HYDRO-ELECTRIC POWER

New Zealand Herald, Volume LXIX, Issue 21347, 23 November 1932, Page 14

HYDRO-ELECTRIC POWER

CURTAILING DEVELOPMENT

BUILDING WAITAKI DAM

COST OF BULK SUPPLIES

[BY TELEGItAm —SPECIAL REPORTER]

WELLINGTON, Tuesday

Hydro-electric development this year, according to the Public Works Statement, would undergo overhaul and curtailment. Jt was anticipated that about one-third of last year's expenditure would be incurred. The large portion of this would be required for the construction of the dam 011 tho Waitakj River, a work which it would bo most unwise not to carry on at a sufficient rate to ensure its safety from floods.

Capital expenditure had been mainly concentrated on the remedial works at Arnpuni and on continuation of construction works at Waitaki. The general financial position of the operating accounts showed a small improvement on that of last year, the percentage over net operating expenses being 7.28 as against 7 per cent last year.

Result of Operation

The general result of the operation of tho department's electric-supply system to date had been that tho schemes had paid all operating expenses and interest, and, in addition, had been able to provide £642,267 toward reserves for depreciation and sinking fund purposes. "Throughout the year at various times,'* said the Minister, "tho department has been asked to make reductions on tho price of power supplied in bulk, particularly to the smaller power boards, so that they should obtain the same rates as are applicable to tho main centres. Although tjie Government is anxious to do everything possible to bring down the cost of living, it is regretted that it has not been possible to comply with this request. Government action in other directions has, however, enabled power boards to effect economies in many cases by reductions in interest rates and in wages, which have been passed on to the actual consumers.

"It has to be remembered that by far the greatest part of the cost to tho Government of supplying electricity in bulk is made up of capital charges on its investment, and, as the money has practically all been raised abroad, it has not itself obtained any benefit from reduction on interest rates. Power has, moreover, been supplied in the past at such reasonable rates that the actual retailers of electricity have, on the average, been able to bring their own financial positions into a better condition than is that represented by the Government's own Electric Supply Account. In the general cry for reduction the fact is often overlooked that since Government schemes came into operation very considerable reductions have already been made in tho average price per unit paid by the consumers. ,

Differences in Price "Where there is in all cases one supply authority, and, in many cases, two supply authorities, between the Government system and the actual consumer of electricity, a uniform price for power supplied in bulk by the Government does not by any means necessarily mean that the actual consumers are all going to obtain power at tho same price. Some authorities have existing plants on which they stfll have to pay capital charges, the cost of distribution per consumer and per unit sold varies quite considerably in different localities, and some authorities have different ideas from others as to the reserves they should establish or as to the methods they should adopt in disposing of any profits made. "The present system may not be absolutely equitable, but it can reasonably be claimed that it has been successful. As compared with conditions existing before the advent of the Government scheme, it has brought down the price of electricity in all places where electricity was previously used, and it has made electricity available at a reasonable cost to thousands of consumers who otherwise could not possibly have availed themselves of its benefits."