POWER RATES FOR DAIRY INDUSTRY.

Shannon News, 21 May 1926, Page 3

POWER RATES FOR DAIRY INDUSTRY.

deputation to the board. UNIT RATE INSTEAD OF HORSEPOWER CHARGE. At Tuesday’s meeting, of the HOrowhenua Power Board a deputation representing the dairy companies operating in the Power District, waited on the Board ,to ask for lower power rates for the dairy industry. .Mr S. A. Broadhelt' (chairman of directors of the Levin Dairy Co.) led the deputation, which comprised Messrs F. T. Wilton (Otaki), C. Dimock and F. W. Robertson (Manaka/u), M. Maclean (Paruparaumu), J. R. Whyte (Tokomaru), R. W. Taylor (Shannon), arid R. G. Wall (Kuku). Mr ’l’. G. Vincent introduced them. Mr Broadhelt said that the dairy industry considered it was not .getting just quite as well treated as it should, and, in some' cases the cost of electric .power pressed very heavjiv upon the dairy companies. Some months ago it had been decided to piece 'the position before them ns soon as they had had a year’s run. The (speaker understood that they had been considering giving a slight concession to the dairy industry, and lie hoped that, by the time the deputation had finished its discussion, the matter would come to its fruition. ■ In the first place, when canvassers went round the district the fanners had been led very much to believe that the power would be a good deal '.cheaper than it. was to-day. Unfortunately it did not come out that way. At the same time he also realised ill at the finances of the Board Inusti be kept .sound. Seeing the Board had picked up in eighteen months the load what (had been originally allocated to it for five years, the Board must be in a very fair position to do sound business. The industry for which he spoke was the soundest dealt with by the Board, and the- charge's- meant, a tremendous lot to the district. The Levin Dairy Company alone had 400 families working for it, and it was necessary for them to have the power to make it a little more convenient as the lot of the dairy farmer was a very hard one. The revenue from the dairy companies along this coast equalled nearly half a million at least- —

The Chairman: The Power Board haven't much of it, though! Mr Broadhelt also, stressed the fact that the dairying industry would increase Instead of decrease, and it did not fluctuate like other industries. If the dairy producers were in a position to use electricity as a payable commodity their positions would be very much better a,t the present time. The Chairman: Hear, hear! DAIRY FACTORIES tCASE. Tire dairy factories, said Mr Broadbelt, felt they were unjustly treated in having the maximum demand indicator ready for the quarter as a basis of charge. The industry was not a stationary one. For a part of the year it was fairly stable, but for about six months it was much less and fo.r three months they only worked every other day. The maximum demand charge was therefore not a fair one. The factories recognised that the Power Board had to purchase power on the peak load, but it was considered that there should be some, way of so conducting the Board’s business that the peak load would be worked to better advantage. From April to June the, factorv load went, practically, to nothing, hut the factories had to pay on the peak in April; the same thing applied as from the 30th June to 31st. August, and while the peak appeared on the latter date, on the Ist July they had to pay on the basis of August 31st. The deputation asked, said Mr Broadhelt, that the factories should have a monthly reading of their meters during tlie six months of the year, and that the maximum demand charge be reduced by 30s per KVA, thereby lowering the charge to £4. The "chairman: Might I ask on what you base these rates? That would help us considerably, if you could. Mr'Broadhelt said he had not gone very definitely into the figures, but he had compared the charges with those of other Power Boards, and found that Horowhenua was the heaviest charge among the adjoining Power Boards. FARM MOTORS.

He said that in respect to farm motors, these were in a somewhat similar category as the .factories There was a unit charge ol M oml a fiat rate ot £6 unit and vt nau been found very much more expensive than were the old oil engines. As a matter of fact, the difference amounted to about one-third more, and on' that score the farmers were asking the Power Board to do away with the KVA charge of £6 and the flat rate of m per unit, substituting therefor a charge of 4d for the: first 75 units, 3d for the second 125 units, and 2d for the balance. On being asked by the chairman as ■to what they based those joining connection with those of i a^ oini | boards, Mr Broadbelt replied tha t d deputation did, not wish to enter into a battle of figures. ■The Chairman: All the same, question boiled down to a mattea f I take it at > “ members of the Power Board, y know how far you can go? , , The Chairman: Too right, we doi Mr Broadbelt: We are not out w make comparison, hut are trying > come to some amicable arrangement which, in the end. will benefit your business Is there any chance of getMg a redaction to the first cost of wataSieaters, as £lO tor a 15-gallon heater is rather excessive jip B. Waring Taylor *aii »• f ar

mars did not know one iota about KVA charges and other technicalities, but they understood that the Board was selling power cheaper to one client than to another. The Chairman: It might clear tlie air if you tell us exactly what you mean.

Mr Taylor said he understood that the, flaxmillers were getting their current at lower rates than the dairy factories. Some discussion took place, between the chairman and Mr Taylor ■as to the actual cost of running tlie Shannon Factory. Mr Wall said it was not a fair comparison to make between factories , because it depended entirely upon the manager, who by bumping up, liis power consumption for eight or ten hours on one day might make a peak on which the Company would have to pay for three months. FACTORY MOTORS UNSATISFACTORY. Mr R, S. Wall said the Power Bear'd had had a fiar run for 12 months and knew what profits they had made. They were not out to make a surplus and should now be in a position to know -exactly what reduction they could make. One oi their complaints was that the electric motors they were advised by the Board to put in were unsatisfactory in the factories. There it was necessary to use steam and the coils of motors became damp and were eventually destroyed by tlie action of steam on them. The motors were disappointing, end the speaker' thought that, in future, the Power Board should see that all motors' installed in dairy factories were of the damp-proof type. THE POWER BOARD’S STANDPOINT. Mr G. A. Monk, chairman of the Horowhenua Power Board, said that the Board was pleased to be able to discuss the position with representatives of the various factories. In the first place, he did not wish them to go away with the idea that the Board easily found a solution for all these difficulties, but it was a satisfied clientele that they were after. In addition to' satisfied customers, the Board had to see that the two ends met so far as the finance was concerned. Referring to the rai.es of dairy factories and those of the dairymen, the speak er considered that these should be considered Mr Overton, Engineer at the time tlie Board was .first organised, had had experience of these rates in the' Waikato. He

Said tlie rates for milking motors were certainly high, and tlie Board said the fust reduction would be given to ’ that industry, which was what they now proposed to do. What tlie Board would have liked was knowing on what the deputation based its ideas on. The Board had figures on which they based their ideas. Speaking as a consumer, he said that by the adoption, of these new rates, he would have to pay a little more than what he had been paying according Jo the flat rate charge and unit charge. Possibly, there would be other dairymen who would be in a similar position, but there was, nevertheless, going to he a fair reduction over the Board’s system. When the report of the proposed charges came down, he thought the deputation would find that the Board had dealt fairly with the dairy industry consistent with the safety of the Board’s affairs. THE FACTORY CHANGES. In dealing with the question of factory charges the Board had to consider that last year the revenue from them was ‘Only £ISOO. Then there was the factor of the peak load, which

seemed to worry them. They knew that the factories created a peak in April, which they could not maintain in June, but the Board had to pay on the April peak for the power. Possibly, there was something in the argument ‘that a re-arrangement in the Board’s internal working the argument that a re-arrangement would onable it to give the dairy industry; a reduction, but if that were so/ why so them any more than any other consumer? The speaker had thought that possibly when they caipe before the • Board, they would have produced figures to show why. FLAXMILLS. Mqrjion bad been made of flaxmills, but practically every one of these had a special contract, under special conditions. The very large mills had a better rate than the cmcstripper mill, hut he would point out that a ftaxmill started at 7 o’clock in fire morning and left off, perhaps, at 5 o’clock at night, running on. the same peak and running all the time. The dairy factories, however, created their peak intermittently, and they did not take an average load for all these hours. Hie would quote one one-scrutoher mill, in particular, that had a special contract by which it could not start until a certain hour in the morning, nor must it continue after 4 o’clock in the afternoon. He was able to make the contract because he was able to work those hours. There did not appear to the speaker any reason why there should not be special contracts for individual dairy factories. Tlie Board knew that, one factory could keep its peak down better' than another, due to mtera working. He did not know how it was done, hut the factory manager had a consultation with Mr Overton, as a result of which he was able to keep down bis load. FIGURES WANTED.

The Board would very much like to laiow how the. factories arrived at the £4 charge and what, the would be to the Board if they gavei a monthly reading. The Board knew that it would get paid on the April and September peaks, hut it was concerned \vtth the other four months and what the loss would he, as there

were only four months affected out of the other six. . Referring to the water-heaters, Mi Monk said that the Board did not receive a 30 per cent, profit on these, not by any means. Ho considered that consumers received a fine service with these heaters, and the staff were always available to give service to consumers if anything went wrong. In addition to this they had the cheapest electricity which was supplied by the Power Board, as the cost per unit j for water-heating was about, a farthI ing, and he had no doubts as to its I efficiency. The Board was seized with the fact that the reduction to £4, I meant to them a sum of something like £270 a year, but was there any representative among the deputation who could tell the Board y what the saving to his factory would ' be by having a monthly reading? Mr Broadhelt said he could not say anything in this connection. NO REASON WHY.

Mr Matlieson, a member of the Board, said be was surprised that anyone should come to them for a reduction, but wiithout producing some evidence why the reduction should be carried out. As a member of the committee which handled the matter, however, the speaker said they had given it a good deal of thought, and were prepared to make certain recommendations that such reduction should -take place. The re«duicit)ions to be placed before, the, Board were gojng to cost it a sum of money which, at this particular stage of its career, it seemed very doubtful whether the Board could stand. Personally, he liked the idea that the matter should be gone into separately with each factory. He was rather surprised to- hear Mr .Broadhelt say that the price charged by the Board was greater than what canvassers had led the farmers to believe, and the speaker said he believed that it could hardly be substantiated. The Chairman: I think Mr Broadbelt meant that in a general way. OIL ENGINE v. MOTOR. *

Mr Matheson stated, in regard to the comparison between oil engines and electric motors, the Board had never yet been able to obtain from a single farmer, the cost of running his oil engine, and they had never yet found a farmer who had kept a record of such cost, Mr Broadhelt informed the meeting that plenty of figures could be procured in connection with running costs of oil engines. Mr Taylor considered the question of oil engines had nothing to do with the matters brought forward by the deputation. The only point .was that they were led to expect that the cost of power would be considerably less. The chairman of the Board said he hoped the deputation hadn’t got it into their heads that the Hoard had made a profit. That was not so. The reductions being made were quite problematical ones, as the Board expected to derive an increased revenue during the coming year, otherwise the reduction would not have been forthcoming. To say that the Board had made a profit on-the purchase and sale of electricity was wrong, and he did not think any other Power Board had been able to do any more than the Horowhenua Power Board, was doing. The speaker could produce records to show what his own oil engine cost to run, and for a few months of the season, when they, had used electricity, it had cost about 15s a month more than the prdyious season, but the advantages were worth far more than that. The water-heat-er was beyond anything he had ever seen in the cow-shed, and if they lost in the one instance, they certainly gained with the water-heaters, whilst another thing was the added convenience. There was just one other thing he would like to mention, and that was in connection with the people who canvassed the district when the Board first started. The chairman said he had stumped the country, and he would defy anybody to say that he encouraged people to think that the power would be cheaper. Mr Overton had said how much better it was going to be, but not how cheaper. REDUCTION AND INCREASE In conclusion, the chairman observed that he had worked out the figures as applicable to his own concern, and had discovered that, instead of a decrease, there would be a slight increase under the new rates. On the whole the very small man and the very big man were going to have the most benefit, especially the man with - from one to thirty cows, hu.t the man 'with from 30 to 60 cows was not going to be much better off, under the new arrangement. “THE JOLLY OLD POWER BOARD.” Mr Taylor asked how this was going o affect the revenue of the Board, to which the chairman replied that it would affect the revenue and there must be a minimum charge. The Board could not allow anybody to be connected to the system unless they were prepared to assist the Board a little. They were afraid that, if this minimum charge were not made, people during the slack months would sav: “Never mind Hie jolly old Power Board. I’ll shut the thing up.” With regard to the factories, the Board would, if necessary, confer with them. 'LOWER CHARGES FOR MILKING MOTORS. Tlie Finance Committee reported as follows:-^ As directed by the Board the Committee met on the 7th instant and dealt with various matters of routine and also the questions referred to it by the Board. I.—The revision of the rates to dairy factories of the District occupied a considerable time. It was found that there, was a considerable difference in the cost of power to factories

of practically the same size and capacity. On the Committee receiving information that there would be a deputation waiting on the Board at its next meeting to place the views of these concerns before it, it was decided to hear what requests would be made, before the Committee would make a recommendation to the Board.

2.—‘Milking-plant Rates. After going into- this question with careful consideration and analysis, it was decided that -tlie Board should be asked to abandon the present method of charging a horse-power rate plus units, for a. method of charging for units used only. In the flush of the season the rates hereunder submitted for adoption would produce practically the same amount as our present rates. Taken however over the whole year there would be a reduction in the favour of the consumers of at least 10 per cent. The Committee therefore recom mends that the charges for milkingplant motors be as follows:

Per unit net. First 100 units per month 4£d Second 100 units per month 3d All over 200 units per month 2d Minimum charges to Abe: Up to 1 h.p., 5s per month; up to 1J h.p., 7s 6d per month; up. to 2 h.p., 10s per month. Maximum size for milking motors (except by special arrangement).—2 h.p. (50 degrees rating). Maximum size for separating motors—l h.p. (50 degrees rating). The chairman moved the adoption of the report, which had been thrashed out in committee very fully and had been--further thrashed out that day. It meant a reduction for the T h.p. man'who had been complaining very bitterly. EFFECT OF NEW RATES. The Treasurer gave the result of the new rates as applied to 22 average dairying consumers which showed a saving to them of £4B a year. This meant that a concession was being given to the whole of dairy-farmers of about £SOO a year. The individual reductions would bo from £3 downwards. Mr Vincent quoted one case where a 40 per cent, reduction was made, and questioned whether the list was an average one. The chairman said it was as nearly an average lot as could he obtained. Tljcy had to include some of every class of dairy farmer. Tire Treasurer said it was merely an estimate of how the new rates would work out. POWER COMPARED WITH OIL. Mr Vincent said -there was a general reluctance on the part of farmers to put in motors. He knew of one case where a man who had recently taken up a farm. Tire lines ran past ■ tlie place and yet be bad put in an oil engine. Did ,lie do that because he knew it would be cheaper? The farmers said the power was much more ‘expensive than oil engines. The deputation said .that the people were promised that the power would be cheaper. The speaker had asked Mr Over,ton how much it was going to cost and he'said bout 10s per cow. The cost was nearer 15s per cow. The Chairman: .For running the plant?

Mr Vincent: Yes. The Chairman: Oh! no. Mr Vincent: Those are the figures I have gathered. The chairman said the hot water service and every tiling else was being included then. The cost for running the plant was more like 10s per cow. PLEA FOR GREATER REDUCTION. Mr Vincent said I he would very much like to see whether tlie charge could not be reduced a little more. The -Board was,, of course, 'more in touch with the matter ihan he was as a new member and lie felt under a disability in pushing it, but could not a charge of 4id on a total of 75 units be entertained. The chairman said that, was cutting it a bit too fine. They were getting a revenue of £SOOO a year from the dairy people and to give them £IOOO hack was more than the finances of the Board could stand. There was another aspect to lie considered. They 'had had strong arguments for the abolition of the meter rent, in winch the dairy farmers would share. What could they say to, tlie meter-users if they turned round and gave the dairy people a 20 per cent, concession. It did seem extraordinary that with a line going past iris door, the farmer Mr Vincent, referred to preferred to put in an engine. Perhaps he had the engine given to him. Mr Vincent said the line into five farm might cost a good deal in this case.

The chairman said tlie cost of the line in was sometimes a bar, Die aim of the Board was to link ail consumers up. He would like very much to agree to. Mr Vincent’s suggestion of a further reduction. It would affect him as much as anybody else. COMPARISON WITH OTHER boards. Mr Vincent: 'Can you not. come into line with Manawatu-Oroua. The chairman said theirs was essentially a dairying loan and they were differently situated. The Mtniawatu Board was in trouble itself because their neighbours, Rangitikei, which had a large town load for tramwavs, etc., could give a lower r a still. Dairying did not affect their peak load. ' . The Treasurer said the Manawatu rates were: 100 ‘Units s»d. 100 uni s if and the balance l?d with Id a unit discount. The 'Horowhenua minimum charge, however, was lower. _ REDUCTION TOO MUCH AT PRESENT.

Mr c. Kilsbv (Otaki) said he sympathised with the dairy farmers but before they could see their wav .o reduce the charges. _ they must see where thev were going to pick up

revenue. As soon ae they made a reduction other consumers would want redactions and the Board might find itself in difficulties. They should remember that it would be impossible to get the rates up again when once they were reduced. He considered that the 10 per cent, reduction ,Being given would he a loss to the Board. Why not make it 5 per cent, now and the rest later on. METER RENTS CLAIMS.

Mr W. H. Gunning (Shannon) said the meter rent should have some consideration when the Board was making concessions. The people were told in Shannon that it would be only a temporary thing which would be taken off at the first opportunity. They were told that by the Engineer and the speaker was going to get into hot water if it was not withdrawn. He did not say they could have , reduced' it at present, but the Board should be able to see its way clearly ahead before making any reductions. Until the scheme was proved they could not do so. The concessions proposed were ample for the present, and he did not think they would add a single farmer to the mains. THE BOARD’S PLEDGE. Mr D. W. Matheson said so far as the Board was concerned there had only been one pledge as to reductions and that was to the dairy industry. As a member of the Finance Committee he did not feel quite certain that the Board’s finances could stand the reduction proposed. The deputation had only asked for reductions consistent with safety to the finances of the Board. Mr Vincent: That, is all we want. Mr Matheson said each Board member must be certain in his mind that the Board could afford to give any reductions. HORSE POWER, CHARGE ABOLISHED. The Treasurer said he took it that the change in method of charging by the abolition of tlhe horse-power charge would remove a great deal of dissatisfaction as the dairy farmers would onlv have ■ a unit charge and would be able to reckon up their own charges. RISK THE REDUCTION. Mr Ross thought the Board 'Ought to risk the- reduction because they anticipated further revenue, but they could noit possibly consider any further reductions. The only other way they could make them was by reducing expenditure. If they could do that they could pass it on to the consumer. Mr Vincent said the estimates showed that they expected to pay the Government an extra £4OOO for power, but only expected to get £2OOO more for it in revenue. The estimates must be very elastic if that was eo. The Chairman: Estimates are always elastic. It is alright so long as they are elastic on the right side. SATISFACTORY TO SMALL MILKERS. Mr W. E. Barber thought the small people would be satisfied with what was proposed. The bigger milkers were very well satisfied not only with the power, but with the convenience and the water heaters. This ended the discussion and the milking motor rates as recommended were then adopted. The dairy factory charges were referred, on the chairman’s motion, to a sub-committee consisting of Messrs Monk, Matheson and Vincent, with the Treasurer and Engineer to consider. DAIRY FACTORIES TO PRODUCE FIGURES. .Mr Ross said he hoped the Committee would go into what it cost the dairy companies before they installed power. He was quite prepared to Bring figures to show that the flaxmillers were not receiving cheaper power since they installed electricity. The chairman said he had that in mind when he asked the deputation for figures. He could make the statement. that the fluxmillers who scrapped suction gas plants for the power bad not got cheaper power. They certainly had the convenience. They expected to pay for making the change in five years. Mr Ross: They will not do it -in ten years. The Chairman: You are right in asking that the dairy companies produce figures to show that it is costing them more. What is worrying me is the difference in the internal working of the factories. Mr Vincent said the committee could go into these figures. The chairman said the most serious statement was that made by Mr Wall in regard to the motors. The worst complaints come front the Ivuku and it might be an isolated matter so far as they were concerned.