POWER BOARD PROBLEMS.

New Zealand Herald, Volume LXVIII, Issue 21020, 3 November 1931, Page 14

POWER BOARD PROBLEMS.

INTEREST RATES ON LOANS. DISCUSSION AT TAURANGA. [FROM OrR OWN CORRESPONDENT.] TAURANGA, Monday. The Tauranga Electric-Power Board last week discussed the question of high interest rates. It was pointed out that the maximum rate that the board could pay on additional loans was 5 per cent, per annum. At present the board was paying 6 per cent, to the Public Irustee on a sum of £104.500 and 5£ per cent, on a sum of £2OOO, and also 5 2-3 per cent, to the Tauranga Borough Council on a sum of £IO,OOO. Members considered that the holders of these debentures should be prepared, under the present circumstances, to accept a reduction and the secretary was instructed to communicate with the parties with a view of obtaining a reduction to 5 per cent, per annum. The consequent saving in annual interest charges would exceed £llOO per annum. Another matter of importance to power boards and other local authorities controlling .electrical undertakings was the question of compulsory provision for depreciation. The board considered that as the present consumers were obliged to repay the existing loans at maturity, and to maintain the assets provided therefrom in first-class order, the provision for amassing a large depreciation reserve was unnecessary. Ib was decided to agitate for legislation fixing the compulsory maximum provision for depreciation at 5 per cent, on the capital expenditure.