THE GOVERNMENT’S SCHEME

New Zealand Times, Volume XXXII, Issue 7301, 3 December 1910, Page 1

THE GOVERNMENT’S SCHEME

CITY ELECTRICAL ENGINEER'S REPORT QUESTION BEFORE PARLIAMENT In the House of Roproaentotivwi yesterday afternoon Mr T. M* Milford, M.X> dealt with ills* question of water--IJOWCV ns It'affected the Wellington City Council under the Governments scheme. Jlr Wllfovd exceeded his time limit m his speech, and, on the motion of Mr Buchanan, he was granted an extension of fifteen minutes to enable him. to analreo and elaborate tables _ prepared by the City Electrical Engineer, Mr Btuart Richardson, whoso mam report as follow: , FIGURES COMPARED. "There are two reports attached to the Public Works Statement, one from Mr Dirts, tho ■ Government Eioctrical Engineer at Rotorua, and the other from Mr Holmes, Engineer-in-Chiof. "Mr Birks, in his report, has compiled a mass of information, some of which is from statistics of the last years: butput from existing electrical undertakings in the different centres. In these figures I find discrepancies, duo no doubt bo the short time at his disposal for the presentation of such an-important report- Per instance, ho gives m table 3, * page 78, the power installed in the Wellington lighting station as -oW) kilowats. whereas it should be 3000 kifowahs. which brings down the capital outlay per kilowat from .£B7 quoted by him to -E62. It must be noted that thec-e figures include the capital cost of the n-holo svstem, which is the wrong basis on which to compare the _ costs of a, water-power scheme supplying current in bulk; and a generating ond'distributing system such as is established m Wellington. Other figures quoted in the> same table showing the relative position! in Wellington and Dunedin with regard to electrical energy supplied and revenue obtained bv these -municipalities- are so tabled ns to ho quite misleading. ■ ■ ,r Mr Birks has also estimated the, probable amount of current' th<v Government would lie able to dispose of-to consumers., and for ite own use tor .the «mr 1915. These estimates iaro as set out on page 87. and are as follow:

Units. Tramwavs 6.100,000 Pumping 3.9en,000 Harbour 1.180.000 ; Railway shops 330.000, ’ Motor power Lighting, private 2,020,000 Lighting, street 575,000 Heating and cooking ... 4,620,000 Total 27,635,000 I have reviewed these figures very carefully. so far ns they affect the city, and 1 consider the following figures a fanrstimate of what the city is likely to ho in a position bo purchase from tho Government in five years’ time: —

■ . Units. 6 '» Motor power 2,016,000 Lighting, private 2,527,000 Lighting, street G94,'_00 . Track, lighting 303,800 'Heating and cooking 516,000 , i Total 12.483,000

"Mr Birks on page 98 sets out the prices per unit lie proposes tho Government. should charge for enrrent supplied in bulk for different , purposes. These are as follow; —

Per unit, v d Tramways Pumping ... ; .a 0 Motor jxxwor .. t* l ** Lighting, private I*oo Lighting, street Lighting, track DW . Heating and cooking I*oo

This works out at an average cost to tho city of .Bid per unit. “Mr Birks suggested that current for motors be retailed at an average of 2d per unit, and for private lighting at an average of 3d per unit. On these bases 1 havo prepared a statement (as per schedule A) showing tho financial position of the corporation trading lor a year under these conditions. This shows a loss would result to the city, of £23.837, and therefore proves that the foregoing rates are actuarial!.? unsound, and must \>o recast to givo & financial soundness to the scheme so far as the city vis concerned. With this purpose in view, I have prepared anothqr schedule (B) which shows the time prices at which the city could afford to buy and sell current. This table shows a profit of £4919 for the year, which is equivalent to the expected-sur-plus on the present year’s working, and is therefore showing tho position in a moderate spirit, without desire to embarrass tho success of tho Government M.-’aome. A WORKING BASIS. “As these figures are of grout importance with regard to the Government proposals, I set out below the different rates at which I consider tho corporation should pay for its current, and also the rates consumers should bo charged during the first few years of -the scheme.

This would yield tho Government an income from the city of £34,558. or an average of ,66d per unit supplied. “Mr Holmes (page 103) estimates the average price at which the corporation can afford to fake enrrent to he about .6 pence per unit, so that my estimate is practically in agreement with bis price. „ "Mr Holmes in. his report (page 102) (dvea as his estimate the following an-

nnal charges incurred by the Government in supplying rower £ ■ Interest .at 4 per cent. ....... 1G.889 Sinking fund at 1 per cent. 4,220 Maintenance ’>”00 Depreciation m-™ Running cost 6 ’°- u Total .£38,000 As it will be reasonable for the Government to exncct revenue, from other local authorities apart from its own requiremerits, it scorns to mo that td© financial success of the scheme on the figures quoted by him is assured. ** AN EXHAUSTIVE ANALYSIS BASED ON GOVERNMENT REPORTS. EXPLANATION BY MAYOR OF WELLINGTON. Mr Wilfotd went exhaustively into the whole position, dealing fully with the report submitted by tuo city electrical engineer (Mr S. Richardson!, his object being to place before the House and tno city Wellington's position as far as it was or was not able to take current supplied by the Government through its water power proposals. Mr Wilforcl said Mr Richardson had gone carefully into the scheme to arrive at one particular point—whether or not it tho Government’s scheme were brought into oiteration it would' bo possible for the city, which was now equipped with electrical plant, to take current irom tno Government at tho charge proposed. He had told the engineer to be very care.ul in his estimate—to rather be pessimistic than optimistic—and above all things, to remember that as far as the requuements of tho city were concerned, a most cautious and careful analysis was needed of What tho city could do.- In tho deductions he proposed putting on record, Mr Holmes’s figures of the cost of , production and current had been taken as the basis of the report. It was necessary that he Should criticise Mr Birks’ report. They could not altogether rely upon it, some of the figures and comparisons being misleading. It was wrong to estimate any amount of revenue .to come from Wellington for pumping sewage, as the city had that done for nothing by the destructor plant. Mr Richardson’s estimate of the number of units required for pumping was 396,000, compared to 3,960,000 units estimated: by. ;Mx. Birks. For street and track lighting,Mr Birks'* estimate was 575,000 units, -while Mr Richardson stated that 938,000 units •would be the actual number required. Hon. R. McKenzie: At what time? Now? . , WHAT WELLINGTON COULD PAY. i Mr ’Wilford : In' five' years’ time. That, is the period Mr Birks takes. 1 By Mr Richardson’s tables he would show that, notwithstanding these differences in figures, Wellington could .pay to the Government for current £34,558 a , year at an average cost of ,66d per unit supplied. Mr Holmes’s annual charges upon the whole cost of.’construction of the works and everything connected with them ran to .£38,000. He proposed to show that, of that amount Wellington could furnish, at an average cost of .66d per unit, .£34,558 per annum. At the same time it could hold its present profit of .£4OOO odd a year and provide .£47/7 per annum for wiping out the total cost of the two power stations and machinery which would not -be required were current taken from the Government. That was a big thing to figures were not his. He had not the knowledge and ability to put them together, the tables and estimates being prepared by the city electrical engineer. They showed that for the amount of current that tho city could take in five years’ time they could pay ,66d per unit; make the same profit as now, and put on one side .£4777 for wiping out the cost of the two power stations and the machinery, and at the end of twenty-two years the city would have wiped off tho whole cost of the erection of the two stations and machinery. He fixed the period at twentytwo years because that was the time when tho City Corporation debentures fell due and certain loans came to maturity,' REGULAR SUPPLY NECESSARY. Of course, it must be understood that, if the City Council considered the question of "scrapping” its two stations and its machinery it would have to be well satisfied that it was going to receive a regular supply of current, and, moreover, that a steam plant would not be required for the purpose of meeting a possible breakdown and a possible irrefular supply. He had been told—the linister would be able to say if it were correct—that it had been necessary for the Waipori people to provide a steam plant as well, in order to provide against any interruption of tho supply. A member: They are at tho limit of their power. Mr Wilford: I have no knowledge of that. I want to point ’ ijlris! out: This city must be careful that 7 ft will get ''a regular supply, and that there will be no necessity for getting a steam plant. It bad been first of all suggested that a station should bo erected at Upper Hutt, with a sub-station for breaking down the voltage after arrival, either at Kaiwarra or Ngahauranga. From the substation to the converter station in the city the current would bo sent along for distribution. The current would bo brought to the converter station at what was termed 50 periodicity as supplied by the Government, and to be distributed would have to be broken down to 80-periodicity as supplied by the corporation. The question was: Wbat would lie tbe cost of tbe change? Many of the city’s transformers were old and out of. date. They had had to consider whether all those transformers could be altered at a cost of thousands of pounds. Mr Richardson had hod to consider the best method of alteration, and whether it would be better to use a brealdngdown machine or static transformers, and distribute at the 50-periodicity, or whether it would bo necessary to put in an alternator to coincide with all tho transformers, meters and motors fixed at the 80-periodicity. Mr Richardson had decided, after examining both schemes, that it would he far better to have the current broken down at the converter station before it reached the motor ,by the use of the same static transformers as would be used in tho sub-station of the Government for breaking-down the voltage after arrival from the Upper Hutt at Kaiwarra or Ngahauranga.

ALL CHARGES. CONSIDERED. The whole expense of. the converter-sta-tion. the . possibility* of , another on a smaller: scale at -Newtown*, the exponses of the, power station, including rents and rates, the expenses: ol 1 the whole distribution system, total working expenses, interest, charges, sinking fund, and depreciation, had all been set out in the estimate of revenue and expenditure compiled by the council's electrical department.. It would be a. valuable , paper ns'far as tho Government s scheme was concerned, because even if the engineers -of tho Government could say to the city corporation: “It will cost us so much to send you power, tbe City Council must also understand what it- could afford to pay under the conditions existing five years henoe, before it would be right for.it to say, to the Government: "Come on. We will take, your current/’ After referring to the question of tribntion and the conversion of the current from the Government’s 50-period-icity to the council’s 80-periodicity, Mr Wilford said • the council did not get paid for nil the current it produced. "I want the Minister to take notice ,of this: A lot of onr current, especially over large distances, wo lose.” Hon. R. McKenzie; Everylxxiy else does. LOSS OF CURRENT.

Mr Wilford: That may be so. Wo find the average to be this; In producing 100 units we get paid, for 70, which is a 30 per cent, loss in unfrs generated, through probably poor trans-, formers or long distance currents, leakages, and matters of that kind. -At the first blush it would,appear that the city is receiving at present a very high profit, but we have to remember this: The cost of production of a unit in the city is different according to the purpose for which it i« applied. It costs the city 2ld to produce a unit for lighting—--generation lid and capital charges Id. It costs for the-tramways lid —generation .795 d and capital charges .742 d, for stowage- ipunpoees .nothing, because we take it off the destructor. He did not know whether the Minister expected the city to pay for the main from the substation to Wellington. Hon. R. McKenzie: -That.would be probably a_ matter for arrangement. Mr Wilford said the city electrical engineer had estimated a possible profit in five years amounting to £7255, but tbe scheme of generating current by the present steam plant yielded a much larger profit than would be obtained by taking the current from the Government for 22 years, because until that period had expired a part of the £4777 profit, plus £4OOO odd to’the city was making now, would bo devoted to the scraphcap, or, in other words to "scrapping" tho power station. At the end of the 22 years, however, calculating that there would bo some advance of reticulation, that there would be extra subscribers, that there wonld be more local concerns requiring power, and that the general material advancement would create a higher demand, it might be fair to assume that tbe profit 22 years hence would be very largely in favour of the corporation. Although £1777 a year was wiped off the stations would still bo in existence and remain an asset of some kind. COMING TO THE POINT. They had to come , down to this pointCan the Government give us the current at Mr Holmes' price—.66d .per unit? "If the answer is yes,” he continued, "then we say wo can give the Government £31,890 a year, towards £38,000, tho estimated annual charge on. the scheme, the amount they want tp make tho whole concern payable. Can the Government guarantee that if we can take their supply we shall not require to keep a steam plant in the event of failure of the current? If they can, X should, upon, tho city electrical ’engineer's..advice, ask the city to at once enter into a contract with tno Government to go ahead with their scheme. If the Government can give a regular supply there is no hotter scheme than the Hutt one—not, even the Lake Coleridge scheme, because we have got a concern hero in working order in every possible way, working like clockwork, with our sinking fund, depreciation account, with interest charges providing for every single thing that, a provident business man would provide for. Wo have a going concern, and all we have to do is to link it up with the Gov-

emment’s and at once make, the Wellington scheme a payable concern.

Present Purchasing Selling average cost price selling Required in pence in pence price. 0.41 1.214 1.214 Humping 0.50 2. C00 2.000 Motor power ...... 0.B7 2.000 2.500 Heating and cook0.87 1.500 1.500 1.00 6.000 ■ 6.290 Street lighting... • 0.83 4.0CC ■ , 4.000 Track lighting ... 1.00 3.500 3.500