STEADY IMPROVEMENT

Otago Daily Times, Issue 22563, 6 May 1935, Page 19

STEADY IMPROVEMENT

SOUTHLAND POWER BOARD'S POSITION REVIEW BY CHAIRMAN In view of the fact that the meeting on Tuesday will be the last meeting of the present board, the following statement concerning the progress of the boutnland Electric Power Board's business, particularly in regard to. the financial year ended March 31 last, has been prepared by the chairman (Mr W.Hinchey). His report, which presents in concise form a summary of the bailing features of the board's business over that period, will be supplemented by a more exhaustive survey in the annual report which will come before the board at its annual meeting at the end of tne month: — ~ ... . , "It i s gratifying to me, as it will be to all of the members of the board, to look back over the figures of the past six years and to see that the board s position' has shown a steady improvement. "A 'bird's-eye' view of the trend ot the improvement in the revenue is shown in ,the following table in which I have taken the figures of the year 1930 as a base and, on the like items of that year, calculated in percentages, the results oi the subsequent years:— . "Domestic and commercial use °f electricity: 1930, 100 percent.; 1935, 126.8; 1934, 114.9; 1933, 114.4; 1932, 110.5; 1931, "Total income from electrcity services: 1930 100 per cent.; 1935, 123.6; 1934, 112 8; 1933, H2; 1932, 108.7; 1931, 106.9 "Cash receipts: 1930, 100 per'cent.; 1935, 119.1; 1934, 113.3; 1933, 111.5; 1932, 110.3; 1931, 108.3.

REDUCTION IN RATES. "It has been specially pleasing to the board to find it practicable to .relieve the ratepayers by gradually reducing the land rate and I feel that to no small extent this policy has favourably influenced the board's present satisfactory position in regard to the increase m the consumption of electricity. The following figures show the rates expressed as Send percentages of the 930 rate:-19S0, 100 per cent.; 1935, 55 per cent.; 1934, 72.7 per cent.; 1933, 70.9 per cent.; 1934, 96.1 per*cent.; 1931, 98.6 per cent. These figures are all in the right direction, the rate in 1930 totalling £62,958, whue for 1935 it was £34,640. " In the financial year ended on March 31 1935, the board sold 19,640,239 units for a revenue—including guarantees, meter rents and services—of £l In the previous year we sold units: the revenue for the like items was £128,283. FINANCES' STRENGTHENED. "The finances of the board have been further strengthened during the _ year; we commenced with an overdraft m our power fund account of £8714 Is "d and concluded with a cash credit of £3529 los sd. We paid £8483 2s 5d to the depreciation fund commissioner. ■.Our London loan sinking fund now stands at £365,060 4s 5d against which there is a contingent liability of £32,670, representing exchange on London interest Our credit funds which have been conserved, to provide future extensions and additions amount to £76,698 8s Bd. . „ "At this time last year I briefly referred to the arrangements in connection with the conversion of our internal indebtedness. Since then the matter has been finalised, the conversion operations from 6 per cent, to 4i per cent, have been carried out as at May 1 last. Ine amount subject to conversion was £150*,000. After utilising accrued sinking fund and paying the" premium on conversion the converted loan became £139,010. Our conversion arrangements provide that the loan will be repaid by annual redemption year by year till 1964 when the whole of the loaji will have been liquidated.

INTEREST ON OVERSEAS LOANS. "Unfortunately we have been unable to obtain any relief in the payment of interest on our overseas loans. Our, annual interest bill m London is £82,500, to which must be added exchange of just over £20,200, bringing the average rate to £ (N.Z.) 6 17s 6d. This is a matter which has been very fully discussed with the Right Hon. the Prime Minister and the Right Hon. the Minister of Finance, who have given an assurance that they are fully alive to the ,position in which the board is placed in regard to the London loans in question, and although it will be 1936 before the board will be in a position to do anything definite, the Ministers have promised to do their best when in London to ascertain what the prospects are of the board obtaining some relief in 1936 as a result of the conversion or renewal of the present loans. " The members of the board have given a great deal of thought to the question of the London loan position, and they see in it the possibility of the rating burden being eliminated. To effect this it will" be essential (a) that the State guarantee be continued, (b) that there be a considerable reduction in the present rate of interest, (c) that the sinking fund be retained at the existing rate of U v per cent. UNDER CONSIDERATION. "Another matter regarding which the members have been (and still are) giving close study is the offer from the Government, the effect of which may be summarised as follows: — (1) That the board, in lieu of generating power for Southland at the Monowai electric power station, should sell to the Government that portion of the board's works consisting of Monowai, the main (66,000-volt) transmission lines conveying the power from Monowai i to the board's sub-stations, and parts of the sub-stations. (2) That the board should purchase Southland's power requirements in bulk from the Public Works Department. (3) That the board should retain the ownership of the reticulation and continue to distribute the electricity to consumers as at present. " The whole scheme, including reticulation, involved an expenditure of £1.500,000 sterling and £150,000 New Zealand currency, total £1,650,000. The Govern : ment's proposal is to buy out Monowai at £ (N.Z.) 435,000. This purchase money would have to be sent to London for loan redemption purposes, therefore the purchase money would be reduced by the amount of the exchange. In effect the Government proposal to buy Monowai would not relieve the board of loan indebtedness of about £1,302,000. This matter is still under the careful consideration of the board. PROPOSED GOVERNMENT PURCHASE. " There is a feeling abroad that the Government proposes to buy the whole of the board's undertaking, and as there is considerable misunderstanding of the position that would exist if the Government bought the Monowai headworks, I therefore make a short explanation. The Government would own the headworks, the three main sub-stations at Winton, Invercargill and Gore, and the 66,000volt transmission lines. The power i would be sold to the board in bulk and measured at each of the three substations. The board would function exactly as it does to-day; controlling reticulation, price of electricity, fixing of rates, managing its finance, and doing everything pertaining to the business of dealing with the consumers and the ratepavers.

" Throughout the year the smooth working of the organisation in the office, in the field and at the generating station and in all other services of the board has been such as to be worthy of special mention by me. Credit is due to the executive and to the staff as a whole. I wish to place on record my appreciation of the whole-hearted support afforded me by all the board members. This has gone a long way to lighten what would otherwise have been a heavy year."