THE LOCAL POWER BOARD

Bay of Plenty Times, Volume LXXI, Issue 13055, 25 January 1943, Page 2

THE LOCAL POWER BOARD

A RECENT CIRCULAR Supply Development In District Borough’s Contribution During the past week there has been distributed about this district a somewhat lengthy circular signed by Mr Allen Smith, chairman of the Tauranga Electric Power Board, and one of them has been handed to us. This circular traverses (a) the various transactions between the Tauranga Borough Council and the Power Board down to the date of the hearing of the recent Supreme Court action and even during the hearing itself, and (b) the effect of the judgment of his Honour, Mr Justice Smith. This judgment was recently published in its entirety in this paper. It was so published to prevent, if possible, any misrepresentation of what it said and what it meant. We have taken some trouble to carefully peruse that judgment and we have also carefully perused this circular. We can only say that if the board’s version of the transactions classified (a) above is as reliable as its statement of the effect of his Honour’s judgment then the board has totally disregarded the excellent advice we gave it in a recent issue that it should stop the humbugging and get down to solid earth and conunonsense.

The tone, also, of the circular is deplorable. One would expect from a representative body a standard of public utterance above the level of this document with which the board has seen fit to broadcast the town and district. We now give our readers certain preliminary basic facts for consideration. We trust that our farmer friends will duly consider these facts.

When the Power Board was first constituted its district’ was coterminous with, that of the Tauranga County Council. Since that date slight modifications have occurred in the Power Board boundaries but for ail practical purposes the board’s district is the same as the Tauranga county. The formation of the Mount Maunganui town district has merely added a new distinctive name to that portion of the board’s area. When the borough, established its hydro-electric works in 1915 and its citizens enjoyed the benefits of that enterprise, farmers in the adjoiningareas of Papamoa, Greerton and Otumoetai clamoured for electric light and power. This was supplied to them direct from the borough. The supply grew outward and reached the Te Puke borough.. Other farmers in the more outward areas clamoured for inclusion in the benefits enjoyed by those who had become linked with the Tauranga borough supply, and out of that desire for union between the Tauranga county area and the Tauranga borough area the Tauranga Electric Power Board was conceived ' and born. The district at that time was a very scattered one because the railway link with Waihi was not yet completed and close settlement had not yet begun.

The Tauranga borough electric power has been one of the chief factors in the rapid development of the farming area of the Tauranga county. It has facilitated th.e development of every farmer’s land and has unquestionably added to th.e values of the individual holdings in the Tauranga county. It did that long before any supply, from Arapuni was available for the area, and, indeed, it was used to supplement the Arapuni supply before that supply was properly developed. To assist the Power Board reticulation in the scattered district during its early operations the borough allowed the power board the use of its own main transmission lines, and so the two systems remained essentially interlocked. The borough supplied the board with power at a cheaper rate than that obtaining anywhere else in New Zealand, and from time to time, as the board’s demands for power grew, the borough has given more generous concessions in prices. The borough, therefore, in the early stages of the board’s existence occupied a kind of tutelary position and that benehcient attitude it has always inaintained. With, the growth of the board’s demands to the 14,000,000 unit mark and the exhaustion of the borough's generated power, it became necessary to purchase additional power from the Arapuni headworks owned and controlled by the Public Works Department. It is over the price for this power that the dispute has arisen.

The borough naturally a , 1 board to pay its talv si , I extra power. / br The board ref used to claiming that under the ,* *1 the contract it wa<s refuse such payment, ° ntitle<! i: Litigation .ensued and as n ly stated we published hi s p ■ judgment. The board's ever, is so generally mlsl N we propose to select cevtai ' features of that circular aad A them with certain ‘comment, H own, side by side with his u!' findings.

We now refer to these sa ii ett tures in the hoard's circular, fore doing so we make this inary observation. At the tj" member of the Power BottrTllU chairman included,'took the /itll stand. The Mayor, ho W ev er very telling evidence on port of the council's case. The p,Alii Board chairman (although pMi throughout the proceedings) ,' the opportunity also to gi V{ deuce. That opportunity taken but he now is responsifet ' a widely distributed circular V oe taining statements which he dip seize the opportunity of makbgat oath in the Court, when all meats had to stand the inmpAlu test of ci oss-examination by coujjaj and examination by the judge. I Feature 1 |rj)(

The board’s chairman says s e: before the trial (sic) the offered £4OOO to the borough a:<¥ a says, “I am advised by the secr<v that if the hoard decide, vija! Government approval, to give lea effect to the findings of fact, lac the cost to the board will closely!® proximate the hoard’s offer." VHI In his judgment Mr Justice Silt says: “On May 1, 1940, thek,|p commenced to take power for; Aongatete district direct from pO' P.W.D. and separate metering lire arranged to show the supply with the intervention in any way ohm council’s plant. The accounts set power for that district were |h( direct by the Department to f boa>rd and paid by the board, kfir< board proceeded to charge to flai council the difference between® P.W.D. rate and the council': |in by making deductions from th«i4| E terly statements. The board liai|s right to do this.” ff 1 At the trial Mr Chambers on oath in reference to these iff* tions in two years ending ID4 2: “The difference between we paid the borough and tbsccsiR 1 the electricity was £2159, an!?-' next it was £IBO2. gate was £3961.” So that theSi is that. the. board’s offer amousiMc a refund of £3961 of wrongful|£S( ductions plus £39. This £39 Kip pay for the extra cost of all M additional power purchased l'^ e council on behalf of the Board in the whole of the area from 1938 to April of 1 and to approximately two-tlr:-the board’s area from April, b 1 March 31, 1942. This extra Cl „ the council exceeded £7OOO, aa® board’s offer was thus a litthj e Id in the £. The Power chairman in his circular SI “jB that this offer, so obviously should have been thus regard ■ acceptable. H Feature 3 H The judgment of Mr Just' in effect, awards to the Power I* alone a certain definite share®* borough’s power referred to '_* established load. This share« by his Honour and is less than 8,000,000- units. of the Power Board of duced, as we show, to tingent on 9,000,000 U nlS allotted to the board. This mJ* extra 1,000,000 which the J* would have to purchase for J* use at a loss of £1857 per jl So, then, had the Borough <|| accepted the £39 it w ° U^ t J saddled itself with an a / ■ annual liability of > ' mit that no public body. , with the interests of its » could for one moment cona ridiculous offer. k Feature 3 _ }J» On the Saturday 1 ' trial an urgent special A the Power Board was ca Jun meeting solemnly I<?a (;rf ;;ilre existence of the contract t Power Board and the boi g j they knew' full w'ell pending trial in the fo ;ls s they had decided to aS yjitalt, to declare that contrac j n ( Feature i As to the Power Board s settlement we publish extract from bis Honou- jjp.Bjg uage 28: “In »««** hoard’s solicitors ieje gestion of the council '■hat. the difference gui)Dl i|PF6 parties should be cob 1 ... .. Thp board 5 arhi:ration. in®

asked that the council should submit its claims to the Price Tribunal and said that if the council would not do this the board would apply to the tribunal.” His Honour refers to the Price Tribunal’s powers under the Regulations on page 4 9 of the judgment, as follows: “I am therefore of opinion that these regulations do not prevent the council from recovering the charges specified in this judgment as payable by the board to the council from 'August, 1938.” In lieu of the jurisdiction of an agreed Arbitration Tribunal, as suggested by the council, the Power Board had attempted to shelter behind the Price Tribunal Regulations. Feature 5 The circular further stated: “The borough endeavoured to maintain that the board’s load was pegged in January, 1936, whereas the judge fixed August, 1938, as the date, which was within a month of the date contended by the board. This is a finding of fact entirely satisfactory to the board.” His Honour on page 34 of his judgment said: “Mr •Cooney does not ask that the established load should be fixed before August 1, 193 8, and the result of my consideration of the opinions of the experts is that the capacity of the council’s plant to maintain a continuous supply to meet the demands of both board and council had been exceeded before that date.” Our readers will compare the statement of the Power Board’s chairman as given above and the statement made by his Honour the judge as to the borough’s attitude. On page 72 of his Honour’s judgment his Honour refers to the contention of the board that its load should be pegged as on April 1, 1940. He is referring to a letter written by the board and he says: “Mr North submits that this letter was accepted by the council and that it constituted the pegging of the board’s load as at April 16, 1940.” We ask our readers again to compare this statement of his Honour’s with the statement of the board’s chairman as given above. The circular abounds with similar discrepancies but we do not propose to deal further with these features. .We have demonstrated sufficient to show the general tenor. We may, however, in a subsequent issue of this paper, refer to other features connected with this dispute.