Change in Net Assets

Today, the Commercial Appeal ran a story on the bad debt MLGW wrote off in 2008 (MLGW writes off $15.3 million in bad debt). There has been some discussion in the comments section about MLGW's "Change in Net Assets" which the reporter equated to a profit.

To be clear, any surplus at the end of the year is used to mitigate the size and timing of future rate increases. It also shows a prudence in controlling costs and judiciously utilizing any excess, so it should be looked upon as a good thing. All of our dollars are rate payer dollars and used for the operations of MLGW to provide cost effective utilities for our customers.

To make all things relative, our monthly power cost payments to TVA averaged $70 million during 2008, over twice that of our "Change in Net Assets" for the year. Said another way, our year-end Change in Net Assets would not pay for even half of one month's payment to TVA.