POWER BOARD MATTERS.

Hauraki Plains Gazette, Volume XXXVIII, Issue 5131, 27 May 1927, Page 3

POWER BOARD MATTERS.

RESUME OF YEAR'S OPERATIONS.

MANAGER’S ANNUAL REPORT.

At the annual meeting of the Thames Valley Electric Power Board at Te Aroha yesterday the manager (Mr R. Sprague) reported on the year’s operations as follows :— “I beg to submit my report on the seventh year of the board’s operations :—

“The amount of loans sanctioned by the ratepayers to date is £850,000,, of which £BOO,OOO has been borrowed and £745,000 expended. The following table shows the rates of interest and sinking fund of the loan moneys raised and the board’s annual liability : —

£350,000 Loan : Bank of New Zealand, London, £350,000, at 6 per cent., £21,000 ; sinking fund at IV> per cent., £5250 ; special exchange sinking fund, £135.

£200.000 Loan : Public Trustee, £l00,000 ; at 5’4 per cent., £5250 ; sinking fund at lU’ per cent., £lOOO ; A.M.P. and Bank’ of N.Z. £loo,ooo' at 5Li per cent., £5500 ; sinking fund at 1 per cent., £lOOO. £150,000 Loan : A.M.P., £50.000 at 5 3 4 per cent., £2875 ; Public Trustee, £lOO,OOO at 6 per. cent., £6OOO ; sinking fund at 1 per cent., £l5OO. £lOO,OOO Loan : A.M.P., £lOO,OOO at 5% per cent., nicluding sinking fund, 5 3 A per cent., including sinking fund, £5750'.

The total of interest and sinking fund on loans is £55,260, less Cambridge Power Board’s proportion, £467 13s 4d, leaving £54,792 6s Bd.

“The amount of interest and sinking fund to be paid for the coming year out of tho Power Fund will be £49,042 6s Bd. “The sales of electricity for the year amounted to £93,047, made up as follows: Towns and districts cn meters : Lighting £11,4'98, heating and power £9937 street lighting £1036, bulk supply (boroughs and dairy companies) £10,831. Flat rate charges: Lighting £8509, heating £7640, motors (milking, etc., including 12,500 excess butter-fat) £38,286, water-heaters £3324, ovens £1986. “My estimate for revenue for the year ended March 31, 1927, was £90,000. The actual salgs of electricity, as shown above-, were £93,047 —exceeding the estimate by £3047. “The expenditure side- of the Income and Expenditure Account totalled £57,292 19s Id. Included in this amount is £31,436 18s 9d paid to the Public Works Department for the purchase of electricity, and the balance, £25,856 0s 4d, consists of maintenance charges, compensation claims, salaries, allowances, discounts, and general administration charges. “The amount of interest and sinking fund paid by the board out of the Power Fund for the year was £44,236 19s lid.

“The installation and showroom department sales totalled £28,974 Ils 2d. which is a decrease on the previous year’s operations. This decrease was to be expected owing to the area now being practically reticulated, and the, demand for installations is now being controlled by the prices the settlers qi'e getting for their produce. From the sales of this department the nett return has shown quite a satisfactory working balance for the year. “On the basis of last quarter’s sales (1 would like to point out that these figures are from actual sales of electricity at March 31, 1927), the revenue for the year ending March 31, 1928, will be as follows .: Bulk supply, £10,217 ; town meters, £22,636 ; street lighting, £1055; flat rate, £57,532; water-heaters, £4o'oB ; ovens, £2284 ; total, £97,732. In addition, there should be installed 100 2 h.p. motors, together with demand from industrial consumers, and applications are daily being received for lighting, cooking, and heating installations.. “The estimate of revenue from electricity and other sources for the year ended March 31, 1928, is £107,805. The expenditure should not exceed £107,866, being: Power purchases £34,000, management and general £lO,000, maintenance £12,000, discounts £2821, and interest and sinking fund £49,042.

“The following will show you the growth of the board’s revenue for electricity from its inception : 1922, £6260 0s 2d ; 1923, £22,701 4s 6d : 1924, £42,391 17s 8d ; £59,001 5s 4d ; 1926, £76,301 15s 2d ; 1927, £93,047.

“It is very difficult this year to make a definite estimate with regard to revenue owing to the possibility of the Public Wprks Department restricting the supply of power to the board until Arapuni comes into Operation, but (/'he figures supplied are conservative.

“The financial position of the board is quite satisfactory from the figures contained in the balance-sheet. The •trading department sales have decreased £10,000! from last year’s figures but, as.already mentioned, this was to be expected. However, the overhead cha.rges have not increased, and this department is still an asset to the board’s scheme and revenue. “The revenue side of the sheet shows a shortage of £1707. This is accounted for by £240 compensation for loss of cows, rate allowances £550, and interest on 'hypothecation of debentures £1055 11s —a total of £1845 Ils. The interest for the year was charged to the Power Fund, but could have been debited to the Loan Fund against the first year’s interest and sinking fund. If these amounts had not been debited to the Power Fund the year’s operations would have shown a credit balance of £l4B. In addition to the above, the maintenance, administration, and othei charges increased £7568 over the previous year, and the purchase of power from the Public Works Department increased £5807 for the

“ Now the main reticulation work is practically completed, the administration and maintenance charges, are not so heavy as during the past year, but I consider the method adopted of charging the Power Fund and Trading Account with their full quota of overheads sound and safe. “During the year a claim for compensation, amounting to £246, was met for the electrocution of cows mi o farm. The cause of this break was

owing to the line being erected by the farmer interested, the main reason being the poles, which were obtained locally, and were not supplied by the board, and would not stand. Since the above-mentioned accident no service line is given supply unless erected by the board. “There are installed and operating on farms 1882 motors, of which 1617 are 2 h.p. motors, of which 197 were connected during the year. There are also 1.001 water-heaters and 147 electric ranges on the board’s mains. This is an increase of 579 waterheaters and 82 electric ranges for the year. Quite a large number of consumers were connected to existing lines in the board’s area during the year. The number of 2 h.p. milking motors alone totalled 172, in addition to which were 274 water-heaters and 53 electric ranges.

“A troubleman was stationed at Turua during the year and has relieved the congestion in the service from the Ngatea depot. One of his other duties is to supervise the operation of the synchronous condenser erected at Tuma. A further troubleman was stationed at Springdale at the beginning of the past milking season. He is connected with the- public telephone, also the board’s high tension system.

“Transport is a very considerable item in the board’s operations, and every endeavour is being made to cut these costs down to a mini,mum. “I wish to thank the chairman and board .members for the assistance given me from time to time in carrying out my duties ; also the staff for their whole-hearted support and cooperation.”

Mr J. Price said that he would like to see the borough and bulk supply figures shown separately. . Mr W. E. G. Willy pointed out that the manager had not given a clear indication of W'hat would be available for the next 12 months. Mr G. Howie said it seemed odd that the board should have- gone down when he knew of other boards showing a profit.

Mr. R. Sprague (manager) said that other boards might have shown a profit, but it was on loan moneys only. Again, there were many boards which were making provision for one per cent, sinking fund only, whereas tlie Thames VijUey Board was paying IV2 per cent, sinking fund. Next year the insurance rates would be cheaper, and another handicap this year had been that the board lifid practically no loading outside of its motors. The chairman (Mr F. M. Strange) said that after careful investigations in every department he could not xce how overhead and maintenance charges could be further reduced. There could be no increase in revenue made on milking motors, pr as far tvs he could judge in any department. He believed that the Te Awamutu and Waitoino boards hfjd shown losses on the year’s workings, and yet those boards did not have tho heavy expense of erecting 11,000-volt lines. He considered the apparent loss was no cause for pessimism. Mr F. E. Flatt pointed out that the trading account showed a decrease of £lO,OOO, and said that he thought it was desirable to reduce the overhead expenses in that department.

The manager said that allowing for depreciation and other contingencies the trading department was just about holding its own. In moving the adoption of the report Mr Flatt said he considered that it was essential to proceed very caution ily, even though the- figures submitted in the report had been given on a conservative basis.

The resolution was seconded by the chairman and carried.