July 18--Weak demand locally for Owensboro Municipal Utilities electricity was more than offset by strong sales on the wholesale electric market during the 2013-14 fiscal year, allowing OMU to finish the year with electric system net income after operating expenses of $9.5 million.
Even after paying a cash dividend of $6.1 million to the city of Owensboro, OMU was still left with $3.4 million to add to its reserves, according to Kathy Roberts, manager of corporate planning and business development.
The year-end financial report was delivered to the City Utility Commission, the board that governs OMU, on Thursday at the utility's customer Service Center on Tamarack Road. Total electric revenue for the year ending in May was $149.7 million, almost $6 million more than expected and more than $5 million ahead of the previous year.
OMU would have had an even better result if local retail sales had come close to expectations, but they did not, falling $13.9 million (16.2 percent) below budget at $73 million. Wholesale sales hit $76.6 million.
The long, cold winter and resulting higher prices for natural gas buoyed prices on the wholesale market, dramatically helping OMU's bottom line. Also helping was the fact that OMU held the line on total electric operating expenses, with those costs coming in $5 million under budget. Maintenance at the Elmer Smith Station coal-fired power plate was $2 million under budget.
"We had a great year in wholesale, so the overall health of the company was improved," OMU General Manager Terry Naulty said.
OMU is studying the drop in local consumption, Naulty said. Some of it is likely related to more efficient appliances, compact fluorescent light bulbs and general conservation by customers.
OMU's water system lost even more money than was expected in 1013-14, with the loss set at $703,300. The expected loss was $606,700. The water system was recently approved for a major rate increase, which is expected to begin reversing the losses starting in about a year when the second phase of the rate increase takes effect, Roberts said.
Steve Vied, (270) 691-7297, email@example.com
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