ELECTRICITY BUSINESS.

Horowhenua Chronicle, 25 November 1929, Page 6

ELECTRICITY BUSINESS.

STEADY GROWTH IN HALF YEAR.

DOMESTIC USE DEVELOPS FASTER THAN POWER DEMAND. CHARGES NOT LIKELY TO FALL FOR A TIME. Statements showing the income ami expenditure for the 'half-year ended September 30th, a comparison with the estimates, and the net revenue account for the same period were presented at the meeting of the Horowhenua Power Board on Tuesday. They were summarised in an accompanying report by the Secretary (Mr P. W. Goldsmith) as follows: — INCOME AND EXPENDITURE STATEMENT. I have to place before the Board the statement of income and expenditure for the half-year, which has been prepared by the Accountant to reveal the Board’s financial position, and to enable a comparison to be made with the estimates which were formed at the beginning of the year. The statement of income and expenditure (omitting shillings and pence) shows that the total income was £2l, 054 and the expenditure £13,324, leaving a balance of £7729 to be carried to the net revenue account. Particulars of the Income. Electricity £20,574 Penalties 167 Rents 136 Gross Profit —Trading ac. 143 Sundries 34 Total £21,054 Statement of Expenditure. This shows that the largest items are as follows: — Electricity purchased .. £8424 Salaries 1322 Wages and transport ~ . . 1160 Renewal 4 motor vehicles 750 Meter reading 312 Insurance premiums .. .. 221 Board members 202 The balance of the expenditure, some £934, is made up of many items, such as printing and advertising, office rent and expenses, collectors’ fees,, legal charges, motor registration, postages, stationery, rates, and bank exchange. Nett Revenue Account. On the income side will be seen the balance brought down from income and expenditure account £7729, and interest from various sources amounting to £317, making a total of £8046. On the expenditure side there appears:— For interest on loans . . . . £5520 Principal repayments and sinking fund 1014 Depreciation reserve . . . . 887 Bad debts reserve 140 National Provident Fund .. 78 (superannuation) or a total of £7639. The balance of £407 is the nett credit balance for the half-year under consideration. Comparative Statement.

In this statement members of the Board will be able to see how the actual returns on the one hand and disbursement on the oilier compare with the estimates made when the year was young. The revenue for electricity, it will be noted, has reached the halfway mark. There seems to be a good increase in the items, lighting, heating, and cooking and water-heaters; but the returns for power have as yet not come up to the estimates. Doubtless in the second half of the year considerable leeway will bo made up under this heading. The position ot the other items of revenue seems to indicate that there is every possibility that at the end of the year the estimates will have been reached.

Coming now to the comparative statement regarding the expenditure for the past six months, some items have exceeded even the estimated amount for the-' year, but on the other hand in some’ instances considerable reduction is shown. The power purchased from Mangahao at £8424 is slightly over half the amount estimated for the year. The renewals of two cars and two trucks cost £750, which is £250 more than was put down on the estimates. Owing to the engagement of the staff upon construction work, little has been expended upon maintenance and renewals for the period, and there is a likelihood that for the present year the, estimates will not be reached in the items which cover this class of work. In some instances the bulk, if uot all, the expenditure has occurred in the first half, now under review. There are other items, of course, where the bulk of the expenditure will come iu the second half of the year. On the whole the position seems fairly satisfactory. With a credit balance of £4OO for the first half of the year, there seems a reasonable prospect of a satisfactory position when the year ends. 1928 and 1929. A comparison of the revenue from electricity to tho September 30th last year, and this year, respectively, is interesting: 1928. 1929. Lighting £7,866 £8,072 Heating and cooking 2,890 3,511 Power 4,853 6,635 Water-heaters 1,571 1,688 Street lighting 051 667 £17,831 £20,573 Cost of electricity £6,130 £8,424 Loan Expenditure. For the first six’ months of the year the sum of £3726 has been expended. The items are as under: — Copper wire . . .’. . . £llOO Poles 401 Line materials . . ... 495 Meters . . . 299 Transformers 265 Insulators 146 Sundries .... .. . . .. 43 Wages 977 Total £2726. At the beginning of the year it was estimated that, to do the work in sight, some £(>2so would lie wanted. With the passing of the months and the extensions and services applied for, there seems little doubt but that morefunds will be wanted than was con-

templated in March. However, the question, of further loan moneys is under consideration by -a committee of the Board set up for the purpose. Conclusion. As I see the position at the close of the first half of the year, it is of quite an encouraging character. The bulk of the dairying revenue will come in the second half of the year and will more than compensate the smaller lighting returns which arc inevitable during the summer mouths; so that the revenue for the year should be satisfactory. The Board does not get so large a return for electricity purchased from the Government as some of the Power Boards, but there is still, I believe, a good prospect next year for the Board to be able to make a reduction in the charge for electricity to the general consumer throughout the district. CAUTION JUSTIFIED. The chairman (Mr G. A. Monk.) expressed the thanks of the Board to the office staff for the presentation of the statements, which, he said, placed members in a position in which it was very easy to review what had happened during the past half-year. The position disclosed only wont to show that the Hoard would not have been justified in making any very great reductions in the price of power to the consumer this financial year. While the revenue from lighting was over the amount estimated for the half-year, theroMvoukl he a considerable falling-off in the current half-year, but the opposite would be the case in regard to power. The secretary was optimistic enough to believe that the result of this half-year would be sufficient to warrant reductions. The Board, however, had to consider that they wore spending loan money, and, while the revenue was increasing the interest account was also increasing, and the bill for power had risen considerably in the past halfyear. He thought the Board would find that there was no chance of obtaining any reduction of costs in that direction for a year or two. DIMINUTION OF FLAXMILLING. “I think that this half-year will probably reveal a fair balance on the Board’s* working, if nothing untoward torus up,” the chairman added. “We have to bear in mind, as Mr Seifert has indicated, that we will have to look for a reduction in the flaxmills load. I have on more than one occasion warned the Board that it was likely, after what happened on the Makerua Plains, that the fiax would have to go out and that country go back to grass. There is a transition stage, and while it will follow on the outgoing of the flax I feel that Hie load will not be at its full extent for a year or two; there will be a falling-off, and it will have to be built up. The country grasses easily, but there is a stage where we have to get people established in the dairying business before we can get the load taken to its utmost. - ’ The chairman concluded with the remark that the report was entirely satisfactory. NO REDUCTIONS IN CHARGES FOR THE TIME BEING. Mr Seifert said that some time ago he thought that the Public Works Department would probably make a reduction in their charges, but now he understood that it had been made quite clear that the Board could, expect no reduction for the time being. The Department pointed out that when the drought was an it had cost them many thousands to buy power. He would like to have particulars of the individual loans raised by the Board, and the terms of them. If these were supplied to the Board, members could file them away and they would form a very good business record. The secretary promised to have the desired returns prepared. The financial statements were officially received.