Financial Update for 2020
Since our annual meeting was canceled this year, we wanted to update the membership on the financial condition of the cooperative, much like we would have done at the annual meeting.
EnerStar’s comparative BALANCE SHEET shows audited results for 2020 and 2019. The vast majority of our assets are invested in “PROPERTY, PLANT AND EQUIPMENT;” basically power lines, substations and equipment to provide electric service. The next largest category is “OWNERSHIP IN ASSOCIATED ORGANIZATIONS.” These are required investments in our critical suppliers of wholesale electricity, insurance, sources of capital, etc.
The funding for all assets comes primarily from two sources; “MEMBERS’ EQUITY” and “LONG-TERM AND SHORT-TERM DEBT.” Member’s Equity is the portion of EnerStar that is owned by those we serve, our members. Think of it like the equity in your home.
As you can see, it takes $7,600 per member to maintain all the assets necessary to operate EnerStar. This investment is funded with Members’ Equity at the rate of $3,700/member. The remainder ($3,900 per member) is funded through some form of a liability.
EnerStar’s comparative INCOME STATEMENT shows audited results for 2020 and 2019. To help put these numbers in perspective, we have included how they translate into revenues and costs per a typical residential bill. (1,000 kWhs)
Please notice how close our “OPERATING INCOME” and “OPERATING EXPENSES” are to each other. 96 percent of our income was used to pay expenses. The small amount remaining (4 percent) will then be added to Members’ Equity and used to help offset the need for additional debt.
Total Margins are higher due largely to Non-Operating Margins. EnerStar, as an organization, is a member and receives goods and services from various other non-profit electric cooperatives. As a result, the co-op receives patronage capital from these organizations and the results are shown under non-operating margins. These margins are largely non-cash capital credit allocations from these associated organizations.