More
Contact
Submit
Premium
SRP's profit rises despite drop in electricity use
Salt River Project's annual profit grew 26 percent after the utility raised its rates 4.9 percent in May 2010 at the beginning of its 2011 fiscal year.
Officials said that electricity sales were actually less than anticipated for the year but that profit increased because several maintenance projects were delayed.
Residential-electricity sales were below budget, and wholesale-energy sales to other utilities were far below expectations, said Ron Koenigsfeld, manager of financial accounting.
"People are just being more conscious of what they are using," he said.
He reported preliminary financial data at a special board meeting Thursday. PricewaterhouseCoopers has not finished its audit of the figures.
Because the municipal utility operates as a non-profit, the positive revenue is reinvested in the electric system, SRP spokesman Jeff Lane said. The earnings mean SRP has less need to borrow money and therefore can reduce the overall cost of providing customers power.
SRP's water-delivery operations lost about $46 million for the fiscal year, so some of the profits will be used to cover those expenses, Koenigsfeld said.
SRP uses the profits from electricity to keep the price of water low for the cities in its territory.
Residential power use fell 1.2 percent for the fiscal year, according to SRP.
Energy use by commercial and industrial facilities was down about 1 percent, slightly better than expected, but the bigger factors benefiting SRP finances were delayed construction projects and power lines, Koenigsfeld said.
"The Coronado (coal-fired power plant) is our largest capital project, adding scrubbers to the plant, and much of that expense has been pushed into the next fiscal year," he said.
The $500 million Coronado project and $1 billion new generator at the Springerville Generating Station were the main reasons SRP raised rates at the start of fiscal 2011, which ran from May through April.
The increase averaged $6 a month on residential customers throughout the year: $8.50 in summer months when air-conditioners are used and $3.50 in winter months when electricity use is low. That rate hike was scaled back from one that would have added $12 a month to the average residential bill.
SRP spent $582 million on capital projects such as power-plant repairs in fiscal 2011, but officials had anticipated those expenses to be $770 million, Koenigsfeld said.
"We had to spend much less at Palo Verde (Nuclear Generating Station, which SRP owns in partnership with other utilities)," he said. "That plant has been running well."
Except for April, the new coal-fired unit at Springerville has been operating well, he said.
January through April usually brings four consecutive months of financial losses to SRP, which makes up for it in the summer when electricity sales are high, but this April was especially hard.
SRP had to power down units at the Navajo Generating Station, Four Corners Power Plant, Craig Generating Station and Springerville for extra maintenance and repairs, Koenigsfeld said, adding that it had to buy power on the open market to take up the slack.
Because of those and other unexpected expenses, SRP lost $77.5 million in April alone, about double the budgeted monthly loss, he said.
But the preliminary figures still show a $41.8 million, or 26 percent, jump over the $161.5 million profit the utility recorded in fiscal 2010.
Including the "fair value" of the utility's investments and fuel-hedging contracts, a standard accounting practice to assess profitability, SRP's profit was even higher: $286 million compared with $371 million in fiscal 2010.
Cebu’s SRP and Singapore’s Marina Bay
The best way to travel when visiting a new city is not via bus, MRT, or taxi. It’s not even while riding on a chauffeur-driven E-class Mercedes Benz. It’s by foot. I did that last Friday. Starting at 7 in the morning, I stepped outside our hotel and was greeted by the Singapore sunshine. I walked, stretched, jogged towards the Singapore Recreation Club, just 300 meters away, where green fields awaited. Football rectangles, covered with pristine grass, smiled. Then, I saw a sight that sparkled: Grass courts. Yes. The same ones you’ll see tonight on Star Sports. The club is exclusive and I did not carry my Babolat gear—so no chance to swing a volley. But the sight was more enticing than any 70-percent-off store in the Singapore Sale.
I ran. Along the famous The Fullerton Hotel, I glided. This was the same strip that our Cebu Executive Runners Club (CERC) group passed during the 2008 Singapore Marathon. I relived that 42K. As sweat rolled down my cheeks while running, another smile emerged. For that’s the secret of running; the satisfaction earned comes from within. Some call it “runner’s high” or “adrenaline rush.”
In Singapore, running is the most popular recreational sport. At their annual Marathon held every first Sunday of December, 50,000 join. Last Friday, I saw snippets of that as dozens exercised, planting one rubber shoe in front of another.
The best part of running Singapore? The Marina Bay. You’ve seen the Marina Bay Sands Hotel. Its design adorns every postcard of this first-world nation. With three colossal towers standing to hold a “boat” at the summit, the sight is majestic. (It’s the world’s most expensive stand-alone casino at $8 billion.) The Marina Bay Sands is the Eiffel Tower… The Burj… the Petronas Towers of Singapore. It’s now the land’s most photographed structure.
Imagine running beside the Sands? For that’s what amazes you about Singapore: their planning and consideration for open, clean and green space. Along the Marina Bay is a boardwalk. That’s where, for 90 minutes, I ran. That’s where you’ll find tourists and locals strolling. It’s a haven for exercise that’s exercise heaven. Fresh air. The water streaming beside you. The Esplanade (or “durian”). I even found solar panels scattered around the boardwalk that provided lighting and cooling (with large fans) to passers-by.
Just last year, when Singapore hosted the Youth Olympic Games, they built the Youth Olympic Park. Plus, around Marina Bay are the Singapore Flyer (Ferris wheel) and the Helix Bridge.
Which got me to thinking: this is how our South Road Properties (SRP) should aim to look like. The similarities with Marina Bay are obvious. Both are on reclaimed land. Both sit on large tracts of land (ours is 300 hectares; theirs is 360). Both sleep beside the water. Our city leaders should visit the Marina Bay project—and copy portions of it for the SRP.
Back to running; another thought came to mind: the Ungo Runners (Max Limpag) vs. Bobby Nalzaro debate on “Road Revolution.” Max and his fellow runners immensely enjoyed that Sunday when Osmeña Blvd. was closed to vehicles; Bobby opposed it. In Singapore, there’s no quarrel. There’s no need for road closure. Why? Because they’ve got sidewalks, open spaces, boardwalks, parks. We don’t. What we don’t have is strategic thinking. (Decades back, Lee Kuan Yew set aside wide roads and planted huge trees that now benefit his people.) Which leads me back to SRP. This open area is the only one we’ve got to do right. There’s nothing much we can do to save our Cebu City inner city roads. They’re narrow with zero sidewalks.
The SRP is bare. The Marina Bay (www.marina-bay.sg) is our best, nearby example. Their vision? “A green-field site surrounded by water and gardens… that provides an opportunity for further urban transformation, attracting new investments, visitors and talent, as well as becoming a new destination for the local community.” They call it “Garden City by the Bay.” How should our SRP be named?
Mesa transformer explodes; 80,000 are without power
A massive power failure sparked by a transformer fire in east Mesa cut electricity to more than 80,000 customers on a sweltering triple-digit day Thursday, forcing hospitals to use emergency generators and prompting companies to send thousands of workers home early.
The blackouts rolled across virtually all of the city's 132 square miles at various times throughout the afternoon, and officials were telling residents their power may not be fully restored until 10:30 p.m.
The City of Mesa has designated the Mesa Convention Center at 201 N. Center St. an emergency evacuation site.
SRP also started handing out bags of ice at four Fry's Food Stores locations: Recker Road & McKellips Road; Lindsay Road & Broadway Road; Power Road & Baseline Road; and Ellsworth Road & Broadway Road. The ice is expected to arrive between 7 and 7:30 p.m.
Falcon Field Municipal Airport in Mesa was forced to suspend operations for several hours and divert traffic to other airports after the control tower lost power, and nearby Boeing company, which manufactures the AH64 Apache attack helicopter, was forced to cease operations for the day and send 4,000 workers home.
Even Mesa City Hall was affected, losing power completely for about 45 minutes before it was restored about 3:30 p.m. A spokeswoman said workers did their best to remain productive.
The failure knocked out traffic lights at different times across the city, but Mesa police said only two minor accidents were reported.
The fire broke out at a Salt River Project substation near Power Road and University Drive shortly before noon, sending billowing black plumes across east Mesa. Mesa fire crews battled the blaze with foam fire suppressant and brought it under control in minutes, but it continued belch smoke for hours.
A resident at nearby Fellowship Square said she thought the senior complex might be on fire after seeing the smoke. She said the power was off for only about 5-10 minutes at the complex.
SRP spokesman Jeff Lane said the transformers use a type of mineral oil for cooling, and that is what appeared to be burning. The transformer contained no PCBs, the cancer-causing chemical that were widely used in older electrical components.
Asked how many crews the utility had working on the blaze, Lane replied, "everyone we can get out there."
He said that since only one transformer was involved, the utility was able to transfer power from other parts of the Valley to Mesa to help alleviate the blackouts.
A key concern was with area hospitals, many of which were forced to go to generator power for most of the afternoon. No surgeries or emergency room services were affected at Banner's Mesa hospitals, however several surgeries at Mountain View Medical Center were postponed.
A spokeswoman said hospital staff were passing out ice cream to patients and that the hospital had enough generator power to last 10 days.
Power went out at around 2 p.m. Thursday at Banner Baywood Medical Centerand Banner Heart Hospital. The two hospitals at Power and Broadway roads were running on generators.
All systems are currently working and some outpatient procedures may be rescheduled, but no major problems were reported.
Baywood had 195 patients at the time, and Banner Heart had 40.
Jeff Holeman, a spokesman for both hospitals, said SRP officials told them hospitals will be a first priority to get power restored.
Nancy Neff, a Banner spokeswoman, said about 1,000 employees were sent home at about 2 p.m. after the Banner Corporate Center, the former Banner Mesa Medical Center, lost power.
"With it this hot, you don't want people in the building,'' she said.
At Arizona Regional Medical Center near downtown Mesa, officials said they lost power for about 30 to 45 minutes and went to backup generators, but that it was completely restored.
While hospitals seemed to be coping, several elder-care facilities were doing their best to cope with the
sweltering heat.
The Citadel Care Center, a nursing home on East Broadway Road, was still relying on a single generator and waiting for a second to arrive just before 6 p.m. to run fans and swamp coolers are set up in the hallways.
As temperatures climbed in the building, employees hung sheets over the windows to block the sun. Unable to cook, the kitchen was serving cold sandwiches, water and popsicles for dinner.
At the Courtyard Towers assisted living home, 22 N. Robson Street in downtown Mesa, power was out for about 45 minutes as temperatures hit about 104 degrees. Residents were given water and snacks until the power came back on about 3:45 p.m., a spokeswoman said.
Residents of the Orchard Active Senior Living Complex, near Greenfield Road and Main Street in east Mesa, congregated outside during the failure to avoid their steamy apartments.
Many of the elderly who live at the complex have health problems, which alarmed some of the others waiting outdoors for power to return.
"I'm worried about the people who are on oxygen," said 64-year-old Marilyn Suiter.
The power failure hit at one of the worst possible times for restaurants and small businesses, which are just starting to struggle through the lean summer months.
At Caffe Boa Bistro near Power and McDowell roads in east Mesa, owners worried that pricey hand-cured meats could be in danger of spoiling.
"It's killing us. I can't believe this, " said Jay Wisniewski. He had to close his business early because computer systems were out and there was no power to cook. The farm-to-table Italian restaruant also has a wood burning oven that requires a fan. "We have everything on ice. We may have to get together with other restaurants and get a refrigerator truck if power stays out," he said.
Wisniewski said his walk-in cooler is kept at 38 degrees but was creeping up in the high 40s by late afternoon.
"We're losing business. It's killing us because Thursdays are pretty good for us," Wisniewski said, adding that is summer business is usually slow for many businesses.
Larger businesses were hit hard too. Movie theaters across the city were forced to refund tickets for customers, and the 160,000 square-foot Costco at the U.S. 60 and Sossaman, the largest in Arizona, closed for the day and sent all its employees home.
This is not the first time a transformer fire has caused widespread blackouts.
On July 4, 2004, fire struck a West Valley power station operated by Arizona Public Service. The fire burned for days, destroyed five transformer units and forced Valley residents to conserve power to prevent rolling blackouts.
An investigation traced the fire's origin to blue heron droppings that crippled an insulator outside the Palo Verde Nuclear Generating Station west of the metro area in mid-June.
That created a power surge that shut down all three nuclear reactors.
While APS was dealing with that, a massive flow of electricity was allowed to hit the Westwing station on July 4, triggering the fire.
That same month a fire at APS' Deer Valley Substation shut power to some 50,000 homes but the power was back on within a few hours.
In July 2006 a transformer fire spewed smoke from SRP's Santan Generating Station in Gilbert for hours but did not result in power outages.
Officials said that electricity sales were actually less than anticipated for the year but that profit increased because several maintenance projects were delayed.
Residential-electricity sales were below budget, and wholesale-energy sales to other utilities were far below expectations, said Ron Koenigsfeld, manager of financial accounting.
"People are just being more conscious of what they are using," he said.
He reported preliminary financial data at a special board meeting Thursday. PricewaterhouseCoopers has not finished its audit of the figures.
SRP's water-delivery operations lost about $46 million for the fiscal year, so some of the profits will be used to cover those expenses, Koenigsfeld said.
SRP uses the profits from electricity to keep the price of water low for the cities in its territory.
Residential power use fell 1.2 percent for the fiscal year, according to SRP.
Energy use by commercial and industrial facilities was down about 1 percent, slightly better than expected, but the bigger factors benefiting SRP finances were delayed construction projects and power lines, Koenigsfeld said.
"The Coronado (coal-fired power plant) is our largest capital project, adding scrubbers to the plant, and much of that expense has been pushed into the next fiscal year," he said.
The $500 million Coronado project and $1 billion new generator at the Springerville Generating Station were the main reasons SRP raised rates at the start of fiscal 2011, which ran from May through April.
The increase averaged $6 a month on residential customers throughout the year: $8.50 in summer months when air-conditioners are used and $3.50 in winter months when electricity use is low. That rate hike was scaled back from one that would have added $12 a month to the average residential bill.
SRP spent $582 million on capital projects such as power-plant repairs in fiscal 2011, but officials had anticipated those expenses to be $770 million, Koenigsfeld said.
"We had to spend much less at Palo Verde (Nuclear Generating Station, which SRP owns in partnership with other utilities)," he said. "That plant has been running well."
Except for April, the new coal-fired unit at Springerville has been operating well, he said.
January through April usually brings four consecutive months of financial losses to SRP, which makes up for it in the summer when electricity sales are high, but this April was especially hard.
SRP had to power down units at the Navajo Generating Station, Four Corners Power Plant, Craig Generating Station and Springerville for extra maintenance and repairs, Koenigsfeld said, adding that it had to buy power on the open market to take up the slack.
Because of those and other unexpected expenses, SRP lost $77.5 million in April alone, about double the budgeted monthly loss, he said.
But the preliminary figures still show a $41.8 million, or 26 percent, jump over the $161.5 million profit the utility recorded in fiscal 2010.
Including the "fair value" of the utility's investments and fuel-hedging contracts, a standard accounting practice to assess profitability, SRP's profit was even higher: $286 million compared with $371 million in fiscal 2010.
Cebu’s SRP and Singapore’s Marina Bay
The best way to travel when visiting a new city is not via bus, MRT, or taxi. It’s not even while riding on a chauffeur-driven E-class Mercedes Benz. It’s by foot. I did that last Friday. Starting at 7 in the morning, I stepped outside our hotel and was greeted by the Singapore sunshine. I walked, stretched, jogged towards the Singapore Recreation Club, just 300 meters away, where green fields awaited. Football rectangles, covered with pristine grass, smiled. Then, I saw a sight that sparkled: Grass courts. Yes. The same ones you’ll see tonight on Star Sports. The club is exclusive and I did not carry my Babolat gear—so no chance to swing a volley. But the sight was more enticing than any 70-percent-off store in the Singapore Sale.
I ran. Along the famous The Fullerton Hotel, I glided. This was the same strip that our Cebu Executive Runners Club (CERC) group passed during the 2008 Singapore Marathon. I relived that 42K. As sweat rolled down my cheeks while running, another smile emerged. For that’s the secret of running; the satisfaction earned comes from within. Some call it “runner’s high” or “adrenaline rush.”
In Singapore, running is the most popular recreational sport. At their annual Marathon held every first Sunday of December, 50,000 join. Last Friday, I saw snippets of that as dozens exercised, planting one rubber shoe in front of another.
The best part of running Singapore? The Marina Bay. You’ve seen the Marina Bay Sands Hotel. Its design adorns every postcard of this first-world nation. With three colossal towers standing to hold a “boat” at the summit, the sight is majestic. (It’s the world’s most expensive stand-alone casino at $8 billion.) The Marina Bay Sands is the Eiffel Tower… The Burj… the Petronas Towers of Singapore. It’s now the land’s most photographed structure.
Just last year, when Singapore hosted the Youth Olympic Games, they built the Youth Olympic Park. Plus, around Marina Bay are the Singapore Flyer (Ferris wheel) and the Helix Bridge.
Which got me to thinking: this is how our South Road Properties (SRP) should aim to look like. The similarities with Marina Bay are obvious. Both are on reclaimed land. Both sit on large tracts of land (ours is 300 hectares; theirs is 360). Both sleep beside the water. Our city leaders should visit the Marina Bay project—and copy portions of it for the SRP.
Back to running; another thought came to mind: the Ungo Runners (Max Limpag) vs. Bobby Nalzaro debate on “Road Revolution.” Max and his fellow runners immensely enjoyed that Sunday when Osmeña Blvd. was closed to vehicles; Bobby opposed it. In Singapore, there’s no quarrel. There’s no need for road closure. Why? Because they’ve got sidewalks, open spaces, boardwalks, parks. We don’t. What we don’t have is strategic thinking. (Decades back, Lee Kuan Yew set aside wide roads and planted huge trees that now benefit his people.) Which leads me back to SRP. This open area is the only one we’ve got to do right. There’s nothing much we can do to save our Cebu City inner city roads. They’re narrow with zero sidewalks.
The SRP is bare. The Marina Bay (www.marina-bay.sg) is our best, nearby example. Their vision? “A green-field site surrounded by water and gardens… that provides an opportunity for further urban transformation, attracting new investments, visitors and talent, as well as becoming a new destination for the local community.” They call it “Garden City by the Bay.” How should our SRP be named?
Mesa transformer explodes; 80,000 are without power
A massive power failure sparked by a transformer fire in east Mesa cut electricity to more than 80,000 customers on a sweltering triple-digit day Thursday, forcing hospitals to use emergency generators and prompting companies to send thousands of workers home early.
The blackouts rolled across virtually all of the city's 132 square miles at various times throughout the afternoon, and officials were telling residents their power may not be fully restored until 10:30 p.m.
The City of Mesa has designated the Mesa Convention Center at 201 N. Center St. an emergency evacuation site.
SRP also started handing out bags of ice at four Fry's Food Stores locations: Recker Road & McKellips Road; Lindsay Road & Broadway Road; Power Road & Baseline Road; and Ellsworth Road & Broadway Road. The ice is expected to arrive between 7 and 7:30 p.m.
Falcon Field Municipal Airport in Mesa was forced to suspend operations for several hours and divert traffic to other airports after the control tower lost power, and nearby Boeing company, which manufactures the AH64 Apache attack helicopter, was forced to cease operations for the day and send 4,000 workers home.
Even Mesa City Hall was affected, losing power completely for about 45 minutes before it was restored about 3:30 p.m. A spokeswoman said workers did their best to remain productive.
The failure knocked out traffic lights at different times across the city, but Mesa police said only two minor accidents were reported.
The fire broke out at a Salt River Project substation near Power Road and University Drive shortly before noon, sending billowing black plumes across east Mesa. Mesa fire crews battled the blaze with foam fire suppressant and brought it under control in minutes, but it continued belch smoke for hours.
A resident at nearby Fellowship Square said she thought the senior complex might be on fire after seeing the smoke. She said the power was off for only about 5-10 minutes at the complex.
SRP spokesman Jeff Lane said the transformers use a type of mineral oil for cooling, and that is what appeared to be burning. The transformer contained no PCBs, the cancer-causing chemical that were widely used in older electrical components.
Asked how many crews the utility had working on the blaze, Lane replied, "everyone we can get out there."
He said that since only one transformer was involved, the utility was able to transfer power from other parts of the Valley to Mesa to help alleviate the blackouts.
A key concern was with area hospitals, many of which were forced to go to generator power for most of the afternoon. No surgeries or emergency room services were affected at Banner's Mesa hospitals, however several surgeries at Mountain View Medical Center were postponed.
A spokeswoman said hospital staff were passing out ice cream to patients and that the hospital had enough generator power to last 10 days.
Power went out at around 2 p.m. Thursday at Banner Baywood Medical Centerand Banner Heart Hospital. The two hospitals at Power and Broadway roads were running on generators.
All systems are currently working and some outpatient procedures may be rescheduled, but no major problems were reported.
Baywood had 195 patients at the time, and Banner Heart had 40.
Jeff Holeman, a spokesman for both hospitals, said SRP officials told them hospitals will be a first priority to get power restored.
Nancy Neff, a Banner spokeswoman, said about 1,000 employees were sent home at about 2 p.m. after the Banner Corporate Center, the former Banner Mesa Medical Center, lost power.
"With it this hot, you don't want people in the building,'' she said.
At Arizona Regional Medical Center near downtown Mesa, officials said they lost power for about 30 to 45 minutes and went to backup generators, but that it was completely restored.
While hospitals seemed to be coping, several elder-care facilities were doing their best to cope with the
sweltering heat.
The Citadel Care Center, a nursing home on East Broadway Road, was still relying on a single generator and waiting for a second to arrive just before 6 p.m. to run fans and swamp coolers are set up in the hallways.
As temperatures climbed in the building, employees hung sheets over the windows to block the sun. Unable to cook, the kitchen was serving cold sandwiches, water and popsicles for dinner.
At the Courtyard Towers assisted living home, 22 N. Robson Street in downtown Mesa, power was out for about 45 minutes as temperatures hit about 104 degrees. Residents were given water and snacks until the power came back on about 3:45 p.m., a spokeswoman said.
Residents of the Orchard Active Senior Living Complex, near Greenfield Road and Main Street in east Mesa, congregated outside during the failure to avoid their steamy apartments.
Many of the elderly who live at the complex have health problems, which alarmed some of the others waiting outdoors for power to return.
"I'm worried about the people who are on oxygen," said 64-year-old Marilyn Suiter.
The power failure hit at one of the worst possible times for restaurants and small businesses, which are just starting to struggle through the lean summer months.
At Caffe Boa Bistro near Power and McDowell roads in east Mesa, owners worried that pricey hand-cured meats could be in danger of spoiling.
"It's killing us. I can't believe this, " said Jay Wisniewski. He had to close his business early because computer systems were out and there was no power to cook. The farm-to-table Italian restaruant also has a wood burning oven that requires a fan. "We have everything on ice. We may have to get together with other restaurants and get a refrigerator truck if power stays out," he said.
Wisniewski said his walk-in cooler is kept at 38 degrees but was creeping up in the high 40s by late afternoon.
"We're losing business. It's killing us because Thursdays are pretty good for us," Wisniewski said, adding that is summer business is usually slow for many businesses.
Larger businesses were hit hard too. Movie theaters across the city were forced to refund tickets for customers, and the 160,000 square-foot Costco at the U.S. 60 and Sossaman, the largest in Arizona, closed for the day and sent all its employees home.
This is not the first time a transformer fire has caused widespread blackouts.
On July 4, 2004, fire struck a West Valley power station operated by Arizona Public Service. The fire burned for days, destroyed five transformer units and forced Valley residents to conserve power to prevent rolling blackouts.
An investigation traced the fire's origin to blue heron droppings that crippled an insulator outside the Palo Verde Nuclear Generating Station west of the metro area in mid-June.
That created a power surge that shut down all three nuclear reactors.
While APS was dealing with that, a massive flow of electricity was allowed to hit the Westwing station on July 4, triggering the fire.
That same month a fire at APS' Deer Valley Substation shut power to some 50,000 homes but the power was back on within a few hours.
In July 2006 a transformer fire spewed smoke from SRP's Santan Generating Station in Gilbert for hours but did not result in power outages.
