The promising update, which some believe points to a recovering economy, came Thursday during a formal monthly session of the Cleveland Utilities Board in the Tom Wheeler Training Center.
Ken Webb, manager of CU’s Accounting Division, said sales growth for the first three months of the fiscal year (July, August and September) shows the Electric Division sparking on the weight of an 11 percent increase; the Water Division is rising at a 10.5 percent level; and the Wastewater Division keeps flowing smoothly with a 6 percent jump.
In the Electric Division, three-month sales were reported at 325,307,790 kilowatt-hours at an average retail rice of 8.6 cents per kilowatt-hour, Webb said. This hiked sales volume to a stage 11 percent higher than for the same quarter ending in September 2009.
“I believe this is a sign of both an improving economy and the type of weather we have experienced,” Webb told board members. The division recorded 29,228 customers in September which is up one-half of 1 percent from the previous September.
CU revenue from the sale of electricity for the quarter was $27,799,489. The utility’s purchased power bill from TVA was $23,849,030, leaving a margin of $3,950,459.
“Purchased power was 85.8 percent of electric sales meaning that for every dollar collected in electric sales almost 86 cents was paid to TVA for wholesale power,” Webb explained.
Also in the Electric Division, other revenue sources added $398,115 to the quarter’s total. Expenses of $3,521,936 were about 5.5 percent under budget leaving a quarterly net income of $826,638.
“I believe this puts us in a good position for the upcoming months including those in which the demand for electricity will be less because the weather should not be as extreme temperature-wise as we have seen since the summer,” the accountant explained.
Not only is Cleveland Utilities’ electricity flowing at a brisk pace but so is its water.
Water Division volume for the quarter totaled 866,151,000 gallons, representing a 10.5 percent spike over the same period in 2009. The average retail price for water for the three-month stanza was $3.77 per 1,000 gallons. The division recorded 29,612 customers in September.
“Once again, the weather played a significant role in this increase in volume,” Webb said. Improving weather conditions have been a factor in CU’s growing financial performance over the past couple of months, especially in the Water Division which struggled for much of the spring and summer — which in some cases surprised utility leaders but a late-summer drought finally beefed up water sales.
For the third quarter, the Water Division reported total revenue of $3,516,415 or about 2 percent more than budgeted.
“Access fees were $46,195 which is a really good sign as this was 95 percent of the budgeted amount for the quarter,” Webb cited. “They still have not returned to the fiscal year 2010 level, but are tracking close to the current budget. Hopefully, this means we will see growth tracking upward and a turnaround in progress.”
Water Division expenses totaled $2,980,728 and here the news is even better. Division expenses are almost 6 percent less than budgeted, leaving a net income of $535,687. The report is another positive one, but the favorable numbers might not hold water in the long term because seasonal consumer demand will lessen.
“We will soon begin to see a decreased demand for water as we move into the winter months so these results put us in a favorable position to ride out those months,” Webb said.
Sales growth numbers aren’t as strong in the Wastewater Division, but they still show a significant increase at 6 percent. Again, this is based on increased water usage.
Third Quarter volume in the division tallied 516,743,250 gallons. The average retail price paid by CU customers for sewer service was $4.68 per 1,000 gallons. September ended with 17,395 customers and this is an increase of 115 customers over the same month last year.
The Wastewater Division’s revenues totaled $2,573,287 which clocks in at 104 percent of budget. Expenses were $2,237,781, leaving a net income of $335,506.
“Expenses have fortunately been less than budgeted and less than those during the same period last year,” Webb pointed out.
The accounting manager is hoping for a sustained volume in the division as winter weather approaches.
“As the demand for water goes down into the winter months, we should not see as dramatic a drop-off in sewer volume,” Webb noted. “Hopefully, most of the drop-off in water will come from irrigation sales which does not have the same impact in sewer as it does water.”
