ELECTRIC POWER COSTS.

New Zealand Herald, Volume LXVII, Issue 20740, 6 December 1930, Page 14

ELECTRIC POWER COSTS.

THE AUCKLAND PLANT.

TO AID BOARD.

NEGOTIATIONS COMPLETED. ANNUAL PAYMENT FIXED.

Negotiations that have been going on for some six months between the Auckland Electric-Power Board and the Public Wofks. Department with regard to the position created by the stoppage at Arapuni have now been brought to a satisfactory conclusion. Mr. W. J. Holdswdrth, chairman of lh» board, and Mr. R. 11. Bartley, general manager, retarnetl to Auckland yesterday morning after negotiating with the Ministor of Public Works, tho Hon. W. B. Taverner, who has issued a statement covering the position from the department's point of view. An outstanding feature of the agreement arrived at is that the board .will receive from the Government a peramounting to about £30,000 annually toward the cost of running its stand-by plant.

The Minister states that the Cabinot has ratified an arrangement whereby an annual payment will be made by the Government to the Auckland Power Board calculated on a basis of half capital the Auckland plant at King's Wharf, which, as soon as Arapuni is recommissioned and is able to supply the Auckland area, will ceaso to operate, and will thereafter be regarded as a stand-by plant incorp&rated with the national system of supply in the northern area. It will be remembered that when tho supply ceased from Arapuni in June last the Auckland Power Board, with commendable promptitude, immediately undertook to increase tho steam plant at King's Wharf by the addition of a 15,000 kw. set, "and the expenditure upon this unit will increase the total capital sunk in tho plant to approximately £600,000. It is half the cost of the capital charges upon this sum that the Government has undertaken. to find. •' / Finances of the Board. Another matter which has been engaging the attention of those concerned has been the extra cost of generating power by the steam" plant, which was undertaken bjr the Auckland Power Board not only for the supply of the needs of Auckland, but to some extent to make power available for the area previously supplied/from Arapuni. As some months have now elapsed, an analysis of the figures, enabled a basis to be reached upon which the Govejaiment will make a contribution to the board. In making this statement* the Minister wished to make it perfectly clear that this should not be construed as being a reimbursement of profits which the board might otherwise have made if supply had been uninterrupted. The Minister has been informed by the Auckland Power Board that the anticipated surplus for tho year's working up to March 31 next was set down at £42,000, whereas the anticipated result will be a deficiency of £35,000. Of this total of .j £77,000, which is estimated as the total difference in the Power Board's position for the year, it is estimated that £52,000 is'due to the increased cost of generating by steam, as compared with Arapuni supply over a period of 12 months. To Ihe extent that this position has Been created by the increased cost borne by the board as a result of generating poVjer by steam, the Government has undertaken to share tho extra generating cost jointly with the board. 1 Arrangement Welcomed. The Minister pointed out with respect to the arrangement with regard to the stand-by plant that this will not be a charge on the electricity account of the Public Works Department until Arapuni is ready to again supply power, but until that time is reached the board will receive an annual contribution toward the increased cost of generation by steam. Commenting on the position. Mr. Holdsworth said that until Arapuni again functioned, the Government was now responsible for half the extra cost of generating by coal instead of by water-power. He anticipated . this would reach between £50,000 and £60,000 by the end of the financial year.on March 31. That extra cost had been incurred because it had been impossible to get sufficient slack to meet the board's requirements, and th« board had been forced to use the higherpriced coal. To keep the plant efficient a large staff of me.: was required to overhaul and repair it every week-end. This was extremely costly, but it had to be done if thet best work was to be got out of the plant. "When we are called upon to ceaso operations," said Mr. Holds worth, "the Auckland plant will act as a stand-by, and the Government has agreed to pay half the overhead charges at tho King s Wharf station!{ This will be a distinct advantage

to the Auckland Board, as the cost of < producing power has been increased by £2 a kilowatt, a year. The Government's assistance will reduce that to £l. Value of Stand-by Plant. "Tho stand-by plant has proved a fine insurance during tho present trouble, and ■will continue to be so. The Government realises that the Auckland plant has helped it out of a very difficult and trying position/ and it is in recognition of this that it has agreed to meet us in what I think is a very fair way. "Tho fact that the Auckland Board was able to take over the load when Arapuni closed and was able to purchase a 15,000 kw. plant to supply the needs not only of Auckland City, but of the province during the- coming winter, is duo to the sound financial policy which th« board adopted at its inception, and has 6tnctly /adhered to ever since. I am naturally very pleased that after negotiating for somo six months with the Minister of Public Works ho hns met us so fairly and the matter is now finalised. The new 15,000 installation will make !rJ° ta ca P acit .V »t tho King's Wharf 41,000 kw. 1 hat will prevent any shortage for some time to conie over the wholo area, including the Waikato. In the coureo ot a few days wo expect to get « memorandum from tho Minister covering, tho various points that have been agreed upon."