PRICES INCREASED

Gisborne Herald, Volume LXVI, Issue 20001, 28 July 1939, Page 6

PRICES INCREASED

ELECTRICAL EQUIPMENT HIRE AND CONCESSION POWER BOARD DECISION ANIMATED DISCUSSION A substantial increase in prices for electrical equipment on the hire and concession principles is to be made by the Poverty Bay Electric-Power Board on September 1 as a result of a decision nt its meeting to-day’, following an animated discussion. ''There are two reasons for this,” stated the managing-secretary, Mr. R, P. ißaigent, in a report recommending the increases. “'Firstly, I consider that the circumstances which necessitated the introduction of these schemes are no longer present and, therefore, the ■ieod 'for the schemes, in their original form a.t any rate, has passed. “When the schemes were first introduced the board had to build up its ton'd rapidly, and a considerable inducement had 'to (be offered t'o the public to persuade them to install range's and water-heaters to the extent required by the board. To-day the load is 'coming to the board at a faster rate 'than, .is desirable, and a slackening in the demand for ranges and waterhea'ters would be to the advantage of the board. “In such circumstances, it does not seem to be a sound policy to take this business on a basis .which is showing the board a considerable loss. Profit Earning' Reduced

“Secondly, the profit-earning capacity of the hoard has been (considerably reduced in the past two years by heavy reductions in charges, and the funds available for these subsidy schemes are very much less than when the board was earning large profits. “I think the board should aim at gradually reducing its expenditure on these schemes so that in two or three years the annual cost of them could be handled from the profits earned each year 'and would not necessitate recourse to reserves. The increases recommended -will not reduce the annual expenditure to this figure.” Mr, J. ‘H. Hall took strong exception to the statement that a slackening in the demand would be to the advantage of the bear’d. The heard conducted a social service, and the statement was opposed to that principle. It should be the board’s policy, he considered, to cope with the demand and net restrict it. The statement was made on the .eve of a great growth in the .development of the town and district, and he maintained that socn the demand for power would be doubled. The .board should go even further than what it Wad done, an'd if it (failed to do so it would be calling a hjilt to service. Despite the board, the demand was growing, and the board should caller for the full requirements of the people. He moved that the paragraph he complained of be removed from the report.

“Buying Business”

(Mr. C. W. Iz'od pointed out that the board was sustaining a considerable loss on the present arrangements, and t'Wa't was (Contrary to it's policy. In doing so, the board was buying its business, and 'was going' black instead of making progress. 'He agreed with, the imanaging-secretary that it was time thait the board eased up on the loss that Was being sustained. Mr. Baigent said that in presenting the report he had taken the opportunity of warning the board of the position, in order to avoid financial difficulty. Under the circumstances, it would be better for the board if the load was increased naturally without forcing it aiong at a pace that might be dangerous.

.Mr. C. Mills contended that when the report, as worded, was published there would be much misunderstanding among the consumers, and it would be better for the board to cut the scheme out entirely, - Or to bring the prices down more in accordance with the actual cost. The chairman, Mr. F. R. Ball, said that the board’s duty was to conduct its business in the interests of the consuming public, even though the board might suffer a loss. He did not think the public would react as suggested. The board did not wish to prevent the increase in the load, and if it did it would eliminate the concession scheme altogether, but there might be difficulty in receiving further loans to carry on. ■ Interest of Consumers He thought that the public would realise that the board was acting for the benefit of the consumers and would realise the position in which the board was placed. Thirty-seven per cent of the board’s domestic consumers were cooking by electricity, Mr. Ball added, and he did not think any other board operating over town areas had such a large percentage. There was certainly no board in New Zealand which had facilitated the supply to domestic consumers to such an extent. Mr. De Costa s'aid that Mr. Hall suggested that the board was trying to exploit the public, but that was riot so. When ithe board wished to cut it's losses 'a little, Mr. Ha'll objected. 'Mr. (Ha'll: Oh, no, riot at all. To Mr. Mills, the chairman, said that he 'did riot think the increase in prices would slow up the installation of water heaters, but the board 'was 'rying to cut it's losses. He was pleased Mr. Hall had brought the matter up. (Mr. J. E. Benson congratulated the •nandglng-'secretery on giving the board adequate Warning of the position. He Was not 'in favour of the bo'ard carrying on g't a loss. 'Mr. Hall’s attempt to delete the paragraph he indicated from the repor! was defeated, and the report submitted by the managing-secretary war adapted, Mr. Hall ‘having his vote recorded against the adoption of the report.

The board agreed to purchase a further 100 two-ring ranges and 40 three-ring ranges.