The Dominion. THURSDAY, NOVEMBER 9, 1911. THE MAYOR'S HYDRO-ELECTIONEERING SCHEME.

Dominion, Volume 5, Issue 1281, 9 November 1911, Page 4

The Dominion. THURSDAY, NOVEMBER 9, 1911. THE MAYOR'S HYDRO-ELEC-TIONEERING SCHEME.

While Me. "Wilford is still making up his mind as to the explanation he will give of his anxiety to run the city into an agreement with the Government for the supply of electricity, we may give a little attention to some of the queer features of the figures with which he supported his proposal at last week's meeting of the City Council. It is possible, of course, that after the election is over the Mayor's ardour may cool, and we may hear no more of the scheme, which wo have ventured to call a "hydro-electioneering" scheme, but the interests of the city forbid lis to build upon even that large probability. The main tahle prepared by the Tramways Department starts out on the basis that in 1915 the purchase will begin of 14,479,000 units of electricity per annum from the Government at ,6d. per unit, at a total cost of £36,197 10s. Working expenses, interest and sinking fund and depreciation bring the total of the expenditure up to £93,544 las. It is estimated that the revenue will amount to £95,750, but this presupposes that the amount of electricity used for all purposes will be about half as large again as it is at present. About 7,500,000 units were used in 1910-11 for all purposes; the estimate for 1915 is 10,725,000 units. This is a sanguine estimate, and it is on the face of it only "an estimate to suit." If the expenditure had totted up to, say, £100,000, instead of £93,000 odd, we should probably have been told that private lighting would consume 2,500,000 units anc! so on._ Howlittle trust can bo placed _ in the estimate of consumption will_ be obvious from a comparison of it with Mr. Richardson's estimate at the end of last year, which was presented to Parliament by the Mayor. Here are the two sets of figures:

Last year's This estimate. year's. Unit?. Unils. Tramways 5,000,000 0,000,000 Piimpinir 30(1,000 300,000 Power and heating 1,750,000 1,750,000 Privato limiting 1,020,000 2,000,000 Street listhtinfj 415,000 .115,000 Track lighting 230,000 230,000

Total 9,315,000 10,725,000 We may leave the Mayor to explain this great discrepancy; the public will conclude that both estimates are extremely optimistic speculations, and so of little value at all. Now, we also find that although the scheme proposes to pay the Government for 14,470,000 units, it proposes to sell 10,725,000. Not only will it possibly not have a market for that number of units; it will not have them to deliver. In his speech in the House on December 2 last the Mayor said—and we believe ho is quite accurate here—that there would be a loss of 5 per cent in conversion of current at the very least and that the loss in distribution is !iO per cent. That is to snv, 100 units purchased will leave only 66 units for delivery and sale tn the consumer. To have ti(i units to deliver to the consumer, !00 units must be bought. In order, therefore, to have 10.725,000 uuits tu sell

the city would need to purchase 10,087,500 units, and not llm M,' 179,000 stated. At .Gd. per unit this would amount to £'10,218, or about £-1000 more than the estimated cost of the 14,479,000 units. Then we find that in the estimate of interest charges only 4 per cent on capital is allowed for. At least i\ per cent should be set down; that is the figure fixed in more than one place in the corporation balancesheets. Again, the charges for depreciation, sinking fund and interest in respect of the power station (capital" at present, £109,577) amounts in the total to £10,147. Under tho scheme only £9362 is provided as a charge in this respect; and since extensions will be required before 1915, the proper charge should be far more than the £10,147. , A reasonable estimate would make it £2060 more than is provided in the speculative balancesheet we arc discussing. And so it h with the lighting station and the distribution system. A proper estimate of expenditure would bring the total to over £100,000, securing a deficit of over £5000, even allowing the bloated revenue estimate to be correct.

What puzzles us is that the Council should have accepted the strange idea that the water-power scheme is a simple and inexpensive miracle. Some foolish persons have exulted in the staggering simplicity of the scheme, imagining, apparently, that the very fact that it was staggering was the best proof of its soundness. Yet a careful examination will show that even if we could get the electricity at .Gd. per unit, and get it all the time, it would he financially better to go along as at present. The corporation balancesheet for 1910-11 shows that at the power-house and lighting station the cost of generating 9,08G,201 units was £31,424, made up thus: Salaries, almost exactly £8000; fuel and supplies, £18,821; repairs, rents, etc., £5103. Now in 1915, for the generation of 16,000,000 odd units we can increase the fuel charge pro rata, and the charges for salaries and repairs by a slight amount. A generous estimate would be: Salaries, £10,000; fuel and supplies, £32,000; repairs, etc., £8000—a total of £50,000. If the water-power scheme were taken up, we should have to pay, in place of this £50,000, a total of over £55,000. Current would cost over £40,000, as already stated. The working costs of the converter station, taking the Mayor's figure, would be £4257, depreciation on converter station £2240, interest and sinking fund (at i\ per cent and 1 per cent) on converter station £2625, and interest (i\ per cent) sinking fund (1 per cent) and depreciation (31-5 per cent) on the entailed addition to cost of distribution system £5915. The total of these amounts if £55,255—showing a direct loss of over £5000 a year on the change, even on the Mayor's own excessively optimistic basis of consumption. It is most unfortunate that the Council should be unable to find anybody to analyse the figures submitted to it by the Mayor and the Tramways Department. But we think we have said enough to show councillors that even if the scheme had not been brought clown at this significant time, it would be one to be examined very closely before the city is committed to it.