The Southland Times WEDNESDAY, APRIL 19, 1939. Lower Power Charges

Southland Times, Issue 23796, 19 April 1939, Page 4

The Southland Times WEDNESDAY, APRIL 19, 1939. Lower Power Charges

CONSUMERS of electricity in 1 Invercargill will welcome the prospect of further reductions in charges which is held out by the Mayor (Mr J. R. Hanan) in an interview printed this morning. Mr Hanan is able to show that the lowering of charges in recent years has resulted —as we have always declared it would—in a substantial increase in sales; and he apparently feels justified in recommending further reductions. Even allowing for a certain natural increase in the number of units sold from year to year, the figures he quotes do indicate that the policy is a sound one:

/ Average price Year. a unit. Units sold. 1934-35 2.33 d 4,824,000 1937- 2.13 d 5,734,465 1938- 1.95 d 6,151,133 It will be observed that in four years the average price a unit has been reduced by 16 per cent, and the number of units sold has risen by 27 per cent. Before the council adopted this progressive policy, the annual increase in demand was not nearly so marked. Last year’s increase, for instance, exceeded the increase for the three years 1932-35. Not Cheap Enough

But electricity in Invercargill is far from being as cheap as it should be. The charges are still “loaded” to produce for the municipality an exorbitant annual profit, of which £lO,OOO is transferred to the General Account and is used for expenditures which should properly be met from rates. The latest reductions, dating from August 1938, involved no sacrifice of this profit but were made possible largely by a more favourable bulk purchase agreement with the Government. The Mayor, during his term as a councillor, advocated the reduction of the transfer to £5OOO. It remains to be seen whether he is basing his present hopes for lower charges on the realization —or partial realization —of this aim, or whether only slight reductions are to be made such as can be fully compensated for by increased consumption. The point that should not be overlooked is that power charges in Invercargill are still far above those in other cities, even in cities of comparable size. The following figures, showing the average prices a unit sold in other municipalities during 1937-38 may be compared with Invercargill’s record “low” figure of 1.95 d for 1938-39:

Average price a unit. d. Christchurch .799 Dunedin -892 Palmerston North 1.015 Wellington 1.047 Hamilton 1.353 Napier 1.122 New Plymouth .922 Timaru 1.372 The policy which Mr Hanan is following will have to be carried a good deal further before consumers in Invercargill obtain “cheap electricity”—as that term is understood in towns and cities in the north.