Up and Running at Koloa Substation - Kauai Island Utility Cooperative

Statement
of Operations
For the period 01/01/2011 – 10/31/2011
54 KIUC CURRENTS
By Karissa Jonas, CFO
We are pleased to report that the KIUC results
of operations through October 31, 2011, are
strong. However, the weak economy only shows
slight signs of recovery. Electricity usage on the
island is 1 percent higher than in the prior year.
Regardless of the slightly improved sales volume,
KIUC is still doing everything it can, while
maintaining safety and reliability, to reduce costs,
operate efficiently and effectively, and continue to
maintain a strong financial position. Revenues,
expenses and net margins totaled $153.0 million,
$144.1 million and $8.9 million, respectively, for
the 10­month period ending October 31, 2011.
As is the case for all electric utilities, the cost of
power generation is the largest expense, totaling
$94.5 million, or 61.8 percent of revenues. Fuel
costs are the largest component of power
generation, totaling $82.0 million, or 53.6 percent
of revenues, and representing 86.7 percent of the
cost of power generation. The remaining $12.5
million, or 8.2 percent of revenues and 13.3
percent of the cost of power generation,
represents the cost of operating and maintaining
the generating units.
Percentage of Total Revenue
Taxes
8.4%
Depreciaon &
Amorzaon
7.3%
Administrave &
General
Net of Non-Operang
Margins
6.9%
Markeng &
Communicaons
0.7%
Interest
4.7%
Member Services
1.7%
Net Margins
5.8%
Transmission & Distribuon
Operaon & Maintenance
2.7%
Producon Operaon &
Maintenance
7.9%
Fuel & Purchased
Power Costs
53.6%
The cost of operating and maintaining the
electric lines totaled $4.2 million, or 2.7 percent
of total revenues. The cost of servicing our
members totaled $2.7 million, or 1.7 percent of
revenues. The cost of keeping our members
informed totaled $1.0 million, or 0.7 percent of
revenues. Administrative and general costs—
which include legislative and regulatory expenses,
engineering, executive, human resources, safety
and facilities, information services, financial and
corporate services, and board of director
expenses—totaled $10.9 million, or 7.2 percent of
revenues.
Being very capital intensive, depreciation and
amortization of the utility plant costs $11.1
million, or 7.3 percent of revenues. Although not
subject to federal income taxes, state and local
taxes amounted to $12.9 million, or 8.4 percent of
revenues. Interest on long­term debt, at a
favorable sub­5­percent interest rate, totals $7.2
million, or 4.7 percent of revenues. Non­operating
net margins added $0.5 million to overall net
margins. Revenues less total expenses equal
margins of $8.9 million, or 5.8 percent of
revenues. Margins are allocated to consumer
members and paid when appropriate.