Archive for the ‘Monthly Summary’ Category

Monday, October 14th, 2019

 

 

 

BUSINESS OPERATIONS – OCTOBER 2019

Future Power Supply Considerations: During the legislative session of 2019, the State legislature passed a handful of new bills that will most certainly have an impact on future power supply options and cost. The legislation included goals to reduce Green House Gas (GHG) by 26% by 2025 and 50% by 2030. It is generally believed that utilities within the state will have to consider significant reductions in generation from their coal fired power plants, to meet those goals. The legislation also included a “social cost” of carbon, which will also impact how generation from fossil fuel plants are managed. To further complicate the issue, at least in the near term, the rules that will prescribe how utilities may be able to manage the directives will not be completed until the summer of 2020 at the earliest. In light of the current level of uncertainty surrounding the implementation of the legislation, and the impact it will have on power generation within the state, the ARPA Board unanimously voted to wait 2-3 years before issuing a Request for Proposal (RFP) for future power supply options. Currently ARPA has a contract for approximately 65% of its power supply through January of 2025 with the Public Service Company of Colorado (Xcel Energy) and a long-term contract with the Western Area Power Administration for the vast majority of its remaining power supply needs.

ARPA Board Reviews 2020 Budget: The ARPA Board of Directors reviewed its proposed 2020 budget at its September meeting and will keep rates at their current level. The Board decreased its wholesale rate by 2% for 2019, after several years of stable rates with no rate increases. The Board is also evaluating opportunities to retire a portion of its long-term debt, which could trigger an additional decrease in rates for 2021.

The proposed 2020 budget includes:
• Power Sales Revenues of $31.0 million
• Power Supply costs of $14.4 million
• Transmission costs of $3.25 million
• A&G costs of $1.92 million
• Debt Service costs of $9.5 million

ARPA’s 2020 Budget Hearing is scheduled for December 5, in La Junta at the Otero Junior College Student Center.

Summary of August 2019 Financial and Operating Statements: During the month of August, revenue from power sales were better than budget by 11.7% and total cost of goods sold were over budget by 7.7%. Net revenue for the month was $726,155 which was 50% better than budget. Year to Date revenues are 4% better than budget and cost of goods sold are 1.5% over budget. Net revenues YTD are well above budget at $3,221,761. Member Energy sales for August were 8.5% more than 2018 and 11.7% better than budget. Member Sales YTD are about 3.4% better than budget.

Next ARPA Meeting: The next regularly scheduled ARPA board meeting is Thursday, October 31, 2019. The meeting will be held by WebCast and Conference Call and will begin at 9:00 AM. ARPA board meetings are open to the public.

Monday, September 16th, 2019

 

 

 

BUSINESS OPERATIONS – SEPTEMBER 2019

ARPA Board Reviews Preliminary 2020 Budget: A preliminary budget was presented to the ARPA Board of Directors at its August 29 meeting that anticipates no rate increase for 2020. The budget includes total revenues of $30.9 million, power supply costs of $14.4 million, transmission costs of $3.25 million, and A&G costs of $1.96 million. Debt service will continue at an annual cost of $9.5 million. The budget also includes achieving a 1.35x debt service coverage and full funding for bond reserve accounts as required by ARPA’s bond covenants.

Budget Hearing: The proposed 2020 budget will be available for inspection beginning November 4 at the City Clerk’s office in each member city. Any interested elector in an ARPA member community or electricity consumer of an ARPA member (Holly, La Junta, Lamar, Las Animas, Springfield and Trinidad, Colorado) may register objections to the proposed Budget prior to its final adoption. The ARPA Board of Directors will hold a public hearing on the proposed Budget at the Otero Junior College Student Center, 2001 San Juan, La Junta, CO., on Thursday, December 5, 2019, beginning at 11:00 AM.

Financial Projection for YE 2019: Following a cooler May and June, sales in July rebounded, and are about 2% above budgeted sales through July. ARPA is conservatively projecting a year-end cash increase of $1.9 million. ARPA’s bond reserve accounts are fully funded and debt service coverage at the end of July is 1.40x.

Summary of July 2019 Financial and Operating Statements: During the month of July, revenue from power sales were better than budget by 11.2% and total cost of goods sold were over budget by 6.8%. Net revenue for the month was $817,499 which was 46% better than budget. Year to Date revenues are 2.7% better than budget and cost of goods sold are right on budget. Net revenues YTD are well above budget at $2,495,606. Member Energy sales for July were 1% more than 2018 and 11.2% better than budget. Member Sales YTD are about 2% better than budget.

City of Lamar Appoints Roger Stagner to ARPA Board Of Directors: Roger Stagner, Mayor for the City of Lamar, has been appointed to the ARPA Board of Directors by the Lamar City Council. Roger is a lifelong resident of Lamar and was appointed to finish out the term of John Sutherland who recently retired. Welcome Roger!

Bond Counsel to Provide Analysis on Integration of Project Based Contracting: The Board authorized the General Manager to engage Bond Counsel to provide an analysis as to whether an alternative business model would be a feasible approach for future power supply options for ARPA members. ARPA’s current contracts and resulting rate structure is an “all requirements” which obligates ARPA to obtain, sell and deliver the wholesale electric power and energy requirements that each municipality requires for the operation of their respective municipal electric systems. It also obligates the municipal members to receive and purchase from ARPA all power and energy it requires for operation of their respective municipal electric systems.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, September 26, 2019. The meeting will be held in Trinidad, Colorado at the Holiday Inn, 3130 Santa Fe Trail Drive, beginning at 10:00 AM. ARPA Board of Director meetings are open to the public.

Thursday, August 15th, 2019

 

 

 

BUSINESS OPERATIONS – AUGUST 2019

Rick Klein, City Manager for the City of La Junta, was named to ARPA’s Honor Roll of Merit: The Arkansas River Power Authority Honor Roll of Merit is presented to a person or organization that makes a significant effort and unselfish contribution either to the mission and purpose of ARPA or to the betterment of an ARPA member community. Rick Klein, the City Manager of La Junta, was officially presented the 2018 Honor Roll of Merit for his excellent leadership capabilities, well-thought-out feedback and insight from a city managers perspective, to the ARPA Board of Directors. Over his career, Rick has spearheaded countless projects and area and state initiatives that not only improved City facilities and programs, but also reached beyond City and state boundaries. His most current project, preservation of the Southwest Chief, is a prime example of the passion and steadfast commitment he brings to projects that benefit not only La Junta, but all the Southeast Colorado communities. Rick commented that nothing is accomplished in a vacuum, change is inevitable and emphasized the power of teamwork and sticking together. Congratulations Rick!

ARPA Operating Committee Accepts Bid for Equipment Inspections- Reviews Safety Training Funding: ARPA entered into an agreement on behalf of its members for electric line equipment inspections for the years 2019-2021. The inspections will occur in October of each year at each member system location. Types of equipment inspected include bucket trucks, digger derrick equipment, hot sticks, rubber live line tools, covers and personal ground sets. The Operating Committee also reviewed safety training funds that are provided by ARPA. Funding is available for hot-line schools, meter training, and general field operations training. Funds can also be used to attend conferences provided by organizations such as APPA (American Public Power Association) and RMEL (Rocky Mountain Electric League).

Summary of June 2019 Financial and Operating Statements: During the month of June, revenue from power sales was less than budget by 5.7% and total cost of goods sold were under budget by 8.8%. Net revenue for the month was $481,803 which was 8% better than budget. Year to Date revenues are 0.5% less than budget and cost of goods sold approximately 1% under budget. Net revenues YTD are well above budget at $1,670,608

ARPA Board Receives Introduction to Project Based Rate Structure: John Krajewski of JK Energy Consulting provided a presentation to the Board on Project Based Rate Structure, and associated contracting, that is a business model used by some Joint Action Agencies. ARPA would continue to be responsible for its existing resources, compliance with its bond covenants, and member Power Supply Agreements. The Board took the presentation under advisement.

Twin Eagle Contract Assignment: Earlier this year, ARPA consented to the assignment of its Twin Eagle Partial Requirements Agreement (PRA) to Public Service Company of Colorado (PSCo), a highly rated, investor owned utility and subsidiary of Xcel Energy. The assignment went through a regulatory approval process with the Colorado Public Utilities Commission and the Federal Energy Regulatory Commission. The regulatory review and approval process has now concluded. Effective July 16, PSCo assumed ARPA’s PRA. All terms, including the pricing in the Agreement, remain in place. The PRA is for approximately 65% of ARPA’s power supply. The term of the ten-year Agreement is from February 1, 2015 through January 31, 2025.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, August 29, 2019. The meeting will be held in Holly, Colorado at the Holly Senior and Community Center, 129 S. Main Street, beginning at 10:00 AM. ARPA Board of Director meetings are open to the public.

Thursday, June 27th, 2019

 

 

 

BUSINESS OPERATIONS – JUNE 2019

Standard & Poor’s Ratings Services (“S&P”) Affirms ARPA’s Credit Rating:  S&P’s Ratings Services affirmed its ‘BBB‘ long-term rating and underlying rating on the Arkansas River Power Authority’s power revenue bonds. The outlook is stable. S&P’s view is that during the next two years, member rates and energy demand will remain relatively stable based on ARPA’s long-term power supply contracts. The rating also reflects ARPA’s strengths and weaknesses. Strengths identified a recent resolution of member litigation, a purchase power agreement that will provide power at a competitive rate through at least 2024; and cost certainty given that most expenses are known and fixed for the next several years. Weaknesses included member rates that are above state averages (although rate increases are projected to be minimal over the next few years); high debt ratios, and participating member municipalities’ limited service area economies. To view the full Standard & Poor’s Rating Report go to: http://www.arpapower.org/docs/Standard_&_Poors_ARPA_14-May_2019.pdf

ARPA Holds its Election of Officers: At its meeting on May 30, the ARPA Board of Directors, by resolution, elected the following individuals into office for the next 12 months. Those officers include: David Willhite (Holly), President; Rick Stwalley (Las Animas), Vice President; Gary Cranson (La Junta), Treasurer; and Arvenia Morris, (Staff), Secretary.

 ARPA Scholarship Program: In 2000 ARPA established a College Scholarship Program that awards a $1,000 scholarship to one high school senior in each of the high schools served by ARPA members. The Program is administered through the member municipalities of Holly, La Junta, Lamar, Las Animas, Springfield and Trinidad. The scholarships are funded equally between ARPA and its members. Congratulations to the following individuals on receiving the scholarship for the 2019-2020 school year: Holly: Amy Bitar; Lamar: Giselle Sanchez; McClave (Lamar): Jordan Parker; La Junta: Caitlyn Dieckmann; Trinidad: Jasmine Abeyta; Las Animas: Alyssa Melendez; Wiley (Lamar): Blake Wilson. Good luck in your future endeavors!

 ARPA Board Adopts Resolution to Continue Negotiations with Tri-State: The Board adopted a resolution that commits the membership to ongoing efforts in completing negotiations with Tri-State for power supply services including transmission service, and defeasement of ARPA’s debt.  The resolution directs the general manager and attorney to continue negotiating with Tri-State, with a view to reaching agreement on a Purchase Power Agreement and Defeasance Agreement. It also directs management to confer with bond counsel to ensure any action taken complies with ARPA’s bond covenants.

 ARPA Board Reviews 2018 Audit: ARPA auditor, Ronny Farmer, rfarmer, llc, presented and briefed the Board on the 2018 Audit. Operating revenue from sales for its fiscal year ended December 31, 2018, was approximately $29.7 million which was almost 4% better than revenues for the Authority’s fiscal year 2017.  Operating income for 2018 was $13,426,852. There were total revenues of $42,556,614 and total expenditures of $29,129,762 in 2018. To view the full audit, go to: http://www.arpapower.org/docs/ARPA_-_2018_Final.pdf

 Summary of April 2019 Financial and Operating Statements: During the month of April, revenue from power sales was less than budget by 1.4% and total cost of goods sold were just under budget by 0.2%. Net revenue for the month was $210,917 which was significantly better than budget. Year to Date revenues are approximately 1.3% better than budget and cost of goods sold 2% over budget. Net revenues YTD are well above budget at $907,308.

Next ARPA Meeting: The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, July 25, 2019. The meeting will be held in La Junta, Colorado at the Otero Junior College Student Center, 2001 San Juan, beginning at 10:00 AM. ARPA Board of Director meetings are open to the public.

Thursday, June 27th, 2019

 

 

 

BUSINESS OPERATIONS – APRIL/MAY 2019

ARPA Member’s Line Crews Help With Lineworker’s Rodeo. Nine lineworkers from ARPA utility members helped the Colorado Springs Utilities prepare for the annual American Public Power Association’s Lineworker’s Rodeo. The Rodeo is designed to highlight the work lineworkers perform to “keep the lights on” with a friendly competition that draws Public Power utility crews from across the nation. Lineworkers from Las Animas, La Junta, Lamar, and Trinidad joined forces with the lineworkers from Colorado Springs Utilities to set approximately 200 poles for the estimated 400 lineworkers who participated in the event.

 ARPA Members Celebrate Lineworker’s Appreciation Day. The line crews from the ARPA communities gathered together on April 18th to not only celebrate Lineworker’s Appreciation Day, but to also participate in a critical safety training exercise- pole-top hurtman and bucket truck rescue. The lunch barbecue and safety training attended by some 27 lineworkers from the six utilities was not only an opportunity for the line crews to get better acquainted, but also to work together as they are often called to do. The ARPA communities rely on Mutual Aid between their respective utilities in times of storms and upset conditions as they strive to “keep the lights on” regardless of the weather and regardless of the conditions.

ARPA Board Receives Report on Financial Compliance. During the summer of 2018, the ARPA Board successfully refinanced approximately $120 million of its debt. The refinancing of the bonds provides significant savings for ARPA rate payers and included certain provisions for bond compliance purposes. One of those provisions includes an annual report to the Board. Aarin Ritter, Manager of Finance and Accounting for ARPA advised the Board that ARPA was in compliance with all the provisions of the bond covenants including the debt service coverage, and that all bond accounts are fully funded. In addition, Ritter reported that the bond funds are all held in approved accounts with the bond trustee, UMB Bank, and that all financial filings are current and have been posted on the Municipal Securities website.

Summary of March 2019 Financial and Operating Statements. During the month of March, revenues from power sales were better than budget by 1.8% and total cost of goods sold were over budget by 1.4%. Net revenues for the month were $218,042 which was significantly better than budget. Year to Date revenues are approximately 2.1% over budget and cost of goods sold approximately 2.7% over budget. Net revenues YTD are well above budget at $696,436.

Next ARPA Meeting. The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, May 30, 2019. The meeting will be held in Springfield at the Longhorn Steakhouse beginning at 10:00 AM. The meeting is open to the public.

 

Thursday, March 28th, 2019

 

 

 

BUSINESS OPERATIONS –MARCH 2019

2018 a Successful Year Financially for ARPA. 2018 proved to be another successful year for the Authority as its Revenues from Sales finished the year approximately 7% better than budget and resulted in revenues of $29.7 million. Purchased Power costs, on a kilo-watt hour basis, were less in 2018 compared to 2017 and ARPA’s A&G expenses were down considerably from 2017 and well below budget for the year. A major factor for the reduced cost was the reduction in legal expenses due to the settlement of outstanding litigation in 2017. ARPA finished 2018 with $5 million in net revenue and an increase in cash of a little over $5.5 million.

During the past few years, ARPA has improved its financial position significantly without having had a rate increase since 2011. The improved financial condition has allowed the Board to reduce costs through refinancing the majority of its bond debt last summer. The Board’s plans also include retiring its 2010 bond debt by the end of 2020. Retiring the 2010 bonds will reduce expenses by approximately $1.2 million annually.

ARPA Welcomes Two New Directors. Rebecca Clark (Springfield) and Calvin Melcher (Holly) have been appointed by their respective Town Governing Boards to fill unexpired terms on the ARPA Board of Directors. The Town of Springfield Board of Trustees appointed Rebecca Clark, Town Manager/Clerk for the Town of Springfield. Rebecca has been actively involved in attending ARPA Board meetings for the last several months. Calvin Melcher has been appointed by the Holly Board of Trustees to fill the unexpired term of Johnnie Lyons. Calvin is a long-time resident of the Town of Holly. Welcome Rebecca and Calvin!

Farewell to Two Directors from the ARPA Board. Darwin Hansen, a long-standing board member representing the Town of Springfield, submitted his resignation in February. Darwin served as a Director beginning late in 2007. Darwin was a member of the Superintendent’s Operating Committee from 1993-2015 and was the Superintendent for the Springfield Electric Department for 35 years. Johnnie Lyons (Holly) submitted his resignation from the ARPA Board effective January 1, 2019. Johnnie served as a Director from February 2016 thru December 31, 2018. Thank you, Gentlemen, for your service on the ARPA Board of Directors.

ARPA Members Lend Assistance for APPA’s LineWorker’s Rodeo at Garden of the Gods. The Garden of the Gods (Colorado Springs) will be the venue for the American Public Power Association’s annual LineWorker’s Rodeo which will be held on March 29-30. The Public Power Lineworkers Rodeo is the foremost showcase of public power lineworker skill and knowledge. Nine lineworkers from the ARPA member municipalities of Lamar (2), La Junta (3), Las Animas (2) and Trinidad (2) assisted Colorado Springs Utilities build and erect some 200 poles for the event.

Summary of January 2019 Financial and Operating Statements. During the month of January, power sales were just better than budget by $17,569. Total cost of goods sold were over budget $49,189. Total A & G Expenses were under budget $32,902. There were net revenues of $290,777 for the month. Member sales for January were just less than 2018 by 0.9% but better than budget by 2.7%.

Next ARPA Meeting. The next regularly scheduled meeting of the ARPA Board of Directors is Thursday, March 28, 2019. The meeting will be held at the Bent County Community Center (1214 Ambassador Thompson Boulevard) beginning at 10:00 AM. The meeting is open to the public.

Thursday, February 14th, 2019

 

 

 

BUSINESS OPERATIONS – FEBRUARY 2019

ARPA Board Consents to Assignment of its Power Supply Agreement. In February 2013, ARPA entered into a Power Supply Agreement with Twin Eagle Resource Management (Twin Eagle) for approximately 65% of its power supply. The term of the ten-year Agreement was from February 1, 2015 through January 31, 2025. In late November of last year, Twin Eagle notified ARPA that they were requesting ARPA’s consent to assign the Agreement to the Public Service Company of Colorado (PSCo- a subsidiary of Xcel Energy).

ARPA agreed to consent to the assignment as there will be no discernable changes to the services ARPA receives from the Agreement and all the terms of the Agreement remain in place. The assignment must go through a regulatory approval process with the Colorado Public Utilities Commission and the Federal Energy Regulatory Commission before it becomes effective.

ARPA Board Continues to Evaluate Power Supply Proposals. At its January meeting, the ARPA Board received a report on the status of its power supply proposals from its consultant, JK Energy Consulting. The ARPA Board received responses from a Request for Proposals (RFP) for future power supply in which they requested pricing for power supply and related transmission services for both five-and ten-year terms beginning February, 2025. In addition, the Board continued its review of a proposal received from Tri-State Generation and Transmission in which Tri-State would assume responsibility for ARPA’s operations including power supply, transmission, and debt service through 2050. The ARPA Board authorized the General Manager, and its General Counsel, to continue pursuing negotiations and communications with Tri-State in conjunction with the responses received through the RFP process, and to update the member’s governing bodies on the status of the power supply discussions.

Summary of December UNAUDITED 2018 Financial and Operating Statements. During the month of December, power sales were just better than budget by $4,273. Total cost of goods sold were under budget $125,001. There were net revenues of $300,932 for the month. Year to date unaudited power sales were better than budget $1,939,988. Total cost of goods sold were over budget $370,873. There were net operating revenues of $4,977,208 for 2018. Member sales through December were better than 2017 by 3.5% and better than budget by 7.2%.

ARPA Board Adopts Resolution Designating Dates and Locations for Meetings in 2019. Subject to further notice, the regular meetings of the Board of Directors of the Arkansas River Power Authority will be held on the following dates in the designated member municipalities or by WebCast as indicated.

Next ARPA Meeting. The next regularly scheduled ARPA board meeting is Thursday, February 21, 2019 and will be held by WebCast. The meeting will begin at 9:00 AM. ARPA board meetings are open to the public. If any member of the public wishes to attend, please call Arvenia at 336-3496 for information on where to attend the meeting.

Wednesday, January 2nd, 2019

 

 

 

 

 

 

 

 

 

BUSINESS OPERATIONS – DECEMBER 2018

ARPA Board Adopts 2019 Budget. At its December meeting, the ARPA Board approved a budget for 2019 that includes a 2% reduction in its wholesale energy rate. The rate decrease comes after several years of stable rates; the Authority has not raised rates since 2011. The 2019 Budget also supports the Board’s plan to accumulate sufficient cash to retire 2010 bonds when they become callable in 2020. The budget includes:
• Revenues of approximately $33.1 million
• Power supply cost of approximately $14.3 million
• Transmission expense of approximately $3.2 million
• Debt Service payments of $9.5 million
• Admin and General expenses of approximately $1.7 million

Wholesale Rate Review. The Board of Directors adopted Resolution No. 07-18, a new Wholesale Rate Schedule that decreases ARPA’s Wholesale Energy Rate by 2%. The rate reduction, which will become effective in January, is projected to save ARPA members and their rate payers approximately $350,000 to $400,000 annually beginning in 2019.

The Board also adopted its Avoided Cost formula for 2019 which will be the average of the base energy rate used by Public Service Company of Colorado to calculate ARPA’s energy imbalance charges. The Avoided Cost Rate will be the reimbursement rate used in the Board’s Distributed Generation Policy.

ARPA Board Adopts Renewable Distributed Generation (DG) Policy. The Board also adopted its much-discussed Distributed Generation Policy. The DG Policy provides guidelines to account for renewable generation facilities that are installed in ARPA’s members distribution areas. This includes solar garden installations and facilities that are installed behind retail electric meters. Provisions of the Policy include the rate of reimbursement (avoided cost rate) for the generated power and addresses issues such as the size limits for net metering programs, how electrical output for installations over 25 kW will be accounted for, operational issues such as metering and reporting requirements, and billing procedures.

Summary of October 2018 Financial and Operating Statements. During the month of October, total revenues were better than budget by $204,482. Total cost of goods sold were over budget $64,045. There were net revenues of $343,977 for the month.

Sales at Ten-Year High, YTD. Member sales for the first nine-months of the year are 4.2% better than in 2017 and 3.6% better than the ten-year average for sales through September. Revenues from sales are also well above average, 4% better than 2017 and almost 8% better than budget.

Next ARPA Meeting. The next regularly scheduled ARPA board meeting is Thursday, January 31, 2019 and will be held by WebCast. The meeting will begin at 9:00 AM. ARPA board meetings are open to the public. If any member of the public wishes to attend please call Arvenia at 336-3496 for information on where to attend the meeting.

Friday, November 16th, 2018

 

 

 

BUSINESS OPERATIONS – OCTOBER-NOVEMBER 2018

ARPA Board Reviews 2019 Budget and Financial Planning: The ARPA Board of Directors reviewed its proposed 2019 budget at both its September and October meetings that includes a 2% rate decrease in ARPA’s wholesale energy rate. This reduction was made possible due to ARPA’s reducing its debt service costs through the refunding of a significant portion of its debt this past summer. In addition to the savings in debt service, ARPA has also significantly reduced other expenses in its Admin and General fund. The total savings of approximately $1.1 million more than offsets anticipated increases in power supply and transmission expense. The proposed 2019 budget includes:
• Power Sales Revenues of $27.8 million
• Power Supply costs of $14.3 million
• Transmission costs of $ 3.1 million
• A&G costs of $ 1.7 million
• Debt Service costs of $ 9.5 million

The Board also discussed its strategy for retiring its 2010 bonds. The 2019 budget, (as will the 2020 budget), is designed to accrue additional cash sufficient to retire the 2010 bonds of approximately $14.8 million when they become “callable” in 2020. Retiring the bonds will reduce ARPA’s annual debt service by $1.2 million. This reduction in costs is anticipated to result in an additional rate decrease in the 2021-2022 time frame. ARPA’s 2019 Budget Hearing is scheduled for December 6, in La Junta.

ARPA Board Discusses Distributed Generation (DG) Policy: Recent trends have promoted expanded deployment of a wide variety of renewable and distributed generation (DG) technologies. This has come at a time when tax incentives and improved technologies have reduced the cost of renewable energy including solar and wind generation. In recognition of this, the ARPA Board has been working to develop a policy to address the many facets of DG.

Key points of the policy include net metering, a process to account for installations less than 25 kW (10 kW residential) that is owned by a retail customer and is “behind the retail meter”. Net metering allows a retail customer to offset their consumption by power generated by the renewable facility. For installations larger than 25 kW, it is anticipated that either ARPA, or its member utility, will purchase all the output from the installation at a predetermined price. The policy discussions also include the type of reporting and metering that will be necessary, how the invoicing, payments and credits for the generation output will be handled, and the total amount of renewables ARPA and its members can install without violating existing power supply agreements.

Summary of Year to Date Financial and Operating Statements: Revenues from Power Sales are better than budget by almost 8%, and better than 2017 sales by 4.2%. Total Cost of Operations, including Admin and General are about 1% over budget. Net Revenue from Operations are $4.2 million YTD.

Next ARPA Meeting: The next regularly scheduled ARPA board meeting is Thursday, December 6, 2018. The meeting will be held in La Junta at the Otero Junior College Student Center, 2001 San Juan, and will begin at 10:00 AM. ARPA board meetings are open to the public.

Monday, September 10th, 2018

 

 

BUSINESS OPERATIONS – SEPTEMBER 10, 2018

ARPA Board Reviews 2019 Budget: The ARPA Board of Directors reviewed different scenarios for its 2019 budget, as it began its 2019 budget process. None of the scenarios discussed included a rate increase which will signal an 8th straight year without a rate increase by the Authority. The Board directed staff to focus on two priorities, accumulation of funds to retire the Authority’s 2010 bond series when they become callable (fall of 2020), and evaluate opportunities to reduce rates both near term and long term. To that end, ARPA placed $4.2 million into its rate stabilization account that is earmarked for retiring the 2010 bonds.

The budget scenarios included recognition of the savings from ARPA’s recent debt refinancing. ARPA’s debt service was reduced by approximately $700,000 annually via the refinancing. If ARPA is successful with retiring the 2010 bonds, it will realize another $1.2 million in annual savings beginning in 2021. The Preliminary Budget presented to the Board included total revenues of $33.7 million, operating costs of $19.1 million and debt service costs of $9.5 million.

Budget Hearing: The proposed 2019 budget for the Arkansas River Power Authority will be available for inspection beginning November 5th at the City Clerk’s office in each member city. Any interested elector in an ARPA member community or electricity consumer of an ARPA member (Holly, La Junta, Lamar, Las Animas, Springfield and Trinidad, Colorado) may register objections to the proposed Budget prior to its final adoption. The ARPA Board of Directors will hold a public hearing on the proposed Budget at the Otero Junior College Student Center, 2001 San Juan, in La Junta on Thursday, December 6, 2018.

Financial Projection for YE 2018: Projections for YE 2018 include power sales approximately $1.5 million better than budget (projected at $29.1 million) while cost of operations are projected to be approximately $1.0 million less than budget (projected at $18.1 million). The reduction in bond interest payments from the recent bond refinancing are projected to lower costs by $308,000 for 2018 and A&G costs are projected to be $1.3 million less than budget. Projections for net cash for operations at the end of 2018 is approximately $3 million.

Summary of July 2018 Operational Financial and Operating Statements: During the month of July, total cost of goods sold were over budget 9.4% which was offset by revenues that were 13.5% better than budget. There were Net Revenues from operations of $1,021,599 for the month. Member sales for July were 1.2% better than July of 2017. Total Operational Revenues YTD are better than budget by 8.7% as Member Sales YTD are 9.2% better than budget and 4.6% better than 2017 sales.

Extraordinary Income and Expenses: ARPA refinanced the 2003, 2006, 2007 and 2008 bonds in July which resulted in approximately $933,000 in bond issue expenses. The Authority also realized revenues of approximately $5.0 million for amortization of bond premiums and $4.9 million from litigation and insurance settlements.

Next ARPA Meeting: The next regularly scheduled ARPA board meeting is Thursday, September 27, 2018. The meeting will be held in Lamar at the Cultural Events Center, 102 East Parmenter, and will begin at 10:00 AM. ARPA board meetings are open to the public.