“All things considered, including weather and the time of year, November 2012 was a fairly routine month when it comes to reporting the financial results,” CU Senior Vice President and Chief Financial Officer Ken Webb offered in a recent session of the Cleveland Board of Public Utilities.
It’s as simple as the change in seasons. The utility’s Electric Division in November showed sales volumes slightly ahead of expectations because more customers began turning to their heating systems, but Water and Wastewater division sales slowed because those same consumers were no longer watering yards, flowers and gardens.
“Electric finished the month slightly ahead of expectations with water and sewer slightly behind,” Webb assessed. “However, I do not see any trend developing that would concern me that the numbers are straying too far from the budget through the first five months of Fiscal Year 2013.”
Volume in the Electric Division for November increased 7.5 percent over the same month in 2011. Residential, commercial and industrial classifications all showed a hike in kilowatt-hours sold. The resulting revenue was $7,256,153 after a $416,904 positive adjustment for accrued revenue, Webb explained.
The month was an historic one for the Electric Division because it became the first time CU made full use of the AMI (SmartMeters) system.
“November was the first month we used the new AMI system for the calculation of the month-end accrued revenue adjustment,” Webb said. “I have been looking forward to having this information available for quite some time. Having this available allows us to fine tune the adjustment and this makes the monthly matching of revenue and wholesale power cost more accurate.”
In the Electric Division, the month’s purchased power (from TVA) costs were $6,040,254, leaving a margin of $1,215,900. The budgeted margin was $1,205,995. Revenue from other sources contributed $125,780 during the month.
Expenses totaled $1,285,330, including $291,858 in depreciation. The margin, plus other revenue minus expenses, resulted in $56,349 in net income.
“This compares favorably to the budgeted net loss of $30,665 for the month,” Webb said. “We will be making a catch-up adjustment to tax equivalents [in December] to reflect the actual YTD tax equivalents for Fiscal Year 2013. That amount is still being reflected on the statement based on the estimated budgeted amount.”
The division provided power to 29,823 customers in November, an increase from 29,434 a year ago.
Electric’s YTD results show a net income of $662,341. The budgeted net income is $969,467 “... with the difference continuing to be in the margin between sales revenue and purchased power cost,” Webb noted.
He added, “Stated as a percentage of sales revenue, purchased power is 84.2 percent [while] the budgeted amount is 83.5 percent.”
As is expected this time of year, water sales volume in November dropped. Volume was registered at 205,281,000 gallons, representing a 3.4 percent decrease under sales for the same month a year ago. One contributor was irrigation (customers watering lawns, landscaping and gardens) whose volume was down 18.5 percent.
For the month, water service was provided to 30,083 customers at an average retail price of $4.45 per 1,000 gallons.
Division revenue was $991,981 which was $54,000 less than budgeted. Expenses totaled $1,014,699, leaving a net loss for the month of $22,718.
“This was more than expected, but considering the decreased demand for water, [it was] still a very acceptable result for the month,” Webb noted.
YTD results in the Water Division show a net income of $686,956.
“This amount is somewhat less than at this time last year, but is still just ahead of the budgeted amount at this time for Fiscal Year 2012,” the CU financial leader explained. “YTD access fees (the amount paid by builders, developers and companies to have new development connected to CU’s existing water system) continue to run ahead of the previous year and the current year’s budgeted amount.”
In November, CU provided sewer service to 17,775 customers. The average price paid by customers was $5.41 per 1,000 gallons.
Total revenue for the month was $808,509 with expenses tallying $812,213. This left a net loss of $3,704. The budget had accounted for net income of $21,210.
“The YTD results in sewer are still running ahead of budget at $525,936,” Webb said. “YTD access fees in sewer are also ahead of last year’s amount and budget.”