THE OTAGO ELECTRIC POWER BOARD.

Otago Daily Times, Issue 20799, 19 August 1929, Page 13

THE OTAGO ELECTRIC POWER BOARD.

TO THE EDITOR. Sin, —Mr Collins's reply to my criticism of the Central Otago scheme is rather indefinite. It is understood that the board’s officials have, over a long period, actively canvassed this district, obtaining COO consumers, of whom 300 have guaranteed £BOOO revenue per annum for 10 years. This number probably represents the total number of consumers who are prepared to enter into a guarantee. It was pointed out that, should these 300 guaranteed and 300 non-guaranteed consumers be connected at a cost of £85,000, the loss would be £5050 per annum, the revenue from- the non-guarantee consumers being based on the Lawrence reeU j ?* I® B per c °usumer per annum, and the annual expenditure costs on the results obtained last year by the Wab takl ,? oa , rd> Further, it was stated that should the cost of the work amount to £IOO,OOO. the loss would be £7750 per annum. These figures have not been disputed by Mr Collins. No doubt the work will cease when the £85,000 is expended, but how many consumers will be served? hor the Lawrence area 600 consumers u ’ er ® , s !iS? osec L to kc connected at a cost of £40,000. The money has been spent, but only 400 consumers have been accounted for The estimated cost per consumer is £67, and the actual cost is £IOO an increase of no less than 49 per cent. The question whether the original estimate is too low or the cost of the work too high has yet to be answered. For tne Central scheme the estimated cost per consumer is £l4l. and might easily amount to £l69—an increase of only 20 sumer n w'ii capital cost Per consumer will show the need for caution. fUain StlCe t t 0 the , ratepayers of Central Otago, not one shilling should be spent om the scheme unless the board has first obtained guarantees for the full amount of revenue required to make the : scheme nav 3 fnr b rti 0 ° ne ‘ • The eensnmers should pay for the service—not the ratepayers It would not be prudent for any board to Ccntrfo™ dectric supply scheme fo? a L • ?°, unless guarantees were forT^Vni led for a long term of years nr lo ri revenue based on at least 18 A l 9 ,Pf r f cent - °, f the capital cost, at tne farmers meetin,, recently held n Mr Cali™ stated that tb A Government had asked the board to obtain 17 or 18 per cent its Centfal'otJ 0 introduce a scheme’’into Central Otago on a 15 pe r cent, basts It hnar4’* b fi lntere sting to know how the boards figures (15 per cent .) were tamed. Are they based on results For ai mv “r y ° f the hoard’s areas? the wL-n - lc e * gav , e masons based on the Waitaki engineer’s report why this figure should be 18 per cent. The Waitaki scheme is helped considerably by the inclusion of the Oamaru and Hampden boroughs. Even 60 , on last ye”r ? s figures the annual costs amounted to 174 per cent, of the capital expenditure. How”, then can one expect to obtain cheaner results in the Central area? The Gen-n„arfiot-ago T n l erms of the Waitaki report) m no t a “good” district from an ®!° A ric , Eupp ly point of view. The m^ er £ d nat H re . of this district means many long reticulation and service lines• consequently, loss of power wil™ a coneiderable item, and maintenance charges w be j bl ? b ,,. Th « frequent storms experienced in thm district will add matenaHy to these costs. Further, once the system !S established there ia little prospect of increasing the number of consumers. tli n vil S i re ? I^ M F Gollins stated “that the people of Mamototo would have little need to worry if the approval of-the Local Goi eminent Loans Board is obtained for the loan. It ebon Id be hardly necessary Mr c °Uins that this Loans Boaid approved also of the Lawrence loan Proposals just two years ago, and he knows the hopeless muddle that has tll en nTi e + ° f ! th r Ech T e - Does he wish the people to believe that the Local Government Loans Board is responsible for these conditions? It must be understood that the responsibility for the revenue balancing the annual charges devolves entirely on the Power Board. The Loans Board realises that any loss incurred will be recovered by way of . rates. Obviously the regulations should be extended to provide that approval for a country supply scheme loan shall not be granted unless the revenue required to make the scheme a payable one is first guaranteed in fuli tor a term of years. Under these conditions the nuecess of the scheme would de9 n ,£ be of the estimated °°i!* wu 6 work and tke percentage on which the guaranteed revenue was based. inoq re S u lations been in force in 1920 the Southland ratepayers would not have paid during the past six years the Incidenfall of t , f2l7 ' 539 > way of rates. Incidentally there would be no need to rIL m l 6 ? 11 ?!! °? , the ratepayers oi Central Otago to the risks they will underbv ti,i U nf greei 2, g t 0 scheme Proposed by the Otago Power Boad, also it would have, been unnecessary for this board to ,a special meeting to discuss accumulated losses future losses, and the rates to be levied to meet these losses. The Lawrence scheme, witli its probable perStont ° SS ° £ f3oo °’ Wol,ld be ,lon ' tbJf he tbe U w 7! 11 be - surpr:6ed to learn that the board has no definite resolution pv™«4it n:inUt i e • book t 0 prevent capital « beU,g l ? am ’ red on the erection of the non-payable extensions. The large ■ loss, still shown by the board’s original area is mainly due to the large sum of money that must have been spent 0 6ervlc T e apd reticulation f as ,P tbls area - It seems necessary T hat r , ti ’?. po w era of *be Local Government Loans Board should be extended, especially when it is remembered that, unlike the county rates, there is no return obtained from money paid by way of rate a power board; the money is lost, it a . S 1V p G 1 dumped in the sea. The payment of rates to a power boai’d increases unemployment, contributes to J e P. ressl ° n ’ and depreciates the value ot the ratepayers' property. Should the Dunedin Chamber of Commerce in;n^tp t f e f ’i n u thlS matter on tIIG lines indicated, and be successful, it will render a signal public service* Hie wlmlo’ be cle - a - ! ? understood that f B . ly c r ,tlclfim of Central be ? n di , rected with the sole object of drawing the attention of its ratepayers to the risk they will incur in agreeing to a non-fully guaranteed scheme, and would remind them that the un/usT 00 .°L POWr i b ° ?rt! t r Xation is most unjust. The conclusions I have drawn bv on , t i ?e resu] ts obtained anrl t J and La wrencc schemes, and I have endeavoured to apply these results to the extent and manner that the local conditions of Central Otago seem sh ° U,d be an easy matter tor Mr Collins, as an expert, to dispose of my arguments. All I ask is that in doing so he will make definite statements and give definite reasons where and why I am wrong. A reply in general terms is of no value The ratepayers of Central Otago would be well advised to request the Power Board to arrange for an independent qualified expert to report fully ™ h , e ' r 6a| mme. There seems no reason tv hj this course should not be adopted i am, etc., r . R. S. Thompson Lawrence, August 17.