Extension for 25 p.c. S.I. concession?

Press, 22 September 1983, Page 3

Extension for 25 p.c. S.I. concession?

Nelson reported A hint that the 25 per cent electricity concession to South Island industry may be extended was given by the Minister of Energy, Mr Birch, when he opened the Electrical Supply Authorities Association’s annual conference. The new bulk tariff structure, which he announced would apply from April next year, would provide a better opportunity to implement differential tariffs where they could be justified, he said. ‘ “The South Island 25 per cent concession was established in recognition of the need to promote growth in the South Island. Although the cost of the full capacity is about the same in each island, there may be economic justification for a small differential in the two tariffs,” he said. “It makes economic sense to use electricity close to

the source of the supply and so avoid the transmission losses and costs in transfer over long distances and the Cook Strait cable,” said Mr Birch.

“I have instructed officials to examine this question more closely with the introduction of the new bulk tariff form. The existing South Island concession will be maintained but defined to co-ordinate with any changes that are made.”

Mr Rex Lester (Christchurch) attempted to draw the Minister out on this subject, but Mr Birch said little more than what he had in his speech. He said he did not know to what degree a price differential could be justified on economic grounds. “It is very, very complex, much more complex than people in the South island have been prepared to concede,” he said.