N.A. Power Board Reduces Electricity Charges

Northern Advocate, 10 May 1940, Page 3

N.A. Power Board Reduces Electricity Charges

ADOPTING THE REPORT OF A SPECIAL COMMITTEE OF INVESTIGATION, THE NORTH AUCKLAND ELECTRICPOWER BOARD AT ITS MONTHLY MEETING IN DARGAVILLE YESTERDAY REDUCED THE COST OF ELECTRICITY TO CONSUMERS WITHIN ITS AREA.

Amounting on the basis of present sales to approximately £2OOO per annum, the changes in the tariff amount to — 10 per cent, net on lighting charges. 2.8 per cent, on milking charges.

2.8 per cent, on the first 500 units per month used under the industrial rate.

5 per cent, on the heat storage overall charge,

The question of future subsidising of rural extensions not able to provide statutory guarantees was not lost sight of by the committee, which expressed the opinion that a reasonable sum should be-set aside yearly for this purpose.

Board’s Profits. 1 '“After a thorough investigation of the board’s position the committee is of the opinion that requests made for a reduction in charges have been put forward mainly because the board has shown a substantial profit over the past two years and not because the charges for electricity have been high,” stated the report. “In this connection the board will remember that a large proportion of the principal repayment upon the original loan of £267,000, is not yet a charge upon revenue account as the terms of that loan provided that interest only would be charged over the first two years after the raising of any part of the loan. “This factor will have the effect of reducing the net profit considerably in the future unless otherwise compensated by a large increase in sales of electricity. “Regarding the board’s charges the committee finds that the commencing rates compare more than favourably with the commencing rates of any other rural board and as charged today show very considerable reductions to our consumers over the methods previously used to carry out the same work.

Rising Costs, Res/irictions

“Main factors of importance considered by the committee having direct effects upon revenue profits include rapidly rising costs owing to the war and import restrictions. It is probable that new extensions may be curtailed if not actually prohibited and that the board’s sales of appliances may be largely reduced.. “As requested by members the possibility that the future subsidising of rural extensions not able to provide the statutory guarantees required should be part of the board’s policy has been considered by the committee. “The committee is of the opinion that all areas that can produce the necessary guarantee should be first dealt with and that in the meantime a reasonable sum be set aside yearly for the purpose of subsidising such lines in the future.

“The amount so set aside each year should be reasonable .and not be of such proportions that the board’s future financial stability will be in any way affected. “The methods to be adopted in regard to subsidies can be dealt with when the time arrives to put the policy into operation. Recommended Reductions. “After full consideration of all the factors involved the committee recommends that upon all electricity accounts read on or after August 1, 1940: “(a) The charge for lighting be reduced to 7d per unit. “(b) Discounts upon all accounts, excepting special rate contracts, be altered to an overall rate of 10 per cent reduction for payment within 14 days. “(c) A sum of £IOOO be set aside for future subsidies upon unpayable rural extensions. Discussion En Committee.

“The total cost of these reductions on present sales of electricity is approximately £2OOO per annum.” The report, which was taken in committee .and later released to the Press, was adopted.

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