By Alyssa Schnugg
News editor
The Oxford Board of Aldermen reviewed the Oxford Utilities $26M+ budget Tuesday for the Fiscal Year 2024 with OU-ED Superintendent Rob Neely.
The Board will vote on the proposed budget next week during their regular board meeting. Since Oxford Utilities’ fiscal year runs from July 1 to June 30, it is approved separately by the Board before the remaining city budgets are approved. The fiscal year for the other city departments runs Oct. 1 through Sept. 30.
Department heads and the Mayor’s office have begun the budget process for the FY 2023-2024 year.
In the proposed budget, OED estimated total spending of $26,136,085, offset by expected revenues of $$26,136,585.
The electric department’s largest expense is purchased power from the Tennessee Valley Authority. More than 78% — or about $20 million — of OU-ED’s revenues go toward paying TVA for energy.
“The greatest challenge when preparing an annual budget is projecting electric sales revenue and purchased power expense,” Neely said. “I spend a considerable amount of time preparing estimates for FY2024’s energy costs, which causes the expenses and income of OU-ED to rise and fall.”
Total operating expenses are projected to increase slightly (3.1%) when compared to the
projected FY2023 budget figures.
“This is mostly due to TVA discontinuing the pandemic relief credit, which will likely end on September 30, 2023,” Neely said. “FY2024 revenues are conservatively projected to decrease slightly compared to projected FY2023 figures, with a reduction of approximately 2% in revenue for the same reason.
OU-ED’s purchased power cost is expected to increase slightly in FY2024 unless TVA extends the Pandemic Relief Credit.
In FY 2023, TVA announced that there would be no wholesale rate increase for 2023 and
that they anticipated flat rates for a period of seven years. OU will not be requesting any local rate action for FY2024.
“After Winter Storm Elliott it has become evident that TVA will need to add generation capacity in the near future,” Neely said. “That could affect their ability to hold wholesale rates flat.”
As of March 31, Oxford Utilities provides electric service to 10,199 electric customers (8,204 residential, 1,680 small commercial, 229 medium commercials, one large commercial, 19 street and athletic customers and 66 lighting installations).
This is a 1.7% increase in electric customers over the calendar year.
Oxford Utilities provides this service through three substations and over 100 miles of primary electric line. The average residential electric usage for FY2023 is approximately 966 kWh per month, a 2% increase compared to FY2022.
Oxford Utilities also serves 14,512 water, 12,697 sewer and provides billing and customer service to 13,969 sanitation customers.
