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IID projecting $11 million savings on natural gas

November 15, 2001|By RUDY YNIGUEZ, Staff Writer

The Imperial Irrigation District power department is projecting an $11 million savings on the cost of natural gas to run the district's power generators next year.

The potential savings, though not guaranteed, were discussed at a power department budget public workshop Tuesday.

The savings are the result of lower expected fuel costs and cost hedging by the district, according to IID Chief Financial Officer/Controller Kris Fontaine.

"The good thing about hedging is you lock in price," Fontaine said. "The bad thing about hedging is you lock in price."

IID board President Andy Horne urged district staff to try to lock in the price for at least 2002 to avoid price fluctuations.

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Meanwhile, the power department's overall 2002 budget is projected to have $294.7 million in revenues and $294.3 million in expenditures. For 2001, budgeted revenues were $356.1 million with budgeted expenses of $355.9 million, while actual revenues were $281.7 million and expenditures were $281.7 million.

Eighty-five percent of the department's revenues in 2001 were from power sales. The department sold 2.72 billion kilowatt-hours of electricity for $247.1 million. The department also had $5.18 million in interest income and $239,585 in rental income.

For 2002, the department projects power sales of 2.8 billion kilowatt-hours; for 2003, 2.85 billion and for 2004, 2.9 billion. Revenues from power sales for 2002 are estimated at $247.8 million; 2003, $252.7 million and 2004, $257.8 million.

On the expenditure side, the department's major expenditures for 2002 by type are fuel and purchased material, $142.9 million; staffing, $58.1 million; contract services, $42.3 million; materials, $20.8 million; debt service, $16.9 million; and other operating expenditures, $13.3 million.

The IID board is expected to finalize the district's various budgets at a final workshop, a time and date for which have yet to be announced.

>>Staff Writer Rudy Yniguez can be reached at 337-3440.

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