3.1.C. ERMUSR FINANCIALS 12-13-2011

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PROFIT AND LOSS NARRATIVE October 2011 Electric P&L October Total Electric Operating Revenue is up 15% from the prior year, and total usage is up 9%. Within the Operating Revenue category, Residential usage is up 17%, Small Commercial usage is up 3%, and Lazge Commercial usage is up 6.5%. Other Operating Revenue is consistent with the prior year, up 2.5% from the prior year. Purchased Power is up from the prior year by 19% (reflective of our 15% increased usage mentioned above) and has no Power Cost Adjustment (PCA). GRE did not pass along any PCA for October, choosing to absorb the cost over-runs instead. For other expenses, Operating Expense is consistent with the prior year. Landfill Gas is down from the prior year because last year there was additional maintenance recognized in the last quarter, and this yeaz we have been recognizing these costs throughout the year for the additional maintenance. Distribution and Maintenance expense are down from the prior year numbers this month and Security Expense is consistent with last year. Other Operating Expense, Services to the City, and Customer Accounts Expense are increased over last year. Services to the City are increased as the 3% contribution increases with customer usage, and donated electricity is increased. Customer Accounts Expense is increased due to the purchase of statements and forms that did not occur the same month of the prior year. Administrative and general expenses are significantly below the prior year. Last year there were three pay periods in the month of October, an impact of approximately $40,000. Also, approximately $35,000 more in CIP rebates were posted last year for October. For October, the Electric Department has a net profit of $444,243 which is ahead of the prior year's net profit of $301,947. The year to date net profit is $866,245 and is ahead of the prior year to date net profit was $630,324. Water P&L The October numbers for Water Operating Revenue were very good this year, with Sales up over $100,000, a 66% increase from the prior year. The million gallons of water pumped is up 23%, and consumption is up 56%. Other Revenue is increased from the prior year with the Connection Fees of approximately $35,000 from Guardian Angels. Total Revenue is increased 80% over the prior year. Production and Pumping Expense are increased over the prior year. We replaced several gas chlorinators for the chlorine pump meters, and did some SCADA control work for the re-routing of well #9 to well #8. We also had the generators inspected at wells #5 and #6. The Administrative and General Expenses are decreased from the prior year with the third payroll the prior year, as noted above. For October, the Water Department has a net profit of $114,772, ahead of last year's net loss of ($38,220). The year to date net profit of $87,891 is behind the prior year to date net profit of $158,112.