CITY’S ELECTRICITY

Otago Daily Times, Issue 22654, 20 August 1935, Page 6

CITY’S ELECTRICITY

SUPPLY FROM WAITAKI AGREEMENT WITH GOVERNMENT CONDEMNED BY CR M'MILLAN The suggestion that instead of yielding profits the E. P. and L. Department might become a liability to the city as the result of the contract entered into by the late council for the supply of power from Waitaki was made by Cr M'Millan, chairman of the E. P. and L. Committee, at the meeting of the City Council last night. The matter came under discusison when Cr Silverstone asked why there had been a drop in the proceeds from the depaitment during the first four months of the present financial year compared with the corresponding period last year. ,

Cr Silverstone said it had been stated last year that the power from Waitaki would be available this year, and on the strength of that it had been decided to reduce the price of power with the object of inducing a larger consumption. That course was adopted, but recently it had been found necessary to have the auxiliary plant working and, in some cases, to impose restrictions on consumers. There had been a drop in the receipts of over £3OOO during the first four months compared with the cor responding period last year, in addition to which over £3OOO had been paid for Waitaki power. What was the reason for that?

The Mayor: Was there not an Increase of 14 per cent, in the sales?

Cr M'Millan stated, in reply, that it was correct that the profits, for the first four months of the financial year were down 50 per cent, compared with last year. Before he was elected to the council he had drawn considerable abuse upon himself by objecting to the Waitaki contract, but .it had been revealed that the position was even more serious than he had then believed. The profits from the E. P. and L. Department for the first four months last year had been £6700, and this year they were £3600. Over £3OOO had been paid to the Government for power from Waitaki, and that sum would be increased each year. In six year’s time the payment to the Government each four months would amount to £8450, and in 10 years it would be £21,000, or over £63,000 per year. Thus, it was within the realms of possibility that as the result of the action of the old council, the E. P. and L. Department would become a liability, whereas it had been formerly a profitmaking department. The had effects of the Waitaki agreement were beginning to be felt already. The Diesel and the expensive steam plant had had to be run, and it had been necessary on certain occasions to cut off some of the big consumers in the afternoon. On the eve the municipal election the City Council reduced the price of electricity on the strength of the prospective sale of power from Waitaki, and the council must have known then that it had not the machinery necessary to use that power and would not have it for t six months. Thus, because of the reduced price of power, it had been necessary to run the standby plant to meet the demand because the council was not able to use the Waitaki power except on the Port Chalmers line, after having paid over £3OOO for it. “ There was no justification for endeavouring to boost the load during this winter, Cr M'Millan concluded.'" ' . : f! ‘ <■