Higher Power Costs Last Year

Press, Volume CVIII, Issue 31680, 16 May 1968, Page 8

Higher Power Costs Last Year

The cost of bulk power bought by the board in the year ended March 31 had increased by 7.6 per cent to $1,209,425, the Central Canterbury Electric Power Board was told yesterday.

In 1967 the board paid 0.615 c for each unit, and received 1.142 c a unit, whereas in 1968 the unit cost rose to 0.659 c, and returned to 1.223 c in revenue, stated a joint report from the secretarymanager (Mr V. G. Mason) and the engineer-manager (Mr S. E. Slatter). They attributed an increase of only 0.87 per cent in the total number of units sold to the relatively mild 1967 winter, the state of the economy and the increase in the retail tariff, and said that had Kempthorne, Prosser, Ltd. (now generating their own power), remained a consumer, the increase would have been 4.25 per cent. Line losses had fallen to 7.35 per cent, the lowest rerecorded, attributable to the reinforcement of the board’s system, particularly the extension of 33kva reticulation. Before the 33kva conversion programme, losses averaged 12.4 per cent.

Sixty cents in every dollar of revenue went to buy power, they said. The year was the first under a major change in the system of buying bulk power from the State, requiring payment on both 1 peak demand and units sold, instead of just on peak demand. In 11 years, they said, the board’s demand for power had risen 260 per cent, with a rise of 350 per cent in its distribution capital to $4,248,911.

To continue development, even at a restrained level, would need the investment of at least s3m in the next five years.

If the policy for capital development was followed, the board in that period would probably Increase its loan liability by $1.25m. By 1973, the demand for power would probably rise to 55,000 kw from last year’s maximum of 36,736 kw.

Over the last year every effort had been made to reduce capital work in view of the economy, said the acting chairman (Mr P. G. Wederell). Temporary arrangements had been made which would fit in with future growth without affecting efficiency.

“Perhaps after the Budget things may be a bit better, but there is no sign now of an improvement,” he said. Messrs Slatter and Mason said they had arrived “with a good deal of caution” at an estimated income for 1968-69 of $2,397,246, and that the estimated expenditure would leave a net profit of $3059. The main item of expenditure was an estimated $1,401,935 for bulk power, and they estimated that $164,480 would be needed to make up sinking fund shortages on loans maturing during the year, and that $llO,OOO would be paid from revenue to capital work.