Application has-been made to the Shanghai Municipal Council by Shanghai Power Company fora variable form of relief, instead of general tani increase perm! under its franchise, in respect of substantially increased costs of operae tion due to the depreciation in value" of the Chinese currency. d In addition to the difficulties Ww financing occasioned thereby, the Company has been compelled through) force of circumstances beyond its control to contract: for supplies coal from India and Australia, the result that cost of coal per will, it is anticipated, be some per cent. greater for the six s. ending December 31, 1988, than dor. the six months ended June 30, 1086. The cost of fuel is the predominat ing item of the Company's operating expenses.
In accordance with the Camp desire that jointly with the Council" the effect on the Company's ce should be determined and pary compensated for by a fair surcharge" on all classes of consumer, the Treasurer and Controller, on the Council's behalf, undertook a detailed investigation of the matter and ascertained that reasonable grounds existed for affording relief to the Company. i Surcharge on Tariffs 1
In view of the uncertainty both regards local conditions and exchange, it was decided that the desired increase in revenue could best be obtained by means of a temporary surcharge on the present tariffs based on the effect of varies tions in exchange on the Company's working costs. It was felt that this method while equitable to the con" sumer would also provide reasonable protection to the Company, After completing his investigations the Treasurer and Controller sub mitted for the Council's consideration a formula whereby a surcharge should be assessed monthly "and commence to operate from August 1, 1938. The surcharge applicable io any month is based on the daily. average of the official opening selling rates of the Hongkong & Shanghai Banking Corporation for United States Dollars of the preceding month, and the amount involved varies directly with fluctuations in exchange so long as the average rate of exchange is less than ESS $100—US$29. The amount of the surcharge applicable to any month will be based on the ascertained effect of fluctuations in exchange on the Company's operating costs for the previous month, and will also be subject to agreement between the Treasurer and Controller and the Company.
At the current rate of exchange, the amount of the surcharge to be added to the bills of ordinary consumers for the month of August will be 2445 per cent. An equitable portion of the Company's increased expenditure is to be secured from. the bulk supply consumers on the basis of such contracts.
In addition, captain of the tariffs applicable to hired plant will Be adjusted from August 1 as follows:—
Present New.
Text read from the printed page and cleaned; old type leaves the occasional error.