ELECTRIC UTILITY FUND
Garland Power & Light (GP&L) provides residential and commercial electric service to
approximately 85% of Garland households and more than 5,000 commercial and
industrial customers. GP&L also serves as the operator of the Garland/Greenville power
pool, which markets excess generation capacity.
The passage of the Texas Electric Deregulation Bill in the 1999 legislative session
opened the State’s utility market to retail competition on January 1, 2002. Municipallyowned utilities, such as GP&L, had the option of whether or not to participate in a
deregulated market. The Garland City Council made the decision not to “opt in” to
deregulation. This decision was consistent with all other municipally-owned utilities in
Texas. GP&L has developed a long-range strategic plan, however, to ensure that it is
able to offer competitive prices and reliable services in the new market environment.
GP&L rates are market-based, which are by ordinance, below the TXU Price to Beat.
Historically, GP&L has positioned its rates so that the total bill paid by GP&L customers
will be slightly less than what the same customer would pay if serviced by TXU. The
current GP&L summer bill at 1,500 kwh’s is approximately 18% below TXU, as a result
of several recent fuel factor decreases by GP&L.
The 2004-05 Revised Budget included an anticipated transfer of $3.3 million from the
Rate Mitigation Fund to meet the 45 day fund balance requirement for the Electric Fund.
However, the transfer was delayed until the FY 05 year-end financial results were
available. Only $1.9 million of the $3.3 million transfer was required for FY 05 and is
included in the 05-06 Revised Budget.
Projected Electric revenues for FY 2006-07 are $271.1 million, an increase of $39.9
million (17.2%) from the levels approved in 2005-06. The increase in revenues is
primarily related to changes in the fuel factor component of GP&L’s rate, which
increased from 0.0566860 to 0.0740763 per kwh in November 2005. Since that time,
the fuel factor has been reduced to 0.0696000 per kwh but remains significantly above
October 2005. No transfer from the Rate Mitigation Fund is anticipated for FY 2006-07.
Electric Utility Fund
Expenditures
Electric Utility Fund
Revenues
High Ten
10.3%
Wholesale
Fuel
29.1%
Capital
0.2%
Residential
45.2%
Debt
4.6%
TM PA Costs
31.6%
Operat ions
5.8%
Gen Svc Lrg
24.5%
Pub Instit
3.1%
Gen Svc
Sml
4.4%
Sales
Resale
9.6%
Other
3.0%
Personnel
8.6%
Lieu of
5.5%
Other
10.8%
Power Pool
3.7%
Proposed expenditures for FY 2006-07 are $278.7 million, reflecting an increase of
$48.0 million (20.8%) over the 2005-06 Adopted Budget. This increase is due primarily
to $25.6 million in increases in natural gas costs and energy purchases, plus the transfer
of $14.7 million to the Capital Improvement Program (CIP) to cash-fund 50% of the
capital projects for 2006-07.
The FY 2006-07 Proposed Budget also includes funding for 11 additional positions. Two
of the positions, an Inventory Associate and a Meter Tester, are requested to expedite
the transition to electronic read (ERT) meters. One new T&D Contractor Inspector is
proposed to perform conduit inspections in residential developments and a new
Substation Engineer is needed to support substation construction. The remaining seven
new positions, Planning Coordinator, Applied Electric Administrator, ERCOT Settlement
Coordinator, Admin Coordinator, Transmission Coordinator, Chief Systems Operator,
and an ERCOT Market Analyst Manager, are all related to the statewide implementation
of the ERCOT Nodal Energy Market.
The Electric Utility Fund is projected to end the year with a fund balance of $33.8 million,
representing 51 days of working capital. Furthermore, the Electric Utility is projected to
have over $75.1 million in reserves within the Rate Mitigation Fund at the end of 200607.
Total fund balance reserves available to the Electric Utility, including the Rate Mitigation
Fund and subtracting the Freeport Reserves attributable to the General Fund, are
$106.4 million, the equivalent of 161 days.
Electric Utility Fund
(In Millions)
Proposed
Revenues
Rate Mitigation Transfer
Expenditures & Transfers
Net Cash Flow
05-06
05-06
06-07
Adopted Revised Proposed
$231
$268
$271
0
2
0
231
253
279
$ 0
$ 17
$ (8)
Electric Utility Fund
Net Cash Flow - Budget Basis
(In Millions)
20.0
17.6
18.2
98-99
99-00
17.1
15.0
9.9
10.0
5.0
0.0
97-98
00-01
01-02
-3.4
-3.6
(5.0)
02-03
03-04
04-05
-3.9
(10.0)
05-06
Rev
06-07
Prop
-7.6
(15.0)
-12.5
-15.5
(20.0)
In FY 2006-07, eleven (11) new positions are proposed.
Staffing Level Changes (FT)
Budget
Year
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
Position
Adds/Deletes
11
6
4
24
9
(1)
0
11
Total
Positions
194
200
204
228
237
236
236
247