GM Retirement, Financial Impact of GP Shutdown and More Discussed at HW&L Board Meeting
Hope Water & Light Meeting from SWARK Today on Vimeo.
Among the items on the agenda for Hope Water & Light’s June meeting, including the impact of the loss of revenue from one of their largest customers (Georgia Pacific) closing operation in Hope, the company accepted the resignation of General Manager Steve Saum.
Saum has been with the the local utility for just over five years. Saum put in his resignation, which was accepted by the board, who wished him well in his next endeavor and thanked him for the leadership he brought to the company and its projects during his tenure. Saum’s last day will be in early July. He will take his vacation time until his last day of employment on August 22.
Saum presented his monthly report on the financials for the utility. Saum said that the company likes to keep a certain amount of cash on hand to pay bills and cover expenses but that the amount is getting higher than they like and they will be moving some of the capital into investments. Saum said the company’s balance sheets are good and a $60,000 deficit from April was the result of a late payment by Hexion, which entered bankruptcy earlier this year. Saum said the company is caught up on what they owed and can still be billed.
Saum said he had a meeting planned with AEP SWEPCO, which, he said, it appears will be loaning Hope Water & Light around $700,000. Saum said if it comes to fruition, the money will be taken in two payments and put into a PCA.
A question was raised about the closing of the Georgia Pacific facility. Saum said a new rate study was conducted, excluding GP. He said it looked like the HW&L operating margin will reduce by $465,000. The study recommended an increase of the electric rate of 2.3% to recoup the cost but, Saum said, the company doesn’t plan on doing that. Saum said, depending on how long GP continues to operate, which he hears will be August, HW&L may be looking at around $250,000 less in revenue this year. Saum said the company plans to watch its expenses carefully and adjust its budget accordingly for next year. Saum said if another business comes in and takes over the facility, it will help with the revenue, but the company plans to adjust without increasing rates on their customers. Saum said losing the money from the GP operations will have a negative impact and the demand for electricity from AEP will go down by 6%. GP was HW&L’s largest electricity consumer and top 5 water consumer, so the utility will have to adjust.
In the monthly project update, status of several projects were given. Software updates and programming adjustments caused slight delays in a couple of the projects but, the projects are still moving forward.
Saum said he is traveling to Washington, D.C. this week with a team from AEP SWEPCO to meet with the Federal Energy Regulatory Commission on Thursday morning to seek approval for HW&L’s transmission project. Saum said that if FERC gives approval of the project, they will begin moving forward with it.
Les Patterson presented a slideshow and information showing the progress on the construction at the water treatment plan located between Fulton and McNab. Patterson said the project is progressing well. He showed images of the progress of the concrete work over the last few months.
The next HW&L Board meeting will be held Wednesday, July 17.