Staff Report Item 12
TO: East Bay Community Energy Board of Directors
FROM: Jason Bartlett, Finance Manager
SUBJECT: Fiscal Year 2021-2022 Mid-Year Budget Report (Informational) DATE: January 19, 2022
__________________________________________________________________ Recommendation
Receive the report informing the Board of the mid-year Budget position for the 2021- 2022 fiscal year.
Background and Discussion
This staff report compares EBCE’s financial performance for the current fiscal year from July 1, 2021 through November 30, 2021 with the approved June budget.
December’s revenues and expenses are still being reconciled, and therefore included in this report as estimates.
Attachment A provides the numerical table summaries and comparisons. The difference for each category shown in dollar amounts and percentages relative to budgeted amounts.
Highlights and assumptions from this comparison are listed here:
• Revenues
o Year-end electricity sales are expected to be 7.9% above budgeted amounts driven by higher than expected energy costs for 2021 and 2022, which lead to a lower 2022 PCIA and higher than expected rates starting in March of 2022. Sales have come in softer in the mid-year due to lower demand from cooler temperatures in 2021.
o Uncollectable amounts are remain unchanged to the budget at 2.0% for 2021 and 1.5% for 2022
• Energy Costs
o Year-end Cost of Energy is 3.5% above budgeted amounts due to higher than expected market prices estimated in 2022, with mid-year costs coming in lower than expected due to cooler temperatures o Pre-Pay agreement adds about $2MM in cost reduction in 2022 estimates • Operating Overhead
o Overhead is 10.6% below budgeted amounts due to lower than expected costs with personnel as not all positions have been filled • Non-Operational Position
0 10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
Monthly Net Sales Revenue
Budget Actuals
0 10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
Monthly Total Energy Expense
Budget Actual
o Non-Operating Position is 25.2% above budgeted amounts primarily due to the new building purchase
o Interest on cash accounts generating a return of 0.25% average as compared to budgeted 0.4%
o Some grant revenue has been recognized against appropriate expenses • Net Position
o Overall year-end Net Position is 48.0% above budget estimates due to the significant increase in expected revenues from 2022 rates despite rising energy costs in the same time period
Fiscal Impact
This report has no fiscal impact on operations
Attachments
A. FY 2021-22 Mid-Year Budget Report Table
-20,000,000
-10,000,000
0 10,000,000
20,000,000
30,000,000
40,000,000
Monthly Net Revenues
Budget Actuals
ITEM 12—Attachment A: FY 2021-2022 Mid-Year Budget Comparison BUDGET ACTUAL DELTA %D
OPERATIONS
REVENUE & OTHER SOURCES
Operating Revenue
Electricity Sales 508,636,000 548,790,000 40,154,000 7.9% Uncollectables (8,939,000) (9,441,000) (502,000) 5.6%
Other Operations Revenue 0 112,000 112,000 0.0%
Total Operating Revenue 499,697,000 539,461,000 39,764,000 8.0%
EXPENSES & OTHER USES
Energy Operating Expenses
Cost of Energy 442,338,000 459,087,000 16,749,000 3.8%
Data Management/CRM 8,645,000 8,032,000 (613,000) -7.1% Billing & Metering 2,752,000 2,709,000 (43,000) -1.6%
Scheduling 843,000 848,000 5,000 0.6%
Total Energy Operating Expenses 454,578,000 470,676,000 16,098,000 3.5% Overhead Operating Expenses
Personnel 9,421,000 8,472,000 (949,000) -10.1%
Marketing & Communications 1,614,000 1,422,000 (192,000) -11.9% Legal, Policy, & Regulatory Affairs 1,592,000 1,403,000 (189,000) -11.9% Other Professional Services 850,000 822,000 (28,000) -3.3% General & Administrative 3,033,000 2,639,000 (394,000) -13.0% Depreciation 60,000 57,000 (3,000) -5.0%
Total Overhead Operating Expenses 16,570,000 14,815,000 (1,755,000) -10.6% Total Operating Expenses 471,148,000 485,491,000 14,343,000 3.0%
NON-OPERATIONS
NON-OPERATING REVENUE
Interest Income 798,000 141,000 (657,000) -82.3%
Grants 894,000 894,000 0 0.0%
Other Non-Operating Revenue 0 210,000 210,000 0.0%
Total Non-Operating Revenue 1,692,000 1,245,000 (447,000) -26.4%
NON-OPERATING EXPENSES
Borrowing Interest 898,000 906,000 8,000 0.9%
Local Development Funding 9,007,000 9,007,000 0 0.0%
Capital Expenditures 5,500,000 8,507,000 3,007,000 54.7% Total Non-Operating Expenses 15,405,000 18,420,000 3,015,000 19.6% NET NON-OPERATING POSITION (13,713,000) (17,175,000) (3,462,000) 25.2% TOTAL REVENUES 501,389,000 540,706,000 39,317,000 7.8%
TOTAL EXPENSES 486,553,000 503,911,000 17,358,000 3.6%
NET INCREASE(DECREASE) IN POSITION 14,836,000 36,795,000 21,959,000 148.0%