2.3. ERMUSR 04-08-2014 - Laserfiche WebLink

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PROFIT AND LOSS NARRATIVE February 2014 Electric P&L February's electric kwh sales (for January usage) are down slightly from the prior year; Residential usage is up just under 1%, Small Commercial usage is down 2%, and Large Commercial usage is down 2% from the prior year. However, January Operating Revenue is slightly over the prior year by 2%, and slightly under budgeted numbers by 2%. Other Operating Revenue is up 3% from the budgeted numbers, and down from the prior year 5%. Most components are consistent with the prior year, with the exception of the Connection Fees and Miscellaneous Revenue (both are very sporadic). Miscellaneous Revenue is down as a result of less recycling of scrap materials. Overall, Revenues are ahead of the prior year slightly by 1.7%, and year to date are ahead by only 1%. Purchased Power includes a PCA of$269,812.29. I included the explanation provide from GRE last month in my staff update and it can be summarized as high prices for the high load of energy used in January. The total purchased power cost of$1,950,782 is up from budgeted numbers 10%, and up from last year 17%, reflecting the PCA as well as the increased wholesale cost and usage. This is the biggest single impact to the electric financials. The PCAs (Power Cost Adjustments) are a tool for power providers to recoup extraordinary costs incurred in delivering the power that would not be covered by the regular rate. When ERMU is charged a PCA from our power provider, it increases our expense for our purchased power. If we choose to pass on the PCA, our power cost is not reduced - we simply make it back in our revenues charged to our customers (much like the power provider did to us.) Conversely, if we receive a credit PCA from our power provider, it reduces our power cost, and if we choose to pass it on to our customers, our revenues are reduced as we credit our customers. For other expenses, most are up over the prior year and budget. There were some reductions to expenses in 2013 that are not repeated in 2014 and, therefore, skew the numbers. Total expenses were $2,658,219, over budget by 7%, and higher than the previous year by 15%. For February, the Electric Department has a Net Loss of$(83,511), compared to a budget of$146,430, and the prior year of$220,245. (Not factoring the additional PCA we were charged, we would be above budget and just under the prior year.) Year to date we are ($373,858) compared to the prior year of$363,124. Given that it is the PCA having the impact, at least we are able to rectify this in subsequent months. 19