HYDRO ELECTRIC POWER

Poverty Bay Herald, Volume LIX, Issue 17944, 23 November 1932, Page 3

HYDRO ELECTRIC POWER

A PROFITABLE ACCOUNT GOOD RETURN ON INVESTMENT COSTS TO POWER AUTHORITIES (Parliamentary Reporter.) WELLINGTON, tins day. One of the directions in winch the investment of public money is making a return substantially in excess ot tlie interest cost of the investment is tlie hydro-electricity account, winch according to the Public. Works Statement tabled in the House of Representatives to-day by the Hon. C. E Macmillan acting Minister of Public Works, paid an average of 7.28 per cent, interest on the total amount invested during the past financial year. , , T . It is interesting to note that the Lake Coleridge scheme,’ which has always been notable for its financial success, owing mainly to its proximity to a big consumer-body and low initial cost ot installation, maintains the leadership m the matter of returns, while the Manga* hao-Waikaremoana group, serving Wellington. Hawke’s Bay, Wairapapa, Manawatu, and a large part of Taranaki stands second to Lake Colei idge and well ahead of the llorahora-Arapum group, serving the Waikato, Bay o Plenty,- and Auckland. _ Capital expenditure during the financial year 1931-32 was mainly concentrated on the remedial works at Arapuni and on continuation of the construction works at Waitald, in the South Island, the statement intimates. Ihe operating works have felt the effects Of the depression, in a retardation of the urowtli of demand, though the North Island has shown a small percentage increase for the year. ... , Tlie average operating capital invested in the Horahora-Arapuni scheme to date is £1,310,081, and the gross revenue for the financial year was £161,884, while working expenses absorbed £Ub,OUo, leaving a net credit balance for the year of £46,881. or 3.58 per cent, of the operating capital. In the case of the Mangaliao-Waikaremoana group, the operating capital represents £3,004,0i4, the gross return £300,022, and working expenses £48,900, leaving a net credit balance of £251,122, or 7.11 per cent, on the capital. In the case of Lake, Coleridge, the average operating capital is stated at' £1,734,544, the’ gross revenue at £218,196, and the working expenses at £37,245, leaving a net credit balance of £180,951, representing 10.40 per cent, on the outlay involved, lhe totals under the various headings arc: Average working capital, £6,577,504; gross revenue, £680,102; working expenses, £201,148; net balance, £478,954; percentage of net balance to operating capital, 7.28. The general result of the, operation or the department's electric-supply system to date has been that the schemes paid all operating expenses and interest, and in addition have been able to provide £642.267 towards reserves for depreciation and sinking-fund purposes. _ The statement reviews the circumstances relating to tlie completion of Professor Ilovnell’s rectification scheme for Arapuni, as advised in .1930, and the location and correction of a leak in the lining of the headrace, the latter work being carried out without necessitating tlie stoppage of the station, though it was deemed advisable to run the Auckland Power Board’s plant for a short period of each day to facilitate work on the repairs. Nq new development work was cairied on at Waikaremoana, hut investigational work had been undertaken to determine the character of the barrier forming the south-east wall of the lake, and to locate and measuro the leakage paths therein, in anticipation of detailed designs for the next stage of development. At Lake Coleridge, the abundant ramfall and the steadiness of the load rendered it unnecessary to run the Diesel station which had been provided to meet overload or water-shortage conditions. After the close of the financial year, however, the low rainfall in the watershed had produced conditions necessitating the operation of the auxiliary station, and with the present loading on the system, it is anticipated that the Diesel station will have operating periods in any but a. very wet year in the future.

Work was continued without inteiruption oil the \Vaitnki development scheme, though it Intel been necessary to curtail activities to some extent through shortage of funds. Most of the work done during the year was on the Otago side of the river, and in the power-station. Unfortunately the rock in a section of the Otago half of the river has turned out to be rather poor, with the result that excavation has had to go rather deeper than originally contemplated, with consequent increase in concrete quantities and costs. DISTRIBUTORS’ CONTRACTS Osi a subject which lias been arousing considerable interest in the rural areas in particular, the statement includes the following observations: — “Throughout the year at various times the department has been asked to make reductions on the price of power supplied in bulk, particularly to the smaller power boards, so that they should obtain the same rates as are applicable to the main centres. Although the Covernment is anxious to do everything possible to bring down the cost of living, it is regretted that it has not been possible to comply with this request. Government action in other directions lias, however, enabled power hoards to effect economies in many cases by reductions in interest rates and in wages, which have been passed on to the actual consumers. It has to be remembered that by far the greatest part of the cost to the Government of supplying electricity in hulk is made i.p of capital charges on its investment, and, as the money has practically all ■beep raised abroad, it has not itself obtained any benefit from reduction on interest rates. Power lias, moreover, been supplied in the past at such reasonable rales that the actual retailers of electricity have, on the average, been able to bring their own financial positions into a. better condition than is that represented by the Government’s own electric supply account. In the general cry for reduction the fact is often overlooked that since Government schemes come into operation very considerable reductions nave already booh made in tho average price per unit paid by the consumers; ,

“Whore there is m all cases one supply authority, and in many eases two supply authorities, between tho Government system and the actual consumer of electricity, a uniform price for power supplied in hulk by the Government does not by any means necessarily mean that the actual consumers are all going to obtain power at tho same price. Some authorities have existing plants on which they still have to pay capital charges, the cost of die tribution per consumer and per unit sold varies quite considerably in different, localities, and .some authorities have different ideas from others as to the

GET GENUINE J.D.K.Z. J.D.K.Z. Gin is actually distilled with tho berries of Italian Juniper, and is therefore unique in its benefical actioo" the system. Identify the genuine by tiro White Heart Label. Sold In flasks, pints, and full-sized bottles at ail hotels and bottle stores.*

reserves they should establish op as (-0 the methods they should adopt in disposing of any profits iriiide. The present system may not he absolutely equitable, hut it can reasonably he claimed that it has been successful. As compared with, conditions existing before the advent of the Government, scheme, it Was 'brought- down the price of' electricity in til phibes where electricity 'Was previously Used, and it has made electricity available at a reasonable cost to thousands of consumers who otherwise could not possibly have availed themselves of its benefits,”