But a prelude to the record heat wave may have begun in May, according to a monthly report filed this week by Ken Webb, senior vice president and chief financial officer for Cleveland Utilities. During a formal session of the Cleveland Board of Public Utilities, Webb pointed to increased volume in all three major utility divisions for the month.
“May is a transition month for the Electric Division,” Webb told board members at the outset of his fiscal update. “The results in May are subject to all the normal factors affecting usage, but none of them are any less predictable than the weather and the influence it can have on results.”
And the weather played a big role; at least, based on the numbers.
It was true in all three divisions including Water and Wastewater. Yet, the electric report topped the day based on this sobering statistic — the average temperature in May in the Cleveland and Bradley County community was 73.3 degrees, compared to 69.5 for the same month a year ago. This constitutes a 6 percent increase and was the driving force for electric sales volume for Cleveland Utilities.
In the meantime, the Water and Wastewater divisions saw sales volume increases of their own, Webb explained.
For May, revenue from the sale of electricity was $7,449,467 and CU’s cost for purchased power from TVA totaled $6,259,593, leaving a margin of $1,189,874. Purchased power was 84.03 percent of revenue; the budgeted percentage was forecast to be 84.9 percent.
“The YTD (year-to-date) percentage for purchased power is 83.1 percent and we used 83.5 percent for the fiscal year 2013 budget projections,” Webb explained.
After adding other electric revenue to the margin, the total available for operations was $1,315,073. However, expenses for the division’s month hit $1,319,391, leaving a net loss of $4,318 for May. Losses are never good, but the projected loss for the month was $96,394, Webb cited.
“The YTD electric continues to exceed the budgeted amount, but is trailing the same number from last year,” the CFO pointed out.
Like its electric counterpart, the Water Division saw a significant hike in volume sales. Again, this points to the dry and unusually warm conditions for this time of year, Webb noted.
“Water saw a fairly significant increase in usage in May compared to last May,” he noted. Documented sales hit a volume of 250,179,750 gallons, representing an 11 percent hike over the same month in 2011.
“Once again, the weather can and does play a significant role in the volume of product sold,” Webb stressed. “Irrigation (lawn sprinkler systems) volume was up 131 percent over May 2011,” he said.
The Water Division recorded 30,098 customers who paid an average retail price of $4.15 per 1,000 gallons.
Revenue for the month was $1,124,970. Expenses totaled $1,060,880, leaving a net gain of $64,090. This far exceeded budget projections which had called for a net loss of $17,961.
The YTD net gain in water was $536,421.
“This gain becomes a part of the amount used to fund debt service and for investment in new plant and facilities,” Webb noted. “So far this year, the Water Division has invested $3,351,576 in new plant and facilities, and paid $1,086,923 in principal on outstanding debt.”
Sales volume in CU’s sewer operations also went up compared to May last year. Volume measured 152,756,250 gallons which was up 4 percent from the same month last year. The Wastewater Division recorded 17,848 customers at an average retail price of $5.20 per 1,000 gallons.
Revenue in sewer totaled $890,540 in May and expenses tallied $796,339, leaving a net gain of $94,201.
The YTD net gain in wastewater so far is $575,959. It is an improvement over last year, but less than the projected amount of $638,962, Webb explained.
“Maintenance expenses this year have prevented sewer from achieving the budgeted amount of net gain,” he said.
Investment this year in sewer for new plant and facilities has totaled $2,418,990, and $1,838,710 has been paid in principal on outstanding debt, Webb pointed out.
rates sliding up
For the month of May, CU customers paid 8.612 cents per kilowatt hour for electricity, Webb reported. The amount rose to 8.970 cents per kwh in June, and will rise again to 9.103 cents in July. However, this rate actually is lower than last year.
Webb pointed out the 9.103-cent rate per kwh in July means the average CU residential customer will realize a 55-cent reduction in their electric bill over the same period in 2011.
Because of the ongoing heat wave and increased power demands placed on TVA, Webb projected the month of August will see a higher rate per kwh.