THE GAS QUESTION.

Star (Christchurch), Issue 6292, 17 July 1888, Page 4

THE GAS QUESTION.

* Decision of the City Council. A LOAN OF .£50,000 EECOiBIENDED. At a meeting of the City Council last night, the Special Lighting Committee presented the following report : — "The Committee appointed for the purpose of obtaining a reliable estimate of the i present cost of a complete gasworks, sufficient for- the requirements of the city, bee to lay before the Council the following report : Your Committee ha 3 given very careful consideration to the subject cf lighting Christchurch. The opinion of a number of experts has been taken, and information collected from the various Municipalities in New Zealand in which the Corporations own the gasworks and have the control of publij and private lighting. In order to arrive at a decision as to the required capacity of the gasworks, a canvass has been mads of the principal consumers in the city, and the Committee finds that out of an annual consumption of about forty millions of cubic feet, it has received guarantees amounting to nearly thirty millions of cubic feet. From this data ib is estimated that a gasworks will be needed capable oil producing at least forty millions of cubic feet per annum. The whole cost of such, including reticulation of the City, is estimated at £50,000. This estimate has been arrived at by obtaining reliable information from engineers and other experts. Where the Municipalities have the control and management of gas works, it 13 found that the public ia supplied with gas, and that the public lamps are lighted at a much cheaper rate than -whero the works are in the hands of private Companies, besides which any profits made go to lesson the price of ga3 or in the reduction of rates. In proof of the above the Committee tegs to point out the following facts:— That in Invercargill, the population is only 6200, the rateable value of property .£55,000, the consumption of gas fifteen million of cubic feet per year (about half the quantity already guaranteed to be taken by our citizens), and the cost of their works .£15,000, on which they pay interest and sinking fund ; they charge only ft Gd per thousand cubic feet, whereas in thi3 city, where the population ia three times as large, the rateable property four times as valuable, and the consumption of gaa nearly (3) three times as much, the citizens up to the present month have been made to pay 9s 7d per thousand cubic feet, and, for the future, are asked to pay 8s 4d. The public lamps in Invercargill, including lighting and cleaning, cost .£4 5s per lamp per annum, whereas here the price has been £5 10s up to date for the same services. In Invercargill, coke is supplied to the public at 16s per ton; in Christchurch, 25s to 30a. Notwithstanding InvercargilTs low charges it has been enabled to save .£3OOO for extensions or in reduction of rates. The official report from that town concludes by saying- that "if IhvcreargiU can supply gas at 7a Gd, populous cities like Christchurch could supply at 5s or 5s 6d per thousand cubic feet, and street lamps at about £3 10s. In Nelson, where the works are also in the hands of the Corporation, gaa is supplied to the public lamps and private consumers at lower rates than those charged here, and still they show a profit of .£BSO per year, which, can either be applied to reduce the price of gas by Is 3d per thousand cubic feet, or in the reduction of ordinary rates, and these results arealsoinatown where thepopulation is only half that of Christchurch. In Dunedin, where they have a most, expensive plant, which 'was purchased from a private Company by the Corporation, and where they pay interest and sinking fund on the cost of the -works, amounting to J85343 per annum and other heavy charges, such as rents, compensation, &c, they are enabled to supply gas to consumers at 7s 6d per thousand cubic feet, and supply their public lamps at Jji 2a 6d each per year, which sum includes lighting, cleaning, and repairing, and still make a profit for the ratepayers of .£3OOO to JS4OOO per annum. The cost of manufacturing gas in. Dunedin after deducting amount realised from the sale of coko, &c, is 3s 84 per thousand cubic feet. The Committee proposes that the cost of £as to the public should be 6s per .'thousand; cubic -feet* The estimated

cost of manufacturing gas in Christchurch, including all charges for clerical work, office management, &c, will not exceed 4s per thousand cubic feet. After adding to this cost of interest and sinking fund on loan, a substantial profit will remain to the ratepayers. Having taken into consideration all the above facts, your Committee unhesitatingly arrives at the conclusion to recommend the Council to obtain authority from the ratepayers to have works constructed at onco for the supply of Christchurch with gas." Councillor Gray moved — "That this Council approves of the report of the Special Lighting Committee, and considers that the same should be submitted to the ratepayers at an early date, asking them for authority to raiae a loan of J850,000 for such purpose." He said that the present action of the Council had been takon largely in consequence of the reply of the Gas Company to the Council's letter of Nov. 21 last. The Company had ignored altogether one question then submitted to them, that of a reduction in the cost per lOOOf fc, and had taken the very high position of charging the Council the same as at present for street lamp 3 lor one year, and wanting them to bind themselves for a number of years before agreeing to a reduction. It had been suggested that befeva going in for such a large work as that proposed, the Council should exhaust every means of obtaining a compromise with the Company. Now the Gas Company had never treated the Council in a straightforward manner, and it was useless to continue parleying with them under the circumstances. The subject of electric lighting had been brought forward, and some of the members of the Committee had felt that it would be better to have two alternatives. If the proposals with regard to electric lighting proved a failure, the Council would be thrown back into the ann 3 of the Gas Company whether they liked it or not. They had, therefore, been compelled, as a duty they owed the citizens, to take up the question of ga3 supply, which they had just as much right to consider as the question of water supply or drainage. He would quote some figures to show the progress of the Ga3 Company. Commencing about IS6I-, with a plant which cost .£IO,OOO, the Company had at first 36 customera. In I S6B they had 205 consumers, consuming 3,576,000 cubic feet of gas in a year; in 1873 thex-e were 405 customers, consuming feet of gas; in 1878 there were 1026 consumers, using 25,272,000 feet of gas ; ia 1883 the consumers numbered 1952, who consumed ■16,115,000 feet of gas ; in 1884, 50,633,400 cubic feet of gas had been consumed, and the consumption in ISSB was estimated at 70,000,000 cubic feet per annum. The profits made had shewn a steady increase. The Company began by paying 7J- per cent. The amount went up to 16 per cent, at which ithadremained for sometime. The amounts paid in dividends were as follows: — Five years, 1865 to 1869, .£4770 16s sd; six years, 1870 to 1875, .£16,449 19a 2d ; six years, 1876 to 1881, .£38,574 12s Id; £ix years, 1882 to 1887, .£85,524; total, .£145,319 7s Bd. These sums were paid, without taking into account sums carried to reserve, depreciation, and re-insurance funds. The dividends had been taken out of the pockets of 2500 consumers, and put into the pocket 3 of about 180 abareholdera. Notwithstanding that they had been getting theEe very large dividends, the Company had done their very beet to keep up the price of gas. They had, since the commencement of the agitation, thrown out a few sops. Large consumers had had a reduction of Is 3d per 1000 ft offered. The reduction of 10a per lamp for street lamps did not come with a very good grace from the Company under the circumstances. It was rather late in the day to establish gasworks. Had the Council bought them ten years ago they would have had th&ir gas cheaper now, and perhaps have had their rates at a shilling. However, it was better to do a good thing late than not to do it at all, and the experience of other places ought to bt and themin-good stead. He read extracts from the Argus and the Ironmonger to show the experience of Melbourne and Berlin in regard to the gas question. The Dunedin Council had paid what was considered a high price, but recently the Mayor said that there was a balance of .£IO,OOO to the credit of the Gas Depart- . ment. The Committee of the Christchurch City Council had decided to recommend the ratepayers to sanction the erection of works which would coefc about .£50,000, and provide a, sufficiently large plant to make a maximum of 200,000 cubic feet of gas ia twenty-i'our hours, which would be large enough for some years to come. The works could, of course, be extended if necessary. With regard to the question of whether it would pay. The Committee had ascertained that they might depend on having to supply 30,000,000 feet per annum. Those data were based on the consumption under the present high, prices, and it was fair to assume that if gaa was cheaper tho consumption would be increased from 25 to 50 per cent. At present gas was three or four time 3 as dear as kerosene, but if it were only Ga per 1000 ft it would be burned in twelve private houses for every one where it was burned now. According to the estimate made by the Committee, based on a consumption o£ 30,000,000 cubic feet of gas per annum : — Cost of production, including wages, Ealaries, &.<;., of 30,000,000 ft, at 4s per 1000 ft, would be .£6000; the interest on .£50,000, cost o£ works, at 4% per cent, together with sinking fund, would be .£2485 ; 381 lamps, at .£4 each, would cost .£1524; making a total of .£10,009. Thirty ' million feet at 6s per 1000 ft, would yield .£9000 ; cost of 381 lamps, up to June 30, at .£5 10s each, the present price, was total, .£11,095, leaving a credit balance of J6iOBG; The Council did not intend to charge rent for meters. It was a very, general custom to do so, but it would be as fai? for a grocer to charge his customera rent for the use of his scales and weights. This would save tlie consumers some ;£7GO a year. All profits would go towards reducing the rates, and the Council would be able to run gasworks cheaper than the Company, because they would have no Chairman at an honorarium of .£IOO a year, nor Directors at .£SO each. They would nob have to pay property tax, nor large • sums in office expenses and salaries. He concluded by urging that it was to tho interest of the Council and tho ratepayers to adopt the proposals of the report. Councillor Scott had very much pleasure in seconding the adoption of tho report, He said that the Committee had given a very considerable amount of time and trouble to the report, arid were satisfied that it was quite reliable, and that the estimates, both as to the cost of gasworks and other points, were thoroughly reliable. Councillor Eeese moved, as an amendment — " That Councillors Prudhoe, Crooks, M'Laron and the mover be appointed to confer with the managei'3 of the Gas Company, with. a. view to making a, new contract for lighting the street lamps, and failing to be able to come to a satisfactory contract, then to try if there is a possibility of purchasing the Company's gaa works, and if so, at what price, and report to this Council at its next meeting." It waa quite evident, he contended, from the letter sent to the Gas Company by the Council on Nov. 21, that the Council did not really wish to get the best possible terms from tho Company. The letter proposed to enter into a contract for one year only, though the members knew that better terms were to be obtained by entering into a contract for a longer time, say for three years. It was said that some of the Councillors were largely interested in the Gaa Company, but, on the other hand, was it not a fact that there were in the Council large gaa consumers, whose only object was to get gas as cheap aa possible. The Council had no right to consider the interest of the gas consumers bo long as they could enter into a fair contract for lighting their street lamps. If the report were adopted, the citizens would be asked to enter into the responsibility of carrying on gasworks in opposition to a wealthy Company. To benefit only one-third of the citizens, for only one - third were gas consumers, the other two - thirds would bo called upon to pay. Rather than run in opposition. :to this "wealthy Company, the

Council should make arrangements with Sydenham and St Albans to purchase tbe gasworks. He would ask Councillor Gray whether the general rates of those cities which owned gasworks were any less than they were in Christchurch. Councillor Gray had carefully kept from the Council the price paid for the Dunedin gasworks. The Cbristchurch Council could probably purchase the gasworks here for half that amount. Councillor Manning supported Councillor Gray's resolution. It would, he thought, be very undignified for the Council to re-open negotiations with the Gas Company. About five years ago an attempt had been made to get up a new Gas Company, but the present Company had offered reductions to some of the principal consumers, who had abandoned the scheme and left the others in the lurch. The same thing would probably occur again if it were left to individuals to carry out the present proposals. Councillor Crooks heartily supported the report of the Committee, who, he thought, were entitled to great credit for the hard work they had bestowed upon the very exhaustive report they had presented. He thought ifc would be an insult to the Committee to adopt Councillor Reese's proposition. Councillor Hulbert said that the Committee had been unanimous as to the report^ and that the Mayor and the two Councillors who were absent were also in favour of it. He disagreed with Councillor Reese when the latter said that the private consumption of gas was not a matter for the consideration of the Council. He would like to corroborate what Councillor Scott had said as to the reliability of the estimates presented by ihe Committee. He believed that gas could be produced cheaper in Christchurch than in InvercargUl, Dunedin, and Nelson. In tbe first ! place, the Council would borrow the money at a lower rate of interest. Secondly, tbey would be able to carry on the works at a much cheaper rate. Thirdly, they had | offices, they had an engineer whoso time was, unfortunately, very little occupied at present, and they had other officers whose service could be employed, instead of paying a staff as the Company would have to do. Councillor Gray's remark that the Council would have saved half their rates had they purchased the gasworks ten years ago, was not an absurdity, for the Dunedin Counc! had made a profit; cf JGIO.OOO on the purchase of their gasworks. The saving on the lighting of the three hundred and eightyone street lamps was a mere bagatelle compared with tne saving to private consumers, whose interests the Council were seeking to conserve. With, regard to electric lighting, he would point out that in America the electric light was produced cheapest where it was run by those who also had the control of the gasworks. Care must be taken lost the city weie made subject to the same monopoly in regard to electric lighting as it was now in regard to gas. It would be derogatory to the dignity of the Council to again begin parleying with the Gas Company. He would like to point out that out of 9s a thousand charged for the gas, 4s Gd had been paid to the shareholders of the Company. Councillor Prudhoe seconded Councillor Rec-e's amendment pro formG,. Councillor Gray, in reply, said that the Committee had never taken up the position of wishing to get gas for less than it cost — less than 3s 6dper thousand. They only wanted to get it at a reasonable advance on cost. The Chairman had under-estimated the proportion of the cost of gas paid to the shareholders. In ISS6 the shies of ga3 amounted to .€31,000, at.d Ihe balance to credit of profit to about .£IB,OOO. In 1887 the tales were about £32,000, and the balance to credit was over .£17,000. Councllior Reese's remark about two-thirds of the ratepayers not being gas consumers was no argument, but he would reply to it by saying that not one-twentieth of the ratepayers were gas shareholders. A large number of the gas shares were held outside the city, ancl even outside the Colony. As to buying the gas works the Council would probably hava to pay about 110 per cent iipon what it had coat the Company, for their JES shares were now quoted at .£lO 10s, and the .£2 shares at J£s 103. He would like to pay the Company just the amount of their paid up capital, for -*bea tne Council would be able to make 16 per cent. It was not- £or the Council to approach the Gas Company any more. They had gone like beggars to them and asked them to do a certain thing, and they had refused. Councillor Bishop: "No." Councillor Eeecc's amendment was then put and negatived on the voices, only the mover voting for it. Councillor Gray's motion was then put and carried. Councillor Manning moved—" That the Chairman, in the absence of His Worship the Mayor, be requested to carry out the provisions of the Municipal Corporations Act in regai-d to raising a lean for gasworks. Councillor Crooks seconded the motion, which was carried. Ths Council then proceeded to other business.