Tussle On Power Looming

Press, Volume CIX, Issue 32031, 4 July 1969, Page 12

Tussle On Power Looming

An opening skirmish in the tussle that will develop over the reorganisation of electricity distribution in New Zealand is evident in a circular letter which has been sent to cities, boroughs and counties by Mr E. Whittlestone, president of the Municipal Electricity Supply Authorities’ Association.

Mr Whittlestone asks the councils to consider the concept of area electricity authorities set up by themselves. He refers twice in his circular to the profitability of electricity sales. He says that the Electricity

, Distribution Commission, which has the job of reorganising the distribution side of the industry, will initiate its proposals after October 1. Saying that 25 municipalities and three counties have proved that electricity distribution is a proper function for territorial councils, Mr Whittlestone urges the other councils to accept new responsibilities and additional sources of revenue.

Any alternative to the concept, he says, would be more fragmentation of territorial local government and a move towards more ad hoc bodies. The original function of power boards has been fulfilled, and it is time to consider the future system of electricity distribution. A councils-orientated area

authority, he suggests, could have the right to distribute to the member council an amount equal to 2$ per cent of the-capital value of the undertaking from the surplus of revenue over expenditure.

The commission itself has warned the supply authorities to put their house in order, or the commission, armed with statutory powers, will do the job for them. The power boards say that one of the commission’s main jobs will be to resolve a fundamental difference of policy between the boards and the councils supplying electricity. Power boards use their profits only to pay for capital work and to keep the retail power charges as low as possible. Some councils use a proportion of their power

profits for general purposes, and this, the boards say, is open to abuse, and is unjust in that the user does not get back all he paid for. Although the' Christchurch Municipal Electricity Department—in effect the City Council—has not had its profits taken for general purposes of recent years, it has done so in the past, and there is no legal bar to it being done now.

The M.E.D. also supplies Waimairi County, which has no say in M.E.D. policy, though it contributes to its profits. The Riccarton Borough Council and the Heathcote County Council are other local power retailers that have used profits for general council expenditure.