Power report not ‘true picture’

Press, 2 August 1983, Page 9

Power report not ‘true picture’

Some comments made in a Canterbury Manufacturers’ Association report seeking a different power pricing structure did not give a true picture, the Christchurch City Council’s public utilities committee was told yesterday. It was well known that averages could “cause serious distortion of the true position,” said Mr J. H. Donald, the M.E.D.’s general manager. A manufacturer in Auckland using 40,000 units a month with a typical load factor would pay $2732, compared with $3138 in Christchurch. When the South Island’s 25 per cent regional development power rebate for industrial consumers was deducted the Christchurch amount would be $2354, lower than Auckland’s. Some Christchurch manufacturers had modest-sized businesses, said Mr Donald. Auckland manufacturers, had “huge operations enabling units to be supplied at a very low rate,” he said. Averaging those with other units produced a figure “very much lower than would otherwise be the case” for Auckland.

“When you take averages, you can make the figures

suit your argument,” said Cr Rex Lester, the committee chairman. Three big M.E.D. consumers, who use at least 10 million units of power a year, now get a “coincident demand tariff’ which allows them to obtain a lower power price by switching off during the evening peak electricity demand. Mr Donald said it was proposed, during the present tariff review, to extend that tariff to other consumers. A revised form of bulk tariff would probably be announced by the Minister of Energy, Mr Birch, during the Electrical Supply Authorities’ Association’s annual conference in September.

That change would be considered along with a future increase in bulk power charges during the M.E.D.’s tariff review.

Cr Lester said he was “surprised and ' disappointed” that the manufacturers had included as part of their report a suggestion that the M.E.D. should stop transferring surplus M.E.D. income for non-supply purposes. Cr A. J. Graham said he was disappointed that the manufacturers had made their case public, rather

than seeking “true facte” through consultation with council officers. Mr Donald said that the ratio of domestic sales to total sales in a power supply authority’s area had “a considerable bearing on the cost of supply.” The effect could be shown in a comparison of New Zealand authorities with the largest industrial power consumption. In Christchurch domestic electricity sales were 64 per cent of total sales, and the average price per individual unit sold was 6.1 c. In the Hutt Valley, domestic sales were 60 per cent of total sales, with an average price per unit of 6.9 c. In Auckland where domestic sales were 43 per cent of total sales, the average price per unit was 3.8 c. The lowest price per unit was 3.1 c in the Bay of Plenty, where domestic sales were 22 per cent of total sales. It could be seen that supply authorities with a high proportion of domestic sales were at a disadvantage, said Mr Donald. “Formulating electricity tariffs is a complex matter, and not simply a question of comparing figures shown in statistical form,” he said.