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HYDRO SHOWS PROFIT FOR NORTH UNITS Operating Surplus Adds to System's Sound Finances, Says Roebuck AMPLE POWER SEEN _ The combined Northern districts of the Ontario Hydro System are this year "out of the red." with total rev-- enues exceeding expenses other than «inking fund. C & Wxt'.to'mey-(}eneral Arthur Roebuck made this declaration in the Legisla-- ture yesterday as he wound up a six-- hour Hydro speech, which he had started on the previous evening. _ He coupled his Northern announce-- ment with a statement that Hydro's finances are now "as sound as the Rock of Gibraltar," and gave an emphatic assurance that never would Industry of the consuming public need to fear a shortage of power in | power, or 10.74 per cent., over last year. "In this system, as in the Niagara, good management is evi=-- denced in increased revenue on the one hand and decreased expenses on the other hand." he said. | The results of the favorable trend ' in the relationship of expense as com-- _pared with revenue were found in the increasing surpluses, he said, From a surplus of $36,413.06 in 1933, the sur-- plus had jumped to $241,091.02 in 1935, he stated. "Nor have these surpluses been achieved at any cost to capital ac-- count. Reserves have been faithfully secumulated on the basis of the Com-- ;nl-lon's highest standard of practice, so that our combined reserves have 'now grown to $6,674.598," he said. -- Reductions in Hydro rates in the Eastern Ontario district were fore-- east "in the near future" by the At-- torney--General, as he detailed the growth and administration of Hydro, system by system. He started with the Eastern Ontario "A striking feature of the history ef the past year in this system has been the marked increase in the srowth of load, and a surplus of more than $100,000 in excess of the com-- fortable surplus of last year," he said. Outstanding Achievements. "This has been most satisfactory, but the most outstanding achieve-- ments in the Eastern district has been the making available of the idle capacity of the Commission's plants on the Madawaska River--the instal-- lation of a frequency--changer con-- necting the 60--cycle load of that dis-- trict with the 25--cycle load of the | Niagara district, and the cmeeuauon' of the former contract with the Gatineau Power Company and the substitution of a new contract, based Ihe revenue of the last year Nnad been $76.892 46 greater than that of 1934, and $220,944.03 in excess of that of 1933, he said. Decrease in Expenses. Offsetting the growth in the cost of operation, interest and reserves in-- cluded. In 1935 expenses decreased $54,243.56 from 1933, he said. V ;l;o;"t--he _Commission's actual re-- quirements, at a considerably reduced 'l'h.e peak load of primary power this vear had increased 10402 horse-- crease in the expenses of the system, istration. Mr. Roebuck stated: "During the past summer the Com-- mission has connected the Madawas-- ka local system to the general Eastern district by the building of a 33.000-- volt transmission line from Galetta to Smiths Falls, The cost of this transmission line and transformer equpment has been approximately $120,500. The Commission has thus added to its Eastern system resources approximately 4,000 horsepower, avauable at all times for peak pur-- poses and for energy on a high--load factor during periods of normal stream flow. Aside from the invest-- ment in the plant, which had al-- ready been made, this is a capital outlay of only approximately $30 per horsepower ." Anticipated Growth. The growth of Gdenfand in the Eastern system had been due to the operations by General Motors at Osh-- awa and the Howard Smith Com-- pany at Cornwall, he said. An an-- ticipated growth of 6.000 horsepower for the next two or three years was an ou'side estimate, he said, and the surplus power was ample to supply the current needs, and no further orders for power were necessary. Two Questions. 'When one turns toward the fu-- ture," he continued, "two inquiries naturally arise. . What will be the cost of power under the new arrange-- ment, and what are the Commission's resources should the growth in de-- mand continue beyond the 60,000 horsepower now provided. '"As to the first question, one has but to note the surplus last year of $241.000, and to bear in mind what 1 have said with respect to the pros-- pect of savings under the new con-- tract, and to appreciate that the Commission will very shortly be in a position to grant a substantial re-- duction in the cost of its power to our municipal customers, "With regard to the second ques-- tion, 1 need but m:ntion the possi-- bilities that are suggested in the fre-- quency changer between the Niagara system and the Eastern system with a capacity of 60,000 horsepower, and to this is to be added the 85,000 norsepower of undeveloped capacity on the Madawaska River, in which we have already paid the exorbi-- tant price Oft $1.800,000 to the O'Brien interests, and to this is to be added further capacity available on the Mississippi River and the Trent Watershed, to say nothing of such supplies as may be made avail-- able fr¢m the Ottawa and St, Law-- rence kivers. Escaped Blight. The Georgian Bay system, said Mr. Roebuck, turning to that develop-- ment, had,. "fortunately escaped the blight of purchase power contracts." "In 1935 the total expenses of the system were $908.902.77, a decrease from 1933 of $68,988.16. The total revenue for the year 1935 was $1,-- 004,226.63, leaving a surplus of $00 323 .85. "The fact that the present Com-- mission in each of its annual reports of 1934 and 1935 is able to announce a surplus of nearly $100,000 a year. togeth:r with the fact that the phy-- sica operation of the system has been so uneventful that there is nothiag of note to be mentioned, is sufficisnt indication of satisfactory good management," he said. 3 For the first time since 1930, the Thunder Bay system is out of the "red." and this year is able to report a furplus of $3.721.20, Mr. Roebuck said. "Th.s satisfactory change in the fi-- nancial showing of the system is in part the result of mining activity tak-- ing place on the north shore of Lake Superior, in the Bturgeon River dis-- trict. The Northern Empire Minss, and the Little Long Lac Mines built theit own transmission line in 1933, and last year absorbed approximately 25,000 horsepower," he stated. Maxch 5 ~ _ _ Industry Revives. The deficit in the Manitoulin Rural Power District had been decreased thls' year to the small amount of $638.42. \"This deficit is so small as to be un-- | important, particularly in view of the{ | fact that sinking fund, renewals and contingencies reserves have been pro-- vided. and it may confidently be ex-- pected that a surplus will be reported this year," he said. Reduced Costs. \ In the rural power districts the Hydro Commission had not only ex-- tended its lines by a greater number of miles than in any year since the commencement of the depression in 1929, but it had also reduced the cost of its services and had inaugurated a policy of giving free power for cer-- tain purposes. 'There had been a revival in the pulp and paper business at the Head of the Lakes, where three great mills were located, and the Commission was now in a position to offer more favorable rates to the industry. They were now paying for firm power from $20 to $21.50 per horsepower, and a proposal was now under consideration to re-- duce this to $18 on the basis of in-- creased takings. "If this could be accomplished, it would result in considerably increased industrial activity and in employment, as well as financial benefit to the sys-- tem and the municipalities," Mr. Roe-- buck said. The total expenditures on the dis-- tribution systems in the rural power districts to the end of October, 1935, had been $19,000,000, and of this the Ontario Government had contributed $9.500,000. _--This year the Commission is plan-- ning construction of 838 miles of line, to serve approximately 6400 eddi-- tional consumers, at & total expendi-- ture of, roughly, $2,000,000, of which the Province will contribute $1,000,000. Reserves for contingencies now amount to $1,000,000. Betterment of the fund by way of interest earnings was sufficient to meet ordinary charges on this account and the Com-- mission had decided to discontinue charges against rural customers on this account. Reserves on account of renewals wore in excess of the annual charges and they had been reduced tets and on small farms and a 20 per cont. reduction to standard and large farms and other consumers needing heavier than ordinary loads. The total saving per annum to rural con-- sumers on account of this reduction '!s estimated at $225,000 beginning in 1936," Mr. Rosbuck said. \ _ The Attorney--General dGealt next | with the Northern Ontario properties, octher than. Abitibi. Thess include Nipissing, Wahnapita¢, Espanola, A!-- bany River and Rod Lake. "In 1934 the divisions other thani | Abitibi showed a revenue as of Oct 31 of $675.761.69, and a total expense of lss34.955-55. being a surplus over cost cf operation, maintenance, interest, renewals, cbsolescence and contingen-- cies of $140.806.15--a very cerditabl showing," he said. "During the year 1935, due to in-- creased Gg@emand for power, the rev enue of the districts, exclusive 0o Abitibi, have shown a satisfactory growth. To Oct. 31, 1935. the revenue | was $754,313.60, and the total ex-- penses were $627.271.83, jleaving a sur-- plus of $127,041.77." New Units Planned. " from 2 per cont. to 1.75 per cent. on the total capital investment, he said. $225,000 Saving. "The result of these changes has been a substantia Ireduction in maxi-- mum service charges to rural cus-- tomers. This is a reduction of rough-- ly 10 per cent. to customers in ham-- The Commission was planning, h continued, the installation of addition-- al units on both the Albany River and the English River. Last year the Commission started installation of an additional generating unit at Rat Rapids on the Albany River in the Lake St. Joseph district, for the Pickle | Crow and Central Patricia mines. /