The Press SATURDAY, OCTOBER 20, 1956. Gas and Electricity

Press, Volume XCIV, Issue 28104, 20 October 1956, Page 10

The Press SATURDAY, OCTOBER 20, 1956. Gas and Electricity

The Government’s difficulty in reconciling the national need to maintain an efficient gas industry and its reluctance to adopt the method of nationalisation is well illustrated by the Electricity and Gas Co-ordina-tion Bill. The compromise of local government control under national direction is not easy to apply uniformly when the circumstances and wishes of local authorities and the proprietors of gas undertakings i differ so greatly. The chief purposes of the bill, plainly a stop-gap. are ,to give the retailers of gas and | electricity a probationary year in which to compose their differences, to provide financial conditions that j may facilitate settlements, and to set up a statutory, over-all, coordinating authority. Of all these, | the last is quite the most important. The establishment of some organisation was advocated long ago by the Royal Society of New ■ Zealand. If the Government had ; followed its first thought and i heeded the Royal Society's advice, j it would have instituted a competent i inquiry into the supply and use of j all New Zealand's power resources 'and into the most economic method :of co-ordinating them. It would then have known what sort of | authority was necessary and what !it should do. After years of delay and months of wrangling, the Government is now setting up the authority, but with powers too limited and objectives too vague. Nevertheless, if the five members of the Electricity and Gas Co-ordina-tion Board are well chosen for business sense, technical understanding, and economic foresight they have a great opportunity to restore order out of confusion. Any attempt |to appoint members to the board as directly representing either the electricity or gas industries would jeopardise its chance of success. In the circumstances, a delay of another year in transferring control of the gas industry could hardly be avoided, and this period should allow the board to decide what further powers it will need. Even in its uncompleted state, the legislation includes some significant provisions. The arrangement for the replacement of company shares by government securities will ease the financial problems of local authorities which acquire gasworks without the considerable inflationary effect that purchases in cash would cause. A tentative approach is made to the question of an economic balance of charges, surely a crucial question for the Co-ordina-tion Board. Finally, a State indemnity is provided to cover anv loss on gas supply that may he suffered by local authorities. Thi* is possibly the most controversial point in the bill, because relief will be given from the Electric Supply Account. Yet it is the almost inevitable consequence of using the valuable capacity of the gas industry to escape the need for an increase in electrical generating plant that would certainly add heavily to the cost of power and would probably be beyond the ability of New Zealand to provide.