Reason for lower S.I. concession wanted

Press, 9 March 1984, Page 4

Reason for lower S.I. concession wanted

Clarification will be sought from the Minister of Energy, Mr Birch, on why the South Island electricity concession scheme has been lowered.

From April 1, the 25 per cent concession on electricity charges for South Island industry will be reduced to 20 per cent. The electricity committee of the Christchurch City Council decided yesterday to write to the Minister to find why the concession had been reduced. Cr Maurice Carter said

that whatever way one looked at it, manufacturers would have to pay another 5 per cent for their power. Mr E. H. Mace, the' chief engineer of the Municipal Electricity Department, said that the ratio of costs between the South Island and the North Island would remain the same because of a price increase in the North - Island.

The Mayor of Christchurch, Sir Hamish Hay, said that the council had been strangely advised on the reduction, in that it had

come from the Dunedin regional advisor of the Trade and Industry Department and not from Mr Birch.

From Wellington, the Press Association said that in November, when Mr Birch announced that there would be a new supply differential, Mr Birch had said the main reason for the move was to relate the cost of bulk electricity with the cost of supply. Electricity was cheaper to produce in the South Island, Mr Birch said, and it was the Government’s

policy to encourage expanding industries and other developments in the South Island to use electricity.

He said the 25 per cent concession would be preserved against North Island prices until April 1, when it would become 20 per cent.

In comment on the announcement in November, Sir Hamish said the move was a “pleasing decision under the circumstances.”

He was then quoted as saying that he would express “considerable satisfaction that the Government has now acknowledged that the South Island has got a case for a differential.”

Sir Hamish said late last evening that his statement in November referred to the bulk power charges (affecting all consumers) that were being kept constant in the South Island while being increased in the North.

His comment earlier yesterday was about regional development charges (affecting only industry) he said and he saw no discrepancy in the two statements.