[11/14/16] No Rate Increase Planned For Chelan County PUD Customer Owners
Chelan County PUD meeting updates:
Chelan County PUD commissioners Monday held the first of two public meetings for review of the utility’s proposed 2017 budget that supports strategic priorities, meets financial targets and looks ahead to holding electric rates steady for the next year.
The 2017 spending plan continues investments in key District facilities and PUD employees, accelerates debt reduction to reach $52 million and continues Public Power Benefit project spending of about $4 million for next year including broadband network expansion.
The annual spending plan is based on carrying out the goals of five-year business plans presented earlier this year for each of the District’s operating units. Overall, the 2017 budget sets expenditures at $342 million, including $52 million in net debt reduction, which is about 14 percent more than 2016.
The plan forecasts ending next year with a positive bottom line of nearly $84 million, roughly the same as this year’s forecast. And, it forecasts healthy bottom line results through 2021, although those will decline over time due to lower wholesale market prices for power.
General Manager Steve Wright said it’s important to note that the District’s hedging program and prudent management are cushioning the impact of lower market prices for at least the next five years. “This five-year period looks good, beyond that, there is more concern,” he said.
The last general electric rate increase was in 2012 and no change is planned for 2017, said Mark O’Bryan, strategic financial planning director. The proposed spending plan is based on meeting all financial targets. The debt ratio would be less than 45 percent next year, well on track to meet the 2019 target of less than 35 percent.
The 2017 budget proposes spending on major capital projects of $97 million consistent with strategic priorities and compared with $77.1 million adopted for this year.
Commissioners also reviewed financial results through the third quarter of this year getting the good news that year-end positive bottom line results are forecast at about $86 million compared with the budget of $75.6 million.
Commissioners will hold a second budget hearing at the Nov. 21 meeting. Comments are encouraged and can be sent to firstname.lastname@example.org. Staff will ask the board to approve the 2017 budget at the Dec. 5 meeting.
In other business Monday, commissioners:
- Received updates on the two substation projects from John Stoll, Customer Utilities director.
- About 40 people attended the Nov. 2 Community Meeting in Leavenworth, along with substation focus group members. Staff provided an update on the three specific sites under consideration and showed preliminary drawings. A few people expressed concern about adding another transformer to the existing substation site near Alpensee Strasse. There will be another community meeting in January with more detailed drawings and comments will continue to be taken with the goal to bring a recommendation to PUD commissioners by the end of Q1 2017;
- In Chelan, another property has been identified that is owned by Washington Federal Bank near the old city golf course (two sites on that property). Chelan Mayor Mike Cooney supports District’s efforts to proceed with consideration of these potential sites. Two additional sites in Chelan Heights also are being considered. Discussion with the community continues with plans for a community meeting in January with the possibility of a recommendation to PUD commission by the end of Q1-2017.
- Heard that early forecasts show the Northwest is facing a “borderline” La Nina winter weather pattern with above-average precipitation and average temperatures. With heavy October rain, Lake Chelan inflows are the third highest in 88 years. Spill started Nov. 2 and generation is at full capacity to lower the reservoir to make room for fall and winter rains and next spring’s snow runoff. Early forecasts for Columbia River flows are 109 percent of average.
- Received an update from Brett Bickford, Engineering and Project Management director, on the progress at Rock Island on units B5 – B8. An extensive internal review on costs and proposed rehabilitation schedule shows the project remains within budget and project benefits will be realized. Resource agencies are on-board with the District’s plans.
- Held a hearing on the new six-year plan for the Wenatchee water system and set water use efficiency goals for the Wenatchee, Olalla, Dryden and Chelan Ridge systems.
- Reviewed third-quarter progress on the District’s performance plan of 183 items.