POWER BOARD

Gisborne Times, Volume LXXXII, Issue 12531, 17 April 1935, Page 5

POWER BOARD

Rfcfifws' Mu' ; Tb CRITICISM/ PUBLIC MEETING AT CITY IT ALL A comprehneslvelsuirimary of the Poverty Bay Electric. Power Board affaifg was ; presented! dby .the chairman (Mr F. It. Ball) at 4 public meeting ijx: ( the ..City Ha|V last evening. He dealt with the hoard’s general policy,, and also to ohai'gtesj • developfiiehi' m'oasures, etc. Beveral' other speakers addressed the meeting, briefly and a. numher of questions [were, later a.nswered by Mr Bail.' Mr D'. W. Coleman; M.P., presided and also o.n the platform ; wore Messrs , Ilf! T. Trafford, H. H; Do Costal; V. E. Sanders’’(man"My object in addressing this meet jno*f ’ said'Mr Ball } “is' - to 1 give to the public a comprehensive survey of the history and affairs of the Power Board 1 . ; ..While we are naturally most interested in the present 1 ' it is sometimes desirable ip take a look back" over the past and,' as it is some, four years since I delivered! m.v last public address on Power Board affairs, I will commence with a brief resume of .the early history and' operations' of the board. The board’s history dates hack to about 1923, when the borough and the two adjoining counties—Cook and Wailcolni—decided to form the Poverty Bay Electric! Power Board. 'Representation on the board was' agreed on as four borough,. four Cook County, and three Waik°hu County members. A petition from the requisite nWmber of ratepayers was obtained: and 1 ,/tho setting-up of the Poverty Bay Electric Power Board was duly authorised. The first election of members was held, in June, 1924, and the first meeting- of the; board’ in August, of that year. Some of the original members have held their seats for eleven years and arc still members. They have had! their periods , .of anxiety, but havf? rid-vr the satisfaction of knowing that ,tli c , electric ship has reached safe waters. "We do not claim that, no mistakes. have been made, hut. in spite of: whatever .. mistakes have been made—and according to some critics they have been many—tliesuceess of the board lias been due. m no small measure to the patience and carefulness exercised by the members of the board in its" early year s and to their refusal to enter into any. agreements or undertakings until they had been thoroughly iffye.stigated. "The early years were years of hard work, work that.was Jjew to the district, and membership dn the beard 1 ,wa s not keenly Sought after. Tho first members held their seats for two years and eight months — August, 1924, to May 1927. Two of the borough members then retired, and I had to search for two new members to take their place. No election was necessary. The following years saw th e passing of most of the preliminary work and the commencinent of important load development work. From then on'very keen interest was awakened. Naturally tho progressive measures adopted. were S'ubjected to some criticism’ and succeeding elections were keenly contested. "With the carrying of the second Loan Poll for £78,000 in 1931. by a majority of approximately 4 to 1, it was evident that the board’s policy was meeting with fairly general approval. Since 1931 the board has further pursued its progressive policy and hag adopted now measures for load building and generally .extending its electric service*, and here again, as whs to be expected with something new, the hoard’s development campaigns were subjected to some criticism. "Up to 1931 tho community was most concerned 1 about the possibility of a power board rate. The f° nr °f a rate removed and a taste for concessions and reductions m charges having taken its place the natural result wa s a demand for more and greater concessions arid reductions. This demand, however,, is mixed up with criticism of those very policy measures that have made progressive reductions possible over the past four years. In other words, those who demand greater reductions condemn the board for adopting schemes without which reductions could 1 not safely have been made. "From its inception the board’s policy has been one of, financial, soundness and stability, ft has had three main objectives:—(l) : The avoidance of a. rate; (2): The steady reduction of charges consistent with sound finance; 3):The greatest- possible electric service to the community. It will be admitted that tiie^first, objective has been obtained. The most,' pessimistic have long since ceased to forecast or even to mention a Power Board .ate., < CONCESSIONS TO .DATE. "The following list of given to date shows that th 0 hoard’s second objective is being pursued with marked success, and members are very optimistic as to future possibilities in this direction. Juno,, 1927: Meter rents reduced to one meter free and II- per, month for any number in excess of one/ March, 1928: Surcharge for „ late payment reduced to uniform 12 per cent in place of previous;, .surcharges of:_3B£ per cent for lighting; 50 per cent for heating-; 66 2-3 pep cent for power. July, 1928: Meter rents further reduced to one meter free and 6d pgr month for any number in excess of one. May, 1929: Meter rents abolished. January, 1930: Surcharge for late' payment abolished. Abril, 1930.: /Water heating charges reduced'/by introduction of flat rates/ A- • JLanuaryff 1931: Consumers’ deposits returned. ..• v August, 1931: v General reduction in charges of 5 per cent.

creased to 7i pev cent. :j August, 1933 ; General reduction further increased to- 10 per cent except on water-heating.

j August,' 'servicing’ arid’ replacements of el®" intents on approved water heating services . ’ June, .1934: Revision °f charges); embodying further reductions valued' at £3500 per annum.

REDUCTIONS 1 AMOUNT TO £23,000

..(1) : "It .is . estimated,’’ continued Air Balk “that the value to consumers of the reductions referred .to above exceeds (2) : This amount , bias to a large degree been passed! back’ to consumers' during the, period of depression when tlio board’s own obligations were increasing. (3) : It will be noted that- not a year has passed! without substantial' concessions being made., This .year, 1935, further substantial reductions will be considered/ as was promised last year Tho board’s position will ,be reviewed this month according'to’its" customary annual practice

"Thh Finance Committee will prepare it s report and! submit, its re- : comariendations, for further reductions to the board, at tlio meeting to ho held on April 26. I cannot even hint at what those recommendations will be, but I can say that the past year has been successful beyond expectations and the position is most satisfactory. "The greatest possible electric service for the community is the paramount. objective, of the hoard. How can it best be attained? It is becoming recognised, as a fundamental - principle, that cheap current is not .in itself sufficient to ensure the greatest possible service. The capital cost, of installations of consuming appliances has been the biggest obstacle to development and service. The ' hoard! may claim to have led the way to overcoming this obstacle by adopting progressive measures. Other boards and .municipalities are following our example arid still others are ;considering doing so. Christchurch municipality had nop the same powers as a. Power Board! lias and has just obtained, special .legislative sanction to do very much what. Poverty Bay .is doing. . , . . "Before dealing with the various measures adopted by the board for increased development*, an explanation of the differentiation in charges for electricity when iffed for different purposes is essential. Unless the reasons for this differentiation are . understood the methods by the hoard for installing ranges, water heaters,, -etc., cannot be properly judged >or appreciated.’’ Mr Ball wenp on to illustrate, by ■means of diagrams, ho u - the differentiation in charges was brought ’a.h,out> —lighting, radiators, stoves, wat-” or heaters and night-load contracts all being dealt with iri very graphic fashion. LOAD BUILDING MEASURES. ‘The greatest scope for load bundling in Gisborne* as elsewhere, haS been proved to be in the domestic field” proceeded Air Ball. “And here the electric stove is the ‘lvey to the Position,’ Hence tho board’s gradual development from: Buying ranges in bulk and selling at reduced cost ; to reduced cost of installing; to 'free installations; to hiring at nominal rental of Gd per month ; to selling combine stoves and water beater installations below cost. “Each range returns s s cn the average £lO 18s a year, a statement that requires some explanation for it includes all electricity registered through the range meter, whether for kettle* ironing, radio, vacuum cleaner etc. Hence our drive "for the installations. Next to the range m importance is the water heater, Which give s an average return of £6 10s. Our present drive is f°r the dual installation of range and water heater at below cost price. Mr. Ball then quoted th e following figures : Average annual revenue per electric range for tho year ended Alarcli 31, 1935. £lO 18s. Average annual revenue per electric water heater, for tho year ended Alarcli 31, 1935 £6 10s. Total; £l7 &s. Cost of hire range scheme (350 ranges) £4912 8s Id. Annual revenue from chore ranges (350 ranges at £lO 18s) £3,820 per annum. Average cost of installation £l4. Cost of wiring Is not iriehiilcd as wiring for installations of all ranges is free. Tho cost of wiring is provided for each year. COST OF SUBSIDISED SCBEArE The cost to the hoard oh each dual system is approximately £lO , for which the hoard? each 1 year receives in revenue:—Range £lO 18s and! water heater £6 l{is,'.a total annual revenue of £l7 Bs. "By the careful control of our peak ■load' we have been able to provide all current for the increased number of stoves arid water, heaters in use through the yeah ending March 3.tV 1935, at oho, penny extra, peak load cost. For the year ended! Afarch 31 wc paid to the Government £16,4’32'., and. for the year . ended March 31 1935 we paid, exactly the same amount.

ALL ROUND BENEFITS

".The method .of financing tliri cost of hirer fringes 1 ' arid tlie? subsidy or : lobs on under-cost ranges and water

hoatdrs is as follows; \ “Hire ranges: Depreciation on hire ranges is written off; at tlie rate ef \2O per cent annually; 7\- per cent of which i-',-;.. funded, the balance 121 per cent being credited' to a- load development reserve «et aside for the purpose t pf financing furtlipr dcvelriprnent sch'emris. 4 ; ? !- “Subsidised scheme: Tho losses on this scheme ar c charged direct to the load development lescrve which is financed partly out of 'surplus profits ■ arid partly by depreciation . preditffi froip tho .previous scheme; The cost’' is £ls and revenue £l7 Bs. - "It must be realised that when the jiborilrd 1 instituted' these 'schemes file ordinary sale of ranges and watcr-

heaters , had owing to .the depression come, almost to , a Standstill,. , "The adoption* of these. proposals has had' the following all-round benefits :-r (1) : Created employment in New Zealand for the manufacture of electric ranges. (2) : Created employment in Gisborne for the manufacture of water heaters. (3) ; Created local employment for wiremon for installations. (4) : Made it possible for more consumers to participate, in'the benefits of electricity. .(5): Assisted other consumers by reduction in char go's through increased consumption. (6) : AVidened the scope fori the sale of other appliances and wiring because of the fact that when aii riiectric range is installed the ' demand arises for other electrical appliances. "I do not propose tonight to discuss tlie question of trading. As you know tlio board was waited on by a representative of tlie traders and! it wwsi arranged .that the finance committee should draft a reply to ..the representations made. That reply will be published in due course.”

Regarding the Afr .Ball pointed out that, apart from statutory reserves there were about £2O- - in reserves, with sbm 0 £ISOO lipid for had' debts. Reserves were the hall-mark of a successful business arid in 1931, by using the. reserves, it. was possible to avoid having to. raise money by other means. In four years there, had been a. saving of £4OOO by lower interest rates and! in 20 years tlie saving would be £11,700. Any man understanding sound! business principles however would thoroughly appreciate tlie valu 0 of 'sound reserves. There had hoen a. recent drop in lighting revenue, due to the financial depression, daylight saving and! reduction in charges Tlie real test of any administration was in. results revealed', added Mr Ball. Seme results could' he put into figures and others were not possible to be so defined.' Shortly however, it could he put there had been phenomenal increase this year. He wished to stress that the board was run by the people for the people and! no o'ivid'endg were. paid. (A-uilau'So.) A progressive policy had been pursued (Applause) and tlie aim had been • always to -offer electricity at the lowest .rates possible. (Applause). He trusted that whatever the personnel of the new board it would carry on the same policy. Afr Bull concluded by voicing his appreciation of the '.steady and loyal service board members had 1 given throughout. AIR. PgILIH : f > BsHN'MiiE3Mn8 s HN'MiiE3Mn^ 4^' ...-Mr S. H. Phillips was then invited to address tlie meeting and he opened of to the public at reduced! rate's, opportunity accorded him. He also stressed that he stood there simply as secretary of the traders’ commit^ From the charts displayed continued Air Phillips, it appeared there das a large of tlie P.V.D supply vstill to be sold. Despite an anticipated deficit there had been good results and he hoped that much of the surplus power would be disposed of to the public at reduced raise, a, policy which was sound business as t,hey all must realise since reduced prices meant increaed turnover. Turning £0 the last balance sheet the -speaker pointed out that tlie accumulated visible reserves were £66.030 odd. Statutory reserves amounted to a. large sum yet the board despite all its building up of reserves had not seen fit to reduce the charges substantially. Sundry debtors were shown as £9.111 odd a startling fact, yet the had debts reserve constituted nearly 20 per cent of that amount. It seemed to him the time had arrived • to call a- h a lff to this piling up of reserves for the benefit of future generations. The time seem ed also overdue for the reduction of the commercial lighting and other charges. It seemed the time was also overdue for more attenioo to present conistimers and less to posterity.” BOARD'S POLICY /CRUjTCTSED. Afr I. Stephenson stated he wished to congratulate tho board on the ■service to the. people of the district. There was nothing to complain of in this respect hut lie wished to criticise tho policy of the hoard. Gisborne was the .dearest among the towns m New Zealand, -of like size which were buying power from the Government. If the board 1 had reduced chares to 1-Jd per unit for cooking private enterprise would have produced the demand. Tlifi price for demestie power, he considered was exorbitant an.d the -off-peak charge should 1 he reduced considerably. He believed' also that the higher cost, was due to the low charges for water heaters, and cookers. . It seemed the board should 1 consider the claims of the poorer people of the district- and reduce the charges for domestic lighting. Air E. T. Dod'drell inquired whether it would be possible, to have a special daytime charge for shop lighting. CONSUMER 8’ POOR SUPPORT. In' reply to these speakers Air Ball stated that the board had already offered commercial users a. daylight •rate which would have cut the cost down by half. The response by conVsumerßi was very disappointing. It was.... impossible, to do .as .Mr. Phillips suggested—generally reduce charges. _.Hc stressed, also that low power lights used for peak , periods coht more than higher power lamps for off-peak, periods. If shops? desired to use lights only one. night per week they must pay .'more for the privilege than the man who. used it 24 hours a day. Regarding Air Stephenson's remark Mr Ball stated that the saving to smaller consumers if reduced to. Napier charges, would pe infinitesimal.. i But for hoarh’k'strive rent scheme not one-tenth of the ranges woul cl now be in use. Th 0 . hoard too, had borne all the costs of tho campaign to popularise ranges and then, had, given private enterprise an opportu-; nity hut . private .enterprise could not cope with the demand. Air Ball; said , ho whs surprised at Mr Phillips opposing' I the reserve j fund's built up by the board. Had

other loqal bodies adopted the riiuic policy the district would'not ha’vc , b-eeri bui’drincd with tlie* dipayy rates Which' existed today. 'Without reserves a business .co-ukl not be carried on along sound line's. Mr Phillips stated that iny diet not' object to reserves, hut to laying aside large s u ms reducing chaff geS- : r . - : . , , Alri Ball replied that the hoard was not looking for more reserves at the present time. Actually last s’ 2ar its reductionls wore expected to produce a loss,.

Air Stephenson mentioned that Basting's, charges were slightly higher than at Napier. For a. five roomed house th 0 charge was 7d per unit for the first four units, and from then 011 at a rate reducing with the mcreasQ of use . QUESTIONS INVITED. Asked by AIT H. R. Kendon what ny-as tlie notj-, return to tlio hoard from stoves arid water heaters combined Afr Ball pointed put that it was surplus euiTonj, which was used and therefore the revenue, was practically a nett return. Mr. Phillips inquired «s to tlio basils on (which amended charges for commercial users wore drawn up. Why wa s there differentiation in tlio basin V-AL' Ball pointed out that any user copld have scoured, full particulars by inquiry from tlie board. “Why did the board delete tho surcharge?” asked Air T. CorTt was desired, to benefit ap cousumson Air Ball replied that tlio sur-c-.liarge was at the same rate for all. It was desired to benefit ail. consmn-ei-B. Asked regarding the position of guaranteed line's’, Mr, Ball pointed out that it was impossible to reduce the guarantees as country lines bad to pay over periods of five or 10 years In most districts the guarantees were being used up. The difference in cost per unit, as between Napier and Gisborne, was explained by Air Ball, in reply to a further question as{ bqing partly duo to the compactness of the. Hawke’s Bay capital add the fact that it was on the main line thus permitting' a contract with the Government for any amount desired. Each town Wa s -on a. different basis and no fair comparison could be made. Napier had 121 per route mile of line s against only 13 and a. fraction for Gisborne. In reply to. another question, AIT Ball stater! that all hoard members f-weriftspn favor of restoring the -wage cuts. \ The meriting then concluded with a heaty vote of thanlcw to ATr Ball for bis address and to Mr Coleman for prscdchng,