At the beginning of 2020, the Dawson PPD Board of Directors and management team had a strategic planning session. One of the initiatives that grew out of that session was to improve our financial position. Dawson PPD is in strong financial shape, but we wanted to improve in a few areas and have a written long-term plan. Overall, 2020 was a good financial year for us.
Dawson PPD service territory and customer overview
We ended the year with 23,153 meters and 5,830 miles of line. These numbers vary slightly from year to year, but they remain relatively stable over time. We have an average of four customers per mile of power line.
In 2020, irrigation sales rose significantly to 167 million kilowatt hours compared to the past two years. In 2018 and 2019, our irrigation sales were down due to above average precipitation in the area. We sell about 143.4 million kWh of irrigation energy annually. We ended the year with $64,939,435 in total operating revenues among all rate classes.
Cost of power
Our power bill consists of several components, including actual kWh sales, and a peak demand component. We were able to trim our peak demand in the summer and winter months for cost of power savings. Since 2019, we have also received a power cost adjustment or PCA on our power bill. In 2020, we received a $2.1 million PCA credit. These are the two major ways we kept our power bill costs stable.
We held our operating expenses to almost the same level as the year before. Operating and cost of power expenses were held to $52,987,751. We spent just over $100,000 more for non-cost of power operating expenses, an increase of just 0.5% from 2019. We are aiming for a similar result in 2021.
To keep our operating expenses level, Dawson PPD has worked to reduce the overall budget and construction schedule over the past few years. During this time, Dawson PPD did take one rate increase and introduced it to customers using a phase-in approach.
Investing in your electric power system
Dawson PPD has put substantial investment back into our electric system over the past decade. In 2020, we scaled this investment back to $8 million which is still a very significant amount. This also allowed us to not issue any new debt to finance capital outlay. Our net capital assets are $190 million. This is the historical cost of our investment into our electric system and capital assets, net any accumulated depreciation. This helps us keep our system up to the highest quality and in return helps keep reliability high.
Refinancing saves money
We refinanced three bonds in 2020. We look at refinancing bonds when we can realize an interest savings over the life of the new debt.
This refinancing allowed us to save over $1 million in future interest payments.
The low interest rate market really helped us out in 2020.
The bottom line
Increased sales and keeping expenses in check allowed us to have a healthy net margin for the year. We ended 2020 with a $10,314,274 increase in net position.
This, along with reducing our capital outlay for the year, helped us improve our cash and investment (CDs) reserves, which was a top financial goal. We were able to increase our cash reserves by $4.2 million. Cash and investments at the end of 2020 were $14.2 million.
These savings will be used to continue plant improvements and also protect Dawson PPD from future below average sales years due to the weather.
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