By VERNON ROBISON
Moapa Valley Progress
By most measures, the Overton Power District (OPD) is on solid footing and performing well in comparison to similar utilities in the state and across the country. At least that was the message given to the OPD board of trustees at its meeting last month in Mesquite. OPD accounting supervisor MeLissa Garcia gave a report on the district’s Key Ratio Trend Analysis, a study which is performed annually by the National Rural Utilities Cooperative Finance Corporation (CFC), a major financing organization for rural utilities.
“In this report, the district is compared to other entities across the state, and also with similar-sized utilities across the country,” Garcia said. “So it gives a picture of the industry as a whole and how we fit within it.”
The analysis showed several areas of strength for the OPD. Perhaps chief among these was reliability of service.
In 2017, the average duration of system interruptions was at only 30 minutes for OPD. That was compared to 124 minutes per average interruption for utilities in the state, and 218 minutes for similar-sized utilities nation-wide.
Where OPD really shined was in a ratio titled “Average Service Availability,” which shows a percentage of total time that the district system remained in service. OPD showed a 99.99 percent ratio in this category for 2017. The statewide number for that period averaged 99.98 percent, while nationwide it was 99.96 percent.
OPD also showed strength in its future infrastructure planning. In a ratio measuring the utility’s total system investment per customer, the OPD came in at $7,129 invested per customer. This compared favorably against $10,978 per customer of utilities throughout the state. The national average was at $6,183 per customer. According to CFC, utilities serving remote, thinly populated areas will have higher ratios in this category than those that are more densely populated.
“This (ratio) just shows that we are planning out our infrastructure well and keeping current,” Garcia said. “In this industry, to be able to keep current, you have to be thinking out 20 or 30 years into the future, not just about right now.”
The Analysis also showed that OPD has done well in controlling costs, compared to its peers. Total Controllable Expenses per consumer came in at $368 per customer in 2017 for OPD. That was far below the state average which was at $920/customer and the nation which was at $516/customer for similar-sized utilities.
Average measured number of customers per utility employee was also good for OPD. In 2017, the district showed 320 customers per employee. That was on par with the national number of 326. But it was far better than the Nevada average which was at only 168 customers per employee.
OPD also rates well in its cost-of-power ratios. In 2017, the district paid 5.52 cents per kilowatt-hour (KWH) sold. That was compared to 6.6 cents in similarly-sized utilities nation-wide.
This number ended up a bit higher compared to state utilities which averaged 47 cents per KWH. But that is because many other rural Nevada utilities are wholly served by much cheaper hydro-power allocations, Garcia explained.
The Analysis showed OPD on solid footing in its ability to pay its debts. CFC uses a measure called Debt Service Coverage ratio to show the financial stability of a utility. Anything above 1.35 percent is considered by CFC as healthy and qualified for certain interest rate discounts on loans. OPD far exceeds that threshold at 2.58 percent for 2017. That is compared to 1.33 percent as a statewide average, and 2.15 percent for similarly-sized utilities nation-wide.
Not all of the ratios were stellar for OPD. There were some areas where the district lagged behind in the comparisons.
The district’s measure of long-term debt is somewhat higher than other entities compared in the Analysis. The ratios showed OPD with about 45 percent of total assets in its long-term debt. That was compared with a 41 percent average for nation-wide utilities and 34.8 percent in the state.
“We have come a long way on that one, though,” explained OPD General Manager Mendis Cooper. “Just ten years ago, we were at 77 percent on that ratio. So while we still have a way to go, we have been working on it.”
The ratio where OPD compared most unfavorably was in a measure showing the amount of its total 2017 margin per customer. This measure showed OPD making an average of $495 per customer in 2017. This amount far outpaced the average number for the state at $279/customer and in the nation which was $143/customer.
But this ratio showed a sharp spike for the OPD only within the last two years. Before that it followed the state and national numbers more closely.
Cooper explained that this was due to a new power purchase contract with Morgan Stanley that was entered by the district in 2016. The agreement has eneabled the district to purchase its blocks of power in a much more economical way than it did before, thus increasing the district’s margins.
“That is why we have been working on a rate study and on making equitable adjustments to our rate structure,” Cooper said. “Once that is completed it should address this issue soon and will bring us back in line like we were before.”
