OTAGO ELECTRIC POWER BOARD.

Otago Daily Times, Issue 20800, 20 August 1929, Page 10

OTAGO ELECTRIC POWER BOARD.

TO THE EDITOR. Sm, —The Southland Power Board commenced operations in 1920, and Is nowcompelled to meet annual charges for the almost unbelievable sum of £1,650,000. Facing the position in a resolute manner the board has made every post a winning post, expenses have been reduced to the lowest possible figure, and no expenditure is incurred unless a profitable return is obtained. The Southland ratepayers realise that the best is being made of a bad job. Last year, after allowing for proportion of salaries, etc., the trading department showed a profit of £855. The Waftaki Board commenced operations in 1924, and has obtained highly creditable results. This board rigidly adhered to the sound policy of refusing to reticulate any portion of their country districts unless a full guarantee for the necessary revenue was first obtained. Last year its trading department showed a profit of £llO9. The following information is also of interest:—Capital expenditure £165,000, of which amount £IO,OOO will be repaid; sinking fund payments £10,122; depreciation reserve payment £3970; reserve for contingencies £13,503; credit in power fund account (accumulated profits) £11,114; last year’s revenue £32,585. From the above it will be seen that With a capital expenditure of £165,000 a revenue of £32,585 has been secured. On the other hand, the Otago Board, with a capital expenditure of £228,000, has secured a revenue of only £29,255. Both boards commenced operations in the same year, and, comparatively speaking, the results obtained by the Waitaki Board could have been obtained by the Otago Board. The Otago Board’s trading department shows a loss-of £1302,- and this year a further loss of £O9O is provided for. The manager contends that these losses are a necessary evil. My criticism of the Lawrence area scheme is based entirely on my local knowledge, and a study of tho manager’s reports;—l have no inside information I have been ■ainable to refer to the original area, because the report deals with the board’s operations as a whole. The members adopted this report, and, as far as I am able to gather, not a single member asked, for further information. From this, it is evident, that having little or no knowledge of the Lawrence area, they relied implicitly on their executive officer. The manager bases the whole of his recommendations (as far as I am able to judge) on one factor—the manner in which the revenue of the original area increased from 1927 to 1929, two very prosperous years. Applying these results to the Lawrence area, he contends that the revenue of this district will double itself inside two years—that is, last year’s revenue of £3OOO will increase this year to £4500 and increase to £6OOO next year, and in other words the total future losses of this area will be only £ISOO. I maintain that the revenue will not increase, and that the loss of £3OOO per annum will therefore continue indefinitely, My reasons for making this statement are clearly given in my article (see Daily Times, August 7). The members must realise that any increase of revenue in this area can be obtained only from the present 400 consumers—it all depends on their willingness and their ability to pay. The real trouble with the Lawrence area is that the annual charges (£6000) are too great for the consumers to pay, and the unfortunate ratepayers will be compelled to make up tho loss. Should the members inspect the board’s reticulation of this district and obtain the local opinion of the scheme and its prospects, they will soon realise the correctness of my statements. Had information relative to capital expenditure, past years’ revenues and expenditures, estimated future revenues and losses and the amount spent on unprofitable reticulation and service lines, etc., been stated separately in the report for each of the following districts—northern area, if possible in two portions, southern area in two portions, Owaka area, and the Lawrence area —then, it is believed, the members would have found it necessary to adopt an entirely different rating scheme. I fully realise that the members of the board honestly believe they have, in all cases, acted in the best interests of the ratepayers. _ Nevertheless these ratepayers are entitled to know, their true position. My contention is that the members have not been supplied with the necessary information to enable them to come to a correct decision.—l am, etc., _ . R. S. Thompson. Balgove, Lawrence, August 19,