After taking hits in last two fiscal years, Columbus Light and Water expects to see a profit for the Fiscal Year 2020.
Executive Director Todd Gale said CLW has taken funds from its reserves to make up for lost revenue the past few years. After dipping into more than $800,000 in reserves, Gale said the board decided to increase its customer rates last October.
“We were zero or negative,” Gale said. “We had to do something. After it’s all said and done, we’re hoping to make $145,000. That would go towards building our surplus account we’ve been using for the last few years.”
Gale said thanks in part to last year’s 2.7 percent rate increase, the CLW will start to add to its reserves rather than rely on them.
“We had a fairly substantial rate increase,” Gale said. “(Tennesse Vallety Authority) had a rate increase. We had to have it because low to no growth as far as sales. As far as numbers of customers, that’s staying flat. People aren’t using as much electricity and we have fixed costs such as personnel.”
CLW has almost 12,500 electric customers and 10,500 water customers.
The board unanimously approved the fiscal year budget for 2020 during the June regular board meeting on Thursday.
Chairman Michael Tate said it was good to see a balanced budget this year. As of now, Chief Financial Officer Mike Bernsen said the CLW has a little more than $3.5 million in its reserves. Bernsen told board members this year’s budget was better than previous years.
“We did real good on our budget,” Bernsen said. “We are better off. We are doing pretty decent.”
Gale said he likes to have at least twice its largest bill from the TVA — from which the local utility purchases power — in the reserves. That, Gale said, hasn’t happened in some time.
“Rule of thumb is two times the highest TVA bill,” Gale said. “The bill is probably $3.5 million in the summer. A rule of thumb is we need to have $7 million in reserve. It’s our financial plan. That’s our goal.”
Gale added this year’s major capital projects include replacing two transformers, one on College Street and one in east Columbus. The transformer on College Street, which would cost about $800,000, was damaged during an EF-3 tornado on Feb. 23 and will be reimbursed with insurance. The east Columbus transformer will cost CLW about $1 million.
The CLW was previously trying to brainstorm ways to also provide internet to its customers. After a bill died in the state House of Representatives that would allow CLW to issue about $2.75 million in bonds to finance the expansion of the utility’s already 20-mile network of fiber optic cable it now uses for internal communication, Gale said CLW was planning to finance its own internet. With the budget presented to the board, Gale said those plans are now on hold.
“(The transformers), that’s our big project for the year,” Gale said. “Otherwise we are not buying any trucks. We’re assuming we are not going into the internet business, but that may change.”
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