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Prepa Posts $2.03 Billion In Revenue
BY LUCIENNE GIGANTE
April 19, 2001
The Puerto Rico Electric Power Authority (Prepa) reported operating revenue of $1.99 billion for the fiscal year (FY) ended June 2000, up 29.9% over the $1.53 billion reported for FY 1999.
Consolidated financial statements for fiscal 2000 show total operational and other revenue amounting to $2.03 billion.
Prepas improved financial results earned it an improved bond rating. Both Standard & Poors and Moodys Investor Services upgraded Prepas credit rating in fiscal 2000.
According to Prepas annual report, net revenue represents 1.61 times the principal and interest requirements for FY 2000, which witnesses a financially solid outlook for the utility and encouraging financial situation for the public utility.
Of the $1.99 billion in operating revenue, $1 billion came from basic charges, $826 million from fuel adjustment charges, and $71.5 million was revenue related to purchases of power from EcoElectrica, a privately owned co-generation plant that began operations on March 21, 2000, according to the report.
Revenue for basic charges was $51.3 million above the previous year. Revenue from fuel adjustment charges increased $333.6 million above the previous years amount, primarily due to a nearly $9 increase in the per-barrel cost of fuel. Prepa passes oil price fluctuations on to consumers as fuel adjustment costs whenever oil prices rise.
Prepas fuel oil expenses amounted to $801.4 million in a $300.5 million increase over FY 1999. The power utility consumed 34 million barrels of fuel oil at an average price of $23.54 each. Although fuel oil consumption was similar to last year, the average price per barrel increased by $8.98.
Other current expenses increased by $49 million, with Production and Distribution Operations expenses increasing by $12.9 and $8.9 million, respectively. Distribution Maintenance, Customer Accounting & Collection, as well as Administrative & General Operations expenditures each increased by $11.4 million, $9.1 million, and $8.2 million, respectively. Increases were reflected primarily in salaries, materials, and miscellaneous & general expenses.
Former Prepa Executive Director Miguel Cordero is quoted in the annual report, "Although this was a challenging year for the electric power industry throughout the world, mainly due to the dramatic increase of crude oil prices, Prepa showed continuous improvements in its fuel diversification program, technical operations, and finances." Cordero served as Prepas executive director from 1992 to 2000.
The utilitys key achievements include Standard & Poors upgrade of Prepas credit rating from BBB+ to A-, and the change in Prepas rating outlook from stable to positive by Moodys Investor Services. Power Revenue Bonds Series HH were issued on August 29, 2000 at an interest cost of 5.4% thanks to bond issue planning and preparation process that was carried out during fiscal year 1999-2000.
Prepa serviced an average of 1,344,907 clients during FY 2000, a 1.4% increase over the previous year. There was a maximum peak load of 3,133 megawatts for a 2.5% increase over FY 1999.
This Caribbean Business article appears courtesy of Casiano Communications.