Commercial Tolley chairman puts strong argument

Press, 9 May 1979, Page 25

Commercial Tolley chairman puts strong argument

PA Wellington Cheaper power, produced from New Zealand’s plentiful natural energy resources — water power, natural gas/ and coal — was the key toi solving the country's: “energy crisis,” said the chairman of Tolley Holdings/ Ltd (Mr F. L. Parkin) at the annual meeting. The cost of New Zealand’s electricity was inherently cheaper than that of other countries, and this should be used as “an instrument for economic survival,” he said. Energy users should be attracted towards electricity, which requires indigenous fuels to generate. Coal, and natural gas, should be used for base-load generation, and water power for both base and peak-load generation, he said. Mr Parkin claimed that “there was absolutely no need” to import oil, and use it as a fuel, except for road transport. There was no “energy crisis,” only an oil price crisis he thinks. “In reality, New Zealand has a balance of payments problem, not a transportable fuel crisis,” he said. “We have about as much unexploited water power as has alreadj 7 b_een harnessed in the last 50 years. We have large resources of geothermal heat, more natural gas than we know what to

do with, and substantial untapped coal deposits.” In terms of conventional primary energy . resources per capita. New Zealand .ranked about the richest in I the world — the energy represented by Southland coal .deposits alone was equal to 'about six Maui gas fields, I Mr Parkin said. Mr Parkin attacked the inter-related energy pricing policy, which was linking the price of energy from New Zealand’s resources to the price of imported oil, and creating “serious economic distortions.” “As 80 per cent of New Zealand’s electricity is generated by water power, and in no way can the cost of it be related to imported oil, it must be priced to attract people away from imported fuels, and not the reverse, which could well be what will happen,” he said. Artificial prices had upset the competitiveness of both farming and industry, and capital, which might have been invested in new mach inery, forests or land development. was diverted into paying them. A cheaper power supply from low-cost sources, such as hydro-power, should be available to both domestic, and commercial users, said Mr Tolley. A two-part tariff, allowing

- cheap use of low-cost produced power, and higher 1 charges for power drawn 5 from imported energy, could i easily be introduced using i ripple control, and two-rate - metering, said Mr Parkin. I On the company’s results 3 for the year to November • 30, Mr Parkin said the reported net profit, after 5 extraordinary items, oi ’ $850,000 had been sig- ' nificantly down on 197", and 1 had not measured up to ex--3 pectations. ’ The company had now increased efficiency to a level t previously unequalled, and . separated activities into four j divisions, cable, transformer, t switchgear, and agencies, t These changes had set the I stage for the “upturn in j business when it comes,” he , said. t “The board had not been slow to see the implications t of the economic downturn 1 b u t, although heavy I retrenchment to cut costs j might have been correct financially, for longer-term I- success this would have 3 been quite the wrong thing Ito do. ■j “Accordingly the board ; |had made changes, reduced , I staff levels, evaluated prodfl ucts, and their life cycles, , but had not reduced activity ’ drastically for short-term needs. Our confidence in our industry, and our company, is too high for that,” Mr Parkin said.