For Great River Energy and its member cooperatives, 2016 will go down as a great year, financially speaking.
Great River Energy recorded a margin of $38.4 million and deferred $12 million of revenue for future use. Without the deferral Great River Energy’s margin would have been $50.4 million, more than double its budgeted margin of $23.0 million.
“The strong margin was largely driven by operations and maintenance savings,” said Great River Energy Vice President and Chief Financial Officer Larry Schmid. Great River Energy’s operations and maintenance spending was $23.6 million below budget – a direct contribution to the margin.
Midwest AgEnergy Group (MAG) also had a strong financial year. MAG contributed $4.9 million to the margin, most of which occurred in the fourth quarter.
The 2016 power cost adjustment (PCA) was a credit to members of $7.5 million. The positive PCA is the result of favorable variances in wholesale power and fuel costs. The strong performance of our power supply portfolio, especially power plant performance and the overall interaction in the MISO market, were major drivers of the positive PCA.
“Positive results in both the PCA and margin are a win-win for our members and for Great River Energy,” added Schmid.