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Power sales contract approved

Chelan County PUD
News Release
1/30/2006

PUD commissioners Monday approved a 20-year power sales contract with Puget Sound Energy (PSE) on a 4-1 vote. Commissioner Werner Janssen voted against the contract and read a statement listing nine points of concern, including not negotiating with public utilities first.

The existing contracts expire by 2012.

The other four commissioners noted their support for the contract. Under the new contract, PSE will receive 25 percent of the power output from Rocky Reach and Rock Island dams through 2031 in exchange for paying 25 percent of the costs. PUD General Counsel Carol Wardell noted the new contract will maintain local control for Chelan County PUD and provide long-term financial stability.

Commission President Gary Montague thanked the negotiating team, noting that the contract process started more than eight years ago with commissioners giving direction for potential negotiations.

“It’s a very good contract,” said Commissioner Norm Gutzwiler. “I think this is the right thing for Chelan County.”

Commissioner Ann Congdon, who called in to the meeting, said the contract is “critical” because of volatility in the power markets. “I’m very pleased,” she said.

Commissioner Bob Boyd thanked the PUD and PSE staff who worked through the contract. Boyd also thanked past commissioners who paved the way for today’s actions, including Jean Ludwick, who attended the meeting to support the agreement.

The contract will allow the PUD to pay down debt and pay for some future capital improvements at the dams without borrowing. PSE will provide an $89 million payment within 30 days of the contract’s approval by the Federal Energy Regulatory Commission.

Commissioners also approved a related transmission agreement and agreed that both contracts will serve as templates for future power sales contracts.

Commissioners affirm support for hydropower as a renewable resource
Commissioners Monday continued discussions on state legislation with Governmental Affairs Director Andrew Munro. He reported on an initiative filed to require a renewable portfolio standard (RPS) of 15 percent of a utility’s load be renewable “green” power by 2020. Efficiencies gained by modernizing existing hydro facilities would count under the proposed initiative, but large hydropower generation is not included as renewable energy.

PUD commissioners then voted on a motion to declare that “existing hydroelectric generation is a renewable resource.” Washington state power generation is 70 percent hydropower.

The motion will be sent the Washington PUDs Association, which meets later this week to discuss the topic.

In other business, commissioners:

• Received positive preliminary 2005 year-end financials from Chief Financial Officer Joe Jarvis. Jarvis reported that:

Distribution net revenues were $19.5 million, with $5.1 million budgeted

Distribution reserves were $110.9 million, in contrast with $90.5 at the end of 2004.

The cost to produce power was $16.20 per megawatt hour, versus $16.70 for 2004

Water/Wastewater net revenues were $218,000, the first time the water system has had positive net revenues.

Networks net revenues were $100,000 more than budgeted for the year

Capital costs were $59.1 million, with $72.3 budgeted

• Approved a contract not to exceed $125,000 with Columbia Research, Chelan, to long-line fish as part of the PUD’s pikeminnow control program in the Rocky Reach and Rock Island reservoirs. Long-line fishing uses 200-foot lines with 200 hooks that are dropped to the riverbed and left overnight. In 2005, 19,000 pikeminnow, predators of young salmon and steelhead, were caught in less than two months. PUD biologists report that the control program is effective, as the size of the pikeminnow is decreasing each year, showing that the larger fish, the biggest predators of young salmon, are being caught.
• Approved a no cost, 25-year right-of-way agreement with the city of Leavenworth for installation, operation and maintenance of the PUD’s wholesale fiber-optic system. Similar agreements were approved in 2005 for Entiat, Chelan, Wenatchee, Cashmere and Chelan County. 

*** 

The next regular meeting of the PUD commission will start at 1 p.m., Monday, Feb. 6, in the boardroom of the Headquarters Building, 327 N. Wenatchee Ave.

Most PUD commission meetings are recorded and a link to the audio is available on the PUD’s Web site, www.chelanpud.org.

Christy Shearer
Communications Audio-visual Specialist
(509) 661-4258
(509) 421-4258 cell
christy.shearer@chelanpud.org