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<br /> -5-
<br />Yr. Ending Profit (Loss) with Profit (Loss) without
<br />Prior to Ramped Capitalized Ramped Capitalized
<br />January 1 I ntere st Concept I nterest Concept
<br />1986 -0- ( 656,000)
<br />1987 -0- ( 525 ,000)
<br />1988 -0- ( 386,000)
<br />1989 -0- ( 238,000)
<br />1990 -0- ( 78,000)
<br />1991 -0- 93,000
<br />1992 120,000 276,000
<br />1993 74,000 204,000
<br />1994 283,000 413,000
<br />1995 506,000 636,000
<br />1996 746,000 876,000
<br />1997 1 , 002 , 000 1,132,000
<br />1998 1,276,000 1,406,000
<br />1999 1,569,000 1,699,000
<br />2000 1,883,000 2,013,000
<br />2001 2,219,000 2,349,000
<br />2002 2,578,000 2,708,000
<br />2003 2,962,000 3,092,000
<br />2004 3,374,000 3,504,000
<br />2005 3,814,000 3,944,000
<br />2006 4,284,000 4,414,000
<br />2007 4,789,000 4,919,000
<br />2008 5,327,000 5,457,000
<br />2009 5,905,000 6,035,000
<br />2010 6,521,000 6,651,000
<br />2011 7 ,182 ,000 7,312,000
<br />2012 7,889,000' 8,019,000
<br />TOT AL 64,303,000 65,269,000
<br />
<br />Difference
<br />
<br />+656,000
<br />+525,000
<br />+386,000
<br />
<br />+238,000
<br />+ 78,000
<br />- 93,000
<br />
<br />-156,000
<br />-130,000
<br />-130,000
<br />
<br />-130,000
<br />-130,000
<br />-130,000
<br />
<br />-130,000
<br />-130,000
<br />-130,000
<br />
<br />-130,000
<br />-130,000
<br />-130,000
<br />
<br />-130,000
<br />-130,000
<br />-130,000
<br />
<br />-130,000
<br />-130,000
<br />-130,000
<br />
<br />-130,000
<br />-130,000
<br />-130,000
<br />
<br />-966,000
<br />
<br />Over 27 years, the Ramped Capitalized I nterest concept would cost
<br />$966,000 more than without the concept, representing a loss of only
<br />1.5% of the benefits while wiping out the shortfall in the early years.
<br />
<br />RECOMMENDA TIONS:
<br />I recommend that we transfer Electric Department Surplus; as outlined, to the Escrow
<br />Account for the followi ng reasons:
<br />
<br />1. The Electric Department does not have a Reserve for Depreciation
<br />Account. Mr. Noland says that Southeastern Engineers have advised us
<br />that we will need a $3.2 million sub-station to receive additional power
<br />in the late 80' s if we do not build the hydroplant. Because we have not
<br />accummulated reserves for depreciation, we should begin setting money
<br />aside now regardless of whether or not we build the Ridgeway Plant;
<br />
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