Electricity price rise “inevitable”

Press, Volume CXI, Issue 32701, 2 September 1971, Page 2

Electricity price rise “inevitable”

A price increase to consumers supplied by the M.E.D. appeared to be inevitable said the chairman of the City Council electricity committee (Cr G. D. Hattaway). The price of bulk electricity to electrical supply authorities was increased by 10 per cent yesterday.

Electricity rates had been held since October, 1967, in spite of wage and salary increases of between 50 and 100 per cent in that period, Cr Hattaway said.

The had made a net profit of $200,000 last year, and it was estimated there would be a $lOO,OOO loss this financial year.

He said that the M.E.D. had loan charges to meet and needed more loans for capital development. “It is not possible to estimate the increase in rates to consumers. The committee will have a good look at the situation. We will accept submissions from the Canterbury Manufacturers’ Association and the Canterbury Chamber of Commerce concerning the spread of the increase among domestic, commercial and industrial consumers.”

The Central Canterbury Electric Power Board increased its tariffs last April and they now would have to be reviewed to see what adjustment was needed to meet

the added costs, said the board’s general manager (Ml S. E. Slatter). '

Two-year contract In a joint statement yesterday, the Minister .of Electricity (Mr Allen) and the president of the Electrical Supply Authorities Association (Mr A. W. Gooder), said that agreement had been reached between the department and the association on tariff and conditions for the two-year contract period beginning on April 1, 1972, according to a Press Association report. The new bulk supply tariff would be $25.87 per kilowatt of the average of six peaks, and 0.297 per kilo-watt-hour for energy supplied. This represented a 10 per cent increase on the present rates of $23.50 and 0.27 c. Expansion “The expansion of the electricity system to meet the growing domestic and indus-

trial demands is of primary importance to the country’s economy,” Mr Allen said, “and the bulk-supply tariff must make reasonable provision for this expansion.” The present tariff had been set when costs were lower than today and a further fiveyear contract period had been considered to be too long, taking modern conditions into account.

“In all the circumstances, the 10 per cent increase must be considered to be moderate,” the Minister said. Operating costs Mr Gooder said in Auckland yesterday that the increase would raise the authorities’ operating costs, by nearly 7 per cent. "But extra costs have been absorbed during the last five years and at the same time we also have been having to do more capital works out of revenue because of loanraising difficulties,” Mr Gooder said.

“But although the cost of electricity supplies from the State will rise by 10 per cent, the amount of increase in retail tariffs cannot be stated generally at present. “Each authority will have to consider its own finances, and allow for its requirements as well as for the increased bulk charges in setting its new prices to consumers."