CITY ELECTRIC POWER

Otago Witness, Issue 4041, 25 August 1931, Page 8

CITY ELECTRIC POWER

SUPPLY FROM WAITAKI NEGOTIATIONS FINALISED. Dealing with the development of the Waipori electric power supply, the town clerk states, in the City Council’s departmental reports, that matters pertaining to the future of Waipori as a generating station have again played a prominent part during the year just closed. The history of the negotiations with the Government for a supply of power from Waitaki is included in the reports, and the following extract should prove of interest:—

“ The Electric Power and Lighting Committee realises that had circumstances admitted of complete development at Waipori before seeking a contract for further supply from the Government we should be expected to pay Government standard rates for our requirements beyond the capacity of the Waipori River, which has been definitely fixed at 32,000 kilowatts as a maximum.

“ The acceptance of a contract for supply from Waitaki implies, as a matter Of necessity, completing the dam at something less than the original height. This arises from the fact that linked with another station, and thus able to draw current on a 100 per cent, load factor, a greatly diminished water storage capacity will meet our requirements. Moreover, it is imperative that our capital expenditure at Waipori should be hept to the minimum to meet our needs. The committee estimates that the capital saving in completing the dam at or about 70ft in lieu of taking it to the 110 ft as originally contemplated will be £40,000 to £50,000, to which is to be added a further £30,000 to provide for bridges near the old township of Waipori, and which will not be called for if the height of the dam be restricted. Again, by deferring the £90,000 expenditure on No. 3 station for eight or nine years, further relief in interest and other standing charges on borrowed money will be saved. These several savings are estimated at not less than £17,000 per year. Furthermore, the committee has been to some extent influenced by a consideration of the possibility or otherwise of obtaining loan money to carry out a full programme, based upon the development of Waipori as an isolated generating station in

the time that is necessary to meet the demands. The figures mentioned in this paragraph as probable capital expenditure to be deferred total £lOO,OOO or £170,000, all of which would be called for during the next two and a-half to three years, and that is in addition to the normal capital expenditure on extensions carried out b.v the department and which calls for a yearly provision of new loan money of about £50,000, together with the heavy cost of the improved provision in respect of the tunnel and pipe lines. This latter work alone is set down to cost not less than £lOO,OOO.

“ A consideration of these figures together with due regard to the present economic state of the country and the huge sums of loan moneys the city has falling due during the next e. suing three or four years all point with unmistakable clearness to the fact that the city’s borrowing policy must be reduced to a minimum. Prudence suggests, therefore, that a supply for our immediate additional requirements be obtained meanwhile by means of a contract with the State, quite apart from the added security that interconnection with Waitaki will provide by way of insurance against failure, either temporary or otherwise.”

The contract with the Government has since been put in legal form and duly completed. It runs for 10 years from the date of supply, and the city is to refrain from proceeding with Nos. 3 and 4 stations for a term of eight years from the date of the contract —May 1, 1931. “ Thus a series of negotiations was consummated ” (writes the town clerk) “extending from October, 1923. to May, 1931, in which every conceivable aspect of th? Waipori hydro-electrical undertaking has provided matter for discussion —its strong and its weak points, its eminently satisfactory rate of progress in the past with attempts to estimate what the lap of the gods holds respecting its future, to say nothing of the effect for good or for ill that the contract with the State for a bulk supply may have on its profit-earn-ing capacity. Whatever these results may finally disclose, one point is strikingly clear —that when the interconnection with Waitaki shall have been finally completed users of Waipori power shall be in a vastly better position of assurance for a continuity of supply than would otherwise have been the case. “ I would close this short sketch of what has been an interesting, if at times a disappointing, series of negotiations with the hope that the break in the progress of the undertaking that has been reflected in the accounts as the result of the depression, may soon be healed and that in the near future the yearly increase in the output of round about 15 per cent, may be restored. In such a case the full benefits to the city of the contract for bulk supply from Waitaki should be attained and no misgivings regarding its terms need be given a moment’s thought.”