TABLE I.-Summary of amount and cost of energy purchased by REA borrowers 1 fiscal years 1940-65 Distribution borrowers 3 Cost of energy Average cost 1 Includes energy purchased by Louisiana 21 (Ark-La Electric Co-op, Inc.) from Southwestern Power Administration for the fiscal years 1943, 1944, 1945, and for approximately 3 months during 1946. Excluding the energy purchased by Louisiana 21, the "average cost per kilowatt-hour" is: 1943, $0.89; 1944, $0.92; 1945, $0.90; 1946; $0.89. 2 Excludes all resales of purchased energy between borrowers. Excludes resales of purchased energy between distribution borrowers. KWH (billions) 40 30 CHART II: ENERGY GENERATED AND PURCHASED BY REA BORROWERS 20 10 KWH (billions) 1960 FISCAL YEAR ENDING JUNE 30 1965 TABLE II.-Energy generated and purchased by REA borrowers, by type of supplier, fiscal years 1940-65 TABLE IV.-Energy purchased by REA borrowers from major privately and publicly owned suppliers, fiscal year ended June 30, 1965 1 Excludes 9,485,415,477 kilowatt-hours purchased from REA cooperative borrowers which in turn purchased this power. Excludes 2,387,061 kilowatt-hours purchased from other REA borrowers which in turn purchased this power. 3. HOW MUCH THEY HAVE ON HAND ASIDE FROM THE AMOUNT NECESSARY TO MEET EXPENSES REA publishes an "Annual Statistical Report" which includes condensed balance sheet and operating data for individual borrowers in both the electrification and telephone programs, the latest issue covering calendar year 1964. The condensed balance sheet data are found in lines 15 to 37, inclusive, in the report covering rural electrification borrowers, in lines 12-31, inclusive in the report covering rural telephone borrowers; operating data in lines 38 to 54, inclusive, for electification borrowers, in lines 32 to 54, inclusive. The latter lists revenues and expenses and net margins or income and patronage capital (line 54). The amounts reflected in this item are available for repayment of REA loans and for reinvestment with proper allocation, in the case of cooperative borrowers, under the capital credits or other patronage capital plan adopted or otherwise under the applicable state statutes, cooperative articles and bylaws, Copies of the 1964 Annual Statistical Report-Rural Electrification Borrowers are on file with the committee. The amount of funds each borrower has on hand and the amounts necessary to meet expenses are not separately identified in these reports. REA Bulletin 1-7 (Electric) and 300-5 (Telephone) recommends that borrowers' working capital and reserve funds (which are generated principally from operating revenues) not exceed certain levels. An over-all general fund ceiling of 20 percent of total plant is used for loan review purposes. A list of electrification borrowers with general funds in excess of 20 percent of plant, reported as of September 30, 1965, was supplied to the Agriculture Subcommittee of the House Committee on Appropriations and is reproduced at pages 164-166 of the hearings on the 1967 Agriculture Appropriations bill. The Amount Originally Borrowed, Amount Paid Back and Funds Used for Expanding These data for individual electrification borrowers are to be found in the 1964 Annual Statistical Report-Rural Electrification Borrowers on the following lines: Amount originally borrowed Loans approved as of 12/31/64, lines 2-5. Funds advanced, line 10. Amount paid back Interest due and paid as of 12/31/64, line 12. Principal due and paid as of 12/31/64, line 13. Advance payments (principal) as of 12/31/64, line 14. Funds used for expanding The amount of general funds (generated from revenues) reinvested in the enterprise can be determined roughly By listing total assets and other debits-line 25 By adding accumulated provision for depreciation and amortizationline 19 And deducting from the total funds advanced-line 10 Senator ELLENDER. May I say to my good friend that I understand they charge off a certain amount for depreciation and what-have-you and that much of that is used for replacement. So that we do not want to mix the chargeoff's with the extra profits, if any there be. Senator MILLER. That is so, but the Senator also knows that because of the increasing costs that just a mere writeoff in depreciation is not enough in most cases to give them the replacement money needed for the replacement of equipment. And, so, we are going to have to come up with something I do not know what kind of a guideline that Senator Talmadge can give the administrator on this, but, perhaps this could be worked out as to what is a fair amount of this surplus that is needed for replacement, because I think it would be unfortunate if one cooperative would say: "We are using a rule of thumb of 20 percent of our surplus funds for replacement," and another cooperative says "We are using 30 percent." I think that we will need some kind of a guideline to get this information down to a meaningful point. I have seen |