M.E.D. transfers 'still too high’

Press, 21 February 1986, Page 5

M.E.D. transfers 'still too high’

Transfers from the Christchurch Municipal Electricity Department accounts to the general Christchurch City Council accounts are still too high, according to the Minister of Energy, Mr Tizard. Mr Tizard is not happy that the council will still transfer $3 million in the present financial year, in spite of the original sum being reduced by $700,000 on Monday evening.

The Minister said in Christchurch last evening that the figure should have been nearer the $2.5 million agreed to in the 1986-87 x year as the start of restrictions on transfers of M.E.D. funds. He applauded the council for dropping its power tariffs increase to 5 per cent rather than the 7 per cent it had originally suggested. Seven per cent was absolutely unacceptable when the bulk tariff increase was only 4 per cent, he said. However, he was critical of the means the council used to achieve the reduction. The postponing of $1 million of capital expenditure on a new ripple-

control system was a “false saving," he said. The ripple control, which allowed some control over the peak load, was a significant factor in the winter.. He was also critical of the M.E.D. borrowing to finance its capital works programme while making transfers out of M.E.D. funds.

“Those funds are going somewhere else. The people receiving the benefit are not the electricity consumers who are paying for the power,” he said.

Mr Tizard acknowledged that the restrictions on transfers were not to come in until the next financial year but he said he would have expected the council to move towards those figures, not to transfer the largest sum it had yet

In an address last evening to the annual conference of the Institute of Electricians, he said he was pleased with the council’s response to “wider concerns and some comment by myself’ in reducing its tariff increase to 5 per

cent. Other South Island authorities had not stayed as close to the bulk tariff increase and he would write to them telling them he wanted transfers limited. All authorities would have to declare their intentions on transfers; He said earlier that the authorities at which he aimed these comments were Dunedin, Waitaki, and Otago Central which were considering 9 and 10 per cent increases. There might be mitigating circumstances that justified a Dunedin increase of about 9 per cent, he said. There was no justification at all, however, for the argument of increasing costs, put up by the Christchurch City Council for its 7 per cent increase.

Mr Tizard also told the conference that a director responsible for the electricity industry had been appointed. He is Dr G. P. Saha, formerly of the Planning Division of the Ministry of Energy. He would “purposefully progress the policy matters of the electricity industry.”