We’ve just wrapped up our reporting year (on Jan. 31, 2016) and I’m proud to share with you that our CPS Energy team demonstrated solid financial performance for our 2015-2016 fiscal year (FY). We take tremendous pride in our financial stewardship, the benefits of which continue to be passed on to our valued customers and community. Importantly, this also helped us to avoid another rate increase, that would have taken effect this month—which continues to keep costs low for our customers.
As the nation’s largest electric and gas municipally owned utility, we also returned revenues to the City of San Antonio that were on par with FY15. A total City Payment of $320.5 million will once again makeup about a third of the City’s general fund budget, helping keep property taxes low for our community.
The following is a high-level summary of CPS Energy’s early (unaudited)1 Financial Highlights:
- While slightly down from the prior fiscal period by $13.4 million, or 11.7 percent, our net income for the 2015-16 fiscal year, came in solidly at $100.9 million.
- Total cash levels (General and Repair & Replacement Accounts) as of January 31, 2016, were $824.5 million and compared reasonably to the prior year-end total of $843.9 million.
- Due to favorable market interest rates, our variable and fixed-rate financing costs came in lower than the prior fiscal year by $12.5 million or 5.6 percent.
- Due to the pass-through nature of natural resource commodity costs, a decline in fuel expenses of $121.0 million primarily accounted for lower operating revenues of $133.0 million. This, in turn, directly contributed to our ability to keep bills down.
- Operating & Maintenance (O&M) expenditures, including our direct, non-fuel CPS Energy costs and our 40 percent interest in STP Units 1 & 2, came in 1.2 percent, or $7.0 million, above our prior fiscal year level.
In addition to our solid financial results, as highlighted above, we also experienced exceptional safety and top operational performance relative to system reliability. Our financial and operational results were due to our entire team’s efforts to keep safety top of mind, while controlling costs.
- Our Recordable Incident Rate (RIR) was 0.35, which was substantially below our prior year’s safety metric of 1.09.
- Our generation fleet’s summer availability and our distribution system’s average outage duration index were both top decile, in comparison to our industry peers. We achieved reliability success despite continuous severe weather in the Spring 2015.
In FY 2015-16, we also made the decision to financially write-off our investment in the proposed South Texas Project Units 3 & 4. The decision to write-off the investment should be seen solely as an “accounting decision.” CPS Energy will retain a legal interest in the project, which aligns to our perspective that nuclear is a significant part of our local and the broader national energy portfolio and will continue to be an important, carbon free and economic fuel type, as well as a good alternative to help counter volatile fuel prices.
1 The annual external financial audit is currently planned to be completed by April 30, 2016.