Energy prices

Press, 18 December 1976, Page 14

Energy prices

Sir, — I believe the policy of a national price for each form of energy is not sound. If electricity is produced cheapest at a hydro site, the main economic considerations of where to use it are the costs of transporting electrical energy measured against the industrial products derived from it. Equalising costs over the whole country makes the energy more expensive over ail, it sets up vested interests to maintain uneconomic situations; and makes corrective action painful. If energy from natural gas is cheaner in the .North Island, and energy from electricity cheaper in the South Island, we would all benefit from costing it thus. Should gas be best used for petrochemicals, it would still make sense to use South Island power in the North only at its true cost. If there is no surplus hydro power to send north, the" nation would need to produce power in some dearer way, or do without. — Yours, etc., R. A. SMfTHAM. December 16, 1976.