POWER BOARD FINANCE

Wanganui Chronicle, Volume LXXXIII, Issue 19845, 20 May 1927, Page 6

POWER BOARD FINANCE

A COMPREHENSIVE REVIEW REPORT BY THE CHAIRMAN. The financial side of the activities of the Wanganui-Rangitikei Electric Power Board was dealt with in a report by the chairman, Mr F. Purnell, which was submitted to the annual meeting iof the Board yesterday. The report stated: —“The estimated expenditure was £61,200 with revenue estimated at £61,000 and tho actual amount expended is £64,780 3s 3d, with revenue £70,835 19s. These figures do not include depreciation nor the interest received from investments. The annual charges for interest and loan repayments account for £31,685 0s 7d; bulk supply from the Public Works Department cost £11,425 Ils lid, and tho generation of current with the steam plant cost £1.1,034 4s 4d. As there will be no appreciable increase now in the annual capital charges and the other items of expenditure will increase only as the result of increasing demand, the nett return from increased business should therefore show a supbstantial profit. Provision had been made in the net revenue account for the year for depreciation to the extent of £12,654, 3s 7d. The prospects of the undertaking indicate that funds will be available to provide more adequately for renewal of wasting assets from year to year and that in this respect the Board is fortunate in having built up a sound business in such a short period. Power House and Steam Plant. “The depreciation written off poweY house and steam plant annually is £6OOO and tho preliminary capital charges, including interest and sinking fund on loan money during construction and payment to the City Council to cover losses on the steam plant, are being written off at a rate that will provide for these assets disappearing from tho balance-sheet simiultaneous with tho repayment of the loan. The loan is being repaid by half yearly instalments over a period of 36J years. The sum of £2676 3s 7d being loan repayments previously capitalised, has now been transferred and written off preliminary capital charges. Tho balance £3978 representing 1A per cent, of the wasting assets, is being invested in liquid securities readily available for renewals as may be required. “The Board will bear in mind that it has undertaken an extensive business upon wholly borrowed capital that has to be repaid ovtrr a period of 36i years. As tho assets for which the loan has been spent cannot last for this period it is most desirable to make provision out of revenue to maintain or renew them otherwise ratepayers may have a burden, to carry in the future. Reticulation. “At the beginning of the year £60,000 was received from the A.M.P. Society to reticulation, and £60,000 of 5J per cent, debentures having currency of five years were issued by the Board. These have been taken up sufficiently to provide funds as required, the sum of £27,700 being subscribed up to March 31. This money has been used in financing consumers for house wiring and electric ranges and is repayable within a period of from 3 to 5 years. “The Board has authority to raise loans to the extent of £562,500 of which £485,000 has been raised. Of this sum £30,000 has been invested to meet liabilities in 1931 in respect of the purchase of Wanganui steam plant and the Bulls electric plant. Advances to consumers outstanding at March 31 amount to £31,961 2s 9d in addition to which the value of stock of ranges and fittings on hand is to be added, making a total of approximately £40,000, representing loan money invested in assets not permanently absorbed in capital outlay. Income and Expenditure. “The expenditure for the year ended March 31 is as follows: —Power purchase account, £15,500; power house — wages £3400, fuel £7600, maintenance £lOOO, total £12,000; interest and sinking funds, £34,000; maintenance —main lines £lOOO, distribution lines, transformers, etc., £2500, street lamps £6OO, meters, including reading £l5OO, retesting installations, etc., £5OO, total £6100; administration expenses £6000; balance estimated surplus to meet renewals and depreciation £12,259 —grand total, £85,859. Income was as follows: —Sales consumers: 5882 consumers at £ll, £64,702; new consumers, £7990; sales to tramways, £4000; street lighting £4700; community lighting £700; interest and rents, etc., £3767. Grand total, £85,859.