Power At Cost For Comalco

Press, Volume CII, Issue 30212, 17 August 1963, Page 14

Power At Cost For Comalco

(From Out Own Reporter) WELLINGTON, August 16. The new agreement between Consolidated Zinc Pty., Ltd., of Australia (of which Comalco Industry Pty., Ltd., is an associate), and the New Zealand Government is embodied in a ManapouriTe Anau Development Bill introduced in Parliament today. Under the 1960 agreement, now repealed. Consolidated Zinc had the water rights to the power development ar J was to build the Manapouri station itself to supply its proposed aluminium smelter at Invercargill or Bluff. In the new agreement the company exchanges its water rights for the right to buy power, at cost from the station to be built by the Government. In ddition, the Government resen «g a block of power of 200,000 kilowatts The company must take 100000 kilowatts of continuous power by June 30. 1971. and must give notice of its intention to do so by December 31. 1968. The extent of

the prior notice has been fixed at two and a half years because this is the time that it will take to build an ’nitial smelter unit with a capacity of 50,000 tons of aluminium a year. A block of 100.000 kilowatts of continuous power is necessary to support a smelter unit of this capacity The company may, however, decide by the end of 1968 to ask for 200,000 kilowatts of continuous power by mid-1971. This would be sufficient to support a smelter of 100.000 tons annual capacity If the company makes an earlier decision to go ahead with ” e smelter and requires power earlier than 1971, it may do so by giving 30 months' notice of its power requirements

After taking up the initial block of power, the company may ask for further power in 100.000 kilowatt blocks on 30 months’ notice up to June 30. 1991. The maximum amount of power available to the company is 460.000 kilowatts of continuous power. If it needs more than this it may ask the Government to surrender its 200.000 kilowatts of 60 per cent, load factor power, which will have been used for the national grid in the meantime. But the Government need not give up this power. The bill provides a formula for assessing the cost of

power supplied to the company, which will be the actual cost of production.

The company has already spent about £700,000 on the scheme. The Government will reimburse the company for this amount, less £lOO,OOO The final £lOO.OOO will be paid two months after the company takes power from the scheme tor the first time An appendix to the bill contains the exchange of letters between the company and the Government in which scenery preservation requirements are listed and the lakelevels are established. The maximum level ot Lake Te Anau will be 676 6 feet above sea level, the natural level of a fiood so great in its magnitude as to occur only once of 500 years, but the maximum operating level of the lake will be some feet below this. The normal level of Lake Manapouri will be some five or so feet below the operating level of Lake Te Anau. in order to cope with Te Anau in flood and to allow the controlled run-off of floodwater to Manapouri Introducing the bill, the Minister of Works (Mr Goosmani said the new agreement could be very advantageous for New Zealand. "I think it will ensure under changed conditions that the aluminium smelter will be established in New Zealand at an earlier

date than it would under any other arrangement.” He said the new bill included all the provisions for the preservation of scenery that were in the original bill and the cost of scenery preservation was taken into account in arriving at the cost of power He gave an assurance to the deputy-Leader of the Opposition (Mr Watt) that the people of New Zealand were not to pay any of the cos! of providing power tor an iverseas company.

The Leader of the Opposiion (Mr Nordmeyer) said. 'ln the event of the company not taking up the power and the whole of the power being available to the Government, am I correct in assuming that as Aviemore would be available about the tame time, there would be a considerable surplus of power in the South Island?”

Mr Goosman said that if Comalco did not go ahead with its plans, the State would have expended about £lO million sooner than it would otherwise have done but because of the cheapness of the power it would recoup that over the years. Eventually there would be no extra cost to the Government. A surplus of power might entice industry and one of the best things New Zeal, id could have was goods manufactured from cheap power.