Local & State Headlines

Drought hurts, gas helps WG&L

• Drought is blamed for declining revenues at Albany Water, Gas & Light.

Susan McCord

ALBANY — Persistent drought conditions are eating into Albany Water, Gas & Light revenue projections, an official with the city utility company said at a meeting Monday.

Reviewing WG&L revenues for the utility board, which hadn’t met since November, Fiscal Affairs Director John Vansant said a mild November coupled with water restrictions left water revenues at approximately $100,000 under budget and electricity sales approximately $600,000 below projections, which are based on a five-year average.

“The water restrictions are probably still hurting us,” Vansant said.

Sales of city gas, meanwhile, were over projections, thanks largely to some $400,000 in sales of propane the city had stored at two sites for 15-20 years, he said.

A more “normal” December brought sales of the several utilities closer to projections, but Southeastern Power Administration, or SEPA, costs ran $250,000 over budgeted amounts, Vansant said.

WG&L is under contract with SEPA, a federal agency that sells hydroelectric energy, but drought has forced SEPA to buy its power elsewhere at market rates and pass the costs on to Albany, he said.

“Because of the excessive drought that we’ve had, they have not been able to make electricity at the dams,” Vansant said.

For the year ending in December, SEPA costs were $1 million over budget, while Municipal Electric Authority of Georgia costs were $500,000 over budget, Vansant said.

“With drought expected throughout the next year, what steps are we taking, or is MEAG taking, to address this?” board member Commodore Conyers asked.

“It’s a good resource we have, hydroelectric, except when we have drought,” Vansant said. “It’s an emission- free source of electricity.

“What surprises me is that the government does not have a contingency plan, when this kind of thing comes along,” said WG&L chairman Willie Adams.

For the year ending in December, water revenues were $327,000 under budget “because of the water restrictions,” while gas ended the year $454,000 over budget, Vansant said.

Electricity, thanks in part to a record summer heat wave, earned $4.1 million in revenues, but didn’t quite meet projections of $6 million, he said.

What will help is WG&L’s expected settlement from MEAG, about $1.9 million due in April, he said.

The annual MEAG rebate reimburses WG&L and its other energy-purchasing members for the amount members have overpaid for power based on MEAG’s actual costs, Vansant said.

Less appealing to members was a “letter of notice of intent” of the City of Albany’s plan to pull out of a group health plan it formed with WG&L and Dougherty County in 1981.

“Hold on,” said Adams, also Albany’s mayor. “There was not a motion to pull out. We were only conforming to the contractual agreement.”

The group health plan requires a member give 6 months’ notice “of intent to pull out,” Assistant Albany manager James Taylor said.

“Would it leave the other two entities to negotiate on our own?” board member Andrew Reid asked. “Don’t you get lower rates when you have more people?”

Conyers asked if there would be a dialogue between the three first.

When WG&L unsuccessfully bid in 1994 to leave the plan, joint meetings were held at Albany Civic Center, WG&L General Manager Lemuel Edwards said. “It will not just happen overnight,” he said.

Edwards also told the board of Georgia Power’s request for an extension, until late May, to make a bid on a nuclear power plant.

The board, including members Carol Fullerton and Joann Pope who were sworn in Monday, also signed off on two MEAG member cities’ telecommunications agreement amendments.

“This is a good thing,” said WG&L Senior Accountant Ken Hutchinson, of the first.

The first removes a “step- up” provision making MEAG members liable for other cities’ default on telecommunications bond obligations, Hutchinson said.

The second allows any member to pay off its bond debt at any time, he said.

“If we sign this document, we won’t have to worry about it if anything happens to the bond rating of the (issuing) company,” Hutchinson said.

The board, hearing Adams’ comment that Albany was the second-to-last member city to sign, agreed to both.

Board members also agreed unanimously to join MEAG’s municipal competitive trust, which MEAG set up in the late-1990s “in anticipation of deregulation,” Hutchinson said.

“This is why it’s great to be a part of MEAG,” WG&L attorney Nathan Davis said. “They put the money in a trust, we didn’t even realize. Now it’s $90 million.”

The trust funds will be credited back against WG&L’s energy purchases, Davis said.

The board won’t hold its next meeting on the usual fourth Thursday of the month because of MEAG’s annual conference, which Edwards encouraged all board members to attend in middle Georgia.

After briefly closing the meeting to discuss “personnel” the meeting reopened.

Edwards thanked the board and staff members for attending his mother’s funeral and members adjourned the meeting.

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