POWER AGREEMENT

Manawatu Standard, Volume XLIX, Issue 163, 11 June 1929, Page 2

POWER AGREEMENT

SUPPLY FOR BOROUGH. FURTHER INFORMATION SOUGHT. The prospects of bringing to a conclusion tire negotiations entered into with the Palmerston North Borough Council concerning the basis of the supply of electricity were discussed at the meeting of the Manawatu-Oroua Power Board, yesterday, when the recommendations of Mr F. T. M. Kissel, chief electrical engineer for the Public Works Department, who acted as mediator at the private conference held on Friday, were received. The subcommittee which had been appointed to go into the matter indicated the nature of the proceedings, and after considering the issues involved the Power Board decided to seek further information, in order to have it available for a special meeting which, it is proposed, shall be called before the end of the current month. The letter received from Mr Kissel was as follows:—“I have to advise that, as requested by you, I attended a conference with officials of the Mana-watu-Oroua Electric Power Board and of the Palmerston North Borough Council to try and arrive at an equitable basis for the price for power in the contract between the board and the council. Figures of costs and estimates were submitted by the engineers of the respective bodies and were discussed in detail. It was agreed that the present contract price for bulk supply from the board to the borough at the Government rate plus £3OO per annum was not giving an adequate return to the board.

MR KISSEL’S RECOMMENDATIONS “The main difference in the figures submitted by the borough engineer and those submitted by the board’s engineer arose from the fact that the borough figures were based on a line 43 miles long between Bunnythorpe and (the borough power station, and the board’s figures on the existing line which is six miles long. In view ot the fact that the board was not originally allowed to build a line along the shortest route owing to prospective railway and telegraph, interference, 1 think it is reasonable that the board should base its cost on a line longer than the 4 2 miles. Considering all factors, I am of the opinion that, based on a contract between the two authorities of the order of 2000 k.w., a reasonable price would be £lO 10s per k.v.a. of maximum up to 200 k.v.a.. £8 10s per k.v.a. of maximum demand from 200 k.v.a. up to 1000 k.v.a., and £8 8s per k.v.a. of maximum from 1000 k.v.a. upwards.

“In view of the fact that the Power Board’s own contract with this department does not provide for more than 2400 k.v.a., it does not seem advisable for the board to contract with the Borough for more than the amounts stated above, unless the whole question of the contracts with both bodies is completely reviewed. This, also of course, affects the question of whether or not the borough takes the whole of its supply from the board. I have arranged to go into this matter further on receipt of certain information which the district electrical engineer, Shannon, is collecting from his records and from those of the Palmerston North borough, and I will advise you in this matter in about a fortnight’s time. “I should like to express my appreciation of the assistance rendered by the officers of both bodies.” The chairman (Mr J. A. Nash, M.P.) intimated that the board had been receiving £3OO on a 1500 k.v.a. supply, and on 2000 k.v.a. supply it was going to get £9OO. If it were not prepared to supply the borough, then evidently the Government was. He would like to 6ee the borough take all its supply from the board, and it was quito possible that it would, judging from the discussion which had been held.' That would, however, probably lead to future negotiations, unless a reply was received from Mr Kissel, the chief electrical engineer, in time for the board to hold a special meeting to settle the matter definitely before July 1.

PRESENT POSITION ADMITTED. “The Borough Council have admitted that the present rates aro unreal sonable,” added Mr Nash, “and it was very good of them to do so.” Mr P. G. Guy: They have been robbing us all the time. Mr Nash: I do not think that you ought to use those words. Mr Guy : Absolutely. Mr Nash: I hope you will not carry on those remarks as they are quite out of place. Proceeding, the chairman stated that, evidently, the borough was prepared to meet the board as far as possible, and maintained that it could take tho whole of the power it required until March 31 next, in accordance with its interpretation of the existing agreement. However, the board’s solicitor had advised that it was not compelled to supply more than 850 k.v.a., and unless some agreement was reached it was a matter for the hoard to decide whether it was going to stand rigidly by its resolution concerning the k.v.a. supply. Personally, he thought that Mr Kissel’s offer was reasonable and ought., to ho acceptable to tho hoard. Mr P. J. Small suggested that the first portion of the committee’s report on the matter he held over for consideration, ns the contract was still in existence, and he thought that tiie power should be supplied until another meeting was held. The chairman stated that the board s object was to safeguard itself against loss in the approaching quarter. Mr Guy: Can you inform us how the report reached the Borough Council before it came before this board Mr Nash stated that, when the executive of the Power Board met to deal with the matter, it was found that July 1 was the beginning of a new quarter, and, in order to facilitate the negotiations, it was considered wise to meet the council at an informal conference. That had advanced the proceedings much quicker than would otherwise have been possible. So far as the information which went to the Press was concerned, it did not emanate from himself.

The board’s engineer (Mr Waters) suggested that Mr Kissel’s report be adopted. The supply line for the 1500 k.v.a. could then be proceeded with, as it would he three months before it could be brought into operation, ten weeks being required to receive the cable from England. Rumours were in circulation, stated Mr Small, that the Borough Council was going to take the whole of its supply from the Government. No definite arrangements had yet been made, he stated, concerning the actual terms for tho supply of electricity. QUESTION OF PROFIT. Mr PerreTt: Are we going to make a profit ? Mr Small stated that, if the borough took the whole of its supply from the board, it could not expect to have it at the same price as from the Government. Assuming that the necessary reticulation line was constructed what would be the profit to the board, annually,' on the present day consump-

tion? If there were no profit, then, perhaps, it was better for the borough to go direct to the Government. It did not seem to him that the board should function for nothing. The chairman: If we get the whole supply then we will not be working for nothing. . , , The point was emphasised by Mr Small that any further agreements concluded should be entirely satisfactory, and the board should receive a profit. Another aspect mentioned by Mr Roberts as one which called for due consideration was that Palmerston North was the commercial centre for the Power Board area, and should consider the other suppliers to a certain extent. No agreement should be negotiated unless it was fully acceptable. Mr Guy stated that, apparently, no offer had been made by tne board to purchase the borough plant. Why should they supply one consumer on a basis which was causing so much dissension in the board’s area? If the borough could be included in the Power Board area the position would be better. If Cheltenham had held a pistol at the board’s head, then tho Palmerston North borough had done the same by saying it would go to the Government for its supply. Mr Nash said that no definite indication had been given that the borough would take that course of action. Mr Guy stated that there was at least the suggestion to do so. Tho chairman stated that tho borough possessed its license before the Power Board area was constituted. Comment was made that there was a vast difference between the Cheltenham Dairy Company and the Palmerston North borough. AN URGENT REQUEST.

The chairman, stated that he would telegraph Mr Kissel stating that it was imperative for the board to have the information available in a fortnight, and the board could then hold a special meeting to consider the question. Mr Guy: Is there no hope of negotiating for the borough plant? The chairman: 1 am afraid it is absolutely hopeless. The board was previously informed that it was not for sale.

Whatever the remarks which had been passed concerning the “white elephant” which Mr Nash was supposed to have created at Terrace End, commented Mr Small, it had been of great assistance, although they were all anxious that the Palmerston North borough should be associated with the Power Board. If regarded in the true light, amalgamation would he a great benefit to all concerned, and bring about a general reduction in charges. The chairman stated that a resolution had been passed in 1926 by the hoard dealing with an offer to purchase the borough plant, but it was not for sale. It was decided that the executive committee’s report should''he adopted, with the exception of the section dealing with the Palmerston North bulk supply, that matter being referred to the committee for a report to be submitted to a special meeting of the board.