5.3. ERMUSR 05-12-2015 - Laserfiche WebLink

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Financials From time to time our wholesale power provider applies power cost adjustments (PCAs) to the energy and capacity our customers use. These PCAs are then passed along to ERMU's customers as either credits or charges on the monthly bills. To Lessen the impact of these PCAs, ERMU has built in a buffer in the annual budget to absorb some of the PCA charges effectively mitigating the volatility. In 2014 the PCAs totaled over $680,000. The buffer built into our budget absorbed $500,000 of those PCA charges. In early 2014, ERMU went through a Moody's rating call as part of an Electric Revenue Bond Refunding. Moody's affirmed ERMU's Aa3 rating. Moody's notes ERMU's decision to join Minnesota Municipal Power Agency in 2018 and to not renegotiate their current wholesale power contract with their current provider as a contributor to this solid rating. This rating helps ERMU save $240,000 through this refunding which also included restructuring the bond term to be paid off sooner. This puts ERMU in a better financial position for buy in to Minnesota Municipal Power Agency. The 2014 year end net position of ERMU increased by 3.8% over 2013. A turn in the economy in 2014 had resulted in an increase in new connections and connection fees. Overall the electric usage was up slightly by 0.22% but water usage was down by 5.2%. The electric fund revenues increase in 2014 by 1.7% and the water fund revenues decreased by 5.7%. This was in line with projection and the 2014 budget because 2013 had been an abnormally hot year. To see the 2014 financial audit report, please visit our website. Revenue Trends Over Time Electric Operations Cost Comparison Over Time $35 $25 $20 • $20 - t $15 - ti$15 $10 -.. $10 _ •--__. •-----'--+'_"""._._._.� $5 _. $5 --- - -_ $0 -- 2009 2010 2011 2012 2013 2014 ._. ` $0 2009 10. .11 2012 2013 2014 +-Electric Revenue -t-Water Revenue +Purchased Power -.-ERMU local operating costs Page 6