BULK SUPPLY.

Ashburton Guardian, Volume 55, Issue 302, 4 October 1935, Page 3

BULK SUPPLY.

CHARGES FOR ELECTRICITY.

REDUCTIONS NOT LIKELY. WELLINGTON, October 3. An indication that the Government is not likely, for the present at least, to make any reduction in the buffi supply charges for electricity is given in the annual statement of the Minister for Public Work/s (the Hon. J. Blitchener. The Minister claims that this position was recognised in the recent report drawn up by a committee of experts for the Supply Authorities’ Conierence. The statement contains a sig nificant reference to consideration be ing given to the present system of control of power supply, “to see if any modifications are desirable in the interests of uniformity and economy.” “I indicated in my statement of last year that Government charges for power supplied! in bulk had been given a great deal of consideration and that the various requests for reductions received indicated! that some at least of the supply authorities making the re quests were not fully acquainted with all the factors bearing on this important matter,” the Minister said. “During the year just completed the matter again received a good deal of attention, and the Power Boards’ and Electric Supply Authorities’ Association, at its annual conference in 1934, recognising that the matter was one that required! very careful consideration by men acquainted with all its aspects, set up a committee composed of engi neeis and secretaries to draw ui> a report for consideration at the 1935 conference. This report was considered and adopted by the Supply Authorities’ Conference recently held in Wellington, and no doubt will be submitted for the Government’s consideration.

“An Endorsement. “In general, I think it may well be claimed that the report is a general endorsement of the policy of the Government in its handling of the electric supply business. There are, of course, several points on which modifications are suggested, but it supports the Government policy on practically ad. major points on which previous discussions have arisen. It recognises that for the present, at least, the financial position of the Government’s elect-ie supply account is such that it cannot afford to make any reductions in charges which would result in reduced revenue It recognises the Government claim that some graduation in charges is necessary to meet variation in the amount of power taken by various authorities. It recognises and approves the basic principle of charging on the maximumdemand system, and of granting a certain amount of subsidy to local authorities owning standby plants which can be made of advantage to the system generally. It makes suggestions for modifications in the Government tariff which would result in reduced charges for supply authorities. Though there is nothing particularly new or novel rn these suggestions, they will all serve a useful purpose in indicating the direction in which the various distributing authorities are of opinion that reductions should be made when the financial position of the electric supply account justifies such reduction.

Praise and Criticism. “The preparation and publication oi the report have certainly done a great deal of good in making people associated with the various electrical sup,ply authorities more familiar with some of the problems which have to be faced by the Government in dealing with tliis particular utility. It is not clear, however, that the lepoit does anything actually to reduce the cost of generating and supplying electricity. ' It makes suggestions for alterations in tli method of setting out

the accounts which might indicate some change in the cost, but which do not affect the real cost at all. It makes various suggestions for rearrangements of the total cost as between the supply authorities and the Government, but again these suggestions only alter the distribution, hut do not really reduce the cost. In fact, some of the suggestions in respect of more extended use of auxiliary generating plants actually increase the total cost.

“It is indeed questionable if we have not been contributing by way of rebate on ordinary charges too much towards the cost of these standby stations. As pointed out previously, it is recognised that the owner of such a plant, even when not operated, has to pay capital charges in respect to its original cost in addition to whatever he may have to pay to the Government for power purchased in hulk.

It will, however, be found in all cases that the amount paid for power purchased is less than would have been the net operating cost, exclusive of capital charges, if the same amount of power had been generated in the stations replaced by Government supply. It is recognised that such, plants have some value as an insurance against interruption, hut that insurance is of a special value to the owner much in excess of its value to the system as a whole. In the North Island system, for example, the value of allowances made for these plants, plus the cost of maintaining the department’s own standby!, amounts to about £BO,OOO per annum, a sum which is more than twice the total annual operating cost of the whole of . the Government’s own main generating plants in the same area.

Feiw Interruptions. “Electric supply has become such an important factor in the everyday life of the community that interruptions to supply certainly cause a great deal of inconvenience. An examination of all interruptions over a period of years indicates that power was not available when required for about one ten-thousandth part of the time- The existence of the contracts under which the present standby

plants are operated reduced this to some extent. Tlie provision of additional ones would not completely eliminate it. The Government has always recognised and will continue to recognise an obligation to make some contribution towards the cost of standyby plants in approved localities. It must, however, always be remembered that absolute security is not obtainable, and the cost of security beyond what is now attained may be secured in particular localities at too high a cost to the system gener-

ally. Public Savings. “The cost of power supplied in bulk represents only about 30 per cent, of the total cost of power delivered to the consumer. In its investigation the committee in question indicates that no great reduction in cost can be made in this section of the total, but the scope of its inquiry did not include any investigation into any possible savings that might be made in the operation of the other 70 per cent, that goes to make up the total cost. The present system of control has developed, and undoubtedly lias been very successful, as a means of making power available as widely as possible throughout the country. As to whether or not it is just as well suited for the future administration is being given a considerable amount of attention to see if any modifications are desirable in the interests of uniformity and economy.”