WILLMAR -- Recent rate hikes and decreased expenses have resulted in favorable 2012 first-quarter revenue increases for the Willmar Municipal Utilities.
During the three-month period ending March 31, combined revenues for the electric, water and heating divisions rose 7.69 percent from $6,552,622 in 2011 to $7,056,358 in 2012, said Larry Heinen, utility interim co-manager.
Combined expenses for the three divisions fell 6.96 percent from $6,017,679 in 2011 to $5,598,646 in 2012.
Separately, revenue in the electric division was up 10 percent and up 5.45 percent in the water division, but dropped 18.61 percent in the heating division.
Electric expenses were down 7.18 percent, water expenses were up 2.04 percent and heating expenses fell 16.78 percent.
Although revenues in the three divisions were up, consumption was down 4.66 percent in the electric division, down 4.71 percent in the water division and down 18.98 in the heating division.
Heinen said electric rate adjustments of 7 percent in July 2011 and 7 percent at the beginning of 2012 made up a majority of the difference between why consumption was down and yet revenues were up.
The water division had a 9 percent rate increase at the beginning of the year, which was the main reason water revenue was up.
The decline of sales, revenue and expenses in the heating division is weather-related. "We had a nice spring and used less heat than we normally do,'' said Heinen.
One reason combined expenses are $419,033 less than in 2011 is because prices on the purchased power market are very attractive and natural gas prices are low now.
Another reason is that the utility purchased a considerable amount of natural gas in February 2011 after receiving a shipment of unusable coal. Heinen said production operation expenses are down about $100,000 because of that item.
"Even though gas was not as cheap as it is right now, it still was expensive, more so than burning coal,'' said Heinen.
As a result of the favorable numbers, combined operating income increased 172.5 percent from $534,943 in 2011 to $1,457,712 in 2012, and retained earnings increased 2,621 percent from $35,466 in 2011 to $965,109 in 2012.
Heinen said the money is earmarked for capital projects for the year and normal operating expenses.
Heinen said first-quarter numbers look nice compared to the same period a year ago, but he cautioned the numbers represent only one quarter and later results could change.
"That's why the numbers look the way they do and I stress that after one quarter, numbers could be easily distorted. But as of right now they look awfully nice,'' said Heinen.
He reported the numbers Monday to the Municipal Utilities Commission.