Hydroelectric generation increased 13 percent compared to the first quarter of 1998 due to favorable water conditions. The lower debt balances were due to dividends received from Holdings in October and January that were used to pay down intercompany debt owed to Holdings and some external debt. The currency exchange rate for converting Australian dollars to U. S. dollars was 0.63 in the first quarter of 1999 as compared to 0.67 in 1998, a 6 percent decrease. The following discussion excludes the effects of the lower currency exchange rate in 1999. This decrease is attributable to a decline in energy volumes sold of 120 million kWh, or 4 percent.
Volumes are down due to the loss of a few large contestable customers.
This price increase was the result of a contract dispute Powercor is having with a power supplier in Australia. The power supplier did not deliver power to Powercor at the agreed upon rate which forced Powercor to purchase power on the open market at a higher rate than last year. This cash had been invested by Holdings in interest bearing accounts prior to the dividends.