Power Board weathers tough year

Nathan Baker • Jul 24, 2013 at 8:33 AM

The mild weather gave the Johnson City Power Board’s bottom line a beating last year, but the utility’s chief financial officer said the company was able to ride out the difficulties to come in under budget.

“What helped us was holding costs down and also controlling capital spending,” Brent Kitzmiller told the JCPB’s board of directors on Tuesday evening. “Overall, this was a successful year. It’s been an extremely challenging year with the weather, but we did fine.”

Kitzmiller said a cooler than normal summer last year and a warmer than normal winter meant fewer people were buying electricity this fiscal year, which ended June 30.

The utility company’s net income was down more than $900,000 from the previous year, but the company’s general fund balance ended the year nearly $700,000 higher than the previous and topped the budgeted balance by more than $2 million.

The company’s gross margin, which is the total sales minus electric costs, dropped less than 1 percent from the previous year, to $39.3 million.

Kitzmiller said the credit for the better than expected performance lies with employees across the system and investment in new, more efficient technology.

As an example, he pointed to a new system put in place to process electronic payments that saves the company hundreds of thousands in fees from credit card companies.

“We eat credit card fees; when a customer pays with a credit card, we eat the fee,” he said. “When we went to this new company, that dropped from about 2.78 percent to less than 1 percent. When you’re talking about $30 million in volume, our monthly fees are more than offset by the savings.

“It’s pretty much a group effort. Everyone’s looking for places where we can save here and there.”

Power Board CEO Jeff Dykes reiterated the dedication of the company’s workers to finding savings.

“That’s something that is a credit to all the employees, from the administrative side to the customer service, to the linemen, these guys do a great job at what they do to keep costs down,” he said.

Board member Kelly Wolfe commended Kitzmiller for his job seeing the company through tough fiscal times.

“Considering how bad the weather has been for power sales, to end up in the black this year is impressive,” Wolfe said. “That is a near-Herculean feat.”

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