POOLING OF INTEREST

Press, Volume LX, Issue 18234, 19 November 1924, Page 7

POOLING OF INTEREST

ON ELECTRICAL UNDER- : TAKINGS.

A POWER BOARD DISCUSSION. At its meeting on Monday the Springs-Ellesmere Electric Power Board discussed the proposed pooling of interest charges on electrical undertakings.. The matter was introduced by the reading of a letter from the Canterbury Progress League. A copy oi a lengthy report on the subject, which had been before the League executive on November 4th, was /sent for the Board's perusal, together with a copy of a resolution passed by the executive. The' resolution was as follows: "That this executive enters an emphatic protest against the system of pooling interest charges on the capital xsost.'pf hydro-electrical undertakings, believing this to be unsound as a matter of business principle. Further, tlie pooling process places an unfair burden on.the Lake Coleridge scheme which' was proposed' by the people of Canterbury, and largely constructed at? a time when money was 'much cheaper than it is at present;", It was pointed out that the proposed' pooling would' mean an additional burden of £7OOO per annum on Canterbury, power consumers. The,chairman said, that if the Gov-, eminent carried out .its intention of constructing several hydro-electric plants in the South Island and, linking the whole into one big scheme it would be rather a difficult matter, to keep the interest charges entirely separate, even if it was advisable to do so. The linking up scheme would probably be Lin the best interests of power users throughout the South Island, for in the event of Coleridge or any: other plant breaking down, the essential industries could be served from the other plants. The interest charges on the South Island schemes could probably be kept separate from .those in the North Island if it would be advisable to do so. •

Mr Langdale-Hunt pointed out that the.'Lake Coleridge undertaking was a Dominion one, the money raised for the development of that source of power having been raised on the security of the Dominion as a whole. Mr J. C. Free said he thought the Board should take some action in the matter on the lines suggested in the League's letter. He did not see any reason why the interest charges could not be kept separate, and it was his opinion that it would be to the advantage of Canterbury if the Lake Coleridge undertaking was-kept-out of any .pooling scheme. Each undertaking should stand.on its own legs, just as it would have to do in a properly eonducted business concern. As a Canterbury Power Board, he thought it was their duty to enter a strong protest against the proposed pooling. "Are. we .satisfied in our own minds as to what-ia x the best thing to do?" asked Mr R. T. McMillan. He was not satisfied himself .which was the right course to' tike. -" .- Mr Magiiiess said hje.was in dary as. to what: should be'done", for. it opened, up the question of. whether the national system of railway charges was a fair one. If they were going to differentiate in regard to power schemes, should not the same thing be done in the case of the railways! The whole matter required careful consideration.

Mr .Hunt said that when the other [proposed schemes in the South Island

were carried out the whole of the undertakings in this island wbtfld really form one big scheme. The chairman remarked .that the increase of £7OOO in . interest charges spread over the whole of the territory served.by the" Coleridge plant'would not be a heavy burden: It; -was not ■advisable to" be "too parochial in their outlook. .When tlie other proposed South Island schemes were carried cut and the linking up took place it would be an insurance against loss and inconvenience should one of the plants go out of action.. It was , eventually decided to: hold the matter over for further consideration at next meeting.