The management team of the North Little Rock Electric Company provided its input on the recently released 2013 audit of its department performed by EGP PLLC Certified Public Accountants & Consultants of North Little Rock.
“NLRED remains committed to providing safe and reliable services in an efficient, cost effective and prompt manger,” according to the management team’s analysis of the audit. “Currently, NLRED is Arkansas’ largest municipal electric utility, providing reliable service to residential, commercial and industrial customers in the cities of North Little Rock, Sherwood and Pulaski County.”
In 2013, there were 38,373 customers in a territory totaling 60 square miles. The average outage lasted 39 minutes, according to the management team.
A significant amount of focus was made in 2013 on the Murray Hydro plant.
“In January of 2013, the future of Murray Hydro was uncertain,” stated the management team. “Unit 2 was not operational. Contaminated oil had severely damaged internal components. The draft tube was scarred and pitted. The costs of repair were unknown. After exploring various alternatives, Unit 2 was sufficiently repaired to return to service and competitive bids were sought for major overhaul. This strategy proved more successful than anticipated.”
Restructured debt and favorable water flow combined for the first profitable year of Murray Hydro ownership.
“At less than $5 million, the major overhaul of Unit 2 was cost effective and manageable within cash reserves. The work is slated for 2014. Also, the new seal systems that were completed in 2013 will save approximately $500,000 in annual routine maintenance costs.”
The management team added that high debt payments and maintenance costs have caused many to question the wisdom of the Murray Hydro project.
“This year marked the turning point in that debate,” reported the team. “Our community began to enjoy real economic value for the millions of invested dollars – and see the clear path to greater economic value in the future. Properly maintained, Murray Hydro will provide inexpensive renewable energy to this community for generations.”
The management team also pointed out that NLRED was able to secure a long-term contact with the city of Sherwood.
“At times, the relationship between the two cities has been rocky. Nevertheless, near the end of 2012, the city councils of North Little Rock and Sherwood agreed to enter a 22-year franchise agreement for the provision of electric service. Unfortunately, this successful negotiation was short-lived. A group of dissatisfied Sherwood citizens circulated petitions to refer the franchise agreement to a public vote.”
North Little Rock benefited from the efforts of several Sherwood citizens who campaigned on the value of a partnership with NLRED.
“The Electric Department used direct mail, advertisement, and a telephone-based town hall meeting to share a message of reliability, declining rates and fair partnership between the two cities,” according to the management team.
In May 2013, Sherwood voters chose NLRED by a 2-1 margin.
“The new franchise agreement now serves as a foundation for ever-improving relationships between North Little Rock and Sherwood,” according to the management team.