Power price rise hinges on undecided councillors

Press, 4 February 1986, Page 1

Power price rise hinges on undecided councillors

By KAY FORRESTER Christchurch electricity consumers hoping for a reprieve from a 7 per cent power price increase in April may be out of luck. The proposed rise, 3 per cent more than that of the bulk tariff, is likely to be decided by the party line voting of Christchurch City councillors. Labour councillors oppose the Municipal Electricity Department budget — criticised by. the Minister of Energy, Mr Tizard — and Citizens generally supported it. The budget, recommended last week by a vote of 5 to 3 at the council’s airport and electricity committee meeting, will be decided on February 17. Its rejection would depend on councillors crossing the floor. The Citizens Association holds an 11-9 majority if councillors stick to affiliations. Of councillors who might cross the floor, the most, likely is the chairman of the airport and electricity committee, Cr Morgan Fahey.

Cr Fahey agrees with much of Mr Tizard’s criticism but believes a 7 per cent increase in tariffs is justified because of “the massive costs” facing the M.E.D. He doubted yesterday that Mr Tizard was aware of all the costs, including the bulk electricity price, and a 30 per cent rise in salaries and servicing. Asked if he would vote against the budget because it allowed for a 7 per cent increase, Cr Fahey said “No, the 7 per cent is acceptable in light of costs.” He has, however, asked council staff to supply extra information on the effect of leaving $3.7 million, intended for transfer from M.E.D. accounts to the council’s general accounts, with the M.E.D. Cr Fahey has long opposed the transfer of moneys from the M.E.D. to the general account. "I do not believe it is a legitimate way to keep the rates down,” he said. Transfers 1 had been made for many years.

including some by Labour-dominated councils. He had hoped that this year’s transfer would have been smaller. Mr Tizard’s comments that the tariff increase should have been limited to the 4 per cent rise of bulk electricity were rejected. Cr Fahey said: “That simply does not take into account costs. The bulk figure is but one component.” Financing further capital works from loan was. not feasible as the eligibility of works for loan money was limited. Only

another $1 million at most could be raised in loans. The council’s budget allows for $4 million in loans to help finance its $14.5 million capital works programme: a programme Cr Fahey acknowledges is large. To finance more of the programme from loans, and face interest rates of about 20 per cent, would be too expensive, he said. Other Citizens councillors echoed Cr Fahey’s sentiments that the 7 per cent increase was justified by rising costs. The Mayor, Sir Hamish

Hay, believed also that Mr Tizard had not been made aware of the council’s budget before criticising the proposed rise. The 4 per cent increase in the bulk tariff could not be equated to M.E.D. tariffs, he said. Labour councillors, say however, that 4 to 5 per cent is the acceptable increase. Cr Rex Lester, who criticised the budget at its committee stage, believes a 4 to 5 per cent increase would be justified. "Certainly not 7 per cent.”

He is concerned that the Government might alter the favourable 22 per cent South Island power price differential, if southern councils do not limit their tariff increase. “If councils cannot accept the responsibility, the Government may well step in and that would affect everyone in the South Island, not just in Christchurch.” Cr Lester hoped that Cr Fahey would bring a revised M.E.D. budget to the council meeting. As the electricity copimitchairman, Cr Fahey

was the only councillor in a position to do this. Cr Lester said that the Central Canterbury Electric Power Board had held its increase to 4 per cent.

Cr Fahey said, to do that, the board must have decided to use reserves to subsidise costs.

The City Council was consciously running down its M.E.D. reserves, which stood at a record $l4 million in 1984. The reserves would drop to $9.5 million by the end of the year and fall another $5.2 million by the end of the 1986-87 financial year.

This would put reserves below $5 million recommended in a specially commissioned report-V on

M.E.D. finances, Cr Fahey said.

Councillors had been told that a drop in reserves to $4.3 million was dangerously low. Asked if he would bring a recommended rise other than 7 per cent to the meeting, Cr Fahey said he had asked for more information. Beyond that he could not say. When surveyed yesterday, councillors gave the following indication of how they would vote.— CITIZENS: Sir Hamish Hay will vote in favour of the budget which incorporates the 7 per cent tariff increase. “In light of the costs and necessary capital works it is a reasonable level.”

Cr Maurice Carter will vote in favour of 7 per cent. “I have already voted for the budget” (at the electricity committee meeting.) Cr Maurice Fahey will vote in favour of 7 per cent. “I have to. Because of the massive costs facing the M.E.D. and the onstream capital works 7 per cent is justified.”

Cr Matthew Glubb will vote in favour of 7 per cent “I voted that way last week and no information has come to light to change my mind.” Cr John Burn would not say how he would vote but said, “As far as I’m concerned the council is taking the only prudent course. The 7 per cent is acceptable in view of

costs.” Cr Anne Evans unsure of how she would vote. “I want more time to make a decision.” Cr Helen Garrett unavailable. Cr Ron Wright would not say how he would vote, but “I have taken heed of the Minister’s words ‘quite excessive.’ I think 7 per cent is too high. Four per cent would be nearer the mark.” Cr Rex Arbuckle unavailable. Cr Clive Cotton will vote in favour of 7 per cent. “On the basis of information it is reasonable.” Cr Louise Moore unavailable. LABOUR: j ■ Cr Alex Clark wiH vote

against 7 per cent. “When the Government kept its increase to 4 per cent it was up to the council to. hold its increase to some-* thing similar.” Cr Rex Lester will vote against 7 per cent. “Personally I think an increase of 4 to 5 per cent is acceptable. The 7 per cent can be reduced.” Cr. Vicki Buck will vote against 7 per cent. “Seven per cent is a bit excessive. Slightly higher than 4 per cent is more acceptable.” Cr Noala Massey uncertain of how she will vote but “I think 7 per cent is too high.” '

Cr Geoff Stone will vote against 7 per cent “It is important that domestic electricity tariffs in Christchurch be kept

low because of the air pollution.” Cr Mollie Clark will vote against 7 per cent. "Seven per cent is outrageous. Four per cent would be acceptable.” Cr David Close has not decided how to vote but said, “It is extraordinary that the Government, when it requires the Post Office to make a profit, should not want local authorities to.” Cr Alistair James will vote against 7 per cent “An acceptable increase would be in line with the increase in bulk power of 4 per cent” Cr Kathie Lowe will vote against 7 per cent “A nil increase is what I’d like.but if it must go up thenyl or 4 per cent”