Customers have their own ways of telling whether the PUD is doing the right things:
We operate this public utility with all those things in mind – and a lot more. When you stop and think about it, it’s what our customers want and expect. We aim to provide the services people desire for the most efficient cost.
Being successful at all these things takes planning and looking ahead. It requires that we at the PUD set targets – based on what our customers tell us is most important to them – and then do our best to meet those goals.
We’ve been hard at work these past few years on planning and looking ahead – putting our plans to good use -- and 2012 is another year where that is a major focus. We’re moving into the next steps on the Strategic Plan that our Board of Commissioners endorsed in 2010. I don’t expect customers to remember all the details (you can review the plan on our website if you wish), but when people ask me how we are doing, I tell them this: The plan is working, and we are on track to meet our overall PUD targets.
The plan calls for us to “ensure financial stability” by managing costs, managing risks, increasing revenue, improving efficiency and determining priorities for key projects and programs – all geared toward meeting our customers’ expectations.
I am happy to report that for 2011, after two years of shortfalls, PUD finances were in the black. We’ve made terrific progress in implementing a hedging program to stabilize revenues from the sale of surplus power from our hydro projects. This program promises to lessen the impacts of year-to-year snowpack and stream flow variations and swings in wholesale power prices. With a more stable source of revenue going forward, we expect to achieve the Board’s key financial policy targets in our Strategic Plan – including a reduction in outstanding debt of roughly 30 percent by 2016, which, given the scope and scale of our operations, puts us more in line with comparable highly rated peer utilities and ahead of the targets in the Strategic Plan. In addition, we are mindful of the need to maintain sufficient cash reserves to cover anticipated risks and maintain stability through times of economic turbulence.
Our plan is also on track in three other core areas:
This year we are adding a second layer to the plan – places we can get deeper into the details and make the PUD more efficient, more sustainable and more resilient in meeting challenges for the long term. This will entail taking a detailed look at each of the PUD’s business lines – electric, water, wastewater and fiber – with an eye toward achieving financial stability for each over time.
For each of our key functions, we will develop detailed five-year business plans with key measures to gauge progress in meeting the objectives that are important to our customers. By comparing our performance and results to other high-performing utilities and monitoring our results over time, we will be better able to know where we are performing well and where we need to improve.
You are going to hear more from me about our strategic planning as we move through the year. It affects the other major decisions we are making about the fiber-optic system, water and sewer rates, building new substations and transmission lines for reliability, and meeting our natural resources obligations for hatcheries and habitat.
You can find the details on our website whenever you need to look at them, and we are happy to receive questions or comments. It helps us improve over time.