Today, Delta-Montrose Electric Association (DMEA) announced its 2020 financial and operating results, showing significant improvement following its new power contract with a subsidiary of Guzman Energy (Guzman).
Strongest Financial Results Since 2014
DMEA’s 2020 adjusted net operating margins exceeded $4.3 million, more than double its adjusted net operating margins in 2019 and its best performance since 2014. DMEA’s operating margins reflect a significant decrease in operating expenses due primarily to reduced wholesale power supply costs.
DMEA withdrew from its previous power contract with Tri-State Generation & Transmission (Tri-State) in June of 2020 and subsequently entered into its current power contract with Guzman. As a result, DMEA’s power costs decreased by more than $2.7 million compared to 2019 despite relatively equal kilowatt hour (kWh) purchases. DMEA’s savings, which were realized during the first six months of its contract with Guzman, are net of all related expenses and exceeded annual capital credits typically received by DMEA from Tri-State in recent years.
“We attribute DMEA’s strong financial performance to a supportive Board of Directors, loyal business partners, and dedicated employees,” said DMEA’s Board President, Bill Patterson. “We are grateful to serve DMEA’s members and we consider these excellent financial results to be a huge victory for our members.”
Improved Outlook
DMEA has also made advancements in ensuring future stability to its power supply and costs. Its contract with the Guzman subsidiary, whose debt bears an A credit rating, guarantees stable power prices for years to come. Further, due to its financial strength in 2020, DMEA was able to defer $5 million of its revenue in 2020, up from $3 million in 2019, to help guard against future rate increases.
DMEA continues to successfully execute on its rate stability initiative as rates remain unchanged since exiting its power contract with Tri-State and below the state average for distribution co-ops.
“We are pleased to have achieved such a significant milestone in 2020, and we are reaffirming our expectation to deliver stable pricing into the foreseeable future,” said Patterson.
Operational Growth and Success
DMEA’s financial results showed remarkable resilience in 2020 during a challenging year for the community that included the COVID-19 pandemic, layoffs, and significant local business closures.
DMEA will host its virtual annual meeting at 3:00 p.m. on Thursday, June 17.