PUC

revenue

lags

Mild winter blamed for

decrease

By RON LARSEN

Journal Staff Writer

NEW ULM -- The milder than usual winter, at least until March, has had an adverse effect on revenues for the New Ulm Utilities Department, the Public Utilities Commission was told Tuesday night.

Public Utilities revenue for the first three months of 2002 totals $8,169,490 -- nearly $1.3 million below budget and 20.3 percent, or $2,081,839, below the same period last year, Interim Utilities Director Dan Sonnek reported.

Net income for the first quarter is pegged at $454,037, which is 49 percent below budget and 40.4 percent, or $308,093, below the same period last year.

"We expect revenues to level off with budget shortly," Sonnek said. "At least, they're going in that direction."

Electric revenue is $577,536 below budget, but the division still managed a positive cash flow with a net income of $3,061. However, that figure is $102,602 below budget. Although revenues are only $118,926 off last year's pace, net income is $102,602 below last year's income.

Natural gas, while down $656,943 in revenue from budget, showed a net income of $326,087, down 55.5 percent from budget and down $960,417 from last year.

The Water Division is $21,046 below budget in sales and shows a net loss of $26,990.

While Wastewater Treatment revenue is $9,362 below budget, the division's net income of $9,297 is $40,420 more than its budgeted loss.

District Energy (steam heat). which is $30,305 over budget in revenues, is showing net income totaling $142,582.

Natural gas usage ran 17 percent below budget for the quarter and is down 13.6 percent from 2001's first quarter. Electrical usage is 6.8 percent below budget and 4.5 percent below the same period in 2001.

The commission recommended approval of a natural gas procurement contract with the City of Morgan, which now goes to the City Council for its approval. The department already has a services agreement with the city.

Sonnek reported that Courtland is still considering whether to enter into contracts for services and procurement with New Ulm. He told the commission that the City of Tyler also is interested in natural gas services and procurement agreements.

"My only concern is if these keep coming, we'll get to the point of having to add staff to service these agreements," Commission President James Hogan said. "Are we at that point yet?"

"No, and I don't expect it to, get there" Sonnek replied. "I think Tyler may be the last one we'll hear from for quite some time."

Sonnek also reported the proposed Hutchinson natural gas pipeline, with which New Ulm hopes to interface, is "heating up" with hearings soon at the State Capitol.

He told the commission it's a definite possibility that New Ulm could be getting gas from Hutchinson's pipeline by November 2003. "In order to do that, we would need to give our present supplier, Northern Natural Gas, notice by November of this year that we're going with Hutchinson," Sonnek said.

The Utilities Department would need to build a 5-mile-long pipeline to connect with the 80-mile-long pipeline proposed by the City of Hutchinson.