ELECTRICITY SUPPLY.

Horowhenua Chronicle, 29 April 1937, Page 3

ELECTRICITY SUPPLY.

HOROWHENUA POWER BOARD. REVIEW 07 YEAR'S WORKING. FURTHER CONCESSIONS PROJECTED. Tie wisdom of the policy which has been adopted by the Horowhenua Electric Power Beard of con-, serving its funds in lucli a manner as to permit of increasing concessions being made to consumers year by year was again shown in the course of the first meting of +he Board for the 'current financial year on Tuesday morning, when the secretary and treasurer, Mr. r. J. Ramsay, submitted his annual report and balance-sheet. The report, which covered the operations for the year ended March 31st, 1937, showed the gross income to be £60,865, and the gross expenditure £57,232, leaving a nett surplus on the year's working of £3633. The desirability of several concessions being made during the current year was expressed by members of the Board ,an*l it was mentioned by the chairman that many of these might be put into effect. The report read as follows: — Income. The details of revenue from electricity sales, with the estimated amounts in parenthesis, were: — Domestic supply, £28,339 (£22,100),commercial lighting and heating, £7233 (£6530); power, £1(5,517 (£15,500); waterheating, £6268 (£5800); public lighting, £1262 (£1215); Total, £54,619 (£51,145); less for discounts, £46.12 (£4500); ' grand total, £50,007 (£46,645)). Revenue from sundry sources was:— Interest on deposits, £72 (£50); interest on investments, £533 (£500) ; cottage rents, £242 (£213); trading profits, £412 ( (£100). Thus the total revenue was £51,288 (£47,558). The above statement shows that the income exceeded the estimates by £3730. Domestic supply again shows the greatest advance, the excess over the estimate being £1289. To this has to be added the domestic water-heaters which account for a further £4OO. Commercial lighting and heating shows a satisfactory increase of £730, this despite the reductions given early in the year. Power sales were in excess of the estimate by over £IOOO. This increase comes very largely from the big industrial consumers, whose accounts are charged on a quarterly basis. A comparison of these accounts over the two years shows that there was an increase of £652 for 1936-37. However, any additional revenue earned under this heading is always reflected in an increase in the cost of bulk power purchased.

The substantial increase under the heading of domestic supply is due to the campaign for the sale of ranges and water-heaters, which has "been conducted throughout the year with a large measure of success. As pointed out on previous occasions, the domestic field offers almost unlimited opportunities for development, and the suggestion that has now been made is that a sales officer might be appointed, whose duty it would be to concentrate solely on the sale of appliances. At the present time this is carried out chiefly by the inspectors in any time they can spare for it, and often the time given to sales can ill be spared from their pfßUf-H work. However, it must be borne in ,iiimi tnat tne present rate of progress is just about as fast as the construction staff can cope with, and any big increase in sales would undoubtedly mean increased staff and probably further transport. The miscellaneous revenue from interest on deposits and investments, cottage rents and trading accounts totals £1282. This, with the exception of trading profit, is just the usual return from these sources. Interest on deposits is up a little, due to the investment on fixed deposit of some loan monies. Expenditure. The expenditure for the year, with that estimated in parenthesis, was: — Power purchases, £21,869 (£21,000); maintenance and general operating charges, £7456 (£5797); capital expenditure from revenue, £360 (£300); management and general, £4257 (£4SOS); interest, £854(5 (£8550); sinking fund and principal repayments, £4967 (£4967); appropriation to public risk insurance res., £2OO (£200). The total expenditure was £47.6;>5 (£4S--322). Power -purchases exceeded the estimate Toy £869. This is, however, quite satisfactory, as very considerable additions were made to the connected load during the year. The first quarterly payment of £225, standing charge on the new Paraparaumu sub-station. is also included in the total charge of £21,860. Maintenance and general operating charges are less than the estimate by approximatelv £1341. This is accounted for chieflv bv the large amount of construction work done during the year, which had the effect of relieving revenue account of a substantial portion of the wages bill, normally charged on maintenance. The amount allowed on the estimates for wages to be charged to capital account was *JUU, whereas the amount actually charged was £l7lß. . .. Management and general: This item is less than the estimate by £2ol, most of which is accounted for in the adjustment of all insurance premiums to fall due on March 31st. It will be noticed that the charge in this year s acocunts for insurance as only £4l, whereas the total of premiums payable

for the year is approximately £3OO. This will be righted in the current year. Trading Account. The luisi.iess done under this head!.r;- is the largest for many years, the .u.nover being just on £SOOO. The result of the year's trading, after charging a reasonable proportion of salaries. ...iges and transport costs, is a profit .1 £412. As regards the hire purchase -chenie, it will, no doubt, be of interest to note that since its inauguration, the total amount advanced stands at £7314, of which £2998 has been paid, leaving £1316 outstanding. The monthly instalments amount in the aggregate to only 2182. Considerable capital is "required .0 carry on such a scheme. Capital Account. The capital outlay for the y r ear was as follows: —Lands, £1349; primary rind secondary lines, £135,567; sub-sta-tions, £28,538; tools, meters, motor vehicles and equipment, £25,466; management and interest on "loans during construction, £3.1,934; premium ' on loans, £7090; buildings, £10,189; Total, £240,083. The capital expenditure for the year was £11,077. This is the heaviest for some considerable time, the main items being: Primary and secondary lines £5379, main sub-stations £732, distribution sub-stations £2260, buildings £1582, and meters and equipment £1175. The most important work of the year was the installation of the new main sub-station at Paraparaumu Valley and the alterations to the lines leading to it. Liabilities. Capital Account. —The amount now raised by loan is £235,479, leaving an unexercised authority of £24,521. There is, therefore, still a comfortable margin of authority from the ratepayers to provide for further development. foundry Creditors: This is always a substantial amount, but accrued interest, and the quarterly account for power due to the Public Works Department, accounts for almost £7OOO of the total. Reserves: The reserves, including the amount set aside for bad debts, noAV total £99,460. Capital Reserve, £35,329, represents the amount of loans repaid, plus the capital expenditure out of re venue, the increase for the year, being £5017. Interest Fund, £13,095: This reserve was established to meet an emergency, which, fortunately, has not yet arisen. The whole amount is invested in local body debentures, and the interest earned thereon (£553) credited to revenue account. .Sinking Fund, £1296: This reserve covers the two small unconverted loans totalling £9400.

Depreciation Fund, £31,284: This nnid was increased during the year by £IOSB, being interest earned on the investment with the Public Trustee, at 3-J per cent. Public Risk Insurance Fund, SlfiftS: With the appropriation, plus the interest earned on the investment, £."57, the increase for the yeai was £237. 'Net Revenue Account, £l2' 582: This is the total of unappropriated profits, the amount brought forward being £8951, which with the net surplus for the year, makes up the total of £12,582. Assets. •Stocks, £5257: loan account, £3996; power fund account, £1261. Construction stocks are practically the same as they were last year. Trading stocks have considerably increased, due to a fair number- of ranges and waterheaters being on hand at the end of the year. Sundry Debtors, £10,837. Advances to Loan Account, £4,245; In vestments, £46,480: This represents the investment of the reserve funds for depreciation, interest, public risk insurance and sinking fund. Cash at Bank, £7299. General. The year just concluded has undoubtedly been one of progress. It has been marked by very considerable expansion of business, with the result that the anticipated loss of revenue, i through reductions in charges, has not been realised. It has also seen the introduction of a system of capital subsidy, by which certain roads in the Board's area, which were otherwise economically impossible, are now to be supplied with electricity. The extension of this system seems quite feasible, until practically every road has been served. It is thus possible to visualise in tne near future a complete reticulation of the Board's area, leaving only a comparatively few isolated houses out of reach of the Board's mains.-There-will, of course, always be additions and extensions, as further subdivision takes place, but when the main reticulation of the area has been accomplished, it will be an achievement unique in the history of electrical reticulation in rural areas. As to the future, the prospects of further expansion are exceptionally bright, for, contrary to the tendency in most other directions to increase; prices, this Board's position is such i that there is every likelihood of fur- J 'he reductions in charges, which must, i in the light of past experience, great-J ly stimulate consumption. i May I, on behalf of the office staff, | sincerely thank members of .the Board; for the generous and courteous treat- j ment accorded by the Board during the year. Board Members' Views. i It w*as apparent that the year's! working had produced a most satisfactory result, said the chairman, Mr. G-. A. Monk, in commenting- upon the report. Mr. Monk mentioned that the: Board had been more fortunate during the year than in the previous year, in that no serious damage had been sustained to the lines as the result of storms. The chairman complimented the staff on their capable handling of the Board's affairs during the year, as a result of which it was

apparent that, despite the rising costs from higher wages and shorter hours, further concessions to consumers would be made possible during the current year. He was convinced that the policy of making reasonable concessions was the right procedure to adopt, in that by it the Board's position was not jeopardised. Mr. Monk referred to the desirability of the extension of lines in the more thinly-populated areas during the year. Although this would result in increased costs without a corresponding increase in revenue, such a step should be taken to supply power to districts who had been waiting for many years for the service. Such a proeeedure would necesitate the raising of more loan money but this would be justified by the increased service Avhich would result to the public. After making favourable comment upon the hire purchase system, which was growing considerably, and whicn as the result of careful handling was now giving- a steady return, the chairman expressed praise for the work of the Engineer, Mr. J. A. Smith, and the outside staff for the able, manner in which they had carried out their duties, enabling an almost continuous service to be given to consumers throughout the district. Mr. A. Seifert expressed pleasure at the result of the past year's work as shown in the balance-sheet. It was, he said, the Board's business to effect, the supply of power to the outlying areas of the district, and if the results of the past year were maintained, this service should be possible.

In connection with the chairman's proposals for further concessions to consumers,' Mr. F. W. Vickerman pointed out that with the increased distribution of wages among the householders,

this section of the community' could well do without any further reduction in power charges at present. He would ask, he said, that the possibility be considered of a reduction in particular to the manufacturing interests. Mr. T. G. Vincent, after adding his congratulations to the members of the stall for the manner in which they had attended to the Board's interests during the year, expressed the opinion that a reduction in charges for community lighting might be considered during the current year so that a greater degree of lighting could be provided in the various centres within the district.

Mr. W. E. Barber congratulated the treasurer on his report and further remarked that the conservative _ policy of the past would appear to have been justified. The Board should now, however, he considered, adopt the policy of extending the supply to outside areas.

Mr. C. S. Keedwell expressed the View that street lighting methods in the district had certainly lagged, there being room for considerable improvement in the lighting of the main thoroughfares in particular Avithin the Board's area. There was room for some investigation into more modern methods.

This was supported by Mr. D. Richards, who remarked that the street lighting .at Otaki left very 'much to be desired.

Mr. A. E. Hyde thought that some concessions should be made in the charges for power for the purpose of both lighting and heating business premises, with a view to enabling more comfortable conditions to be provided for employees.. This was a matter m need of urgent attention, lie said. On the motion of the chairman, the Finance Committee of the Board, together with Mr. Keedwell, were appointed as a sub-committee to bringdown suggestions and estimates to the 'next meeting for the current year's working.