ELECTRIC SUPPLY.

Auckland Star, Volume LVIII, Issue 167, 18 July 1927, Page 9

ELECTRIC SUPPLY.

TARIFF REVISIONS.

WATTE MATA RATES CONSIDERED. WILL LOSS BE COMPENSATED FOR? BOARD'S FINANCIAL POSITION SOUND. The desirability of the Waitemata Electric Power Board adjusting its electric current tariffs, was discussed at a special meeting of the board this morning, as the result of a report brought down by the resident engineer (Mr. F. J. H. Wilson). The adoption of an alternative rate for domestic supply was recommended, while alterations in the method of assessing the minimum charge for industrial motors, and the unit rate for milking motors were proposed. The details of the revisions were set out in a previous issue.

In commenting upon the proposals, the secretary (Mr. S. Brittam Bull), referred principally to their effect upon the domestic supply. The cost of administration in connection with the making out of meter accounts was con-side-able, 50,000 accounts being made out a year. Complexity Will be Caused. "The result of the proposed alteration will introduce complexity into the accounts," he added. "The engineer suggests that the consumer should have the option as on to which scale his consumption should be assessed, while the chairman considers that the amended tariff should be applicable to those consumers who install a range. We have had one experience with an optional scale—the milking motors—which can be used either on a butterfat basis or a flat rate, plus unit charge. The majority of farmers have elected to work on the unit basis, but there are a couple who remain on the butterfat basis. This state of affairs imposes a strain on the clerk making out the accounts. If the engineer's suggestion is adopted, there will be considerable confusion, as no doubt some of the range owners will elect to use the new, and some the old scales, and there will probably be a certain amount fo experimenting. Both Sides of the Question. "I fully agree that the tariff must ' e attractive in face of competition to secure business, but due care must be taken that the consumer does not get all the benefit and the board all the loss."

Continuing, he said that 2000 units was assumed to be an average figure for the 200 ranges at present connected with the board's system, and on this consumption the loss to the board would be £5 1/9 per annum. Taking a general view of figures he had investigated, he thought it would be safer to estimate the annual loss of revenue at £2000, in place of £1000. Assuming that the lower figure is correct, and the engineer's sanguine estimate that probably the present connections could be doubled in six months was realised, the question was whether the additional revenue of £2900 would compensate for the loss ? The engineer said that the loss of £1000 would not be realised owing to economies that would ensue, but he knew of no economies on his side of the business. In regard to industrial motors, he realised that the minimum charge now in force had acted prohibitively in some cases where 1 h.p. motors were required, but it appeared to him that this might be met by raising the J h.p. allowed to be used under the domestic rates of 3Ad and ljd to not exceeding 1 h.p. unless there was some technical objection. Touching on the proposed alteration in charges for milking motors, it was apparent that the new scale would result in a reduction of between 6 and 17 per cent on the present revenue. The question again arose as to whether any additional revenue would be gained from an increase in consumers that would compensate for the loss. The great majority of the range users were satisfied with the present charges, and till the board had completed a year's operations* the result of the present tariff was only a matter of estimate, although the estimate made tended to prove that the present tariff provided a fair margin over working expenses.

A Business Proposition. ''If it were my own business, I would do it to-morrow," said the chairman (Mr. J. W. Hayden) in supporting the proposed alterations. He went on to read letters from consumers couched in terms that suggested that the proposals should be put into effect. 'Phone messages had also been received requesting reductions. "I think we should do everything we can to increase the board's activities in regard to giving the people power at the right price. I think the board's financial position is sound enough to give the matter the consideration it deserves." The Estimated Loss. In reply to Mr. G. Trevithick, the chairman said that he estimated the loss at from £700 to £800. but that did not matter so long as their business was going to increase.

The consulting engineer said that they had 219 stoves at present and his estimate of reduction of revenue in this connection was £1000 per annum. There were factors to offset this loss in revenue, however. The loss could be shown to be great by including a large percentage of lighting points, and that was what the secretary had done. The point was not so much as to what was the reduction going to be, as could the board soli current at the reduced price? If they could afford to sell current at the reduced prices, then the proposals were sound.

Mr. Trevithick did not think the loss would be £2000 a year. The reductions should be on the little things that would popularise current and motors. That should be their iirst care to the public.

Mr. S. E. Kennings said the board was making a profit of £5000 per annum, and the board, having a duty to the consumers, had no right to have such a profit.

The chairman said the profit made no allowance fur depreciation.

Mr. Kennings observed that in any case the board's position was sound and it was agreed that £5000 was the minimum that the board would make at profit.

The chairman: "I am sure of it." ; He added that they had to look at the proposition from a business point of view. They were losing a lot of business on the competitive basis, so far as ranges were concerned and the question was whether or not they were going to eit back?

Redactions on Siae Lines. Mr. Wilson said they were not touching the main artery—lighting—but making reductions ol the side-lines. Mr. Trevithick said they had to compete against a big corporation and if the scheme was a paying one, he favoured it. "That is the way we should approach the position," said Mr. Wilson, "and I am satisfied that it will pay." Mr. Kennings said the secretary had made his report on assumptions that were not quite correct. The board had a diversity of charges, but they need not worry them much owing to the fact that they were few in number. Load factor was of vital necessity at present, and it must be increased. Th® domestic load was the means of bringing it up. After going through the secretary's report, he did not s>ce any constructive suggestion, outside the milking motors. A member: It is not his business. Mr. Kennings said he did not see any reason why they should deal with the report further. The board's liua noes were sound and he was in favour of adopting the proposals. Mr. H. Day tnought that the reduction would jeopardise the sparsely populated areas. Mr. Trevithick gave an assu ance that the outside areas would not be jeopardised. The proposals consolidated tho board's position. "Step in Right Direction."

Mr. J. D. Morison thought the proposals were a step in the right direction, and moved the following motion:—"That as an alternative rate, to be available at the option of do-raestic consumers, a fixed or service charge of £S per annum be made, to be payable monthly, plus Id per unit for all units consumed by private residential services only for lighting, wiring, heating, and cooking, to be less 12J per cent discount for payment within 14 days; the charges for water heaters to remain on the Hat rate, controlled by time switches as at present; these charges to come into effect on October 1."

Mr. Morison. added that it should be their aim to encourage the use of electricity in every way possible. It" the proposals were adopted, stoves would follow as a matter of course. The as>oeiation was justified in casting arouml for an alternative coil to meet their consumers. He thought the out-districts would benefit, because it would encourage them to come under the scale. The stove proposition was a better proposition on the farm than in the bo'oughs.

In seconding the motion, Mr. Kennings said he did so- from a purely business aspect. Mr. A. E. Greenslade said all the county members were not of the same opinion as Mr. Day. He concurred in the view that the alterations would be more to the advantage of the country than any other section of the community. Proposals Favoured. "As a straight out hayseed. I am in favour of the proposal," said Mr. J. Mackie, in supporting the reduction, together with other country members, with the exception of Mr. Day. Mr. Mackie thought that Mr. Day was "standing in his own light." The motion was eventually carried, and the engineer's recommendation* in respect to industrial and milking motor.* were also adopted. The minimum charge for the former has been fixed at 5/ per horse-power of connected load per month, less 121 per cent discount. In regard to the milking motor rate the rate will be a one, or service charge of £6 16/ per annum per horse-power, less 12£ per cent, plus a unit charge of 2id per unit, less 121 per cent for all units consumed.

The consulting engineer explained that if the board got additional revenue due to its new policy, the return on additional capital expenditure, which was needed to serve it, would be 120 per cent.