2012 Annual Report - Waverly Light and Power

12
PLANNING FOR TOMORROW
WHILE PROVIDING FOR TODAY.
LETTER FROM THE
GENERAL MANAGER
The activities and accomplishments of 2012 reflect who Waverly Light and Power is at
our core. It was a year of re-building and building for the future.
October 11, 2012, when we commissioned the Cannon II wind turbine was a defining
moment. The turbine fell during construction in 2009 and it took three long and
arduous years to recover the costs associated with the project and construct the turbine
again. When that turbine began producing clean, renewable energy for our customers,
it became a symbol of how all of us at Waverly Light and Power deliver on our
commitments.
This year was also focused on building for the future. Reliable electric service is at
the heart of our mission and 2012 saw a number of projects dedicated to maintaining
and even improving the already stellar reliability we offer customers. We retrofitted
our local generators to ensure that they meet ever increasing environmental standards
and we automated a number of the engines to allow even faster response time. There
are very few cities in Iowa that can keep power flowing to customers, if their ties to the
outside world go down. Waverly Light and Power has negotiated an agreement that
pays us for having these engines on stand-by. This revenue means we can afford to
keep this important safety net in place and be assured that we can power the community
during emergencies.
Finally, in 2012, the employees at Waverly Light and Power delivered responsive and
reliable service while holding rates for the second year in a row.
The world and our business are fundamentally unpredictable. It’s constantly changing –
by chance and by design. The results reflected in this report are continuing examples of
how Waverly Light and Power provides today while planning for tomorrow
Diane
1
RELIABILITY
SOUTH PLANT AUTOMATION AND CONTROL SYSTEM
Waverly Light and Power workers from the generation department, completed the South Plant automation and new
control system, spanning over a years worth of work in 2012. The South Plant, located on 10th Avenue SW, houses
six CAT 35 series 16 cylinder 2000 kW generators.
Replacing the old control system at the South Plant allows the new system to meet current standards and enables
WLP to automate the South Plant. The control system was put into place to increase the reliability and response time
during outages.
Any outage, leaving the South Load Center without power, causes the plant to automatically disconnect from the
transmission system, start the engines and turn the distribution circuits back on, restoring power to customers.
This process happens within a matter of minutes without the need for employees to be present. As Waverly
grows, this type of automation will help keep labor costs down because we can do more without adding any new
employees.
2
RELIABILITY
OXIDATION CATALYSTS/SILENCERS AND CRANKCASE VENTILATION SYSTEMS
In 2012, Waverly Light and Power was planning not only for the future of Waverly customers but also for the
environment for many years to come. During 2012, WLP accomplished this by installing seven catalytic silencers on
generators in both the North and South Plants.
Several significant benefits played a key role in WLP’s decision to update the generators with new catalytic silencers.
One benefit was the new equipment allowed WLP to reduce noise levels produced when the generators run.
Another benefit involves cleaner emissions. Steve Butler, production and substation foreman with WLP, explained that
the new catalytic silencers will reduce certain emissions from the generators by a minimum of 80 percent.
“Air pollutants are attracted to surfaces inside the catalytic silencer and filtered from the air which is then released to
the outside. They filter out pollutants and meet new EPA standards for generators, making this generation cleaner,” said
Butler.
(con’t)
3
RELIABILITY
OXIDATION CATALYSTS/SILENCERS AND CRANKCASE VENTILATION SYSTEMS – CONTINUED
The final benefit of the update involves MEAN, WLP’s power supply company. “MEAN
essentially pays WLP for having the engines on-call in case they need to use our generators to
ease power constraints,” said Diane Johnson, WLP general manager. “Being paid for standby
capacity is a significant benefit to our customers because it allows us to maintain these engines
for use in a local power emergency, such as an ice storm. Without the stand-by payments, the
cost to provide local generation in Waverly would be very high and impact customer rates.”
Continuation of this project will take place in 2013.
“We will be able to provide reliable, cleaner power to our customers and also keep our cost
down by completing this project. It’s a huge benefit for Waverly,” stated Butler.
Waverly Light and Power’s local generation is used during emergency situations or times when
electrical service from the grid cannot be made to Waverly. This dependability provides
Waverly with a safety net few other utilities can provide.
4
RELIABILITY
STELLAR OUTAGE REPORT
Waverly Light and Power received a stellar outage report in 2012. WLP’s average outage time was far shorter than other
Midwest municipal utilities included in a reliability study undertaken by the American Public Power Association (APPA). Results
of the study show in 2012 Waverly Light and Power customers experienced 78% fewer outages than other Midwest municipal
customers. For those customers that did experience an outage in our service territory, the outage time was 31% less than the
average Midwest municipal customer. In 2012, Waverly Light and Power had only 9 outages with an average outage time of
43 minutes.
“2012 was a fantastic reliability year for us and exceptional reliability is what sets us apart from other electric providers.
We’re pleased to continue the solid record of reliability customers have come to expect from Waverly Light and Power,” said
Diane Johnson, general manager. “Commercial, residential and industrial customers all benefit when our crews are able to
restore power as quickly as possible.”
5
COMMUNITY
MUTUAL AID TO LONG ISLAND
When others are in need, Waverly Light and Power can be trusted to help.
Hurricane Sandy struck New York and New Jersey October 2012. Two Waverly Light and Power linemen were among other
utilities across the nation assisting their efforts during the aftermath of Hurricane Sandy. Mark Jaquith and Levi Gulick spent
approximately two weeks clearing affected areas and restoring power for Long Island Power Authority. The utility had outages
to about 1 million of its 1.1 million electric customers.
Jaquith and Gulick were honored by Gov. Terry Brandstad at the State Capitol January 14, 2013, for their volunteer recovery
efforts.
“We are very proud of Mark and Levi,” said Mike Litterer, operations manager with Waverly Light and Power. “Their
dedication, community service and commitment to helping those in need was a great representation of WLP and the Waverly
community. We are equally happy with our employees who stepped up to fill in and and take on extra jobs to made this
possible.”
6
COMMUNITY
FOURTH GRADE FORESTERS
2012 marked the first year for participating in the Fourth Grade Foresters program.
To help celebrate Arbor Day, 150 fourth graders in Waverly received an individually packaged 12”-18” evergreen
tree seedling sponsored by Waverly Light and Power. Providing students with trees allowed them to become stewards
of their community by simply planting and caring for a tree.
“Sponsoring trees was a wonderful way to show support for the community, education and the environment,” said Diane
Johnson, WLP general manager. “We are proud of our commitment to beautifying Waverly. Planting a tree is a simple,
inexpensive and easy way to make that happen, offering multiple benefits to present and future residents.”
7
COMMUNITY
COMMUNITY INVOLVEMENT COMMITTEE PROJECTS
Waverly Light and Power employees put their heart into Waverly. Through our Community Involvement Committee,
employees volunteered and donated their personal time to local nonprofit organizations and projects.
In 2012, our employees – and their families – volunteered 403 hours on over 25 community projects including Terra
Recycling, Waverly Recycling Center, Ward 2 Polling, Waverly Senior Center, Waverly Community Gardens, Waverly
Heritage Days, W-SR Booster Club, Salvation Army, Trees Forever, City of Waverly, Waverly Chamber’s Festival of
Trees and Greetings on Main.
8
COMMUNITY
SOCIAL NETWORKING
2012 marked the kick-off of Waverly Light and Power’s social networking. Using Facebook and Twitter, social media allowes
WLP to get information to customers faster. We share energy efficiency tips, safety information, rebate programs and the
latest on energy topics in the U.S. If there is a large scale outage, Twitter and Facebook can communicate with customers
quickly. Customers can also receive messages on their mobile devices, even if the power is out.
9
EFFICIENCY
VENDING MACHINE CONTROLS AT W-SR SCHOOLS
Waverly-Shell Rock High School, Middle School and Carey Elementary installed 10 vending machine controls in 2012.
The controls, designed to save approximately 46% of energy consumed per vending machine, are placed on the
machines to reduce energy when a building or business is not occupied. If the control registers movement, the vending
machine will run, however if the control does not register movement, it allows the machines to shut down, saving energy.
By installing the 10 vending machine controls, the W-SR schools were able to save 6,700 kWh, equivalent to taking
four residential air conditioners off WLP’s system annually.
“A vending machine control can benefit any size business,” said Curt Atkins, energy services manager with WLP.
“Whether the business is large or small, significant savings can be achieved with the installation of these energy saving
devices.”
10
EFFICIENCY
WLP PARTNERS WITH GREEN IOWA AMERICORPS
When Sarah Renn received a letter in the mail from Waverly Light and Power informing her of the new partnership
with Green Iowa AmeriCorps, she couldn’t pass up the opportunity to save some money in 2012.
Sarah Renn’s house was built in 1914, survived a flood and is still providing shelter for her and her family. However,
the home had seen better days when it came to energy efficiency.
“The upstairs bedroom is very cold. Our son’s closet leaks freezing air from the attic into his room,” said Renn. “The
front door seeps air and our basement has gaping leaks.”
The Green Iowa AmeriCorps program targets two-story homes built prior to 1985 with energy efficiency issues. For the
Renn household, WLP paid for the materials and Green Iowa AmeriCorps provided the weatherization labor free of
charge.
After a full day of weatherization work at their home, Sarah Renn couldn’t have been happier.
“The leaks into our son’s room have improved drastically and our upstairs bedroom is not as cold as it used to be,” said
Renn. “The Green Iowa AmeriCorps staff was very nice and explained everything to me. They were thrilled with the
final testing results and left smiling. The best part was only after two weeks of the changes being in place, our gas bill
went down $30.00 and our electric bill went down almost $20.00!”
11
RENEWABLE
ENERGY
COMMISSIONING OF CANNON I & II WIND TURBINES
Cannon I & II wind turbines were commissioned October 11, 2012. A group of city leaders, Wartburg College representatives
and citizens joined Waverly Light and Power at the site to mark the event. The event coincided with Public Power week.
“We’re pleased to provide Waverly with renewable energy from these two new turbines and continue our commitment to
environmentally responsible electric services,” said Diane Johnson, WLP general manager.
12
RENEWABLE
ENERGY
CANNON II WIND TURBINE SETTLEMENT REACHED
Waverly Light and Power concluded the 2012 calendar year with the final settlement of a longstanding lawsuit related to the
Cannon II wind turbine.
The turbine fell during construction in February 2009. Since then, WLP made persistent, significant and diligent efforts to
recover costs resulting from the event and the damaged turbine.
According to WLP general manager Diane Johnson, successful mediation has resulted in a settlement agreement that allowed
WLP to avoid what was expected to have been a protracted and costly court battle.
Reconstruction of Cannon II cost the utility $1.7, which was recovered through a payment of $1.5 million and the waiving of
$195,000 in contractor costs WLP had withheld pending the settlement.
13
RENEWABLE
ENERGY
LANDFILL GAS-FUELED
Waverly Light and Power will be one of four utilities in Iowa to receive environmental attributes from a new landfill
gas-fueled project near Mitchellville, Iowa, started in 2012.
WLP signed the environmental attributes agreement with their wholesale electric supplier, the Municipal Energy Agency
of Nebraska (MEAN), for a portion of the energy output from the project.
“This project will offset other non-renewable purchases and lower our total emissions,” stated Diane Johnson, general
manager with WLP. “The electricity produced at the plant represents a reliable
and consistent alternative source of energy for our customers.”
Methane gas is created by the decomposition of trash and animal manure.
Electricity generated by methane gas output is steady, providing a reliable source
of renewable electricity. Since methane gas is a greenhouse gas, eliminating it
from the environment by producing electricity has a double benefit.
The project at the Metro Park East Landfill, operated by the Metro Waste
Authority, is located east of Mitchellville. The project demonstrats WLP’s
commitment to balancing energy production costs and reducing the impact
production has had on the environment.
14
PLANNING
CONTINUED WORK ON WEST SUBSTATION PROPERTY
In 2011, work started at the new electric substation site located on the northwest corner of First Avenue and 12th Street
Northwest. During 2012, the home and garage on the property were demolished and the lot cleared for the construction of the
future substation building being built in 2013. WLP anticipates completing the new facility in the 2015 timeframe.
15
PLANNING
NO RATE INCREASES IN 2012
Waverly Light and Power continued to hold rates at the 2011 level for 2012. Despite rising power, transmission and
material costs, WLP was able to keep rates steady with careful expense management and improving efficiencies.
16
PLANNING
2005 BOND REFUNDING
In 2012, Waverly Light and Power refinanced bonds from 2005. By doing so, WLP saw a net gain of $75,000,
contributing to WLP’s cost management efforts.
17
Condensed Statements of Net Position
FINANCIAL
INFORMATION
2012
ASSETS
Current Assets
Non-Current Assets
Restricted Assets
Designated Funds
Other Assets
Capital Assets
Total Assets
2011
2010
$ 6,833,881 $ 6,379,592 $ 7,713,783
639,510
9,723,261
3,214,544
32,402,834
52,814,030
LIABILITIES
Current Liabilities
2,544,164
Current Liabilities Payable from Restricted Assets
660,205
5,220,534
Non-Current Liabilities
Non-Current Liabilities Payable from Restricted Assets
8,424,903
Total Liabilities
957,414
8,527,180
3,733,963
957,414
6,616,363
3,649,886
33,123,380
52,721,529
32,734,490
51,671,936
2,435,812
1,011,960
6,281,861
2,483,230
979,673
7,313,385
9,729,633
10,776,288
29,585,297
363,619
13,042,980
28,235,444
330,703
12,329,501
NET POSITION
Net Investment in Capital Assets
Restricted for Debt Service and Improvements
Unrestricted
29,540,187
304,869
14,544,071
TOTAL NET POSITION
$44,389,127 $42,991,896 $40,895,648
18
Condensed Statements of Revenues, Expenses and Changes in Net Position
2012
OPERATING REVENUES
$ 17,296,715
2011
$ 17,354,345
2010
$ 17,257,351
OPERATING EXPENSES
1,746,726
13,344,587
1,700,352
12,864,085
1,603,480
12,291,512
15,091,313
14,564,437
13,894,992
2,205,402
2,789,908
3,362,359
92,221
119,610
104,414
(158,366)
(187,052)
16,893
25,995
133,301
36,948
(214,742)
(81,120
33,107
(23,257)
102,807
(158,341)
2,182,145
2,892,715
3,204,018
150,238
(935,152)
137,449
(933,916)
3,407
(961,984)
1,397,231
2,096,248
2,245,441
NET ASSETS, Beginning of Year
42,991,896
40,895,648
38,650,207
NET POSITION, END OF YEAR
$44,389,127
$42,991,896
$40,895,648
Depreciation Expenses
Other Operating Expenses
Total Operating Expenses
Operating Income
Investment Income
Interest and Amortization Expense
Gain/(Loss) on sale of plant
Royalties
Total Non-Operating Expenses
Income Before Operating Transfers and Contributions
Contributions
Operating Transfers to the City of Waverly
Change in Net Position
19
Waverly Light and Power | 1002 Adams Parkway | Waverly, IA | 50677 | 319.352.6251
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