The Evening Star WEDNESDAY, SEPTEMBER 12, 1934. DOMINION’S POWER SCHEMES.

Evening Star, Issue 21823, 12 September 1934, Page 8

The Evening Star WEDNESDAY, SEPTEMBER 12, 1934. DOMINION’S POWER SCHEMES.

Towards the end of next month it is hoped that the Governor-General will perform the opening ceremony of the Waitaki hydro-electric works. The act signalising this will be the closing of the dam near Kurow—one of the great engineering enterprises undertaken in New Zealand. It was in Mr Seddon’s Administration that the harnessing of New Zealand’s water power became a fixed policy for that and subsequent Administrations, and up to the present loans rather in excess of £11,000,000 have been raised to carry out the various schemes, the great bulk of that sum unfortunately carrying interest charges of 5 per cent., and in a few cases 5J and even 6 per cent., payable in London. In these days of cheap money and high exchange this constitutes a fairly heavy financial burden on the major schemes. In this year’s Budget Mr Coates mentioned that apart from railway improvements on the Wel-lington-Manawatu line (including electrification to Paekakariki) the only other large Government' undertaking in hand was tho Waitaki power scheme, although' money was required for extensions to some of the other large power schemes, involving altogether expenditure of over half a million during the current financial year. Mr Coates went on to say: “ These hydro-electric schemes continue to be a financial success. The net surplus for last financial year, after providing for working expenses, depreciation, and interest, was £117,000, which is.to be applied towards sinking fund and reduction of past losses.”

This week the annual conference of the Electrical Supply Authority Engineers’ Association is being held in Wellington, and on Monday an address was delivered by Mr E. Hitchcock, general manager of the Christchurch Municipal Electric Department, the general tenor of which is only moderately optimistic as to the future Of electric supply in New Zealand. The revenue to meet operating charges, depreciation, interest, and sinking funds is dependent on the rates charged by the Government to purchasers of current. Hydro-electric revenue must meet hydro-electric charges, which cannot be said to be the case at present, as provision for sinking fund is inadequate. Depressed times, however, are some justification for leaving it to a later and more prosperous period to make full provision for capital debt extinction. But the present, depressed times are bringing to light the indispensable requirement that electricity charges must be maintained at a competitive figure. The first indications of dissatisfaction with the charges come from the country By recourse to other sources of. power

for the farm, they are able to emphasise their contention that thp power boards’ charges to them arc more than their industry can bear. As those charges are dependent ou the bulk supply charges at which the Government supplies the power boards, a distinct demand has been heard, especially from predominantlf dairying districts, that the Government should reduce its bulk charges. The Government cannot do this without turning the present very small profit on its hydro-electric system as a whole into a definite loss. Consequently the country districts have suggested that the Government should recoup itself by raising its bulk supply charges to the town municipalities. This, however, might be a dangerous experiment, merely resulting in a bigger deficit to the Government. The cities, with their larger loads, are the customers who could benefit most by substituting fuel plants. Vigorous load-building is an obvious need for the hydro-electric schemes, declares Mr Hitchcock, and hardly anyone will contest this. Attractive rates for power are a first essential to loadbuilding, and at present the Government is unable to offer more attractive rates without making hydro-electricity a burden on the Budget. Most decidedly the Government should refrain from courting load reduction by making hydro-electricity non-competitive in the towns in order to lighten what one hopes aro only temporary burdens in the country. With the opening of the Waitaki scheme the, need for loadbuilding will become still more urgent, for, according to Mr Hitchcock, between £150,000 and £200,000 of new annual charges will thereby be brought into the hydro-electric account. The consumption of current to provide that revenue will need to be enormous, and it appears unlikely that the capacity output of even the generating installation with which the scheme will be equipped for a start will be called on for some time to come. Evidently what is chiefly wanted is the development of some new industry which will be a power consumer on a big scale. Mr Hitchcock has observed the tendency of overseas capital to seek an outlet in New Zealand gold mining activities—a tendency which those interested in the mining industry in Otago can abundantly corroborate. Should big-scale mining operations develop in Otago in consequence, the market for power supplied from Waitaki should be greatly expanded. There is surely here a great opportunity for the Mines Department and the Public Works Department to work in conjunction. According to geologists and prospectors there are numbers of extensive high-level alluvial deposits in Otago which would be brought into the category of payable propositions if only power at. a reasonable ' rate could be made availably on the site. • - ■ 11 ' ■»