To The Bitter End

Manawatu Times, Volume LIV, Issue 7241, 22 August 1933, Page 8

To The Bitter End

City Council Will Fight Power Board Rate Mayor Makes Official Statement t Although it had been mentioned by Palmerston North city representatives on the Manawatu-Oroua Power Board that the proposal to levy a special rate on the city would never be taken sitting down, the first official declaration in that direction was made by the Mayor (Mr A. E. Mansford) at the meeting of the council last evening.

"The action taken by the Power Board in striking a special rate over the city doesn’t meet with the support of this council,” said tho Mayor. “I don’t propose to say very much now, except to mention that I think the city has more than fulfilled tho conditions that it agreed to when it was; decided to come within the rating area of the board. You have noticed thatj statements have been made by certain; people about the profits of the city’s electrical undertaking, but no mention, is ever mndo of the fact that tho city j has very nearly as much capital in its; gas works as it has invested in its. electrical works. Those facts are always conveniently overlooked, as also are 'the losses now being made at the gas works moro or less as a result of tho development of electrical energy.; Grossly exaggerated statements are,, and have, been, made calculated to mis- 1 lead those not conversant with the, whole of the facts. We were and are quite prepared to carry on to the end of the agreement with the Poweri Board, when it could be further ar-| ranged, I take it, that the schedule; of prices could be mutually agreed upon between the two bodies. j “I regret that we will be compelled to resort to legal action to protect our ratepayers, because | legal action can only end in a loss to the country and the city ratepayers. I don’t propose to say any more except that, with the support of the council, I propose to fight the case to the bitter end, going to the highest Courts to get justice shown the ratepayers of the city. ” Cr. Hodgens stated that he was very’ pleased with the latter part of the Mayor’s remarks because he felt that the ratepayers of tho city were justified in taking the matter .as far as it was possible to take it in order to get relief. Mr Muir (electrical engineer to the city) and he had spent some time analysing the position, and ho desired to present a statement on the matter, which read as follows: Early Negotiations Recalled “My recollection of the history of this council’s dealings with the Power Board, right from its inception, is that the records show definitely that at no time was it the intention of the council to dispose of its electrical undertaking to the board, and I think the following facts bear this out:

“(11 In a letter dated August o, 1920, the Minister of Public Works made the following statement: ‘A power board is not necessarily unsuitable for the distribution of electricity within a borough, but where a borough has an existing electrical reticulation m service, it is usual for it to buy power in bulk and continue to manage the distribution. If Palmerston North Borough wishes to retain the reticulation within the borough, thc.y can st do this, taking power m bulk fro the Power Board.’ “(31 The Manawatu Daily Times of November 24, 1920, reports the Minister of Public Works’ (the Hon. J. G. Coates) to have said to a deputation in Palmerston North: ‘Mangaliao woum be ready to give power in about three vears. They therefore could not affoid to have any serious delays in putting out power when it was ready. Per that reason he wanted to enable l*iathe work of reticulation move along smoothly and quickly. Apart from « reticulation, it was also necessary prepare the people to take power II did not propose to interfere with the that they were prepared to carry on with their own reticulation, would bo unwise for him to agre Xw county councils and town board to reticulate their districts as against the Act, which provided that powc boards should do this work.’ “(3) In a further letter dated December 10, 1920, the Minister stated that he was prepared to insert x , contract between the Pubh Deparuicnt and the Power Board a condition requiring the board to sell to constituent local bodies (Pal.i erston North) at a reasonable price •‘(4) The council’s hies show that th.cL.di a. lie Works on December 16, 1920 (Note Within four days of the above letter), intimating its preparedness to join the proposed Power Board subject to t following conditions: (a) That vernment undertake in its .contract with the board to make provision for the necessary supply of eloctnci 7 the Borough Council at usual Government rates; (b) that the standby plan, belonging to the Borough Council bo not acquired by the board except wit.i tbo consent of the council, and on terms mutually agreed upon. _ “(5) Our records show that within six days the Minister informed the electrical committee at an interview with him and the late Mr L. Birks, the department’s chief electrical engineer, that if tho new board desired to purchase the council’s plant this could be done only by mutual consent. He also stated that in the event of the council joining the Power Board - he foresaw no difficulty in arranging for the council to receive the power in bulk at Government rates, “Who, on tho face of these recorded facts, could possibly suggest that Palmerston North in joining. the Power Board, intended to sell its electrical undertaking to the board, or had any other intention than of working its plant at Terrace End for the best possible results, beneficial to the ratepayers ?”■ added Cr. Hodgens,

Delegates to Conference

When Feilding Was Wary "The report of a meeting of the Folding Chamber of Commerce on April 30, 1923. states that Mr Cobbo drew the attention of the chamber to tho proposal being discussed for the Mans* watu-Oroua Power Board to take over the Palmerston North Borough plant, which had recently been purchased. He was doubtful if this would be in the

interests of the Power Board area. ; The matter needed careful watching. 'As a result of this the Chamber of j Commerce carried a resolution that Mr 'J. s. Tingey, the Fcilding representative on the" Power Board, be written to asking him to be good enough to inform the chamber of his vie-ws on the proposed purchase of Palmerston North’s plant. Mr Tingey answered 1 the above request in a letter which [was read at a meeting of the Feild--1 i n g Chamber of Commerce, held on 'Monday, May 2S, 1923, in which he stated:"‘The board should not purchase jnny plant unless it can be shown it is a paying concern with an established 'good-will or will bo a payable asset to the board in a very short time. Do j some members of the board desire to I take any further steps in view of the • fact that all or nearly all such undertakings, when commencing under the ■most favourable circumstances, make

a loss for the first two, three or four years, and also in view of the fact that the Palmerston North BoroughCouncil has been particularly unfortunate in the launching of its electrical scheme? The machinery was ordered from two to two and a-half years ago, i.c., at the highest prices ruling for years past; some of the machinerylaj idle for over twelve months before erection. It seems also that there will be a'clash of interest in Palmerston North between the new gas works and the electrical plant (the working expenses of which will be between £9OOO and £IO,OOO per annum), and therefore between them a financial loss. Apparently it will pay Palmerston North to sell its electrical plant. The board has not been responsible for the unusually unfortunate initial loss of the Palmerston North scheme, and should not take it over without good reason . . “When the letter was read the chamber thought it advisable that it should be brought under the notice of these local bodies, whose areas are in the Power Board's district, and they instructed the secretary to forward copies to them expressing the view of the chamber that the matter was of great importance and needed the most careful consideration," added Cr.

Hodgens. ‘‘lt was reported tliat these local bodies all supported tho contention of the Chamber of Commorce, yet we notice to-day that there are influences at work outside these local bodies, who are advocating tho very opposite and are going to tie extent of striking uniform and special rates with the ultimate object of increasing the burden on tho city of Palmerston North to the extent to where the council will be compelled to hand over to the Power Board the whole of its now profitable electrical undertaking as a going concern.’ ’ Why Did Cheltenham Do It?

Cr. Hodgens then directed attention to the action of the Cheltenham Dairy Company, which had installed its own power plant to cut the Power Board’s peak. He quoted the following extract from a circular issued by that dairy company to its shareholders in June, 1929:—“The installation of a plant at the factory for generating electricity has been a decided success, notwithstanding the unfair charges made to the company by the Power Board for the current drawn from their lines. Our power costs will average out considerably less t.his season than last, when we took tho whole of our power from the board.’’ “The chairman of that company is now chairman of the board, and wants to rule Palmerston North differently from his rule of that company’s business,” said Cr. Hodgens. “Further, a perusal of the minutes of the board discloses tho fact that Mr McElroy, who is a very strong advocate of the rating proposals, seconded the motion that was responsible for the loss ot the custom of tho Cheltenham DairyFactory.” The council decided to get a lcga~ opinion from the city solicitors on the Power Board’s intentions.

Mr J. A. Nash, M.P., and . Cr.. J. Hodgens (chairman of the lighting committee) have been appointed delegates to represent the City Council at the forthcoming conference of Power Boards and supply authorities, to be held at Wellington on September 27 and 28. The electrical engineer . (Mr ,T. W. Muir) will attend in an advisory capacity. Cr. Hodgens, in explaining why Mr Nash had been recommended, said the latter had been chairman of the Power Boards' Association probably from its inception, and councillors would have noticed that at the last meeting of the Manawatu-Oroua Power Board Mr Nash was not chosen as a delegate on account of the feeling that existed on that body. On account of his past experience, Mr Nash would be a most suitable representative. The Mayor pointed out that the city had a particular interest in the forthcoming conference, because it was sending down a Temit, and while they had members of the council probably equal- to the task of sponsoring the remit, Mr Nash had a particular interest in that the .citjr’s electrical __jJs.dert.alc-

ing had been inaugurated during his term of office as Mayor. Use of Generating Plant With reference to the communication from the district electrical engineer, Shannon, dated June 22, 1933, making an offer on behalf of the Public Works Department for the uso of the council’s plant as a standby plaut. it was decided that owing to the relationship at present existing between the Manawatu-Oroua Electric Power Board and the City Council regarding the intention of the board to levy a rate over the city of Palmerston North, the present was not an opportune time to consider entering into an agreement with the department. Remits to Conference Two remits are to be sent to the Power Boards’ conference from the City Council. The first has a direct bearing on the Power Board rating proposal, and seeks an amendment of Section 56 (2) of the Power Boards Act, 1925, in the direction of giving effect to the remarks of the Hon. J. G. Coates mado in the House in. February, 1925, when the Bill was introduced, as it was held, after perusing the Minister’s remarks as recorded in Hansard, that sub-clause 2 went further than was intended.

The second remit advocates that the hydro-electric undertakings of the Government be controlled by a. department separate from the Public Works Department, thereby placing the supreme control of thoso undertakings in the hands of electrical experts.

Cr. Hodgens, in moving the remit, pointed out that there was a Transport Board and Minister of Transport in control of the vehicles running on roads controlled by the Public Works Department. Surely it was in the interest of electrical undertakings of the Government to have a separate control, just as had been done with transport. He believed the management, of the livdro-electrical works was being stultified by attachment to the Fublic Works Department. Cr. W. B. Cameron said he did not want to see the remit lead in the direction of a multiplicity of departments. The expenditure incurred by the Transport Board had been tremendous. The splitting up of the departments generally meant added expenditure. The Mayor seconded the remit, pointing out that the Government had probably more money invested m hydro-electricity than in anything else, and yet it was in the control of somebody who probably bad to refer evervthino- on to somebody else. If the change was effected then, electrical matters could be referred direct to the electrical head. Situated as Palmerston North city vds, a change would be in the best interests. Cr. H. B. Free said he agreed with Cr. Cameron about mounting expenditure, and wondered if a separate department would get them any further There was still political control. Both remits were approved.