Puerto Rico Water Resources Authority (June 1956)

I 0 JUL ^956

A Special Report on Puerto Rico

Water Resources Authority

Government Development Bank ASTRA PER ASPERA

For Fnerto Rico JUNE 1956

June/

Commonwealth of Puerto Rico

(a c2.^

COMMONWEALTH OF PUERTO RICO

Puerto Rico Water Resources Authority GOVERNING BOARD

Chairman: Hon. Luis Munoz Marin, Governor 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

Personnel Officer: Fernando Torrent

Head,Power Division: Rafael R. Ramirez

General Counsel: Gabriel Guerra-Mondrag6n

Chief Engineer: Miguel A. Quinones

Head, Purchasing and Stores Division: Felix Cordova Diaz

Head, Water Service Division: Harold Toro

Treasurer: Eduardo Lube

Acting Head, Commercial Division: Victor M. Cataldo

Power Economist: Walton Seymour

Controller: Antonio E. Lebron

TRUSTEE The First National City Bank of New York CONSULTING ENGINEERS

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

BOND COUNSEL

Mitchell, Pershing, Shetterly & Mitchell

A recent picture of a group of officials of the Puerto Rico Water Resources A uthority

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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 Deoelopment Economic growth and production of electric energy neces sarily go hand in hand. Perhaps nowhere has this been more strikingly illustrated than in Puerto Rico which has made such rapid social and industrial progress in the past few years.

One of the vital factors in this progress has been the Puerto Rico Water Resources Authority, which not only has kept

electric power production apace with industrial development but also has consistently anticipated the requirements of an ever expanding economy.

The Puerto Rico Water Resources Authority is a body

corporate and politic and a governmental instrumentality of the Commonwealth of Puerto Rico. Its purpose is to con

serve, develop and make available hydro and steam electric power resources throughout Puerto Rico.

Created by the Legislature of Puerto Rico in 1941, the Authority is governed by a board composed of the Governor,

the Secretary of Public Works and the Secretary of Agricul ture and Commerce.

The fifth unit of the San Juan Steam Plant of the Puerto Rico Water Resources Authority was com

pleted in February and the sixth unit, now under con struction, is scheduled to be finished in December, 1956. The fifth and sixth units, each with 40,000 kilowatts of capacity, will increase the total output of this plant to 160,000 kilowatts.

/ O.'-'

Background Events leading to the formation of the Authority actually began back in 1908 with the approval of the Public Irrigation Law which authorized the establishment and construction of the Puerto Rico Irrigation Service, South Coast, to serve the eastern half of the southern coast of Puerto Rico. From the

inception of this Irrigation Service, the possibility of making incidental use of waters impounded for irrigation for the production of electric energy was considered.

Some forty years ago in 1915, a small hydroelectric plant, Carite No. 1, 700 kva, was put in service for production and distribution of electric energy to a limited area within the Irrigation District. Ailother 700 kva unit was added shortly afterwards to Carite No. 1 plant. In 1922, another 800 kva plant, Carite No. 2, was built as part of the Irrigation Service.

The desirability of extending the supply of plentiful electric power to areas within the Irrigation District became more and more apparent. Many areas were not being adequately served and needed the added incentive of available electric power for industrial development.

The increased production and widespread distribution of electric power were encouraged by the creation in 1925, in the Puerto Rican Department of the Interior, of an agency known as Utilization of the Water Resources. Under this Agency, additional hydroelectric plants were constructed and rapid extension of the transmission and distribution network was made for more widespread service within the Irrigation District.

Another important step which eventually led to the creation of the Puerto Rico Water Resources Authority in 1941 was the acquisition in 1937 of the Ponce Electric Company, a privately owned utility.

PUERTO RICO WATER RESOURCES AUTHORITY

ELECTRIC SYSTEM JULr I,I9SS SAN JUAN STEAM PLANT

ISABCLA H.E

SANTURCE STEAM PLANT

DOS BOCAS H. E. PLAN

•f—— 1 CAONILLAS H.E. PLANTS

ticscnvoi^^ ■3RO fcscavoiQ.

Jiv

RIO blanc^h.e. Plant

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COMERIO H.E.

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YAUCO\H.E. PLANTS

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LEGEND

it

HYDRO-ELECTRIC PLANTS -CAPACITY 20,000 TO 2S,000 KVA

—111

STEAM PLANT-CAPACITY

STEAM PLANT - CAPACITY

141,000 KVA

31.250 KVA

HYDRO-ELECTRIC PLANTS-CAPACITY 5,000 TO 10,000 KVA STEAM PLANT - CAPACITY HYDRO-ELECTRIC PLANTS - CAPACITY HYDRO-ELECTRIC PLANTS - CAPACITY HYDRO-ELECTRIC PLANTS - CAPACITY

^ RESERVOIRS

2^500 TO SjOOO KVA

11.250 KVA

ELECTRIC DISTRIBUTION LINES

1000 TO 2,500 KVA

, 38 KV ELECTRIC TRANSMISSION

500 TO lOOO KVA

cs» 115KV ELECTRIC TRANSMISSION LINES (uNDER CONSTRUCTION)

LINES

S3 EXISTING 115 KV ELECTRIC TRANSMISSION

LINES

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-'/■^•=^ The Antonio Lucchetti Dam, dedicated in 1954, was the second of five major dams connected with the Southwestern Puerto Rico Project. This project extends over an

area of 250 square miles and encompasses the reclamation and utilization of 26,000

acres of land; development of 100,000,000 kilowatt hours annually of hydroelectric energy; development of a potable water supply for communities in the southwestern part of the Island, and protection from floods in several river basins. Part of the

project involves diversion of water through the mountain divide of nearly eight miles of tunnels.

An Integrated System Today virtually all of the hydroelectric and steam plants of Puerto Rico, trans mission and distribution lines and the other power facilities are operated by the Puerto Rico Water Resourees Authority.

The final step toward integration was taken in 1955 when the Governor of Puerto Rico signed legislation transferring the two other government electric systems, the Isabela Irrigation Service and the Irrigation District, South Coast, to the Puerto Rico Water Resources Authority.

A single unified electric system covering the entire island was thereby estab

lished and the Authority became virtually the sole supplier of electric energy in Puerto Rico. Only the town of Cayey and the small outlying islands of Vieques and Culebra, representing less than I per cent of Puerto Rico's elec tric power consumption, remain outside of the Authority's system.

The Authority now supplies electric service throughout an area of 3435 square miles with a population of 2,270,000.

Total power production in Puerto Rico rose from 166,000,000 kilowatt hours in the fiscal year 1940 to 1,091,699,470 in the year ending April 30, 1956, an increase of 557 per cent. Over the same period the number of con sumers increased from 100,492 to 311,310, a gain of 210 per cent.

Management The commendable record achieved by the Authority is due in large measure to the foresight and vision of its late Executive Director, Antonio Lucchetti, who

conceived it and saw it brought to reality by action of the executive and legis-

lative leaders. They foresaw the role that the development of water resources and the availability of abundant electric power would play in the social and economic progress of Puerto Rico.

S. L. Descartes, now Executive Director of the Authority, is a graduate of Cornell University and of the University of Puerto Rico. His distinguished career as Secretary of the Treasury of Puerto Rico has made his name well known in the continental United States, as well as in Puerto Rico.

Besides having a technical and administrative staff of recognized ability and efficiency, the Authority under the requirements of its Trust Indenture,of which The First National City Bank of New York is Trustee, retains as Consulting Engineers the firm of Jackson & Moreland, Inc., of Boston, and as Certified Public Accountants the firm of Arthur Andersen & Co. of New York.

The Electric System Today On May 31, 1956, the Authority had in commercial operation three steam plants with a capability of 154,000 kilowatts. These plants are located at San Juan, Santurce and Mayaguez. The Santurce and Mayaguez plants were ac quired through purchase from the Porto Rico Railway, Light and Power Co. and the Mayaguez Light, Power and Ice Company. The San Juan Steam Plant is a modern, highly efficient plant, the first unit of which was built by the Authority in 1951. It has been expanded yearly since that time. Fuel oil for its operation is supplied by pipeline from the nearby Caribbean Refining Com pany. This plant now has in operation four 20,000 kw units, and one 40,000 kw unit. Another 40,000 kw unit is under construction and scheduled for

completion in December 1956, for a total of 160,000 kw capacity.

Twenty hydroelectric plants are also in operation with a total installed rated capacity of 110,060 kw. Nine of the hydroelectric plants are fully automatic, operated by remote control from a mother station.

PUERTO RICO WATER RESOURCES AUTHORITY

Total Revenues, Balance Available for

Debt Servicing and Debt Service Requirements DOLLARS

30,000,000

LEGEND 25,000,000 —

TOTAL REVENUES BALANCE AFTER CURRENT EXPENSES DEBT SERVICE

20,000,000 —

REQUIREMENT

15,000,000

10,000,000

5,000,000

FISCAL

FISCAL

FISCAL

FISCAL

FISCAL

FISCAL

1950-51

1951-52

1952-53

1953-54

1954-55

1955-56*1

*' May 1 fo June 30, 1956 estimated, t Not including present issue.

The latest hydroelectric plants placed in operation are the two generating stations in the $32,000,000 multiple purpose hydroelectric development known as the Southwestern Puerto Rico Project. The first of these, Yauco No. 2, with

8,000 kw installed capacity, was placed in service in 1954; the second, Yauco No. 1, a 20,000 kw plant moved by Puerto Rico's largest water wheel — 32,000 hp.- was placed in service in February, 1956.

The transmission system includes 127.5 circuit miles of 115,000 volt lines and 947 circuit miles of 38,000 volt lines, a total of 1074.5 circuit miles of transmission lines. There are 13.6 miles of underground 38 kv gas-filled cable

in operation; other lines are aerial. There are 44 transmission substations in stalled outdoors on galvanized steel structures, each of which provides for transmission line automatic sectionalization.

The distribution plant consists of 110 distribution substations with a total installed capacity of 238,840 kva, which, energized from the 115 kv and 38 kv networks, provide energy for distribution at 2300, 4160 and 4600 volts. Dis tribution voltage is being standardized at 4160 volts. Distribution feeders ex tend from the substations to the urban and rural zones to serve all of Puerto Rico.

General facilities include office buildings, warehouses, laboratory, garages,

repair shops, transportation equipment and communication systems, such as telephone, radio and carrier current. A modern, seven-story concrete central office building was dedicated on March 31, 1956, and will materially improve administrative efficiency.

Assets of the Puerto Rico Water Resources Authority exceeded $195,000,-

000 on April 30, 1956. The system is now producing more than 1,000,000,000 kilowatt hours annually. Gross revenues exceed $25,000,000. Of the 311,310 consumers, approximately 267,000 are residential.

The Son Juan Steam Plant, largest single power station in Puerto Rico.

..*

-I** •

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*

PUERTO RICO WATER RESOURCES AUTHORITY

Condensed Balance Sheet AS OF APRIL 30, 1956

ASSETS UTILITY PLANT

$166,503,652

OTHER PHYSICAL PROPERTY AND MORTGAGE RECEIVABLE

425,608

BOND REDEMPTION, RESERVE AND CONSTRUCTION FUNDS

7,968,220

CURRENT ASSETS:

Funds and working advances Accounts receivable Materials and supplies Prepayments, special deposits and other

$ 6,873,859 4,017,009 5,847,197 495,705

17,233,770

$ 2,726,866 723,165

3,450,031

DEFERRED DEBITS:

Debt discount and expense in process of amortization Other TOTAL ASSETS

$195,581,281

LIABILITIES CONTRIBUTED CAPITAL

$ 27,508,205

UNAPPROPRIATED NET REVENUES

16,236,741

LONG TERM DEBT (Including notes payable

pending long-term financing)

112,534,000

CURRENT LIABILITIES:

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

$ 1,365,204 1,001,716 1,069,961 2,264,660 1,138,446

DEFERRED CREDITS

6,839,987

180,351

RESERVES;

Depreciation Self-insurance Revenue stabilization Appropriated sinking fund Other TOTAL LIABILITIES

$22,163,297 2,575,036 2,160,773 5,041,241 341,650

32,281,997

$195,581,281

PUERTO RICO WATER RESOURCES AUTHORITY

Condensed Statements of Reoenues and Expenses (For Revenue Fund Purposes per Trust Indenture) TWELVE MONTHS ENDING

April 30

June 30 1954

June 30 1955

$16,114,935 84,352

$17,825,369 181,159

$19,799,240 309,090

$24,234,652

$16,199,287 313,788

$18,006,528 212,894

$20,108,330 203,360

$24,777,139 300,908

$16,513,075

$18,219,422

$20,311,690

$25,078,047

$ 2,603,077 4,292,205 1,213,288 236,656

$ 2,801,957 4,972,383 1,429,663 119,753

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

$ 4,422,212 6,564,219

$ 8,345,226

$ 9,323,756

$10,881,004

$13,484,799

expenses (per Trust Indenture). $ 8,167,849

$ 8,895,666

$ 9,430,686

$11,593,248

$ 1,781,539 1,432,637

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

$ 3,016,575

June 30 1953

1956

REVENUES:

Sales of electric energy Other operating revenue Total operating revenues Other income Total revenues

542,487

CURRENT EXPENSES:

Operation —

Fuel purchased Other operation expenses Maintenance

Other current expenses Total current expenses

2,116,065 382,303

Balance of revenues after current

SINKING FUND PAYMENTS:

Interest account (exclusive of interest

charged to construction) Bond redemption account

$ 1,831,828 1,400,000

Reserve account

—

—

1,640,586 211,441

Total sinking fund payments

$ 3,231,828

$ 3,214,176

$ 4,369,775

$ 4,868,602

Balance

$ 4,936,021

$ 5,681,490

$ 5,060,911

$ 6,724,646

$

$

$

$

TRANSFERS TO:

General reserve fund — provision for selfinsurance

Total transfers

200,545 2,438,951

1,995,458

178,296 2,289,708

$ 2,147,898

$ 2,468,004

$ 2,639,496

$ 3,169,453

$ 2,788,123

$ 3,213,486

$ 2,421,415

$ 3,555,193

1,696,704

1,869,299

2,093,697

2,631,867

$ 1,091,419

$ 1,344,187

$

327,718

$

923,326

545,710 318,412

$

$

163,859

$

461,663 178,008

$

864,122

$ 1,095,968

$

163,859

$

639,671

$

227,297

$

$

163,859

$

283.655

Renewal and replacement fund

152,440

237,755 2,931,698

Balance available for contribution

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

PROVISION FOR:

Transfer to sinking fund reserve account $ Revenue stabilization Total

672,094 423,874

—

Balance transferred to unappropri ated net revenues

248,219

Growth of the Annual Load of the System Since 1940 Revenue

Total Kwhrs.

Sold

Customers

Maximum Peak Load Kilowatts

138,960,072 176,174,675 183,788,983 211,574,477 225,520,917 258,594,948 296,661,918 344,694,360 371,051,833 411,726,648 488,243,234 565,103,630 625,274,634 699,920,609 774,933,164 921,150,000

100,492 106,762 109,352 112,147 117,101 124,959 132,492 144,207 162,133 176,642 185,090 195,061 211,567 228,205 245,058 314,435

17,960 18,350 46,800 51,490 54,060 62,900 70,410 80,060 87,900 98,180 109,040 122,330 139,870 154,520 178,160 209,740

r

A

Fiscal

Sales of

Year

Electric Energy

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='=

$ 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 25,050,000

Average

Kilowatt

per

Revenue

Load Kilowatts

Hours per

Kilowatt Hour

Customer

1,383 1,650 1,681 1,887 1,926 2,069 2,239 2,390 2,289 2,419 2,638

$.0260

$35.93

2,897

.0263

76.28

2,955 3,067 3,162 2,930

.0258

76.17

Customer

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 97,124 108,717 127,608

=^ Estimated.

The above summary of the electric energy sold, system peak load and number of consumers served is indicative of the extraordinary rate of growth expe rienced during the past sixteen years. Lower per customer revenue and kilo watt hour consumption as estimated for the current fiscal year results from adding an unusually high proportion of small consumers by acquisition of Isabela Irrigation District and Irrigation District, South Coast.

The figures for the 12 months ended April 30, 1956 are impressive: Power Production — 1,091,699,470 kwhrs. Maximum Peak Demand — 209,740 kw — Consumers — 311,310.

Financing of the Program The Puerto Rico Water Resources Authority has broad powers under its en

abling legislation. It has perpetual existence as a public corporation. It has the right to make contracts; to sue and be sued; to acquire properties by any lawful

means, including the exercise of the power of eminent domain; to hold, operate and administer its property; to borrow money and issue revenue bonds for any corporate purposes and to secure the payment of its revenue bonds by a trust indenture; to determine, fix, alter, charge and collect reasonable rates, fees, rentals and other charges for use of its facilities and to have complete control

and supervision of its properties and activities.

The sale of revenue bonds of Puerto Rico Water Resources Authority con stitutes the main source of funds for the financing of its capital improvement

program. There are $103,034,000 of such bonds now issued and outstanding, as described in the table on the opposite page.

Revenue bond issues of the Authority consist primarily of general issues

which are marketed periodically to the investing public and to a lesser extent

per

.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

.0255

78.11

.0255

80.79

.0272

79.63

of REA issues which carry a fixed rate of interest and are sold to the United

States Government by direct negotiation with the Rural Electrification Admin istration.

In addition, a substantial amount of the capital improvement program has been financed out of revenues of the Authority. In the period from May 1, 1947, to June 30, 1955, a total of $108,913,472 was invested in capital im provements. Of this amount, $81,789,248 was provided by the proceeds from the sale of bonds, and $27,124,224, or 25 per cent, came for the most part from revenues of the Authority.

During the current and next three fiscal years, from July 1, 1955, through

June 30, 1959, it is anticipated that $94,165,604 will be invested in capital improvements, of which some $74,000,000 will be raised from the sale of bonds, and approximately $20,000,000, or 21 per cent, is expected to be pro vided principally from revenues of the Authority.

Security for Bonds Revenue bonds of the Puerto Rico Water Resources Authority are issued under and secured by a Trust Indenture dated January 1, 1947 by and between

the Authority and The National City Bank of New York (now The First National City Bank of New York), as Trustee. The proceeds of such bonds are required to be deposited with the Trustee for the credit of the Construction Fund. Moneys in the Construction Fund are disbursed by the Trustee upon requisitions of the Authority approved by the Consulting Engineers.

Bonded Debt Now Outstanding GENERAL MARKET ISSUES Amount

Coupon by Maturity Range Original Issue

Date

$50,000,000

Jan. 1/47

From

July 1/56 Jan. 1/66 Jan. 1/74

25,000,000

July 1/50

July 1/56 Jan. 1/81

21,000,000

July 1/53

July 1/56 Jan. Jan. Jan. Jan.

12,500,000

Jan. 1/55

1/59 1/71 1/81 1/84

Jan. 1/57 Jan. 1/60 Jan. 1/70

Jan. 1/83

To

Int. Rate

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

2.75% 2.50%

Amount

First Call Date

Price

Outstanding April 30, 1956

2.70%

$15,200,000 16,087,000 9,358,000

Jan. 1/50

104%

$40,645,000

July 1/80 July 1/84

2.75% 2.80%

11,594,000 10,425,000

July 1/53

104%

22,019,000

July July July July July

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

4.75% 4.30% 4.60% 3.75% 4.75%

200,000 1,325,000 2,020,000 1,555,000 15,825,000

July 1/58

105%

20,925,000

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

5.00% 3.00% 3.25% 33/8%

180,000 980,000 2,490,000 8,850,000

Jan. 1/60

103%

12,500,000

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

July July July July

1/52 1/53 1/54 1/55

July 1/56 July 1/56 Jan. 1/57 Jan. 1/58

July July July July

1/87 1/88 1/89 1/90

2.00% 2.00% 2.00% 2.00%

$

967,000 1,978,000 2,000,000 2,000,000

Any time Any time Any time Any time

100% 100% 100% 100%

967,000 1,978,000 2,000,000 2,000,000

$103,034,000

Bonds issued by the Authority under the Trust Indenture are payable from the Puerto Rico Water Resources Authority Sinking Fund into which Fund the Authority has covenanted to deposit a sufficient amount of the revenues of its electric power properties, over and above the expenses of repair, mainte nance and operation of such properties, to pay the principal of and the interest on all bonds issued under the Trust Indenture as the same become due and

payable and to create reserves for such purposes.

The Trust Indenture requires the Authority to fix reasonable rates and charges sufficient for the payment of such expenses and such principal and interest and to create such reserves, and in addition to provide for making the deposits required by the Trust Indenture to the credit of the General Reserve Fund and the Renewal and Replacement Fund and for making certain pay ments to the Commonwealth and the municipahties thereof.

In order for the Authority to issue additional bonds under the Trust Inden ture, it must, among other requirements, present to the Trustee a certificate signed by the Executive Director and approved by the Consulting Engineers showing that the average annual net revenues of the electric properties of the Authority for the twenty-four months immediately preceding the date of such certificate, after deducting the costs of maintaining, repairing and operating such properties during such period, are not less than 150 per cent of the maximum amount of the prineipal and interest payable in any succeeding fiscal year on all bonds then outstanding and the bonds to be issued.

The new Central Office Building of the Puerto Rico Water Resources Authority.

n

md

PUERTO RICO WATER RESOURCES AUTHORITY

REVENUES FROM SALES OF ELECTRICITY

^

RESIDENTIAL TOTAL

MILLIONS OF DOLLARS

FISCAL

1946

YEARS

* May 1 fo June 30, 1956 estimated.

1947

1948

1949

1950

1951

1952

1953

1954

1955

1956*

Long-Range Planning Anticipating future needs, the Authority, with the advice of its Consulting Engi neers, beginning in 1944,formulated the first of its annual long-range programs for the expansion of electric facilities.

The growth of the system has required constant upward revisions of con struction plans. From May 1947 until April 30, 1956, capital expenditures have amounted to a total amount of $123,715,823, as follows:

Hydraulic Production Plant Steam Production Plant .

Transmission Plant Distribution Plant . .

Other Facilities . .

Total

$ 34,746,051 32,116,145 13,001,636 32,719,669 11,132,322

$123,715,823

Anticipating the needs of the years ahead, the Authority is constantly mak ing economic and power supply studies to determine future power generating requirements and to schedule the necessary construction. The peak demand of the system is estimated to increase from 200,000 kw in 1955-56 to 240,000 kw in 1956-57, 290,000 kw in 1957-58 and 330,000 kw in 1958-59. From 11

16,000 to 20,000 new consumers will be added yearly and it is also expected that system load factor will increase from 62% to 65% due to the installation of new heavy industrial equipment.

To meet this increase in requirements, capital expenditures in the esti mated amounts of $29,358,119 for the fiscal year 1956-57, $20,926,549 for the fiscal year 1957-58; and $21,016,737 for the fiscal year 1958-59, will be made in accordance with a program developed by the Authority and its Con sulting Engineers.

The Outlook

Economic growth in Puerto Rico since 1940 has been extremely rapid. The Commonwealth program of industrialization has brought the economy into bet ter balance. This year, for the first time, income from industry exceeded that from agriculture. Puerto Rican manufacturing has also become increasingly diversified. Agriculture, too, has become more diversified and is no longer a one-crop activity. Home construction has gone forward at a rapid pace.

Half of the Commonwealth budget is currently devoted to health and edu

cation. School enrollment now exceeds 650,000. In Puerto Rico, 71 per cent of the school age children up to 18 years of age now attend school. In the United States as a whole, the average is 83 per cent. Enrollment in institutions of college and university level approximates 17,000. Health centers are stra

tegically located in every community. The death rate has been considerably reduced and average life expectancy increased from 46 years in 1940 to 68. As a result the vigor and health of the population have been generally improved.

Operating in an economy characterized by dynamic growth, the Puerto Rico Water Resources Authority is pushing vigorously ahead with the extension of its physical facilities. Earlier estimates of peak load demands of the system are continuously being exceeded. The Authority has placed orders for additional generating equipment, which, with new construction now underway, will add 170,000 kw of dependable capacity by December, 1958. Plans have been de veloped and construction programs laid out for the expansion of the transmis sion and distribution systems which will market this additional supply.

The continuing expansion of the power system of the Puerto Rico Water Resources Authority is a natural concomitant of the progress of Puerto Rico and a vital element in that progress.

Public Lighting, Roosevelt A venue, Hato Rey, Puerto Rico

PUERTO RICO WATER RESOURCES AUTHORITY San Juan,Puerto Rico

The Community We Seroe Fiscal Years

An Expanding Economy:

1940

1955

% Increase

Net Income — Millions of Dollars

231.7

989.7

327.1

Net Income per capita — Dollars

125.0

436.0

248.8

Gross Product — Millions of Dollars

277.4

1,193.4

330.2

Commercial Banks: Net Bank Assets — Millions of Dollars . . .

92.7

351.9

279.6

Savings Accounts — Millions of Dollars . .

17.5

76.5

337.1

Assessed Valuation — Millions of Dollars . .

Recurrent Revenues of the Central Government — Millions of Dollars

312.0

929.0

197.8

27.5

161.2

486.2

Power Generation — Millions of KWH

166.0

933.6

480.1

1,878,000

2,206,000

17.5

39.0

35.0

—10.0 —60.0

. . .

A Healthier, Better Educated Population:

Population Birth Rate — Per Thousand Death Rate — Per Thousand

18.2

7.3

Life Expectancy — Years

46.0

68.0

47.8

Total School Enrollment

307,400 5,300

652,400 17,600

112.2

University and College Enrollment

232.1

Percentage

A More Diversified Economy in Rapid Transition: Percent of Net Income from:

Increase

Agriculture Manufacturing and Mining Government Payroll

30.0% 12.0

15.0

20.0

28.0

8.0

Trade

10.0

20.0

10.0

Other

28.0

20.0

— 8.0

63.0

37.4

—25.6

37.0

62.6

25.6

Percent of Export Trade: Cane Sugar Other Exports

17.0%

—13.0 3.0

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