ELECTRICITY SUPPLY

Gisborne Herald, Volume LXVI, Issue 20040, 12 September 1939, Page 10

ELECTRICITY SUPPLY

QUEENSLAND’S SCHEME QUASI-STATE CONTROL BRISBANE, Sept. 1. Within four years an area of south-eastern Queensland, embracing 9000 square miles, and extending from the New fioutli Wales border in the south to Gympie in the north, should be served with electricity. The whole of this undertaking, outside the metropolitan area of Brisbane, will be carried out and managed by a single authority, the City Electric Light Company, Limited, under an agreement with the State Electricity Commission.

This agreement is the result of discussions and negotiations extending over a number of years. It has several novel features. It introduces into Queensland for the first time the principle of a fixed dividend rate on actual capital subscribed for investment in an electricity enterprise. Hitherto, an electricity authority has been permitted an earning capacity calculated as a percentage not only of capital subscribed, but also of money contributed from reserve fund.

Apart from the claims of existing preference shares, the dividend to -nareholders in the Ci‘.y Electric Light Company will be limited to a maximum not exceeding by more than 2 per cent the interest payable from time to time cn Commonwealth Government stock. Appropriation to reserve fund is to be restricted to 1 per cent per annum, with a maximum of 2.\ per cent of the total share and, debenture capital.

Right of Purchase

The call which shareholders will be permited to make on reserve funds will be limited to amounts required to equalise dividends in the developmental period of activities, when the immediate earning capacity of the company might be restricted. All net earnings of the undertaking in excess of the sum required to pay dividends to shareholders will be mainly utilised for tariff reductions.

■ Another’provision in tlie public interest requires that the company shall supply electricity in the area outside the metropolitan district at prices not more than 10 per cent in excess of present Brisbane prices. At the end of 15 years, that is, on February 1, 1954, the Government, will have the right to acquire the whole undertaking embr-red in tlie agreement. In the meantime, the Stale Electricity Commission will have complete power to approve or disapprove of all new capital expenditure, and all new assets will be determined at their installed cost, less depreciation.