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Home My WebLink About2023-031 FY 2022-23 Denton Energy Center (DEC) YTD FinancialsApril 7, 2023 Report No. 2023-031 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: FY 2022-23 Denton Energy Center (DEC) YTD Financials BACKGROUND: The FY 2022-23 DEC October 2022, November 2022, December 2022, and January 2023 Dashboards are attached. The dashboards are intended to give a snapshot of relevant DEC metrics. The dashboards highlight the following: • The Emission Charts (based on calendar year) display the engine runtime hours, starts, stops, monthly and annual emissions totals and limits. • DEC MWh Generation and Gross Revenue for FY 2022-23 YTD. • A DEC financial summary showing FY 2021-22 Actuals, FY 2022-23 Budget, FY 2022- 23 Budget actuals and the FY 2022-23 end of year projections. o At this point the FY 2022-23 year-end projections are equal to the FY 2022-23 budget • The Plant Monthly Run Hour Comparison Graph illustrates the monthly plant run times. • The Key Trends section explains variances in revenues and expenses. ATTACHMENTS: Denton Energy Center (DEC) Dashboard – October 2022 Denton Energy Center (DEC) Dashboard – November 2022 Denton Energy Center (DEC) Dashboard – December 2022 Denton Energy Center (DEC) Dashboard – January 2023 STAFF CONTACTS: Cassey Ogden Assistant City Manager (940) 349-7195 cassandra.ogden@cityofdenton.com Nick Vincent Interim Finance Director (940) 349-8063 nicholas.vincent@cityofdenton.com City of Denton, Texas FY 2022-23 Denton Energy Center YTD October 2022 Dashboard Key Trends For the first month of FY 2022-23, the DEC produced 5,829 MWh less than the same time period of FY 2021-22. This resulted in approximately $324,000 less revenue and $303,000 less in total expenditures than for the same time period last fiscal year. The DEC Gross Margin as of October 31 was $1.39 million which is $220,000 higher than budgeted (Gross Margin = DEC Revenue –Fuel Cost –Variable Operating & Maintenance Cost). At this point in the fiscal year, the FY 2022-23 year-end projections are equal to the FY 2022-23 budget. Description Engine Runtime (hours)* Hot Starts Warm Starts Cold Starts Stops Description Nitrogen Oxides (NOx) Carbon Monoxide (CO) Volatile Organic Compound (VOC) Particulate Matter<10 microns (PM10) Particulate Matter<2.5 microns (PM2.5) Sulphur Dioxide (SO2) Ammonia (NH3) Carbon Dioxide Equivalents (CO2e) DEC Monthly Emissions Total (tons)2.19 2.16 1.91 1.58 1.58 0.03 0.38 15,671.00 DEC Annual Permit Limit Operations (tons)**29.78 93.52 48.16 69.72 69.72 1.45 60.90 Monthly Plant Emissions per DEC Permit Limit 7.34%2.31%3.97%2.27%2.27%1.98%0.62% Annual to Date Plant Emissions per DEC Permit Limit 59.10%19.40%35.20%23.20%23.20%19.00%6.90% * Over the past 12 months, the DEC engines ran 29% of the time. During the month of October, the DEC engines ran 28% of the time. **Operations Annual Limit accounts for Balance of Plant standard emissions Octber 2022 Engines (1-12)2, Emissions Month Revenue MWh $/MWh Oct-22 $2,959,594 30,531 $96.94 Total FY 2022-23 $2,959,594 30,531 $96.94 Generation & Gross Revenues FY 2021-22 FY 2022-23 FY 2022-23 FY 2022-23 YTD BUDGET YTD ESTIMATE DEC REVENUE 3.28$ 52.55$ 2.96$ 52.55$ EXPENDITURE SUMMARY Energy Expense - Fuel 1.89$ 37.05$ 1.55$ 37.05$ Personnel Services 0.14 2.17 0.15 2.17 Materials & Supplies - 1.70 0.05 1.70 Maintenance & Repair 0.01 0.56 0.01 0.56 Insurance - 2.24 0.01 2.24 Operations 0.03 0.36 0.03 0.36 Debt Service - Principal 0.66 8.68 0.69 8.68 Debt Service - Interest 0.78 8.62 0.75 8.62 Interfund Transfers 0.03 0.09 0.01 0.09 Transfer to Capital Projects - 0.02 - 0.02 DEC EXPENDITURES 3.54$ 61.49$ 3.25$ 61.49$ DEC NET INCOME (0.26)$ (8.94)$ (0.29)$ (8.94)$ Note: All dollar figures presented in millions. City of Denton, Texas FY 2022-23 Denton Energy Center YTD November 2022 Dashboard Key Trends For the first two months of FY 2022-23, the DEC produced 1,876 MWh less than the same time period of FY 2021-22. This resulted in approximately $794,000 less revenue and $142,000 more in total expenditures than for the same time period last fiscal year. The DEC Gross Margin as of November 30 was $2.33 million which is $674,000 higher than budgeted (Gross Margin = DEC Revenue –Fuel Cost –Variable Operating & Maintenance Cost). At this point in the fiscal year, the FY 2022-23 year-end projections are equal to the FY 2022-23 budget. Description Engine Runtime (hours)* Hot Starts Warm Starts Cold Starts Stops Description Nitrogen Oxides (NOx) Carbon Monoxide (CO) Volatile Organic Compound (VOC) Particulate Matter<10 microns (PM10) Particulate Matter<2.5 microns (PM2.5) Sulphur Dioxide (SO2) Ammonia (NH3) Carbon Dioxide Equivalents (CO2e) DEC Monthly Emissions Total (tons)2.12 2.19 2.10 1.54 1.54 0.03 0.34 15,413.00 DEC Annual Permit Limit Operations (tons)**29.78 93.52 48.16 69.72 69.72 1.45 60.90 Monthly Plant Emissions per DEC Permit Limit 7.12%2.34%4.36%2.21%2.21%2.03%55.90% Annual to Date Plant Emissions per DEC Permit Limit 66.20%21.70%39.60%25.40%25.40%21.00%7.40% * Over the past 12 months, the DEC engines ran 29% of the time. During the month of November, the DEC engines ran 26% of the time. **Operations Annual Limit accounts for Balance of Plant standard emissions Emissions November 2022 Engines (1-12)2, Month Revenue MWh $/MWh Oct-22 $2,959,594 30,531 $96.94 Nov-22 $2,430,599 30,729 $79.10 Total FY 2022-23 $5,390,193 61,260 $87.99 Generation & Gross Revenues FY 2021-22 FY 2022-23 FY 2022-23 FY 2022-23 YTD BUDGET YTD ESTIMATE DEC REVENUE 6.18$ 52.55$ 5.39$ 52.55$ EXPENDITURE SUMMARY Energy Expense - Fuel 3.14$ 37.05$ 3.02$ 37.05$ Personnel Services 0.30 2.17 0.35 2.17 Materials & Supplies 0.01 1.70 0.18 1.70 Maintenance & Repair 0.01 0.56 0.32 0.56 Insurance 0.24 2.24 0.01 2.24 Operations 0.07 0.36 0.08 0.36 Debt Service - Principal 1.32 8.68 1.38 8.68 Debt Service - Interest 1.56 8.62 1.50 8.62 Interfund Transfers 0.06 0.09 0.01 0.09 Transfer to Capital Projects - 0.02 - 0.02 DEC EXPENDITURES 6.71$ 61.49$ 6.85$ 61.49$ DEC NET INCOME (0.53)$ (8.94)$ (1.46)$ (8.94)$ Note: All dollar figures presented in millions. City of Denton, Texas FY 2022-23 Denton Energy Center YTD December 2022 Dashboard Key Trends For the first three months of FY 2022-23, the DEC produced 16,803 MWh more than the same time period of FY 2021-22. This resulted in approximately $3 million more revenue and $668,000 more in total expenditures than for the same time period last fiscal year. The DEC Gross Margin as of December 31 was $5.63 million which is $3.79 million higher than budgeted (Gross Margin = DEC Revenue –Fuel Cost –Variable Operating & Maintenance Cost). At this point in the fiscal year, the FY 2022-23 year-end projections are equal to the FY 2022-23 budget. Description Engine Runtime (hours)* Hot Starts Warm Starts Cold Starts Stops Description Nitrogen Oxides (NOx) Carbon Monoxide (CO) Volatile Organic Compound (VOC) Particulate Matter<10 microns (PM10) Particulate Matter<2.5 microns (PM2.5) Sulphur Dioxide (SO2) Ammonia (NH3) Carbon Dioxide Equivalents (CO2e) DEC Monthly Emissions Total (tons)1.83 1.88 1.54 1.42 1.42 0.02 0.36 14,422.00 DEC Annual Permit Limit Operations (tons)**29.78 93.52 48.16 69.72 69.72 1.45 60.90 Monthly Plant Emissions per DEC Permit Limit 6.16%2.01%3.20%2.04%2.04%1.70%0.60% Annual to Date Plant Emissions per DEC Permit Limit 72.40%23.70%42.80%27.40%27.40%22.70%8.00% * Over the past 12 months, the DEC engines ran 30% of the time. During the month of December, the DEC engines ran 24% of the time. **Operations Annual Limit accounts for Balance of Plant standard emissions Emissions December 2022 Engines (1-12)2, Month Revenue MWh $/MWh Oct-22 $2,959,594 30,531 $96.94 Nov-22 $2,430,599 30,729 $79.10 Dec-22 $4,822,176 29,708 $162.32 Total FY 2022-23 $10,212,369 90,968 $112.26 Generation & Gross Revenues FY 2021-22 FY 2022-23 FY 2022-23 FY 2022-23 YTD BUDGET YTD ESTIMATE DEC REVENUE 7.26$ 52.55$ 10.21$ 52.55$ EXPENDITURE SUMMARY Energy Expense - Fuel 3.59$ 37.05$ 4.51$ 37.05$ Personnel Services 0.45 2.17 0.52 2.17 Materials & Supplies 0.06 1.70 0.23 1.70 Maintenance & Repair 0.09 0.56 0.45 0.56 Insurance 0.84 2.24 0.01 2.24 Operations 0.09 0.36 0.11 0.36 Debt Service - Principal 2.01 8.68 2.12 8.68 Debt Service - Interest 2.31 8.62 2.21 8.62 Interfund Transfers 0.08 0.09 0.02 0.09 Transfer to Capital Projects - 0.02 - 0.02 DEC EXPENDITURES 9.52$ 61.49$ 10.18$ 61.49$ DEC NET INCOME (2.26)$ (8.94)$ 0.03$ (8.94)$ Note: All dollar figures presented in millions. City of Denton, Texas FY 2022-23 Denton Energy Center YTD January 2023 Dashboard Key Trends For the first four months of FY 2022-23, the DEC produced 34,667 MWh more than the same time period of FY 2021-22. This resulted in approximately $3.1 million more revenue and $885,000 more in total expenditures than for the same time period last fiscal year. The DEC Gross Margin as of January 31 was $6.36 million which is $3.33 million higher than budgeted (Gross Margin = DEC Revenue –Fuel Cost –Variable Operating & Maintenance Cost). At this point in the fiscal year, the FY 2022-23 year-end projections are equal to the FY 2022-23 budget. Description Engine Runtime (hours)* Hot Starts Warm Starts Cold Starts Stops Description Nitrogen Oxides (NOx) Carbon Monoxide (CO) Volatile Organic Compound (VOC) Particulate Matter<10 microns (PM10) Particulate Matter<2.5 microns (PM2.5) Sulphur Dioxide (SO2) Ammonia (NH3) Carbon Dioxide Equivalents (CO2e) DEC Monthly Emissions Total (tons)3,983.54 4,007.50 2,876.83 1,999.39 1,999.39 38.45 416.18 9,370.00 DEC Annual Permit Limit Operations (tons)**1.99 2.00 1.44 1.00 1.00 0.02 0.21 Monthly Plant Emissions per DEC Permit Limit 6.69%2.14%2.99%1.43%1.43%1.33%0.34% Annual to Date Plant Emissions per DEC Permit Limit 6.70%2.10%3.00%1.40%1.40%1.30%0.30% * Over the past 12 months, the DEC engines ran 30% of the time. During the month of January, the DEC engines ran 13% of the time. **Operations Annual Limit accounts for Balance of Plant standard emissions Emissions January 2023 Engines (1-12)1, Month Revenue MWh $/MWh Oct-22 $2,959,594 30,531 $96.94 Nov-22 $2,430,599 30,729 $79.10 Dec-22 $4,822,176 29,708 $162.32 Jan-23 $1,316,478 17,864 $73.70 Total FY 2022-23 $11,528,847 108,831 $105.93 Generation & Gross Revenues FY 2021-22 FY 2022-23 FY 2022-23 FY 2022-23 YTD BUDGET YTD ESTIMATE DEC REVENUE 8.44$ 52.55$ 11.53$ 52.55$ EXPENDITURE SUMMARY Energy Expense - Fuel 4.22$ 37.05$ 5.07$ 37.05$ Personnel Services 0.61 2.17 0.68 2.17 Materials & Supplies 0.19 1.70 0.28 1.70 Maintenance & Repair 0.10 0.56 0.49 0.56 Insurance 0.96 2.24 0.49 2.24 Operations 0.10 0.36 0.13 0.36 Debt Service - Principal 2.71 8.68 2.85 8.68 Debt Service - Interest 3.06 8.62 2.92 8.62 Interfund Transfers 0.10 0.09 0.03 0.09 Transfer to Capital Projects - 0.02 - 0.02 DEC EXPENDITURES 12.05$ 61.49$ 12.94$ 61.49$ DEC NET INCOME (3.61)$ (8.94)$ (1.41)$ (8.94)$ Note: All dollar figures presented in millions.