to issue additional bonds under the Trust Indenture, the Authority must demonstrate that the average annual net revenues of its electric proper

ties for the preceding twenty-four months, after deducting the cost of main taining, repairing and operating such properties during such period, have been not less than 150 per cent of maximum debt service payable in any succeeding fiscal year including the proposed issue.

The Authority's bonds are exempt as to interest from Federal and State income taxation under existing laws, and are specifically exempted from Commonwealth taxation. There has never been any delay in payment of the

obligations of the Authority when due, nor in those of the Commonwealth and its municipalities and agencies.

11

The Outlook During the period from July 1, 1957 through June 30, 1961, it is anticipated that the Authority will invest $117,800,000 in further capital improvements.

Of this amount the sale of bonds will provide some $95,000,000, while about

$23,000,000 will be derived principally from direct revenues of the Authority.

This four-year program compares with capital expenditures actually made during the past eleven years, as follows: Hydraulic Production Plant Steam Production Plant Transmission Plant Distribution Plant Other Facilities Total

$35,691,686 54,695,772 18,092,467 45,027,183 13,582,112 $167,089,220

It is well known that the economic growth of Puerto Rico has been very

rapid in recent years. Commonwealth status exempts Puerto Rico from Federal income taxation, and the Commonwealth Government has exempted

most new industrial plants from local income and property taxes during their initial operations. Other industrial incentives in Puerto Rico include the recruitment and training of workers, and the provision under attractive lease terms of modern buildings favorably located for industry.

The result of this successful industrialization program is an ever-increasing diversification of the economy accompanied by rapid construction of homes,

hotels, and commercial buildings. This in turn is producing an unparalleled demand for electric power, which the Puerto Rico Water Resources Authority is responsible for meeting, and at the same time it must anticipate needs for the immediate future. Continuous studies of power needs, constantly reviewed

and revised by the Authority and its Consulting Engineers, now indicate that peak demand on the system will increase from 289,000kw in 1957-58 to 347,000kw in 1958-59, 410,000kw in 1959-60, and 464,0Q0kw in 1960-61.

From 16,000 to 20,000 new consumers will be added yearly, and the system load factor is expected to increase to 65 per cent as a result of further new heavy industrial equipment. To meet this demand, the projected name plate rating generating capacity of the Authority in 1960-61 will be raised to approximately 600,000kw by 1961, or almost double the present capacity.

Public Lighting, Roosevelt Avenue, Hato Ray, Puerto Rico.

/

PUERTO RICO WATER RESOURCES AUTHORITY San Juan,Puerto Rico

The Community

We Serue Fiscal Years

An Expanding Economy:

1940

1957

Net Income — Millions of Dollars

225.3*

1,006.9*

346.9

Net Income per capita — Dollars .

121.0

443.0

266.1

286.7*

1,236.7*

331.4

92.7

449.0

384.4

17.6

112.4

538.6

311.8

1,044.0

234.8

Gross Product — Millions of Dollars

. . . .

% Increase

Commercial Banks:

Total Bank Assets — Millions of Dollars . .

Savings and Time Accounts — Millions of Dollars

Assessed Value of Taxable Property — Millions of Dollars Recurrent Revenues of the Central Government — Millions of Dollarsf Power Generation — Millions of KWH . . . .

26.3

197.5

651.0

166.0

1,341.6

708.2

A Healthier, Better Educated Population:

Population

1,878,000

2,287,000

Birth Rate — Per Thousand Death Rate — Per Thousand

39.0

32.9

18.2

7.0

Life Expectancy — Years Public Day School Enrollment State University and College Enrollment . . .

46.0

68.0

47.8

286,113 4,987

553,683 15,176

93.5

21.8

—15.6t —61.5$

204.3

Percentage

A More Balanced Economic Life:

Points

Change

Percent of Net Income* from:

Manufacturing Agriculture Commonwealth and Municipal Government .

12.0%

21.0%

31.0

15.0

—16.0

9.0

13.0

Trade

12.0

18.0

+4.0 +6.0

Other

36.0

33.0

—3.0

62.0

27.0

—35.0

38.0

73.0

+35.0

Percent of Export Trade: Sugar — Raw and Refined Other Exports

* According to a revised series prepared by the Puerto Rico Planning Board. t Includes Federal Grants in Aid. t Decrease.

+9.0

I k

n

■'<

-.ii ' *-i

■K