Hinemaiai Power Scheme

Taupo Times, Volume II, Issue 58, 25 February 1953, Page 5

Hinemaiai Power Scheme

Further Loan ' I o Be Sought ENGINEER'S CONFIDENT REVIEW OF PROGRES5 AND PROSPECTS At a special raeeting on Wednesday last the Taupo Town Board had before it a review given by the Consulting Engineer Mr Lloyd Mandena, of the development to date of the Board's power scheme and of the financial prospects of the undertaking. Referring to his recommendation on October 18, 1951, that capital funds totalling £119,000 should be provided, Mr Mandeno stated that in the light of increased costs, further reticulation requirements and demands for power from outside the Town District, which had since developed, additional capital would be necessary. He recommended that the Board should apply to the Loans Board for authority to raise further instalments amounting to £37,500. Mr Mandeno considered that the auxiliary plant now operating was capable of earning sufficient to pay for the annual cost of the scheme including capital. charges on the full increased outlay. Despite increased costs the scheme remained capable of giving supply at a cheap overall rate per unit. By the time future load had increased so as to inyolve the sale of the full output of million units per annum available with the power station running as a detached plant, the cost of power produced would be about equal to the average cost of power produced 2 years ago by all the 43 Power Boards of N.Z. Power costs in N.Z. had increased very considerably since then and consequentiy he was confident of the financial success of the Board's JSCI^GM© - Following reading and discussion of the review the Board passed a resolution giving effect to the Engineer's recommendation that authority be sought for raising a further sum of £37,500.

Increase Costs. Mr Mandeno's review polnted ont that both the generating plant and the town reticulation were costing more than estimated in 1951 and the town had greatly developed meantime while demands for power outside the town boundaries were substantiau The price of the main turbine, for example, quoted by the makers in 1951 at £9,480 had risen to £11,400 without any ehange in sise or design, due to rise of costs in England and oee&n freights. Regarding labour costs of reticulation, the original contract was let to Mr V. R. Morrison, an experienced contractor in that class oi work, for £7,585 12/6, but he could not attract labour at the rates he had based his tender on. It was then necessary to accept. the next lowest tender at £12,400. Another increase ' in cost arose from the fact that while it had been intended to reticulate the residential areas on the single phase " three wire systeni, with arrangements for effecting; a change over to three phase when later circurnstances warranted, it had now transpired that in the last year or two three phase motor loads had sprung up in so many widely separated points that it was necessary ro consider liumediate adoption of three phase aimost throughout tne residential area. This involved extra cost in transformers and aerial conductors which it had been hoped to ^avoid. Other similar setbacks could be quoted. RETICULATION OUTSIDE TOWN Urgent representations had been reeeived, the raview continued, from prospective consnmers outside the town district, including the area mimi ediately south of the town boundary. (Edgewater and the Potts* Bfloek) , Waitahanui, Nukuhau and Woodward's mill and settlement area, and Wairakei. While ihe Board's own areav naturally had f'irst claim, it would be of great benefit to supply the outside demand. To dispose of as much as possible of the potential power from Hinemaiai would iiWolve no appreciable extra cost in generating while revenue on the other hand might be trebled, and there could be no doubt that profitable business could he done outside town boundaries. Revised Estimates of Cost. The capital expenditure on the whole scheme as at the date of Mr Mandeno's present review, 'January 23rd., 1953, was £92,385, leaving £26,615 remaining for expenditure. Mr Mandeno estimated that loan

funds necessary to hring the scheme abreast of the town's present requirements, and incidentally enabling the placing of orders for certain essential materials which it was important to allot forthwith, would amount to £55,889. The estimated capital requirement for reticulation of the outlying areas already rnentioned, from which the Town Board was the Licensed Supply Authority, was £8,251. The total of these two amounts, for expenditure respectively in the Town District and outside it, less the £23,615 still remaining, was approximately £37,500. Mr Mandeno recommended the Board to take steps to raise this amount. Revenue Prospects. Mr Mandeno's review also pointecl out that while additional capital is required and annual costs will be increased by the rise in capital charges, the estimates of the Revenue Account he (had submilted on December 24th. 1951 clearly showed that the excess of revenue over total annual expenditure should be ample to take care of the increased capital charges. Operating' costs would be only slightly affected by the increased nember of consumers and he expected ihe undertaking to show a substantial overall profit. The number of permanently occupied residences in the town continued to increase and a recent canvas by the Board's Buildimg Inspector showed a total of 450 permanently occupied private houses in the town plus 338 houses and holiday cottages not eontinuously occupied. During the past six years the number of permanently occupied homes had more than doubled.