Electricity Dispute

Manawatu Times, Volume 60, Issue 132, 7 June 1935, Page 7

Electricity Dispute

Power Board and City Council DEADLOCK CONTINUES. The following statement by Mr. C. G-. C. Dormor, chairman of the Power Board, has been released for publication: — The conference between the Power Board and tho City Council was held on Wednesday, but no linality was reached. Tho Palmerston North City Committee declined to answer the following questions: — (1) Whether they wanted a five-year

contract. (2) Whether .they intended to run their plant. A deadlock appeared inevitable. The Power Board after retiring made tho following offers:

(1) That if Palmerston North city close their plant, and enter into a contract for five years, the charges will be: —Government standard rates plus a service charge of £2750 per annum for all k.v.a. supplied up to 2750 k.v.a. plus £1 per k.v.a. per annum extra for all k.v.a. over 2750 k.v.a. (2) That if Palmerston North city refuse to close their plant, the charge will be as standard rates, plus a service charge of £2750 per annum for all k.v.a. supplied up to 2750 k.v.a., plus £1 per k.v.a. per annum extra for all k.v.a. over 2750 k.v.a., plus tho extra charge that tho board will have to pay tho Government for all its supply by reason of Palmerston running its plant. The city members retired to consider tho matter, and on returning stated that the board’s offer was not acceptable. Tho Power Board’s offer is below tho amount the Minister of Public Works laid down as should be paid for this quarter, viz.. Government standard rates plus £3OOO per annum and is very much lower than the existing Napier contract which was the previous offer of tho board.

The Service Charge AN EXPLANATION. The Power Hoard has expended £BOOO on lines to bring power to Palmerston North from the Government sub-station at Bunnythorpe. The board pays all the capital charges thereon, also the maintenance of the line. In transmitting electricity there is always a percentage, of loss. The Power Board buy the current at Bunnythorpe and sell it delivered to Palmerston North. The board is standing the line loss. The switch gear to take off from the Government lines is provided and maintained and serviced at the board’s expense. The cost of the items, enumerated is estimated at £1567 per annum. The Power Board is asking for a service charge of £2750 on the city’s expected demand load of 2750 k.v.e. This would givo the board a clear profit of £llß3 per annum on the electricity it supplied to the city. That profit represents 5 per cent, on the board’s proposed charge to the city.

A Penalty Rate The Public Works Department have notified the Power Board that in the event of the board’s allowing any consumer to generate power to cut the peak load, the department will not supply the board at standard rates. Should the board permit Palmerston North to run its power plant for this purpose, the department witl chat go the board at another and higher rate. The effect of this higher rate would be to increase the board’s power cost, on last year’s figures, by £II,OOO per annum. The board contends it must naturally protect itself from such a happening.

Some Queries (To the Editor.) Sir, —The various articles which havo recently appeared in your columns on the electric supply question havo been of keen interest to me, but there are several points on which I should like to be informed. Can you or any of vour well-informed correspondents tell me: — 1. How much does the City Council pay the Power Board annually over that amount charged it by the State for the electricity supplied to Palmerston North?

2. Does the Power Board render any servico at all to Palmerston North other than the maintenance and attendance to switch-gear and line from Bunnythorpc? 3. What is the value of the city ioad to the Power Board in reducing its power bill through the diversity of neak loads?

4. Is the statement which is frequently heard, in the country districts, and to be inferred from your , article in this morning’s “Times, ’ ’ that the Power Board is selling to the city for a lesser amount than it has to pay for current, attendance, maintenance, interest and depreciation in Palmerston North demand, a fact or a falsehood"? a. An analysis of the figures published during tlio last few weeks show that the city already pays the board about £3OOO per annum for its services in transmitting power from Bunnythorpc to town, and under the new proposals is asked to pay about £IO,OOO. Is there any suggestion of service rendered to justify this charge? 6: Is it a fact that the Power Board's ramifications include a lot of lines which do not, and never will, pay their way, and that the city is asked to subsidise these unprofitable lines by the extra charge? 7. You mention to-day that the unit cost to the council' was less than the unit cost to the Power B'oard. Is not this because the city has a bettermanaged load, getting more units for the k.v.a. it purchases? 5. If the city load is of no commercial value to the Power Board, what is the objection to tho council purchasing power directly from the State and purchasing the line from the Power Board? It seems to me that, under the present arrangements, the city is morally bound to pay tho full cost of power at Bunnythorpc, plus the cost of transmitting to Palmerston North, the interest, depreciation and maintenance charges on line and gear used in transmission, engineering, clerical and accounting costs, and any line losses; but beyond this what justification is Ihere for anything? —I am, etc., NOSEY PARKER.