D.—l.

HYDRO-ELECTRIC DEVELOPMENT. The hydro-electric developments have continued to be one of the Government's most successful undertakings. The conditions attendant on the more prosperous times of the past three years have given the public more confidence and a greater sense of security, which is reflected in continually increasing demands for electric power. Largely as a result of the Government's housing policy and stimulating of local industries, the increase in the number of consumers is the greatest for any one year since 1928. The number of units generated in the Government stations shows an increase of 17-14 per cent, in the North Island and 18-97 per cent, in the South Island, whilst the operating returns of the various distributing authorities indicate an increased consumption of 13-35 per cent., as compared with 14 per cent, last year. The operation of the various existing power schemes and the financial returns received therefrom continue to be satisfactory. The gross revenue has increased to £1,688,583, and after paying operating expenses, interest, and depreciation it has been possible to make available a sum of £585,131 to the Sinking Fund Account, which is still, however, £558,076 in arrears. To meet the increasing demand for additional power in all directions the Department has been actively engaged on new work and additions to power-stations and transmission-lines and on surveys and investigations for additional works and lines. In the generating-stations the erection of the third unit (20,000 kW.) at Waikaremoana is almost complete, whilst construction work is in hand and orders have been placed for plant for an additional two units each 21,000 kW. for Arapuni, and for two units each 20,000 kW. for the new lower development at Waikaremoana. Two additional units each 15,000 kW. for the Waitaki Power-station are being delivered, and preliminary work in connection with installation is in hand, whilst orders have been placed for a 25,000 kW. unit for the new development which will be built in the Rakaia River at the termination of the Rangitata irrigation canal. Main transmission-lines inter-connecting the Lake Coleridge - Waitaki system with Southland, and with the West Coast, have been completed, as also has a second main line between Arapuni and the Bay of Plenty. Work is in hand on an additional main line between Arapuni and Auckland, a main line between Melling and Masterton, a duplication of line from Napier to Woodville, and an extension of main line north from Whangarei to Kaitaia to give supply to the new Bay of Islands Power Board. Also, during the year a substation has been built and supply given from the Government system for the first time in the Taumarunui district. In addition, survey and other investigation work has been going on continually to develop a comprehensive long period programme of construction. Operating Results. Financially the year has been a successful one, and the whole Electric Supply Account has been able to earn 8-41 per cent, on the operating capital after paying net operating-expenses. The position of the account is summarized in the following table, and the result since the State commenced operation in the electric supply business is shown in the following graph : —

Percentage earned on Operating-capital after paying Working-expenses.

XIII

a Percentage Operat'ne- Gross Working- Net Net Balance camtal Revenue. expenses. Balance. to Operating - ' capital. £ £ £ £ PerCent. North Island system 9,208,227 1,127,132 200,438 926,694 10-064 South Island system 6,247,478 561,451 187,835 373,616 5-980 Totals .. 15,455,705 1,688,583 388,273 1,300,310 8-413 I