BLP Adopts Business Plan; Reports Slight Improvement In Sales
Grand Haven, Thursday, May 26, 2011 -- The Grand Haven Board of Light & Power reported an increase in residential sales, mostly due to last year's hot summer months. The BLP is also seeing improvements in wholesale sales due to their January switch from MPPA's Power Pool to the Energy Services Market, which provides the utility opportunities for additional wholesale sales.
"We enjoyed a nice, hot summer last year bringing our projected residential sales in higher than expected," General Manager Annette Allen reported. "We are also experiencing slight improvements in our primary and secondary industrial customer markets and our wholesale sales during the second half of fiscal year 2011," added Allen.
The Board of Directors adopted its business plan for the next fiscal year at Thursday night's meeting, which includes an average increase in its electric rates of 2.4 percent effective July 1, 2011. The increase will add approximately $1.44 per month, or 1.85%, to the average residential customer's electric bill.
"With sales coming in higher than fiscal year 2011 projections and proposed budget reductions, we are able to reduce the projected 4% rate increase expected at last year's budget approval to the 2.4% average level," stated Allen. "Our Board considered several different budget scenarios prior to approving the rate increase, weighing the economic impact to our customers with the necessity to maintain utility reliability and appropriately fund important capital expenditures.
At two work sessions in May, the Board of Directors reviewed proposed budget reductions and provided input on sales projections and organizational direction for fiscal year 2012. These operating budget reductions total $908,000 for FY 2012. With those reductions in place, the Board supported the increase to electric rates to assure the utility's ability to properly maintain system reliability while recognizing the deferred items will need to be reinstated in the near future. The increase in rates will contribute $780,000 in revenues to the BLP.
"We continue to absorb as much of the economic impact as possible while assuring that we can appropriately maintain the system," stated Board Chairman Jack Smant. "We do not want to place the BLP in a position where we are jeopardizing reliability, nor do we want to place our customers in a situation where we would need to drastically increase rates," added Smant.
According to the Fiscal Year 2012 business plan, the BLP expects to collect $35 million in total revenue during the year ending June 30, 2012. The BLP will use the funds as follows: $14 million for fuel; $12 million for utility system operating and maintenance expenses; $8 million to pay interest and principal on the utility's outstanding bonds; and $1 million for capital improvements.
Created in 1896, the Grand Haven Board of Light and Power provides electricity to approximately 13,500 customers in Grand Haven and the surrounding area. Grand Haven Board of Light & Power. Community-Owned. Locally Controlled. Not-For-Profit. Environmentally Responsible.