POWER FINANCES

New Zealand Herald, Volume LXXIV, Issue 22839, 21 September 1937, Page 14

POWER FINANCES

LOSS FOR QUARTER "INCREASES IN COSTS THE AUCKLAND BOARD UNFORESEEN EXPENDITURE As the result of a period of rising costs, with unforeseen expenditure and reductions in certain power rates, a loss of about £2JOO on the operations of the Auckland Electric-Power Board for the quarter ended June 30 was revealed in tho report of the general manager, Mr. R. H. Hartley, at the meeting of the board yesterday. The total •expenditure for tho period was £18,600 more thai/ that of tho corresponding quarter of last year, tho chief factors accounting for this being cost of power purchased, which had increased by £9283; expenditure on tho Power Board, building in connection with alterations and tho recent accident to the heating system; increased wages and increased maintenance of mains; together with an additional £3928 in the special trading account covering tho installation of ranges and water heaters. Tho report further stated that tho total operating costs were higher by £17,000 and tho capital charges by £ISOO, against which revenue had increased by £BBOO. For the samo quarter of 1936 a surplus of £B9OO was shown.

Reductions In. Charges "It would appear on tho faco of it that the quarter's operations are not as satisfactory as expected," said Mr. Bartley, "but actually this is not the position. The first matter that affects the position is tho reduction which was made in several of our charges last year, and which did not come into operation until July 1, 1936. Consequently the reduction was not reflected in the June statement last year, and on this account our comparisons between the two periods are hardly equitable, especially when _it is remembered that these reductions were estimated to cost the board £51,310 for a full year, or £12,827 a quarter." Tho additional cost of power to tho board was dealt with in'lhe report, which stated that the demand upon which the payment to the Governemnt was based was 7530 kilowatts above last year. The demand was assessed by the Government on the five highest peaks in tho period, and in tho last quarter two of these occurred on Juno 30. This was probably largely the result of the cold and wet weather experienced at that time, which caused an overlapping in all classes of loading. Prospects for Full Year • In addition, the substantial sum of £17,385, representing lower revenue as the result of reduced rates, together with depreciation and interest charges on capital invested in the electric range scheme, and expenditure on the ground floor and heating system of the board's building, had to bo taken into consideration.

The surplus for the year ended March 31 was £17,655, and although the estimate of an £18,814 surplus for the present financial year did not take into consideration the factors mentioned, Mr. Bartley was hopeful that a loss for the year would not be shown. In view of the special circumstances it did not appear that the results of the June quarter were unsatisfactory. The report concluded, however, by urging the necessity for every care in tho operations of the board over the remainder of the year. New Stage in Operations " This is one of the most important reports that lias been before the board for some years and marks a new stage in its operations," said the chairman, Mr. S. J. Harbutt, in drawing particular attention to the reasons for the deficit. He observed that four peaks had occurred in three days and on one day there had been two of the highest peaks in the history of tho board. The highest loads in the same period of 1936 had not been nearly as large. " I do not think there is anything to bo worried about," said the Hon. T. Bloodworth, M.L.C. " It is pleasing to note that in spite of higher wages, the wages per unit are less than last year, owing to tho increased amount of power sold." The report was approved.