THE WATER POWER FOLLY.

Dominion, Volume 4, Issue 984, 26 November 1910, Page 6

THE WATER POWER FOLLY.

A correspondent has furnished us with a critical examination of the claims advanced by the Government, and its chief supporter, Mr. B.irks, on behalf of the Hutt water-power scheme. He points out that what is proposed under Mr. Birks's calcu-.' lations is that power shall be sold to the Wellington Corporation, which will be able to retail at 2d. a unit. This would only be 20 per cent below the actual cost. That, however, is by the way. All Mr. Birks's calculations are based on. the assumption that the Wellington Corporation will buy all the power it uses at the rate he suggests. It was left for Mr. Holmes to show that it could not possibly pay the Wellington Corporation to give more than .Gd. a. unit; but our correspondent makes a closer examination. If the city buys its power fvom.the State, it must still keep its steam'plant as a reserve in working order. Thus depreciation, interest, sinking funds, management, and other charges will still run on. Tha only' saving will bo in salaries and wages, fuel,.water, oil, supplies, and repairs? Taking the 1910 figures for these items, and allowing an increase of 7A per cent for a date five years hence, our correspondent shows that "the saveable cost of producing power in 1915" is £16,168. _But as £1000 at least must bo spent inside the power-house even when the current is .delivered—this is obviously a very moderate figure— £15,168 is the highest amount the city can possibly save by taking the State's current, and ' the highest amount, therefore, that it can /pay for all the current it wants. The amount that the Government must supply for this sum is 6,560,000 units, which gives a.return of .555 pence per unit. The Government simply cannot sell at that' price, and therefore the Wellington . Corporation cannot shut down its plant. Unless it does so the Hutt" scheme canr not pay. It could not possibly run at anything but a heavy loss ■in competition with the municipality, which is only able to sell at the present rate because of the great demand and good return from its tramways and- private and street lighting; How can the State, with a -capital expenditure of, say, half a million, do well in a field already covered by a rival that has this business as a side line?