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Increase in fuel cost offsets CUC savings
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Posted on May 15 2005
The Commonwealth Utilities Corp. saved $3.37 million on administrative and general expenses in the first half of fiscal year 2005, but this was easily offset by a $7.17-million increase in fuel costs.
An unaudited financial statement issued by CUC showed that the utility firm’s operating expenses reached nearly $40 million in the first six months of FY 2005, up by $3.29 million from the same period last year.
Production fuel ranked as CUC’s biggest expenditure, comprising over $25.5 million or 63.8 percent of the total expenses. This represents an increase of 39 percent as compared to fuel expenses in the first half of FY 2004, which totaled $18.35 million.
The second biggest expenditure was general and administrative expenses, which amounted to $6.22 million from October 2004 to March 2005.
Based on the breakdown, salaries decreased by $746,164; personnel benefits by $206,637; manpower services by $56,856; rent by $184,850; professional services by $179,017; travel and transportation by $73,993; personnel training by $109,398; and bad debts by $1.77 million.
During the same period, CUC registered a net operating loss of $3.73 million, despite generating total operating revenues of $36.26 million—or $354,932 more income—as compared to the first half of FY 2004.
About $30.41 million of CUC’s revenues came from power services, an increase of 2 percent from the first half of FY 2004. “Increase in power revenues is due primarily to the implementation of 1.5-cents fuel surcharge fee billing for consumption in March 2005, but billed to customers in April 2005,” CUC said.
Total revenues from the fuel surcharge accrued on March 31, 2005 amounted to about $347,000.
As to non-operating expenses, CUC made $4.71-million total loan payments to the Commonwealth Development Authority and $584,890 to other creditors during the first six months of FY 2005.
Mandatory payments made by CUC to the Office of the Public Auditor totaled $347,380 during the same period.
Meanwhile, CUC earned only $747,742 in miscellaneous revenues, resulting in a net non-operating loss of $4.89 million.
Overall, the utility firm posted a net loss of $8.62 million in the first half of FY 2005.
