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2022-064 DEC June and July 2022 DashboardOctober 14, 2022 Report No. 2022-064 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: FY 2021-22 Denton Energy Center (DEC) YTD June 2022 Dashboard and July 2022 Dashboard BACKGROUND: The FY 2021-22 DEC June 2022 Dashboard and FY 2021-22 DEC July 2022 Dashboard are attached. The data below reflects the FY 2021-22 DEC YTD July 2022 Dashboard. The dashboard is intended to give a snapshot of relevant DEC metrics. The dashboards highlight the following: • The Emission Charts (based on calendar year) display the July engine runtime hours, starts, stops, monthly and annual emissions totals and limits. • DEC MWh Generation and Gross Revenue for FY 2021-22 through July 2022 • A DEC financial summary showing July FY 2021-22 Actuals, FY 2021-22 Budget, Actuals as of July 2022 and the FY 2021-22 end of year projections. • The Plant Monthly Run Hour Comparison Graph illustrates the monthly plant run times. • The Key Trends section explains variances in revenues and expenses. o The DEC produced 121,000 MWh more than the same time period of FY 2020-21. However, due to Winter Storm Uri in February 2021, revenues through July 2022 were approximately $87.0 million less and fuel costs were $9.2 million less than for the same time period last fiscal year. o The 2021-22 year-end estimate was updated to reflect a $39.9 million increase in revenue, a $11.8 million increase in fuel cost, and a $1.7 million increase in insurance. o These updates result in a $25.3 million increase in DEC net income when compared to budget. o The net income for the DEC through July equals $8.22 million. o The DEC Gross Margin as of July 31 was $28.9 million which is $24.9 million higher than budgeted for October through July. (The Gross Margin = DEC Revenue – Fuel cost –Variable Operating & Maintenance cost.) Gross Margin represents the component of revenue available to pay fixed cost including debt. ATTACHMENT(S): Denton Energy Center (DEC) Dashboard – June 2022 Denton Energy Center (DEC) Dashboard – July 2022 STAFF CONTACTS: Cassey Ogden, Chief Financial Officer cassandra.ogden@cityofdenton.com Nick Vincent, Assistant Director of Finance nicholas.vincent@cityofdenton.com City of Denton, Texas FY 2021-22 Denton Energy Center YTD June 2022 DashboardKey TrendsFor the first nine months of FY 2021‐22, the DEC produced 79,253 MWh more than the same time period of FY 2020‐21. However, due to Winter Storm Uri in February 2021, revenues through June 2022 were approximately $102.2 million less and fuel costs were $12.6 million less than for the same time period last fiscal year.  As a result of higher gas prices and high temperatures, the FY 2021‐22 year‐end estimate has again been updated.  The current year‐end estimate compared to the original budget reflects a $39.9 million increase in revenue, an $11.8 million increase in fuel costs, and a $1.7 million increase in insurance. These updates result in a $25.3 million increase in DEC net income when compared to budget.The DEC Gross Margin as of June 30 was $15.1 million which is $12.7 million higher than budgeted for  October through June.  (Gross Margin = DEC Revenue – Fuel Cost –Variable Operating & Maintenance Cost).DescriptionEngine Runtime (hours)*Hot StartsWarm StartsCold Starts StopsDescriptionNitrogen 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) 1.71             1.77             2.02             2.15             2.15             0.04             0.58             35,853.00   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 Limit5.73% 1.89% 4.19% 3.08% 3.08% 2.44% 0.96%Annual to Date Plant Emissions per DEC Permit Limit 35.30% 11.50%19.40% 11.60% 11.60% 9.70% 3.20%* Over the past 12 months, the DEC engines ran 25% of the time.  During the month of June, the DEC engines ran 45% of the time.**Operations Annual Limit accounts for Balance of Plant standard emissionsEmissionsJune 2022Engines (1‐12)3,904       224       33         199       456      MonthRevenue MWh $/MWhOct‐21 $3,283,392 36,361 $90.30Nov‐21$2,900,79026,776 $108.34Dec‐21$1,073,88311,028 $97.37Jan‐22$1,183,26814,651 $80.77Feb‐22$3,902,69515,172 $257.23Mar‐22$1,645,57714,850 $110.81Apr‐22$2,565,58620,630 $124.36May‐22$6,511,99932,234 $202.02Jun‐22$5,399,85857,964 $93.16Total FY 2021‐22 $28,467,046229,665 $123.95Generation & Gross RevenuesFY 2020‐21 FY 2021‐22 FY 2021‐22 FY 2021‐22ACTUALSBUDGET YTD ESTIMATEDEC REVENUE 130.69$       21.29$          28.47$         61.20$            EXPENDITURE SUMMARYEnergy Expense ‐ Fuel25.75$         12.75$         13.16$          24.50$             Personnel Services1.38              1.80              1.46              1.81                 Materials & Supplies0.12              1.70              0.56              2.89                 Maintenance & Repair0.33              0.56              0.40              0.56                 Insurance1.19              1.81              3.11              3.47                 Operations 0.52              0.33              0.25              0.33                 Debt Service ‐ Principal5.88              8.26              6.18              8.26                 Debt Service ‐ Interest7.09              9.04              6.79              9.04                 Interfund Transfers0.18              0.26              0.20              0.27                 Transfer to Capital Projects‐                    ‐                    ‐                     ‐                        DEC EXPENDITURES42.44$         36.51$         32.11$         51.13$            DEC NET INCOME88.25$         (15.22)$       (3.64)$          10.07$            Note:  All dollar figures presented in millions. City of Denton, Texas FY 2021-22 Denton Energy Center YTD July 2022 DashboardKey TrendsFor the first ten months of FY 2021‐22, the DEC produced 121,000 MWh more than the same time period of FY 2020‐21. However, due to Winter Storm Uri in February 2021, revenues through July 2022 were approximately $87.0 million less and fuel costs were $9.2 million less than for the same time period last fiscal year.  As a result of higher gas prices and high temperatures, the FY 2021‐22 year‐end estimate was updated.  The current year‐end estimate compared to the original budget reflects a $39.9 million increase in revenue, an $11.8 million increase in fuel costs, and a $1.7 million increase in insurance. These updates result in a $25.3 million increase in DEC net income when compared to budget.The DEC Gross Margin as of July 31 was $28.9 million which is $24.9 million higher than budgeted for  October through July.  (Gross Margin = DEC Revenue – Fuel Cost –Variable Operating & Maintenance Cost).MonthRevenue MWh $/MWhOct‐21 $3,283,392 36,361 $90.30Nov‐21 $2,900,790 26,776 $108.34Dec‐21 $1,073,883 11,028 $97.37Jan‐22 $1,183,268 14,651 $80.77Feb‐22 $3,902,695 15,172 $257.23Mar‐22 $1,645,577 14,850 $110.81Apr‐22 $2,565,586 20,630 $124.36May‐22 $6,511,999 32,234 $202.02Jun‐22 $5,399,858 57,964 $93.16Jul‐22 $18,419,548 71,998 $255.84Total FY 2021‐22 $46,886,594 301,662 $155.43Generation & Gross RevenuesDescriptionEngine Runtime (hours)*Hot StartsWarm StartsCold Starts StopsDescriptionNitrogen Oxides (NOx)Carbon Monoxide (CO)Volatile Organic Compound (VOC)Particulate Matter<10 microns (PM10)Particulate Matter<2.5 microns (PM2.5)Sulphur Dioxide (SO2)Ammonia (NH3)Carbon Dioxide Equivalents (CO2e)DEC Monthly Emissions Total (tons) 1.50             1.74             1.85             2.13             2.13             0.03             0.62             35,502.00   DEC Annual Permit Limit Operations (tons)**29.78           93.52           48.16           69.72           69.72          1.45             60.90          Monthly Plant Emissions per DEC Permit Limit5.04% 1.86% 3.83% 3.06% 3.06% 2.37% 1.02%Annual to Date Plant Emissions per DEC Permit Limit 40.30% 13.30%23.20% 14.60% 14.60% 12.00% 4.20%* Over the past 12 months, the DEC engines ran 26% of the time.  During the month of June, the DEC engines ran 44% of the time.**Operations Annual Limit accounts for Balance of Plant standard emissionsEmissionsJuly 2022Engines (1‐12)3,972       424       37         30         491      FY 2020‐21 FY 2021‐22 FY 2021‐22 FY 2021‐22ACTUALSBUDGET YTD ESTIMATEDEC REVENUE 133.88$       21.29$          46.89$          61.20$            EXPENDITURE SUMMARYEnergy Expense ‐ Fuel 26.87$          12.75$         17.72$          24.50$             Personnel Services1.51              1.80              1.63              1.81                 Materials & Supplies0.13              1.70              0.69              2.89                 Maintenance & Repair0.35              0.56              0.50              0.56                 Insurance1.20              1.81              3.23              3.47                 Operations 0.62              0.33              0.27              0.33                 Debt Service ‐ Principal6.53              8.26              6.87              8.26                 Debt Service ‐ Interest7.87              9.04              7.54              9.04                 Interfund Transfers0.20              0.26              0.22              0.27                 Transfer to Capital Projects‐                    ‐                    ‐                     ‐                        DEC EXPENDITURES45.28$         36.51$         38.67$         51.13$            DEC NET INCOME88.60$         (15.22)$       8.22$            10.07$            Note:  All dollar figures presented in millions.