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In the past the loyal support and willing service given by all members of the Department have formed a tradition of which we are justly proud; and in the present troublesome times the same team spirit is of major importance. By fostering this deep underlying feeling of service we can best play our part and then be able to look forward with confidence to a future from which the clouds of war are lifted and in which power shortages have no place. I have, &c., A. E. Davenport, 8.E., M.1.E.E., General Manager. APPENDIX B.—ANNUAL REPORT OF THE RURAL ELECTRICAL RETICULATION COUNCIL FOR THE YEAR ENDED 31st MARCH, 1948 The Chairman to the Honourable Minister in Charge Wellington, 18th May, 1948. Sir, — In accordance with the requirements of section 21 of the Electricity Act, 1945, the Rural Electrical Reticulation Council has the honour to submit its second annual report for presentation to Parliament. The report covers the period from Ist April, 1947, to 31st March, 1948. GENERAL The Council has to date provisionally approved subsidies being paid on a total of 893 miles of line, but so far only 77 miles have been built. This rate of progress is disappointingly slow, but difficulty is being experienced in obtaining the necessary line materials. It is hoped that in the ensuing year the actual work of building subsidized lines will be speeded up. In the case of some Power Boards rural reticulation work is held up until existing distribution lines are reconstructed to allow extensions to be made. This heavying-up of lines is not a matter for subsidies, but accounts for labour and material being diverted from the building of new line extensions. As reported last year, for the purpose of computing subsidies, it has been the policy of the Council to standardize the capital costs at a maximum of £350 a route-mile for a single-phase line and £450 a mile for three-phase. In adopting this policy the Council has not expected that the costs would be the same in all areas, and therefore somewhat higher standards have been allowed in special cases. Since these standards were fixed in September, 1946, costs have risen, and representations have been made for the standards to be increased. The Council has consequently invited the Electric-power Boards and Supply Authorities' Association to make recommendations after examining the present costs of new rural distribution lines. At the request of the Electric-power Boards and Supply Authorities' Association the Council has commenced to visit the districts in which rural line extensions may be subsidized. In the course of a two-week tour finishing in February, inspections were made of the unreticulated districts of the Wairarapa, Tararua, Dannevirke, Central Hawke's Bay, Wairoa, Poverty Bay, and the Tauranga Electric-power Boards ; and shortly before Easter visits were made to the Golden Bay, Waimea, and the Marlborough Electric-power Boards. Problems were discussed with all the Boards, and numerous deputations were received from settlers awaiting a supply of electricity. The local knowledge gained by the Council of the widely varying types of country yet to be reticulated will be of great assistance, and it is hoped that the discussions held with the Boards will benefit them as much as they benefited the Council. It was found that there was some misapprehension

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