GUARANTEED LINES.

Manawatu Standard, Volume XLV, Issue 289, 10 November 1925, Page 9

GUARANTEED LINES.

DISCUSSED AT POWER BOARD

At yesterday’s meeting of the Mana-watu-Oroua Power Board, the question of guaranteed lines was reviewed in a report by the engineer which read:—“The license states that, if a consumer will guarantee a revenue of not less than 20 per cent, return on the cost of the line, the licensee must erect the line-and the consumer pay not less than 20 per cent, for five years. But after five years the tariff charged for supply on these lines must bo the normal one. Incidently I was responsible for this becoming the regulation when a consumer demanded an impossible supply on one scheme I put in. Therefore, if a consumer demands a lino which is going to be a losing proposition, the board can in turn demand its ora terms for five years. “The usual practice is to supply on a 20 per cent, return for five years, and before the five years are up, sell the consumer ranges, water-heaters, motors, etc., so that the revenue will keep up when the guarantee finishes. This is sometimes a risky procedure. As far as can be determined date 124 per cent, income return oh a power board’s expenditure will just equal expenses, so it seems better to compute these lines on 124 per cent, for all time. This is the practice wev are following. As to the 20 per' cent, for five years, it is often argued that the line is paid for by the consumer, but, in the five years, it also costs the board 604 per cent, or .roughly twothirds of the guarantee money, for interest, power and administration, hence the nett cost of the line to the board will be roughly two-tiprds of the original cost when reviewetVat the end of five years. “If the revenue then is less than 124 per cent, on this two-thirds of the original expenditure, . the line is a losing proposition for i all time.” Sir James Wilson held that the rate was too high, for every inducement should bo made for tlie country people to participate in the conveniences of electric power. The engineer, in reply to Sir James, said that the basis had been arrived at on the experience of southern boards.

A general discussion ensued, it being finally, decided that it would be preferable that the margin 'be maintained until the board ascertains the true position of the cost of installation of its- lines.