TOWARDS FULL MONOPOLY

Evening Post, Volume CXX, Issue 99, 23 October 1935, Page 12

TOWARDS FULL MONOPOLY

GENERATION OF ELECTRIC POWER

PROPOSALS OF AMENDING BILL

LICENSING & PURCHASE OF PLANTS

Hidden deeply in the "interpretation" clause of the Public Works Amendment Bill now before Parliament is a definition of "electric line" or "electric line .work," so wide as to encompass generating plant, sub-stations, and reticulation, and the effect of that definition will, if the Bill is passed, with other clauses and the Electric Power Supply Regulations, give the Public Works Department the widest powers: • To refuse permission for the operation of existing steam or other plant; . To refuse permission for the installation of additional or new plant; Give the Minister power to revoke a permit at any time; Give the Crown power to purchase plant, reticulation, etc., from power hoards or supply authorities at valuation, without consideration to goodwill. ■ It is the extreme elasticity which has been given the.interpretation of "electric line" which proposes to confer such wide .powers. Further, in the section headed "Supply of Electrical Energy," there is proposed an amendment of the principal Act which apparently aims at giving the Department authority to sell power, not on a basis to be agreed upon between supply authorities and the Department, as was held to date, but "upon such terms and conditions as the Minister thinks fit."

Little wonder then that the publication of the proposals has created surprise among those supply authorities which possess and operate, or retain for emergency purposes, steam and other fuel plants, for theßill proposes a complete' monoply and the exercise by the Public Works Department of the widest powers of dictation of terms and conditions and not merely as to the sale of power, but as to the taking over of generating and distribution plant. Without doubt the matter will be taken up vigorously by the Municipal Supply Authorities Association. INTERPRETATION CLAUSE. The interpretation clause (Section 11, clause 1) reads as follows:— "Electric line" or "electric line or work" means any wire or wires or other conductor, instrument, apparatus, device, or me^ns used or intended to be used or reasonably capable of being used for generating;, transmitting, transforming, converting, distributing, or otherwise conducting electrical energy, or for the consumption or application of "electrical energy. With a definition of. such sweep established, Section 12, clause 1, continues:— Notwithstanding anything to the contrary in any Act, no person shall construct, maintain, or use any electric line or work except under the authority of a licence issued by the Governor-General in Council under this section. The issuing of any such licence shall be in the discretion of the Governor-General. Every person who commits a breach of this provision is liable to a fine of one hundred pounds. When _ those sections are read together it is clear that the Bill proposes to give the Public Works Department the fullest authority to say what generating plant shall run and what shall not. It is suggested that the object of the Government is to sterilise fuel power plants and so reserve the whole field for its own plant, and later to take over other than Government plant at valuation, without good will. HYDRO AND STEAM GENERATION. The capacity of the hydro-electric system in the North Island of New Zealand is 122,600 k.w.. In the North Island there are also supplementary plants for generating electricity apart from the Government hydro-electric system, with a total capacity of 58,700 kilowatts. .If rumour •is correct the Government is also going to enlarge its own hydro-electric resources, although there is already a surplus of plant in the Dominion which could be operated conjointly with the Government system and thus save additional outlay at the present juncture. Complaint has been made that the Public Works Department has adopted a• dictatorial attitude, for example, at Palmerston North recently, and on other occasions which is not conducive to mutual cooperation.

Public Works Statements show that rnrth° S T i° J^o-ekctric plant in the T.orth Island has been £51 per kw while the cost of one large fuel plant

recently ordered was less than £10 per k.w.

There are a number of supplyauthorities which will be vitally affected if the Bill is passed, Auckland and Wellington particularly so, for Auckland had steam and Diesel plant of 41,160 k.w. and Wellington 10,000 k.w., with additional plant of 15,000 k.w. on order. Other North Island' supply authorities which are faced with the Bill's proposals of closure and purchase by the Government are Poverty. Bay, South Taranaki, Wanganui-Rangi-tikei, Napier, Hastings, and Palmerston North. Supply authorities in the South Island will not be so greatly affected. "AS THE MINISTER THINKS FIT." The principal Act authorised the Minister "to sell electrical energy" and the terms upon which power boards and supply authorities have taken bulk supply from the Government have been arrived at by negotiation and agreement. The Bill proposes to amend this method of arriving at the price to be paid very drastically, for it adds to the clause authorising the Minister to sell electrical energy just ten words: "Upon such terms and conditions as the Minister thinks fit." The Bill in those words proposes to sweep away the right of the purchasing- power board or supply authority to negotiate, and to make the Department's decision definite and final. The Department would present the account, and the. distributing, authority would pay, without negotiation and without argument. Furthermore, if the Department has exercised the. power which is set out in. the 1935 Electrical Supply Regulations and has taken over the whole of a supply authority's undertakinggenerating plant, sub-station, and reticulation—it would appear that the Department would also be in the position of selling power to retail consumers as well "upon such terms and conditions as the Minister thinks fit." The Bill certainly has an unexpected depth of authority. . BY REGULATION. The Bill does not, however, propose that the conditions embodied in it shall necessarily be. fixed and final, for section 16, clause 3, states that the Electrical Supply Regulations are declared to be valid. Apparently up to the present the regulations have had no definite statutory authority, but that point is cleared up by this section. The. 1935 regulations are wide and it is under them that is laid down the procedure which shall be followed for the taking over of an undertaking by the Crown ty agreement or arbitration, which provision is followed by:— The said valuation shall not include any sum in respect of the value of the goodwill of the undertaking or in respect of the value of the licence for the unexpired period thereof. As has been demonstrated on a good many occasions, the inter-relation of Acts and regulations under those Acts may result in unexpected amendment of legislation from the form in which it was approved by Parliament. Still wider power may be given the Minister and the Department by the revision of the Electrical Supply Regulations without further reference to Parliament.