LOWER HUTT GAS

Evening Post, Volume CII, Issue 86, 8 October 1921, Page 5

LOWER HUTT GAS

POSITION OF THE SCHEME

QUESTIONS OF-COST ANb PRICE

STATEMENT BY MR. RISHWORTH.

The controversy over the plan to build ft new gasworks to supply the bororigh of Lower Hutt, which now derives its gas by purchase, through a large meter, from the Petone Borough's works, continues, to exercise the people of both' borougha. At the same time, a great number of them are weary of the disouaaion, and are fairly befogged' with the mass of details that have been stated and restated, and are no nearer a clear understanding than they were a year or more ago. Even on such a fundamental point as the prospective prices of gasfrom the two sources there is much misunderstanding. In the hope of clarifying the position, the Mayor of Lower Hutt (Mr. E. P. Eishworthj made a statement, Supported by documentary evidence in the shape of numerous reports. The agreement tinder which the Petone Borough Council sell? gas to Lower Hutt has still two years to run. During its currency there has been much friction over the supply of gas, as to quality and quantity,, and the pressure at which it waß delivered, and latterly there have been long negotiations between the boroughs with a view to improving the position. The result has been that the negotiations failed, and the Lower Hutt Borough Council secured a report on various solutions, and finally took a poll, which by a majority of about three to one authorised the council to raise a loan of £64,000 for the purpose of erecting a new gasworks proper in the boroughSince that event organise^ opposition has grown up with the object of haying that decision set aside by" means of another poll, and a petition for that poll is now being circulated.

"COUNCIL'S ONLY COURSE."

Mr. Rishworth said it had been alleged, among other things, that the Council hadl made i£s decision without exhausting all v the possibilities pf a satisfactory arrangement with Petone; but that was not true. The Petone Council had been asked to a conference ot\ the question, but had not complied in a way that was acceptable. E&wer. Hutt had made proposals to Petone, which Petone was hot willing to accept, and in ,view of th« urgency of the matter, the Lower Hutt Council had taken the only step open to it. Another important charge made was that, while an undertaking had been given, before the poll that the loan would not be raised at a high rats of interest, it had nevertheless been raised at 7 per cent. In reply to this, the Mayor said that at the time the poll ■was taken, a number of loans were being raised by important commercial organisations at from 7£ to 8£ per cent., in some; cases free of income tax. Jle had been careful to consult a number of the most prominent financial authorities in the cify, and they had all assured him that th« lowest rate he could secure would be 7 per cent., arid hp would be lucky to fet that. Finding that the money market would bp very short,' he put the question to his finance committee, and it unanimously endorsed his proposal to raise the loan at once at 7 per cent., and the money wa-s secured, i

COST TO THE CONSUMER. A point' of special interest to a!l householders in the borough is the prospective price of the gas. Statements have recently been published that the Petone Borough Council has offered to supply gas. at 10 per cent, above the ascertained cost of production, the price on the basis of present cost i.Q he 5s 6dt per'thousand cubic feet. This offer, the Mayor states, has never been made to the Borough Council, but only »to the Ratepayers Protection Association. It costs (Lower Hutt, the Mayor said, 4s per thousand feet to distribute pras. This amount represents interest on the mains, meters, and .other plant', maintenance, office, and other expenses. About -ten per cent of the gas is "unaccounted for," or lost—say sixpence. This makes the retail price of Petone gjks, on the offer, 10s per thousand feet net. The boroughs scheme is based on a report prepared by Mr. A. Ford, a. highly qualified consulting engineer, who went into the matter most , exhaustively. ty^ith coal at 54s a ton, he allows for interest, sinking fund, depreciation, all costs of manufacture and distribution (down to bad debts and printing), and estimates the price at which the gas could be sold from the new works at 7s 16d per thousand feet. There is thus a margin of 2s 2d between the borough's suggested price and that presumed for a Petone supply at 5s 6d at the main meter. The Mayor remarked that in discussing tho offer of th« Petone Council with the Ratepayers' Association, no mention was made of either tar or coke, which, were very necessary to Ijower Hutt. At present, the borough was entitled to onethird of the outfit of tar at 4£d per gallon, but anything ov«r that quantity cost them 6d per gallon. With their own works they would have their full output of coke and tar,- and could use it all. Mr,. Rishworth pointed out that the council's consulting engineer had been represented to have said that one works could supply gas 25 per' cent, cheaper than two in the aame area. This had been used as meaning that the Petone works alone would be more economical than the Petone works and the new Lower Hutt works. It should be obvious that,he did not me£fn anything of the kind, but that the statement waa aplicable only to similar works—two modern or two equally, old works, operating in the/same way. "There is no fear of the new gasworks becoming a charge on the rates," said the Mayor. "The manager of the Wanganui works stated Teoently that there was no case known of a gasworks failing to pay. The highest production cost in New Zealand » 7s 9d pr thousand feet. That is at Gisborne, where thte coal used cotts £5 7s 6d per ton."

OOST OF SHARING PBESBNT i WORKS.

Another important financial argument is that relating to the suggested purchase by Lower Hutt of-a share in the Petona ■works. At present the works are operating .at tKeir full capacity. So are the ma-iris by which the gas is brought from the boundary info the Lower Hutt consuming area (including a new supplementary main). The Petone works are. valued by the Mayor of Petone at £50,----000, so that the amount Lower Hutt would have to.pay for its share -would bd at least £20,000. An additional main within the' Lower Hutt Borough woujid) cost £10,000. The Petone works are, on) the evidanoo of the gas manager, working at full capacity, and large extensions are1 necessary at an early date. Another gas holder, a new m«tei- and meter-house, two settings of r.etorts, and an extension' of retort; lwuse, scrubber, and purifier are declared to bo necessary, and these are estimated to cost about £60,000. Sharing the cost of these brings the Lower Hutt bill for purchase of a halfshare to approximately £60,000, as compared with ££4,000 neoessavy for an in, dependent scheme. The Mayor points out, in this connection, that the loan contract entered into 'contemplates only the erection of new works, and the money now .."earmarked" would, Apt bo

available for the purchase of a share in the Petone works. A fresh arrangement would have to be made, and Mr. Eishworth expressed serious doubt whether money could be got on as good terms, if at all, for that purpose. In conclusion, Mr. Rishworth said, it was not a, fact that the Lower Hutt councillors were "backing down." Some of them were not in agreement in matters of detail, but there had been a distinct statement by ,the minority that they would, stand by.the majority decision, of the council, and work, loyallY to carry it through.