POWER CHARGES DEFENDED

Press, Volume XC, Issue 27445, 3 September 1954, Page 12

POWER CHARGES DEFENDED

MINISTER REPLIES TO OPPOSITION “EVERY CHANCE OF LOSS THIS YEAR”

(New Zealand Press Association) WELLINGTON, September 2. Though the State Hydro-electric Department made a net profit of £1,000,000 last year,'there'was every chance of a loss on this year’s operations, said the Minister in charge of the department (Mr W. S. Goosman), replying in the House of Representatives today to Opposition charges that the price to the consumer of electricity was too high. The Minister said that prices would come under review when the supply authorities met the department at the end of next year. “If the department is in credit, prices will go down, but if there is a deficit, recovery will have to be made from suppliers,” he said. Last year’s operations, the first under the new agreement with the supply authorities, were successful chiefly because conditions were good. Rain fell at critical times, and there was no need to use subsidiary services. This year, however, water storage was not as great, and coal and oil burners would have to be used to augment supplies. Eventually, Mr Goosman said, supply authorities would receive their power at cost, with profits going back to the boards. Mr A. H. Nordmeyer (Opposition, Brooklyn) said the facts warranted an immediate price reduction. The department’s estimates had been too high, with the result it had charged the supply authorities too high a price and received an undue profit The department had made a gross profit of £5,290.000. and after paying interest charges and depreciation at a higher rate had a balance of £2,000,000. Part of this had been used to wipe out almost thfi loss on the previous year’s workings, though it had been .intended to offset this loss over a two-year period. The Minister of Labour (Mr W. Sullivan) said there was already provision in the agreement with the Power Boards’ Association for a review of the charges, but that could not be done until the testing period was over. Mr A. McLagan (Opposition, Riccarton) said the consumer today was paying 50 per cent, more for power than he paid under Labour. It was obvious that the charges could be lowered, as the credit in the account indicated. The Minister of Internal Affairs (Sir William Bodkin) said the power boards now were certain to get an adjustment in charges to them. The Deputy-Leader of the Opposition (Mr C. F. Skinner) asked how big a surplus the Minister in charge of the State Hydro-electric Department required in the account before reducing the price of power to the consumer. It seemed that no reductions would be made until there was a huge surplus in the account.

Further discussion was interrupted by the adjournment for