TRAMS AND LIGHT

Dominion, Volume 24, Issue 104, 27 January 1931, Page 16

TRAMS AND LIGHT

Financial Relationship

GEN. MANAGER EXPLAINS

In order to make clear the financial relations between the tramways department and the electricity department of the Wellington City Corporation in connection with the transfer of the old tramway power station and direct currency power supply reticulation from the tramways department to the electricity department, the following statement has been submitted by the general manager, Mr. M. Cable. “Prior to the amalgamation of the two electricity supply undertakings in April, 1925, the current for tramway traction ahd direct current power for industrial purposes was supplied from the tramwaypower station in Wakefield Street, and the current for lighting, etc., was supplied by the electric lighting department, from the generating station in Mercer Street. “When the new power station was completed al Evans Bay the council decided to .merge the whole of the tramway and direct current power supply with the lighting and other electric services of the city, and operate the undertaking as an electricity department. The tramwaypower station was erected at a cost of £163,000. For the purposes of the transfer this was written, down to £65,000, to which was added £15,000 for new rotary converter plant ibsta'lled in the main substation, Jervois Quay, and paid for out of the tramway renewal fund. The total amount to be paid by the electricity department was determined at £BO,OOO, payable to the tramway department in ten annual instalments. The direct current electric power supply reticulation system, inaugurated in 1906, was also taken over without any payment for assets' in excess of the loan liability. The capital expenditure on this system When it was transferred to the electricity department amounted to £45,598. on which there was a loan liability of £30,000. Against this liability there were accumulated’ sinking funds of £8366. The assets taken over were therefore £23,964 in excess qf the loan liability. “During the last year the tramway department operated the .direct current industrial power stipply. the net surplus was £11,535, as shown in the tramway, balancesheet ended March 31, .1925. This profitable power supply business was transferred to the' electricity department without arty allowance for goodwill being granted to the tramway undertaking. The concentration of the whole of the electrical supply of the city in the one department has resulted in greatly increased plant efficiency with decreased cost of production. “The'tramway load is an exceptionally good one to-the electricity department,.as there is a very large power consumption every day in the year, and on week-days current is consumed for eighteen hours a day. The current used for tramway purposes is considerably more than that supplied to all the electric power consumers in Wellington combined. The total revenue from the sale of current to the tramways department and to direct current power consumers since the electricity department took over this supply now amounts to £210,000 for tramway current and £lBB.OOO for direct current fewer supply. This enormous augmentation to the gross revenues of the. electricity department has been a most important factor in the financial success of-'the undertaking.