2009 APPA National Conference
Dealing with Customers’ Inability to Pay in Tough Economic Times
June 16, 2009, 1:30 – 2:30 pm
William A. Johnson
KCBPU History
• Established public water utility in 1909
• Formed electric utility in 1912
• First Board of Directors installed in 1929
• In 1970s expanded service area to cover 127.5 square miles
• Unified Government created in April 1997
• Charter ordinance adopted
KCBPU’s Role as a Public Utility
• Maintain Low Electric & Water Rates
• Provide Quality Customer Service
• Support Local Governments
• Assist with Economic Development
• Contribute to Charitable Organizations
• Provide Jobs - Local Living Standards
KCBPU Challenges
• Fewer Revenue Sources
• Inability to Raise Rates
• Changing Environmental Landscape
• Aging Workforce
• Depressed Economic Conditions
• Aging Infrastructure
• Shrinking Population Base
• Electric Customers – 69,336 Meters• Water Customers – 56,809 Meters• Generating Capacity (Gross) – 613 MW • Summer Peak (Aug. 2007) – 529 MW• Substations – 29• Transmission/Distribution Lines – 1402 Miles• Water Production – 45 Million Gals (Avg.) • Water Storage Capacity – 34 Million Gals.
Customer Statistics
Sales (Energy & Water)
Commerical34%
Residential29%
Industrial20%
Other17%
2009 Annual Budget (Revenue)$303,304,711
• Electric – $219,573,493 (72.4%)
• Water – $35,683,670 (11.8%)
• Non-Restricted Reserves – $24,390,869 (8.0%)
• PILOT – $23,647,679 (7.8%)
Local Rate Comparison 1,000 kWh (Summer)
Utility Rate Fuel Rider Dollars/$$
KCBPU
6.60
$0.0310
$93.89
Westar
8.00
$0.0234
$89.45
IPL
9.94
$0.0126
$125.61
KCPL
7.93
$0.0126
$98.34
Population Trends
0
100,000
200,000
300,000
400,000
500,000
600,000
1990 - 2008 Population Trends by State, County, and City
Johnson County 355,054 451,086 534,093
Wyandotte County 161,993 157,882 154,287
Kansas City, Kansas 149,800 146,866 143,801
1990 2000 2008
Socio-Economic Summary
Per Capita Income
• $24,838 (County) -vs.- $34,799 (State)
Unemployment (Feb. 2009)
• 12.6% (County) -vs.- 6.2% (State)Poverty
• 20.2% (County) -vs.- 11.9% (State)Health
• Lowest in the State
Customer Service Statistics
• Walk in Lobby – 400 Customers Daily
• Payment Arrangements – 14,000 Annually
• Calls Answered – 18,000 Calls Monthly
• Delinquent Disconnects – 43,200 Annually
• Theft of Services – 292 Annually
• Returned Checks – 2,756 ($1,446,487)
• Write Offs - $1,783,883 Annually
Economic Impact on Customers Ability to Pay
• Walk in lobby numbers up despite use of Kiosk in 31 locations
• Accounts receivables up 16%
• Energy sales down in all rate classes (3.5%)
• Delinquent Accounts up 5%
• Theft of services up 51%
Environmental Challenges
• Climate Change
• Cap & Trade Programs
• Carbon Tax
• Renewable Energy Standards
KCBPU Energy Portfolio
• Coal – 61.4%
• Gas – 28.5%
• Hydro – 6.5%
• Wind – 3.7%
• Landfill Gas – (Future)%
Impacts of Ozone Programs
• Ozone and BART on existing units will require added revenue
• Three possibilities for responding to Ozone and BART:– Add AQC equipment to existing plants– Build new coal generation and retire older
plants– Add combustion turbines and retire older plant
• Maximize Use of Existing IT Systems• Improve Billing Options• Customer Self Service/Web Design• AMI/Smart Grid System Deployment• Demand Responses• Energy Audits/Weatherization• Promote Energy Efficiency Workshops• Continue to Discuss Environmental Issues
Existing Service Strategies
2009 APPA National Conference
Thank You
Questions?
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