POWER BOARD

Timaru Herald, Volume CXLVIII, Issue 21816, 20 November 1940, Page 4

POWER BOARD

Profit of £7lB For HalfYear Satisfaction Expressed Consumers Benefit Satisfaction at the fact that a net profit of £7lB had been shown on the operations of the last six months was expressed by the chairman, Mr G. Dash, and members at the monthly meeting of the South Canterbury Power Board yesterday. In reviewing the period the manager, Mr J. M. Bishop, said that the permission of the Electricity Controller had been received to proceed with one short extension in the Fairlie area. As a consequence, the expenditure on new capital works had been confined to new services and a few short extensions not requiring the Controller’s permission. For the greater part of the last quarter, four of the Board’s permanent staff employees had been in Territorial Camp, and while these were absent that part of the construction gang which had not left or been absorbed into the permanent staff, was retained on necessary maintenance work. The unusually mild winter must be held largely responsible for the dropping away of the growth of load. This was evidenced by the fact that for the last quarter the units purchased increased by 5.75 per cent, over the corresponding quarter last year, whereas for the first quarter of the year the increase was 14.2 per cent, over the corresponding quarter last year. The general Increase of 5 per cent, in award wages that came into force on August 12 had hardly time to effect the half year’s figures. The full effect would be felt in the remainder of the year. The excess of sales of electricity £40.236 over the cost of electricity purchased £20,886, amounted to £19,350 or 92.6 per cent, of cost. This was the amount available to meet all expenses, which, when met, left a net profit for the half year of £7lB. as compared with £2871 for the corresponding period last year. Sales of Electricity The sales of electricity, continued Mr Bishop, showed an increase of £1251 compared with the half-year ended September 30, 1939. The Increase in sales had resulted in spite of the reduction in tariffs which had now been in operation for a full year, and which had been estimated to lose the board £lOOO for the half year under review. The drop of £268 in the Waimate Borough occurred almost wholly in the commercial consumers’ group, where electricity for radiators was now one penny per unit as against threepence per unit for the corresponding period last year. The drop in sales in Waimate County and Mackenzie also occurred in the commercial consumers’ group. There had been increases in revenue from domestic consumers in all areas, and decreases in revenue from commercial consumers in all areas, the greatest decrease being in Waimate Borough where the fall in revenue from commercial consumers amounted to £317 for the half year. Wages for the half year amounted to £4507 against £4879 for the same period last year. The decrease of £372 was due to the fact that four men were not replaced during the first quarter of the year, and that four other employees were in territorial camp for the greater part of the last quarter. The allocation of wages between maintenance and capital was however severely disturbed, owing to the reduction in capital works, and in spite of a reduced total wage bill, maintenance was carrying £lOOO more for wages this half year than the corresponding period last year. The full effects of the serious decline in the Board’s development work was reflected in the figures for loan account for the period, which stood at £2960 compared with £7127 last year. During the last quarter, a further £3OOO of debentures were sold at £3/17/6 per cent, per annum. At the end of the half year £4504 of loan money was in hand, and a further £10,200 of loan authority had not yet been raised. This authority expired in January next, and application had been made to extend the term within which the money might be raised, for a further two years. Record Revenue Per Unit For 5,957,984 units sold retail, a revenue of £27,276 had been received, or a revenue of 1.11 pence per unit sold. This was the same as for the first quarter of the year, and was a record low value for this board. The board had finished the half year with a surplus of £7lB. Considering the capital invested and the revenue obtained, this was working to fine limits. There appeared to be two major reasons why the result this year was not so good as last. One had been unforeseen, and the other had been allowed for. In the first place, the rate of increase of units sold and of revenue was appreciably less during the second quarter than it was during the first quarter, due in all probability to the mild winter which had had a similar influence on other supply authorities. In the second place, the curtailment of capital works had left the revenue account to shoulder an increased burden of wages, salaries, and transport. That the revenue account could not hope to carry the whole of the wages, that in better days were allocated to loan moneys, was now quite clear. There was the obvious, though reluctant, remedy, that with the curtailment of development the board must curtail the labour that formerly produced it. Consumers Benefit Mr K. Mackenzie; Is our commercial charge too low? The chairman (Mr G. Dash); No. You will recall that last year we reduced the rate in order to pass the benefit of the profits on to our consumers. The fact that the reduction was appreciated is shown by the increased consumption, and we still show a profit of £7lB. I think we have done wonderfully well. Mr C. E. Kerr: Taking everything into consideration the position is very satisfactory. Mr C. C. Knight: The most serious factor is that no permits for extensions are being issued by the Electricity Controller. This will mean that we will not be able to retain our full maintenance staff. The chairman: I am satisfied that at the end of the year the Board will be able to show a satisfactory result. The report was adopted.