MEA has grown from 38,000 accounts in 1999 to almost 56,000 in 2009, nearly a 50% increase. Growth of this magnitude requires more work to keep the system up to the reliability members require in this electric dependent age. MEA has reduced operating costs substantially over the last 15 years. It is time to increase the work force to better service MEA’s many new customers and meet the reliability members demand.
The Board of Directors is supporting modernization of the communication technology, the replacement of worn out vehicles and equipment, right-of-way clearing, personnel increases and upgrades and maintenance of the electrical system. To do this, the 2010 budget is projected to result in rate increases of 1.55% in the second quarter, 3.18% in the third quarter and 1.35% in the fourth quarter of 2010.
Under the rules set by the RCA, MEA is allowed on a quarterly basis to file for limited changes in base rates provided that the adjustments stay within certain parameters established by the RCA.
This budgetary increase will go a long way toward achieving the
up-scaling objectives. The budget, while increasing rates somewhat,
keeps MEA on the track of its equity management plan—retires nearly
$1million in capital credits, maintains at least a 40% equity ratio,
maintains compliance with our debt covenants and achieves margins of
$4.1 million.
The operating budget shows revenues of $103 million, and a total cost
of providing the service of about $100 million. The capital budget is
$22 million with $2.7 million in general plant items such as trucks,
furniture, buildings and communication equipment. Much of this money
is to be spent in the local community resulting in more jobs.
Some interesting statistics for easy comparison of 2010, 2009 and 2008 follow:
2010 OPERATING BUDGET FINANCIAL RATIOS & STATISTICS
2008 2009 2010
ACTUAL PROJECTED BUDGET
FINANCIAL RATIOS
Overall Times Interest Earned Ratio (TIER) 2.29 1.64 1.71
Debt Service Coverage (DSC) 2.73 2.40 2.44
STATISTICS
Expenses per customer:
Purchased Power $1,127 $1,316 $1,148
Distribution O & M $87 $95 $106
Customer Accounts $49 $51 $54
General & Administrative $138 $160 $185
Plant Investment per customer $5,102 $5,137 $5,336
Equity Level as a % of Assets 40.9% 41.9% 41.6%
Cost of Power - kWh purchased (cents) 8.27 9.86 8.68
Total mWh Sold 696,912 696,729 703,696
Number of Customers at Year-End 54,652 55,966 57,066
Joe Griffith, Interim General Manager