COST OF ELECTRICITY

Wanganui Chronicle, Volume 79, Issue 239, 9 October 1936, Page 6

COST OF ELECTRICITY

MR. POLSON’S CRIX£ISM

WANGANUI BOARD’S STATEMENT BY CHAIRMAN Reference to statements made bj Mr. W. J. Polson, M.P., and by th/ Hon. J. G. Coates, who contendec that New Zealand electricity costi were higher than those of othex countries, was made at yesterday'! monthly meeting of the WanganuiRangitikei Electric-power Board by the chairman (Mr. F. Purnell). Mr. Purnell said that in the past power boards had been too busy to pay much attention to criticism. The time had arrived, however, when these objections should be met and the right facts and figures placed before those who made them. Reference was made to the recent Public Works Statement in which the Minister of Public Works, Hon. R. Semple, stated that the control of the sale of electricity in New Zealand had generally been good; also that the charges for electricity for domestic uses were half those charged in England, the charges for industry slightly less, and that New Zealand charges were 50 per cent. > less than Canada’s. ’ In a report to the board, Mr. Purnell said:— “In favour of local control and the difference between bulk and retail charges it is claimed: (1) That the Government's charge starts from zero, while that of the local supply authorities starts at 0.34 d per unit for bulk charges; (2) the actual difference between the department's charge of 0.34 d per unit and the supply authorities’ 1.25 d per unit is therefore 0.91 d per unit; (3) that the retail trade imposes many burdens on supply authorities not undertaken by the department. For instance, the department supplies about 300 consumers having about 500 metres to read quarterly, while the supply authorities have 350,000 consumers with approximately 500,000 metres to read, mostly monthly; (4) that owing to the building up of the Dominion s load during the construction of the generating stations the department has been unable to reduce the bulk charges. The Wanganui Board. “The Wanganui-Rangitikei Elec* trie-power Board may be taken as typical of the ideal case for local Y control. Its area includes city, bor- A ough, town district, and country. In ’ the Mam Trunk area it has reticulated 100 miles, to a point nearer Napier than its distributing centre Wanganui, towards Taranaki along the coast it has reticulated an area 40 miles distant from its centre and a similar distance in the Lower Rangitikei district. “Including the city area its consumers average only ten to the square mile of area reticulated. Its average price to consumers for the year ended March 31, 1936, was 0.978 d per unit as against the Dominion average of 1.25 d per unit. Its payment to the Government for bulk charges totalled £36,515 out of a Lotfil revenue of £101,609 for current sold. The capital charges were £34,108, or within £2407 of bulk supply, costs. These capital charges include no less than £11.228 or 11 per cent, of the gross revenue for sinking funds or payments in reduction of loans. The depreciation required was £10,758 or slightly over 10 per cent, of gross revenue. These two items, sinking fund and depreciation, were £21.986, or equal to 21 per cent, of the total revenue. All these charges are better shown in the following list, which specifies how each £1 of re- 4 venue was allocated: * “Bulk power, 7s Id; capital charges, 6s 8d; cost of distribution and service generally, 2s 6d; olfice salaries, 9d; other administrative- charges, Is; depreciation and new work, 2s. Total, 20s. “Our average sale price per unit for the year ended March 31. 1936, as stated herein, was 0.978 d. In 1926 the average prive was 1.889 d. This reduction was made notwithstanding no decrease was made in bulk charges. Loner Charges. “Residents of the Dominion do not seem to have fully realised the extent of the development of the industry (and particularly during the years of depression) due to local control. | One instance of this is the statements made from time to time by Mr. Polson, M.P., and ex-president of the Farmers’ Union, who has inferred that Canada presents the ideal to be arrived at and adopted in New Zealand. As recently as August 26 last Mr. Polson said ‘Our (electricity) costs are higher than those of other countries—Canada, for instance. The Right Hon. Mr. Coates, who as former Minister of Public Works, was responsible for so much of the hydroelectricity development in New Zealand, also said: “I think our costs are A higher, but it must bo remembered ’ that in Canada the reticulation is restricted to the better paying areas.” "The actual position, as already shown in this review from figures quoted by the Hon. Mr. Semple, is that electricity charges in this Dominion are 50 per cent, less than in Canada—and also very much less than is charged consumers in England, Victoria, and other parts of the British Empire. Growth of Industry. The extent to which the industry has grown is indicated by the official statement that the output from Government stations in 1921 was 53,038,000 units and in 1936 the output was 793.101,000 units. Already electricity has reached more than 90 per cent, of the people of this Dominion. These figures are amazing, having regard to the fact that it is only some twelve years since the power boards commenced to function. Surely complete evidence of the outstanding success of local control. The power boards’ and supply authorities’ share of the industry is now represented bv an outlay investment of £20.000.000.” Mr Purnell's report was approved and it was decided to send copies to the Hon. R. Semple and to members of the Power Boards’ Association.