1.-15

(3) Electric-power Boards (a) Revenue Until the formation of the first Electric-power Boards in 1918 the electric-power distribution was generally conceived as being a trading function of a territorial local body. The setting-up of the Electric-power Boards was undertaken with the view that this trading function, which would obviously become of major importance in the economy of New Zealand, should be carried out by a separate body. From the financial point of view the approach was that the receipts from the sale of electricity should be sufficient to meet all the expenses without recourse to any form of taxation. On the other hand, it was recognized that, particularly in the early stages of development, and until reticulation was complete, revenue receipts from the sale of electricity would not be sufficient in general to meet the costs and charges necessarily incurred. Consequently, the Boards have a rating-power, and a large number of Power Boards have in the past utilized this rating-power. The following table shows, in the period from 1924-25 to 1941-42, the Power Boards which have collected rates and the amount of those rates :—

Table showing Receipts from Rates of Electric-power Boards* from 1924-25 to 1943-44

From a study of this table it will be seen that in the earlier years quite a number of Power Boards found it necessary to have recourse to rates, but as time went on, and the reticulation system was completed, the revenue receipts from the sale of power were in most cases sufficient to cover the expenses. In two cases, however, it has been necessary to continue rating to the present day. In the cases, Banks Peninsula and Malvern, the explanation is that the area of supply has been too small to guarantee efficient working, and we make recommendations in another part of this report as to the reconstruction of Electric-power Board districts so as to guarantee that they will be large enough to work economically. A study of the table will show that during the depression quite a number of Power Boards had to have recourse to rates, but with the improvement in economic conditions a continuation has been unnecessary. In Southland the general financial situation of the Board was such that in 1936 the Government had to take the Board over, because the amount of the rates which had to be levied was out of proportion to the revenue returned from the sale of electricity In other words, the Board was approaching a state of bankruptcy. Conditions are, we understand, still difficult in Southland, but since the taking over by the Government the financial position has improved. The ideal situation ultimately will, of course, be that no Power Boards will have to levy rates, and the profits ensuing, as have occurred in quite a number of cases, will be reflected in reduced charges for electrical energy.

* Rates have not been collected in the following districts : Bay of Islands, North Auckland, Waitemata, Auckland, Franklin, Central, Central Waikato, Cambridge, Waitomo, Wairero, Tauranga, Bay of Plenty, Poverty Bay, Hawke's Bay, Central Hawke's Bay, Wanganui- Rangitikei, Horowhenua, Hutt Valley, Wairarapa, Grey, North Canterbury, Westland, Ashburton, Waitaki, and Otago Central. f Acquired by Government 13th October, 1936.

86

(3) Electric-power Boards (a) Revenue Until the formation of the first Electric-power Boards in 1918 the electric-power distribution was generally conceived as being a trading function of a territorial local body. The setting-up of the Electric-power Boards was undertaken with the view that this trading function, which would obviously become of major importance in the economy of New Zealand, should be carried out by a separate body. From the financial point of view the approach was that the receipts from the sale of electricity should be sufficient to meet all the expenses without recourse to any form of taxation. On the other hand, it was recognized that, particularly in the early stages of development, and until reticulation was complete, revenue receipts from the sale of electricity would not be sufficient in general to meet the costs and charges necessarily incurred. Consequently, the Boards have a rating-power, and a large number of Power Boards have in the past utilized this rating-power. The following table shows, in the period from 1924-25 to 1941-42, the Power Boards which have collected rates and the amount of those rates : — Table showing Receipts from Rates of Electric-power Boards* from 1924-25 to 1943-44 a" 4 t 4 I fa >» 3 s3 rQ $ -leu cS • 5 "2 £ -2s GO -S $ 2 $ § ,1 •§ a § § I 3 5 | > ,g° •§ S'FS S 3 £ 3 * & £ % & % § jsilil lEI g £ $ . g I N M H H P- P O H ta H ..O M ■ CO W w O O m H £££££££ £ £££££££££ £££ £ £ 1924-25.. 345 2,120 499 54 20 858 387 .. 13 .. 15 237 4,121 2,300 10,969 1925-20.. 482 2,156 768 7 .. 42 4 .. .. 4 4,428 .. 602 .. 66,805 75,298 1926-27.. 250 2,150 .. 3,167 ..40 39 . . .. 315 . . .. 4,154 .. 532 .. 57,133 67,780 1927-28.. .. 2,138 3 2,540 .. .. 2,766 2,425 4,443 .. 410 .. 48,007 62,732 1928-29.. .. 5 .. 2,023 .. .. 14,861 767 .. .. 687 4,094 .. 354 .. 45,500 68,291 1929-30.. .. 61 .. 2,993 .. .. 9,802 1,300 .. 266 3,933 .. 270 7,72658,939 85,290 1930-31.. .. 2 .. 1,425 .. .. 6,129 301 . . 5,585 .. 1.320 .. 3,945 .. 8 9,86544,107 72,687 1931-32 328 3,173 110 .. 998 .. 1,177 .. 3,580 .. 3 9,13047,502 66,001 1932-33 95 .. .. 2,350 15 .. 2,928 .. 2,000 .. 3,150 .. 1 8,89637,286 56,721 1933-34 1,829 .. .. 1,378 .. 1,652 9 1,714 .. 3,166 .. .. 9,39348,072 67,213 1934-35 2,700 .. .. 194 .. 1,094 107 .. 2,958 .. 3,067 .. 3 6,33137,610 54,064 1935-36 1,845 .... 43 .. 41 66 .. 2,495 .. 2,702 .. .. 3,76432,232 43,188 1936-37 1,832 .... 56 .. 4 2,376 .. 2,844 .. .. 893 5,409f 13,414 1937-38.. .. .. .. 1,186 .... 25 .. 25 1,927 .. 2,449 .. .. 348 .. 5,960 1938-39 .. 135 26 . . 9 10 1,877 .. 2,284 .. .. 76 .. 4,417 1939-40 51 .. .. 118 .. 1 1,797 .. 2,042 .. .. 24 12 4,045 1940-41.. .. .. .. 16 .. .. 48 .. 3 .. 1,809 .. 1,729 .. .. 2 .. 3,607 1941-42 1,729 .. 1,651 3,380 1942-4 1,558,.. 1,540 3,128 1943-44 1,607 .. 1,607 From a study of this table it will be seen that in the earlier years quite a number of Power Boards found it necessary to have recourse to rates, but as time went on, and the reticulation system was completed, the revenue receipts from the sale of power were in most cases sufficient to cover the expenses. In two cases, however, it has been necessary to continue rating to the present day. In the cases, Banks Peninsula and Malvern, the explanation is that the area of supply has been too small to guarantee efficient working, and we make recommendations in another part of this report as to the reconstruction of Electric-power Board districts so as to guarantee that they will be large enough to work economically. A study of the table will show that during the depression quite a number of Power Boards had to have recourse to rates, but with the improvement in economic conditions a continuation has been unnecessary. In Southland the general financial situation of the Board was such that in 1936 the Government had to take the Board over, because the amount of the rates which had to be levied was out of proportion to the revenue returned from the sale of electricity In other words, the Board was approaching a state of bankruptcy. Conditions are, we understand, still difficult in Southland, but since the taking over by the Government the financial position has improved. The ideal situation ultimately will, of course, be that no Power Boards will have to levy rates, and the profits ensuing, as have occurred in quite a number of cases, will be reflected in reduced charges for electrical energy. * Rates have not been collected in the following districts : Bay of Islands, North Auckland, Waitemata, Auckland, Franklin, Central, Central Waikato, Cambridge, Waitomo, Wairere, Tauranga, Bay of Plenty, Poverty Bay, Hawke's Bay, Central Hawke's Bay, Wanganui- Rangitikei, Horowhenua, Hutt Valley, Wairarapa, Grey, North Canterbury, Westland, Ashburton, Waitaki, and Otago Central. ■f Acquired by Government 13th October, 1936.