10-01-10 BPU RPT 11 - Laserfiche WebLink

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RIVERSIDE PUBLIC UTILITIES Board Memorandum BOARD OF PUBLIC UTILITIES DATE: October 1, 2010 ITEM NO: 11 SUBJECT: ELECTRIC AND WATER RETAIL SALES REVENUE AND CONSUMPTION REPORTS FOR FISCAL YEAR 2009110 ISSUE: That the Board of Public Utilities receive a report on Electric and Water Retail Sales Revenue and Consumption for Fiscal Year 2009110. RECOMMENDATION: That the Board of Public Utilities receive and file this report. BACKGROUND: This report provides high level financial results for the year ended .tune 30, 2010, to address inquiries regarding the relatively mild weather that Riverside has experienced this summer, as well as the continuing economic challenges,and their cumulative impacts on the revenues of both the Water Utility and the Electric Utility. Staff continually and routinely monitors its financial results to identify adverse impacts and develop additional strategies to mitigate negative consequences. As a result, both Utilities will end the year with positive results. Financial information is regularly reported to the Board as mandated by the City Charter. Upon completion of the financial audit, a more comprehensive update will be provided. The Electric Utility During this fiscal year,the Electric Utility implemented the final year of the Electric Utility Rate Plan to fund the construction of a second point of interconnection,additional internal generation,and replacement of expiring power contracts. The actual retail sales of$275.5 million are$7.5 million (2.7%) below budget due to a 2.2%decrease in retail consumption related to the effects of an economic downturn, relatively mild temperatures and conservation efforts. Electricity consumption was projected to be 3.7% lower than the prior year, due to the Power Resources Division's robust production cost model that uses weather,development activity, population, per capita income, employment and other relevant factors to forecast customer usage patterns. Retail sales are slightly higher than prior year, while consumption was 4.7% below prior year. Power supply costs comprise approximately 60-70% of the budget, and demand destruction has resulted in excess generation available on the market, and abnormally low power prices which more than offset the reduction in revenues.