3.3. ERMUSR 10-13-2009 - Laserfiche WebLink

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PROFIT AND LOSS NARRATIVE August 2009 Electric P&L Reflecting the unseasonably cool weather, Operating Revenue is down from the prior year in all categories for August. Total usage was down 9 Mwh and related revenue down $200,000. Year-to-date we are still ahead of last year, however this is a result of increased rates over last year, not increased usage. Other revenues are consistent, even slightly higher, to the prior year. The exception is Miscellaneous Revenue which has a bracketed amount for 2009, reflecting a negative number for revenue. This is a result of the Air Conditioning controlled credit that is given to participating customers each year in June, July, and August. This year we don't have any offsetting revenue (last year there were temporary charges for GRE's turbine engine setup of $24,000 and a Capital Equipment refund.) This category brings the total Other Revenue amounts to $20,000 below last year. Purchased Power is increased over last year, which is consistent with prior months. This month we did have a credit for the July usage, as reported at last month's commission meeting, bringing our year-to-date PCA to approximately $30,000. We will continue to update the commission on the accumulated PCAs. As was stated last month, the summer months are the most "expensive" for purchased power and August was the last month of higher purchased power cost from Connexus. ERMU's rate to our customers is also higher in the summer but our summer billing rate goes through September (our "shoulder" month.) An assessment at the end of September of how our operating revenues versus purchased power is comparing will be valuable. Operating and Maintenance expense is lower than last year because of a grading expense we incurred in 2008, not in 2009. Distribution expense is lower as there was a temporary service expense incurred in 2008 and not in 2009. One other decreased expense to mention is the Other Operating Expense category (actually a bracketed number indicating a negative expense) due to recognition of the revenue from the disposition of inventory materials. The past few months have noted the inventory disposition amounts being recognized and reflecting a higher expense. Administrative and General Expense is higher than last year due to CIP rebate expenses lagging the reimbursement and increased legal expenses. All other expenses are in line with prior year and budgeted numbers. Year-to-date Net Income is positive, however lower than last year. The increased power costs, only partially offset by increased rates in this year's budget, is compressing our mazgin. Tazgeted budget net income numbers still differ by approximately $300,000, but our cash position for end of year projections are in line. The Cash Flow Detail report shows this very well. Decreased inventory purchases and capital project reductions (either postponing or reduced project expenses) have been the biggest contributors here. I~