D—l

XXV

In order to reduce the overhead expenses an arrangement has been entered into to lease the plant to the Power Board, who will operate and manage it by means of its own staff, thus keeping the operating-cost at a minimum. In addition to the installation of this 1,000 h.p. plant which has been completed, surveys for the main scheme have been pushed on, including a survey for a sawmill tram-line and investigation of the foundations of the main power-house. The necessary permanent-road improvement and new-construction roads and bridges have also been carried on during the year, accounting for the greater portion of the capital outlay hitherto incurred. Whilst these will not be required for the construction of the new works for some time, they will be immediately useful in serving to improve the access for the settlers of the district. Electric-power Boards. Whilst the responsibility of generating and transmitting the electric power in bulk rests on the Government, it is intended that the whole of the reticulation shall be undertaken by the Electric-power Boards, and the Power Boards Act and its amendments gives these Boards full powers and responsibilities in this direction. The legislation is so far optional on the part of the ratepayers of any district —that is to say, a Power Board can only be formed on receipt of a petition from the ratepayers. Hitherto twenty-three such Boards have been constituted, covering about one-third of the Dominion. Petitions are in course of preparation for ten more districts, which will increase the proportion of the Dominion included in electricpower districts to one-half. In order to ensure the most efficient subdivision of the whole Dominion a suggested scheme of forty-one electric-power districts was drawn up in the last annual Statement. Of the twenty-three Boards now constituted, nineteen of them correspond closely to the scheme there laid down. The other four are for small areas, and were constituted to deal with an urgent demand in a special district ; and as the demand extends and the power becomes available to meet the demand over a comprehensive area, these districts must be extended or merged with adjacent districts in order to ensure the most efficient results. In order to meet this position special legislation is being introduced this year providing for the merger of adjacent electric-power districts. Several petitions are in course of preparation for the formation of further large districts in accordance with the general scheme laid down, but it is a serious question as to whether the procedure should not be mandatory instead of permissive—that is to say, whether the whole country should not be incorporated in electric-power districts, either in rateable inner areas or, if there is no immediate prospect of supply being given in that district, in non-rateable outer areas. This would enable the question of electric supply, which is now a necessity to the industrial development of the Dominion, to be considered in a comprehensive manner for the whole Dominion. Of the twenty-three districts already constituted four are now taking power from the Government power-station at Horahora, four have entered into contracts to take supply from other Government schemes, eight propose also to do so, and seven of the districts are outside the area within which a supply of power is available from the Government stations. Three of these —Southland, Opunake, and Teviot —have arranged to install their own power-stations, and the other four have not yet decided upon their source of supply. Whilst the main object of the Electricpower Boards is to undertake the distribution of the power supplied in bulk by the Government, the Boards must, of course, set up their own generating-station or make other arrangements to obtain power in districts in which a Government supply is not yet available. The suggestion has been made that some of the Boards are not spending their funds to the best advantage, and thus increasing the cost of power to the consumers. In two or three cases the Boards in their desire to give a general supply over the whole of their inner area have constructed or arranged to construct lines which will not be remunerative for some years. The responsibility of licensees to supply in their district has not been clearly defined in the past. New regulations are

iv—D. 1.