Revenue Planning During COVID-19 and Beyond

Published January 25, 2021 By Peggy Maranan, CPA, MBA, Ph.D. Manager, Financial Accounting LCEC

Originally Published in The Cooperative Accountant, Winter 2020 Issue

Introduction

The pandemic has brought overall economic slowdown and changes in social patterns resulting from impacts due to the SARSCoV-2 virus (COVID-19). This is making it more difficult for electric cooperatives to project future revenue patterns, and challenging to forecast future financial outcomes. This article discusses trends in revenue forecasting for the electric utility industry, and offers some guidance in revenue projection and planning.

National Trends

The National Rural Electric Cooperative Association (NRECA) has earlier this year estimated the following:

Economic disruptions related to the pandemic will drive electric co-op sales down by 6.1% in 2020, 6% in 2021, and 3% in 2022, for an average loss of 5% over the period when compared to pre-COVID-19 projections, according to NRECA estimates. This loss of electric load will slash co-op sales revenue by $7.4 billion, while a surge in unemployment, combined with a moratorium on disconnections, will drive up unpaid electric bills to $2.6 billion through 2022.

To read this full article, visit nsacoop.org/publications/tca or NSAC Connect