In the colder and wetter months, CU’s electric sales are supposed to go up and water sales go down. However, in the early months of 2013, just the reverse was occurring. Sales volume in the Electric Division was surprisingly low while water and wastewater sales were holding their own.
Now, the flip-flopped cycle has begun to right itself, according to March results reported by CU’s Ken Webb, senior vice president and chief financial officer. The newest numbers came out of a recent monthly session of the Cleveland Board of Public Utilities.
In short, for the month of March anyway, Electric Division sales have jumped almost 6 percent. But the Water Division sales are down 5 percent compared to the same month a year ago, and wastewater sales volume is down 1.9 percent.
By seasonal trends, electricity sales should stabilize, but water and sewer volume should increase as the warmer and drier months approach, and that’s apparently what the month of March brought to the CU ledgers.
Electric sales volume in March totaled 85,482,560 kilowatt-hours, according to Webb’s monthly report. This is indicative of not only the 6 percent increase over March 2012, but it also points to a year-to-date volume hike of 2.3 percent. CU’s current fiscal year concludes June 30.
Revenue from the sale of electricity, after a positive adjustment for accrued revenue, was $7,658,004, Webb reported.
“Although this was less than budgeted, the wholesale cost of purchased power [from TVA] was also a smaller percent of revenue than anticipated,” the CFO explained. “The budgeted percentage for the month was 83.5 percent and the actual for the month was 80.2 percent.”
He added, “This continues the trend of the last few months of less than budgeted wholesale power cost. The YTD percentage is now 83.6 percent as compared to the budgeted 83.5 percent.”
The result was a margin of $1,517,872 for March, Webb noted.
“This was better than expected and a very welcome result at this point in Fiscal Year 2013,” he said.
Revenue from other sources added another $122,594 to the total.
Electric Division expenses, other than purchased power, were $1,312,864 for the month, leaving a net income of $327,601. The YTD net income is $1,061,508.
“This is less than budgeted and is the result of lower-than-budgeted sales,” Webb explained. “As I mentioned, the purchased power percentage has improved. Sales have come up short [by] slightly over $4 million in the nine-month period. A 15 percent margin on this would have added about $623,000 to the net income line.”
The Electric Division in March served 29,955 customers.
The Water Division’s sales volume for the month was 181,716,000 gallons, down 5 percent from March 2012. For the month, water service was provided to 30,136 customers at an average retail price of $4.68 per 1,000 gallons.
In spite of the lower volume, total division revenue in March was $970,415.
“This was better than the budgeted total of $960,996,” Webb said. “Revenue was boosted this month by a significant uptick in access fees.”
Access fees are the amount paid by developers, builders and contractors to have water meters of new developments — residential and commercial — hooked to CU’s existing water lines.
For the month, Webb had budgeted $14,059 for fees, but the actual amount landed at $38,195.
“March was a very good month for meter sets and access fees,” he said.
Expenses for the month totaled $998,549, leaving a net loss of $28,134.
“This is a significant improvement from the budgeted loss of $83,781,” Webb noted.
The YTD results in water show volume at 2.3 percent less than at this time last year. Revenues have totaled $9,717,093 with expenses totaling $9,214,438, leaving a net income of $502,655.
“We now enter the fourth and last quarter (as of April 1) of fiscal year 2013, and hopefully sales volumes will increase from the winter months and positive results can be reported,” Webb surmised.
In March, 17,867 customers received CU’s sewer service. The average retail charge was $5.72 per 1,000 gallons. Total sales volume was 127,797,750 gallons. Volume was down 1.9 percent.
Although sales revenue was less than expected, access fees in sewer made up for the shortfall, Webb cited. Total division revenue was $815,562 with expenses of $780,636, leaving a net income of $34,926.
“I am pleased to be able to report this positive result [because] a $47 loss had been projected,” the CFO explained.
Of the Wastewater Division numbers, Webb added, “The YTD results in sewer reflect two positives. Revenues are now 2.5 percent higher than anticipated and expenses are 1.7 percent lower than expected, resulting in a net income for the nine months of $565,422.”