The Times. SATURDAY, MAY IS, 1939. Electricity Soundly Administered

Manawatu Times, Volume 64, Issue 111, 13 May 1939, Page 4

The Times. SATURDAY, MAY IS, 1939. Electricity Soundly Administered

The Manawatu-Oroua Power Board is to be congratulated upon the line results reported for the year ended March 31 last These disclose a healthy financial position and it is, too, known that the board has excellently served its thousands of consumers spread throughout a wide countryside. The administration of electrical supply over this territory is not simple. And, furthermore, the board has shown commendable zeal to give the utmost service by pushing its supply lines out into thinly populated areas. A desirable policy, but one none the less involving some risks. That a considerable responsibility is borne by members and the staff of this power board should be realised. An annual expenditure of over £IOO,OOO has to be met, a loan indebtedness of £500,000-odd to be serviced, and at the same time absolute reliability of supply to consumers is to be maintained over hundreds of miles of power lines for 365 days of the year. The analysis of consumers shows how widespread are the interests dependent upon the supply provided. These total 5654, and it may be estimated that homes to that number, almost, are dependent for their lighting, much of their cooking, heating and radio. Some 1343 herds of cows are milked by the power delivered, and hundreds of workers in many branches of industry depend for their day’s earnings upon a reliable power service. Over the years since its formation the board has progressively reduced its charges to consumers. Even for last year certain important reductions were granted to benefit domestic users. Evidence of this is seen in a reduction of nearly £6OO in revenue from lighting, heating and cooking. This despite an increase in new consumers of 213, in ranges of 153, and in water heaters of 232. Despite this lost revenue, the board closed the year with a healthy credit balance after meeting all charges and making fully adoqnatc allowances for depreciation and sinking funds. Overhead charges absorbed almost onethird of the revenue. A most useful analysis given is that showing how each pound of revenue was disbursed. The most striking feature therein is that the Government took 9s sd, or almost one-half. Interest 3s lid, sinking fund and debentures Is 8£d —true capital charges—required together 5s 7|d. Depreciation Is Ofd may be also termed an overhead. This added, and including the wholesale purchase cost of the power, the total overhead is seen as 16s l£d in the £. The board had but 3s 10£d in each £ on which to meet all other charges. Even so, it managed to close the year with a profit equalling lHd in the £ turnover. Lest some may think that even this could be safely reduced by granting yet lower charges, attention may be drawn to the damage wrought by the hurricane of February, 1937. That cost the board thousands of pounds in repairs and considerable loss of revenue. *"Wise management must ever aim to make a small profit to provide against the incalculable element. The stage has been now reached where little reduction in consumer charges can be granted by the board alone. But it is within the power of the State to lower its charges upon the board and so in turn could this reduction be passed on to consumers. To provide cheaper power is now the responsibility of the Government. As has been shown, it took 9s fid of each £ paid by consumers. In fifteen years since the board was founded, the Public Works Department, which produces electricity wholesale, has not lowered its charges to the board. Already in these columns attention has been drawn to this anomaly—consumer-controlled power boards steadily cheapening their supply; a politically-controlled department steadily holding to a high tariff and granting no reductions. We do not blame the officers of the Department concerned for this sad state of affairs. The blame rests upon the system of control exercised over them. Nor is this any matter of political parties. The weakness is one of principle in control by Parliament. Political control is dangerously inefficient. Our railways muddlement provides further evidence of this. The change needed we have already advocated. It is this —the power boards of New Zealand should control electricity right to its source, the boards to elect a commission of their own which would administer bulk power generation and delivery under a charter from the State. Such a commission would serve but ♦me interest, that of the electricity consumers of New Zealand. To-day their best interests arc not being served.