COST OF ELECTRIC POWER.

Putaruru Press, Volume II, Issue 28, 24 April 1924, Page 4

COST OF ELECTRIC POWER.

REDUCTION ASKED FOR. The Minister’s Reply. Mr. F. Lye, M.P., has received the following communication from the Hon. J. G. Coates, Minister for Public Works:— In reply to the deputation representing the electric rower boards which waited on me on December 7 at Cambridge, asking for a reduction in the charge for electric power supply, the position is as follows: The department’s standard rates for electric power supply., published in 1919, were £lO and £6 per K.V.A., not £8 and £6 as quoted by Mr. Claxton. Owing to increased cost it was necessary in 1920 to increase this to £lO and £8 per K.V.A., less a discount of 5 per cent, for high-tension supply. In 1920 this discount was cancelled, and the standard rate is now £lO and £8 net, but as the Waikato power boards had negotiated their arrangements in 1920 they are all receiving 5 per cent, discount. It is recognised that as the output of the Government stations generally increase the standard rates will be reduced, and, with the object of enabling the contracts to be reviewed by both parties, they were all made for short periods, expiring in March, 1925, when they will come up for revision. It is quite anticipated That this revision when made will be in the direction of reduction, but the financial results of last year’s operations are exceptional and must not be taken as a basis. This is due to the fact that the existing plant is heavily overloaded and thus yielding a larger revenue than is compatible with security. Moreover, the capital charges on the extensions now in hand have not yet come into the accounts, and a considerable outlay on additional lines is with the object of giving greater security of supply. Naturally these extra charges are taken into account in conjunction with the increased revenue which will accrue during the current year. It will not be possible to give any undertaking with regard to the revision of the charges, but, as intimated at the interview, I propose to deal with the matter in a sympathetic attitude from the power boards’ point of view and to make whatever reductions are possible. Meanwhile it s-hould be noted that the Government charge is a comparatively small factor in determining- the cost of electricity to consumers in the power board districts. In the four Waikato power boards the gross revenue received last year from consumers amounted to £50,919. Of this only £14,747, or 29 per cent;, was paid to the Department for power supply. The balance of £36,172, or 71 per cent, of the revenue for the consumers, was spent by the boards in other directions, so that the Government charge is not "the main determining factor in the cost of electricity; in fact the cost of power to boards worked out only .63 of a penny per unit, which is very low as compared to the retail selling price of the boards.

It is recognised that the pi’ice of benzine is falling, to the advantage of farmers who are milking with benzine engines, and that this involves keen competition with the electric motor. It is also recognised that the boards are giving valuable assistance to the consumers in the direction of loans to enable their installations to be made. Mr. Claxton was in error in stating that the department had agreed to

reduce the charges in Christchurch City by a discount of 25 per cent off standard rates. The actual offer, over a 10-year contract is 10 per cent off standard rates, and it is anticipated, on the renewal of the Waikato contraits, equally favourable terms will be available. In the meantime the main consideration from the power boards’ point of view is the increase in their business, and an increase of 33 per cent in the boards’ sales, such as forecasted by Mr. Claxton, would do more to reduce the charges to the consumer than would be possible if the power was supplied to the boards on the same output by the- department for nothing.