The governing body’s next gathering is tentatively set for Jan. 3, 2013.
The audit shows a decrease in Electric Division sales volume as compared to Fiscal Year 2011, but increased sales in the Water Division.
Mark Lay, representing Arnett, Kirksey, Kimsey, Sullivan, Lay & Hall PLLC, presented the audit report at the CU board’s most recent session in late November.
The report focused on fiscal operations within the utility’s two primary divisions — Electric and Water — and, as is customary practice, denoted the Water Division as operating within two departments, Water and Wastewater.
The audit also pointed to CU’s debt load, which is approximately $60 million, but specified both divisions are satisfying long-term debt payments in accordance with required payment schedules.
A look at the divisions or departments shows the staggering numbers in kilowatt-hours, water and sewer services provided by Cleveland Utilities to residential and commercial customers within its expanding service territory. A brief look at each follows:
CU sold 1,049,492,557 (1.05 billion) kilowatt-hours of electricity during FY 2012. On the surface, the number seems huge, yet according to the audit it represents a 4.06 percent decrease compared to FY 2011. For the year, the average retail price of all kilowatt-hours sold in FY 2012 was 8.85 cents compared to 8.70 cents in FY 2011.
The Electric Division served 29,673 customers in June 2012, the fiscal year’s final month, as compared to 29,427 in June 2011.
Revenue from the sale of electricity totaled $93,075,085 for FY 2012, compared to $94,908,756 for the year before. Volume in residential, industrial and street lighting reflected decreases.
“Revenue from the sale of electricity to residential customers represented 37 percent of total electric sales revenue,” the audit reported. “Commercial customers accounted for 8 percent of the revenue and 53 percent came from industrial accounts. Lighting accounted for the remaining 2 percent.”
Operating expenses for the year decreased 1.72 percent due to a 2.62 percent decrease in purchased power. CU purchases all its electricity from TVA. The cost of purchased power was $77,939,334 in FY 2012; by comparison, the FY 2011 cost was $80,038,361.
“When stated as a percent of electric revenues, purchased power was 83.74 percent in FY 2012 and 84.33 percent in FY 2011,” the audit explained. “Operating expenses, other than purchased power, increased 4.16 percent.”
The Electric Division in FY 2012 made $930,000 in long-term debt payments. The division’s total debt at the fiscal year’s end was approximately $12.8 million, compared to about $13.7 million in FY 2011.
The audit reports the division projects an investment in capital assets totaling $37,522,000 over the next five years beginning with FY 2013. The investment, which is the audit’s reference to a capital improvements program, is necessary “... to meet the increased demand placed on the system by customer growth and expansion.” These costs are projected to be financed through operations revenue and additional debt of $2 million each year in the five-year period beginning with FY 2014.
For FY 2012, the CU Electric Division made $1,725,056 in Tax Equivalent Payments to the city of Cleveland.
For the fiscal year, the CU Water Department sold 2,860,478,250 (2.9 billion) gallons of water to customers at an average price of $4.20 per 1,000 gallons. This is a 1.02 percent increase over FY 2011.
Percent of water revenue, by customer class, for the fiscal year included residential, 66 percent; small commercial, 19 percent; large commercial, 10 percent; and irrigation, 5 percent.
The number of water customers during June 2012, was 29,966, up from 29,707 in June 2011.
In FY 2012, CU Wastewater billed customers for treating 1,813,133,250 (1.8 billion) gallons of wastewater at an average price of $5.22 per 1,000 gallons. This volume is a .42 percent increase compared to FY 2011.
Revenue from the different classes of wastewater customers included residential, 49 percent; small commercial, 30 percent; and large commercial, 21 percent.
CU Wastewater served 17,709 customers in June 2012, up from 17,532 in June 2011.
Operating revenues in FY 2012 for the water and wastewater departments increased 7.07 percent. This was the result of increases in volume in several customer classes.
Operating expenses increased 1.8 percent. Increases in operations and maintenance expenses contributed to the increase in total operating expenses.
The Water Division’s total long-term debt, including both departments, tallied about $42 million at the end of FY 2012, compared to about $45 million in 2011.
The division made $2,928,418 in long-term debt payments in accordance with the required payment schedule for the fiscal year.
Like the Electric Division, the Water Division projects incoming costs over the next five years. According to the audit, this annual capital improvements program “... is necessary to continue to meet the increased demand placed on the system by customer growth, expansion and environment-related obligations and regulations.”
In detailing the coming investments, the audit cites, “The Water Department has projected an investment in capital assets totaling $24,954,780, and the Wastewater Department an investment of $21,031,788 in the five-year period beginning in FY 2013. Both departments are proposing to finance the additional investment through a combination of funds generated by operations and additional long-term financing.”
For FY 2012, the CU Water Division made Tax Equivalency Payments to the city of Cleveland in the amount of $202,462.