BIG M.E.D. LOSS LIKELY

Taupo Times, Volume 23, Issue 61, 1 August 1974, Page 1

BIG M.E.D. LOSS LIKELY

The latest electricity estimates released by the M.E.D. last week have revealed that the department will probably show a deficit of $214,441 this year. The 1974-75 period will be the first year in which costs have exceeded incorne. "An application for tariff increase will be judged on costs and income comparisons and it is difficult to see the tariff committee of the Energy Resources Commission gfanting a tariff increase while so much money is beipg appropriated for capital works," said the borough electrical engineer, Mr K. G. stewart, in his report to the borough council last week. "Perspective is given by considering that total capital expenditure of the MED for the 1974-75 year is expected to be in the vicinity of $400,000. "An increase in the electricity tariff of approximately 16 per cent would be required to offset the expected deficit." The estimates have indicated that the electricity account is expected to have an opening debit of $46,886. The main reasons for the large increase in overdraft have been attributed to huge rises in the cost of operation and maintenancev management and loan servicing. Severe power restrictions this winter have meant only a small increase in electricity saies and retail tariffs were frozen by the Government. Considerable appropriations for capital works have also been made from revenue. Electricity saies are expected to increase by 12.9 per cent this year. Mr Stewart said the increased saies expected

from domestic and commercial consumers were modest for the supply authority and resulted from the energy crisis and power savings. "Even when the present restrictions end it is reasonable to expect a lack of confidence in the electricity medium, and the habit of economising on its use will continue for sorrte time and reduce the saies expansion rate," he said. MED income is expected to total $1,122,000 this year and departmental expenditure will be $4000 higher. After appropriations and depreciation have been takfc^i into account, the total income is expected to be exceeded by $1-66,000.