ERMUSR Financials 07-11-2006 - Laserfiche WebLink

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PROFIT AND LOSS NARRATIVE Electric P&L The revenue for the electric is up over last year due to warmer than normal weather resulting in 2800 megawatts more usage than last year. The residential usage is up over 1000 megawatts from last year. The residential customer growth is about the same as in prior years, but usually only resulted in between 50 to 750 megawatts more usage. The Otsego commercial revenue is double what it was last year for May due to the growth that area has seen. The rural Big Lake demand is 100% more than last year as the area's first and only demand customer is the Target Data Center. (This is not technically in the Big Lake area but it falls on the meter reading route for Big Lake and so the revenue is classed there.) The large Miscellaneous Revenue amount is for the restitution money we received from P. Hemza, and was split 75% to electric and 25% to water. Purchased power is of course increased over last year with the 2800 megawatt increase. Also, the demand rate we are being charged is higher by 9% and there was an approximate $12,000 credit power cost adjustment in May 2005. Distribution and Maintenance are higher this month as there were a lot of miscellaneous supplies purchased and approximately $15,000 was spent in the relocating of the utility vault cables downtown. Increased fuel costs also play a factor in the increased expenses. Depreciation is more in the current year than the prior year (due to increased capital additions last year) and this will continue to be apparent when comparing year to date numbers. Under administrative expenses, most expenses are in line with last year with the exception of Insurance, Dues and Subscriptions, and Schools and Meetings. These accounts are lower than last year due to an accounting change. The payments for these expenses are handled through quarterly assessments and last year were expensed in the given month in total. This year, the payments are being debited to a prepaid account and expensed equally throughout the 12 months. Last year it presented an obscure picture because there was too much expense in certain months and none in others. This year it presents a bit of an obscure picture, since it looks like our year to date expenses are reduced considerably, when actually it is a timing difference. The Conservation Improvement Program had a lot of expense this month. There was about $4200 in air conditioner tune-ups, about $4200 in air conditioner rebates, about $5,000 in new off peak meters and installs, $1000 in printing costs for brochures, and $10,000 for the A/C trees program. Remember that Miscellaneous Expense is down from last year, as we had the IRS penalties and interest issue last year. ~~