Willmar Municipal Utilities continues to monitor revenue impact of COVID-19 pandemic

Willmar Municipal Utilities is so far weathering the COVID-19 pandemic. While revenues are down, expenses are as well, keeping any financial hits manageable. The Utilities Commission also agreed to keep the public lobby at the Willmar Municipal Utilities office building closed until mid-June and to continue meeting remotely.

The public lobby at the Willmar Municipal Utilities building will remain closed until at least the middle of June. The utilities commission heard an update on how the utilities is weathering the COVID-19 pandemic at Tuesday's meeting. File photo / West Central Tribune

WILLMAR β€” When Willmar Municipal Utilities began planning in early April for how the COVID-19 pandemic might impact its operations, a $3 million reduction in revenue was thought possible. Nearly two months in and the revenue decrease has not been as bad as feared, though that could change as the pandemic continues.

"I don't think we are going to get there," said General Manager John Harren, during the May 26 Municipal Utilities Commission meeting. "Financially we are weathering this, at this point in time, very well."

Revenue from electricity is down. Electricity has seen a 5.2 percent drop in revenue from February through April this year over the same time last year, totaling about $330,000. Overall demand for electricity has dropped almost 10 percent, though data show only 4 percent of that is being blamed on the pandemic.

Winter weather in early 2020 was milder than normal, which cut back on demand to run furnaces. If the summer heats up and residents turn on the air conditioning, a jump in demand could happen.

"It is really dependent on our weather," said Jeron Smith, staff electrical engineer.


Demand for residential water has gone up, though commercial and industrial usage is down. A 20 percent increase in water rates that went into effect in January has helped keep water revenue in the black, though the utilities is not collecting as much as it expected from the increase.

"We are 5 percent short of where we expected to be," said Michelle Marotzke, energy services/marketing representative.

In April, the commission made the decision to waive all late fees for unpaid accounts and the utilities has not been disconnecting services due to non-payment. From the latter half of February through March, Willmar Municipal Utilities waived just over $34,000 in late charges, which is pretty similar to what was collected during the same time last year.

What has been going up is the number of accounts that remain delinquent for 60 days and 90 days.

"Our delinquents, our 90 days, have jumped by $20,000 at this point in time already," Harren said.

There has been no action or guidance on when Willmar Municipal Utilities could begin charging late fees or disconnecting service for non-payment. The Minnesota Municipal Utilities Association is having discussions with the Minnesota Public Utilities Association about the issue. Local staff in Willmar is recommending the utilities follow whatever guidelines come from those organizations instead of coming up with its own.

The financial picture at Willmar Municipal Utilities could change if more accounts go into delinquency or businesses declare bankruptcy. Harren said he expects May's numbers to be down even more, especially because one of the utilities' largest customers β€” Jennie-O Turkey Store β€” was shut down for nearly two weeks.

"That is going to have a significant impact," Harren said.


Willmar Municipal Utilities is still delaying some capital projects, at least until a more concrete picture of the utilities' financial stability comes into view. Staff members hope to give the commission another update in four to six weeks.

"Hopefully by that time we will know where the state and and country are at as a whole, getting back to work," Harren said. "As well as having a better picture on our delinquents and on our actual revenue and expenditure adjustments."

In addition to its financial picture, the commission also discussed when the public lobby should reopen and whether commission meetings should continue to be conducted remotely. The decision was made to keep the lobby closed until at least the middle of June and remote meetings will continue as well.

"I would rather err on the side of caution," said Commissioner Justin Mattern.

The good news is so far Willmar Municipal Utilities remains stable and customers have been doing what they can to pay their bills.

"I think we are doing pretty well right now and keeping track of things closely," Marotzke said.

Shelby Lindrud is a reporter with the West Central Tribune of Willmar. Her focus areas are arts and entertainment, agriculture, features writing and the Kandiyohi County Board.

She can be reached via email or direct 320-214-4373.

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