PENALTY ABOLISHED

Bay of Plenty Beacon, Volume 6, Issue 77, 1 June 1943, Page 5

PENALTY ABOLISHED

POWER BOARD S DECISION

NEW DISCOUNT RATE

Acting on the recommendation --of the engineer-manager, Mr J. D. Dicker, the Bay of Plenty Electric -Power Board unanimously decided to abolish the . penalty on overdue accounts and • as an incentive to prompt payment to allow a discount of 10 per cent on domestic, milking plant and commercial accounts. The report suggested a discount •of 5 per cent on dairy factories ■and street lighting.

Mr Dicker commenting on the. de■cision said that it was a step forward in the board's administration. Members were unanimous that the penalty on accounts had always "left a nasty taste in the mouth." Engineer-Manager's Suggestion In the course of his report and "estimates for the year, the. EngineerManager, Mr J. D. Dicker, stated: —. "With careful budgetary control, and -allowing for power restrictions preventing any appreciable increase in the present revenue f*om sale of electricity during the next several subsequent ,years, I feel the board's ffinances as indicated by the preceding statements, together with accumulated profits, are such as to war.rant a reduction to consumers. As a suggestion I respectfully recommend for the board's consideration the adoption of a discount, rate ■as an alternative to the present ;penalty system. This method would result in a more equitable -distribution of the reduction, and at the same time introduce a more popular basis of in'ducement to consumers to pay on or before due date. Concession to Consumers In framing such a proposal due regard has been given to the necessity of a sufficient, inducement, which has to be general over all sections of load, and to avoid complicated clerical work, simple in application. A general reduction in the manner -suggested involves a considerable sum,, and can be introduced onls r at ■a time when a forecast of f.ic future revenue credit, balances will permit •of such action. To apply a reduction at the present time by the past methods of reducing individual "tariff 1 - rates woukl probably postpone the application of a discount, rat* 1 - for m'any .years. Method of Reduction The 3 r car just ended, marks the :first occasion in which the board's financial position allows consideration of a revenue reduction approxi-

mating £5250 per annum. Details of. a suggested reduction in revenue per medium of general •discount. rates, and the abolition -of .the present penalty charge are set out in tlie following table:— Type of loading: Domestic, milking j>lant and commercial; estimated revenue, £-1,9,287; discount rate per cent, 100 per cent; annual reduction, £4928. , Industrial loading, dairy factories, :street lights) £6400; 5 per cent; £320. Bulk supply, £3813;* nil; nil. Total revenue £59,000. Annual reduction, £5218, equalling 8.89 per • cent. Over £SGOO Annually For the above reduction of £5248 to apply over the whole of the current year would reduce the estimat•ed credit balance to £249; but two months having practically already passed, and for accounting reasons 'it would be more advantageous to introduce the charge as from the half year. Such action would result "in a credit balance for the year ending 31/3/43 approximating £2873, and give a reduction to consumers -amounting to £2624 for the current .year with succeeding years enjoying the full reduction amounting to over £5000 per annum.