WILLMAR — The bottom line at Willmar Municipal Utilities remained healthy through 2020, despite the coronavirus pandemic causing some financial hardships to its customers.
When the pandemic first hit back in March and April 2020, staff and the Municipal Utilities Commission feared the utilities provider could see a $3 million loss in potential revenue, tied to things such as delinquent accounts, bankruptcies and lower utility usage. However, as of December 2020, potential losses have totaled $795,126, about a third of what was expected.
"We feel pretty fortunate where we are. I think we finished the year out fairly strong, actually very strong all things considered," said John Harren, general manager, at Monday's meeting of Municipal Utilities Commission. "Financially we ended the year, in my option, very solid."
From the beginning of the pandemic, at the request of the state, Willmar Municipal Utilities has been waiving all late fees of customers with past due accounts. That has accounted for $358,537 in lost potential revenue, money that will never be collected.
"We will not be collecting those back; those were waived," Harren said.
There has been an increase in past due accounts, both for electric and water accounts. As of December, delinquent accounts were approximately $72,199 higher than in 2019. While some of that money might be collected through revenue recapture or property liens, some of it may not be.
Utilities usage was down overall in 2020, but when separated by customer type, residential accounts used more electricity and water while commercial and industrial used less. This is most likely because businesses were closed for several weeks at a time or operated at a lower level while people stayed at home more.
Electric revenue in 2020 totaled $24,542,862, a 1.8 percent drop from 2019. Water revenue actually rose in 2020 to $3,054,025, a 20.1 percent increase over 2019. This is due to the 20 percent rate hike that went into effect in January 2020 and the increase in revenue is only $2,046 higher than what was expected due to the rate hike.
Willmar Municipal Utilities is working toward bringing things back to more of a normal footing, which will mean starting to collect late fees and disconnect delinquent accounts. The Minnesota Municipal Utilities Association is working with the Minnesota Public Utilities Commission on when exactly providers can start doing such things again.
"Once we are able to move forward and collect again, we need to," Harren said.
The Willmar Municipal Utilities plan is to start disconnect services in the spring, after the cold weather rule expires for the year, to those past due accounts which have not set up payment arrangements. Prior to any disconnections, staff will reach out those impacted customers.
"So they know what will happen," said Chris Radel, energy safety outreach coordinator.
While 2020 wasn't as harsh a financial blow as had been feared, staff and the commission will keep a close eye on finances going forward.
"That doesn't mean we are out of the woods for 2021 either," said Willmar Municipal Utilities Commission President Justin Mattern. "I don't want to get complacent."