HYDRO-POWER

Poverty Bay Herald, Volume LXIII, Issue 19122, 17 September 1936, Page 10

HYDRO-POWER

REVIEW BY MINISTER NO'CHANGE IN POLICY SATISFACTORY FINANCES WAIKAREAIOANA SCHEME (Parliamentary Reporter.) WELLINGTON, this day. “Since taking over the portfolio of Public Works 1 have continued the work in connection with the hydroelectric branch of the department’s activities on the general lines adopted by the preceding Government, ” says the Minister of Public Works, the Hon. It. Semple, in the statement presented to Parliament. “It is my intention, however, when more urgent matters requiring attention in other directions have' been cleared up, to give more special attention to this important section of the department’s activities.

“The principal construction work being carried on is the installation at \rapuni of two additional units, each of 21,000 k.w., which was commenced by my predecessor) The difficult w.ork in connection with the foundations for t lie power-house extensions has been completed and the installation of the machines commenced. It is hoped that the lirst. of Ihe new units will be ready for operation before the peak loads occur in .lime of next year, and the second unit should be complete a few months later. CONTROL AT THE LAKE

“Before my taking over control of the department it was considered desirable that, the water leaving Lake Waikaremoana should be directly controlled, as by so doing the upper (00ft. of fall between Lakes Waikaremotuia and Kaitawa, which at", present, is wasted, may be developed, and also because the control of the outflowfrom the lake will increase the capacity of the present station and also that of a lower station which at some later dale may be developed below the present station. As Waikaremoana forms pari of the Government ’s main interconnected system, full control of the water there would als.o have quite a considerable influence on the methods of operation and degree of development of the other stations connected to the system. “The country through which the tunnel would have to be driven to obtain full control of the water is, however, of such a nature that I have suspended further work on it until the very fullest and most careful consideration has been given to all the factors of risk, cost, and value. “In the South Island a large amount of finishing and eleaning-up in connection with the Waitaki scheme, which went into operation during the previous year, has been carried on. Following, particularly, on increased activity in mining there has been a very much increased demand for electric power on the West Coast. The existing local plants have been quite unable to meet the ever-increas-ing demand, and the department has had an investigation made of several possible, sources of power in the area. MORE PROSPEROUS TIMES “After studying all aspects of the problem, it has been decided that the present position can best be met by connecting this district with the existing Government electrical system supplied from Lake Coleridge and Waitaki by means of an extra-higli-tension transmission from Lake Coleridge via Arthur’s Pass to a central point in the vieinitv of Hokitika.

“During recent months the indication of the approach of more prosperous times has given a great stimulus to the electrical industry, and everywhere there are indications of increasing demands. To provide for this, additional transformers and switchgear will be necessary in many of the existing substations, and arrangements to secure the necessary plant are being made. ” ■ “For the year just closed the increase in tlie number of units generated in tlm Government stations showed an increase over the previous year of 6.84 per cent in the North Island and 14.49 per cent in the South Island, whilst for the quarter ending in June of this year as compared with the corresponding quarter of the previous year the increase has been 11.81 per cent in the North and 15.97 per cent in tlie South. “Financially the year lias been a successful one, although in the South Island the position has been affected by the- fact that the large amount of capital invested in the Waitaki development has come on the operating account for the first complete year. Despite the addition of the large amount of additional capital, however, the whole elec-tric-supply account has been able to earn 6.50 per cent on the operating capital after paying net operating expenses. SUBSTANTIAL. RESERVES “In the North Island the depreciation reserve required by the State Supply of Electrical Energy Act —viz., 12j per cent of the capital invested —has now been reached, and a considerably reduced amount is therefore chargeable to depreciation, with a consequential considerable credit balance of £187,533 on the year’s operations Tlie "balance has been used to veduco the amount of deficiency which has been accumulated in earlier years and which now stands at. £399.315. In tlie South Island, where in the past the depreciation reserve had reached the 12J per cent, limit mentioned above, the addition of a large amount of additional capital has necessitated the resumption of full pay ments into the depreciation reserve fund, with the result that the year’s operations show a loss of £65,609. To meet this loss the general reserve lias been drawn on, and has been reduced to £175,809.

“The general position to date is that the electric supply account has been able to meet all operating and interest charges, has provided £950,988 towards the statutory requirements of £1,350,203 for depreciation, and, in addition, has provided £326,500 to sinking fund and £175.809 to general reserve from profits made from time to time on Lake Coleridge and Horahora systems. In other’ words, the electric supply system as a whole has paid interest and operating charges and provided £1,453,297 in reserves, of which £308,945 has already been utilised by Treasury for the paying-off of loans which formed part of the original capital.” DISTRIBUTION OF POWER “Power generated in hulk is in the main sold to local authorities for distribution to the actual consumers. The

local authorities are thus really partners with the department in the complete business of giving supply to consumers, and their uction and administration thus has a very considerable influence on the success of the undertaking. In fact, as the Government receives on the average only 0.34 d for each unit sold, and as the consumer pays on the average 1.25 d per unit purchased, it can readily bo seen that these supply authorities can have a very considerable influence on success or otherwise of the whole business.

“On the whole I think it can be said that the general result is good, as there is considerable evidence to prove that the cost and general availability of electricity in New Zealand, particularly in rural areas, compares quite favourably with other places. I have not yet had opportunity to go as fully into the matter as I intend, but there are undoubtedly one or two aspects of distribution and of the relation between the generating authority and the distributing authority which are not quite perfect. There undoubtedly appears in some cases to be lack of cooperation between' different owners of generating-plant. It is difficult under any contract to be sure that our available resources are being) worked in the way best suited to The national interest. This particular problem has been considered in other places, and there certainly seems to be quite a decided consensus of opinion among poweg authorities that there should be some centralised control of generating-plants. £33,000,000 INVESTED

“The capital invested in the electricsupply systems operating throughout the Dominion totals £33,181,503, which includes £13,095,382 of Government expenditure, and the gross revenue received for the year was £4,823,324. After paying working-costs, interest, sinking fund, and depreciation charges, the net profit for the year under review was £554,154, as compared with £449.499 for 1935, which indicates that the electric-supply business as a whole is in a healthy condition.

“It is gratifying to notice there is distinct evidence of expansion of business among the electric-supply authorities. An analysis and summary of the operating results and other statistics furnished by each electric-supply authority reveals the fact that there has been an increased consumntion of electrical energy amounting in tlie aggregate to. approximately 8.25 per cent over that of 1935. ’ “The statistics also indicate that during the past year new consumers have been connected at an average rate of approximately 1100 per month, and the completed figures for the year show that the ratio of number of consumers of electricity to the total population of the Dominion (1,573,482) is 22.7 per cent, or 24.35 per cent of population in areas supplied with electricity.’’