Your PUD PUD News Line

9/27/2006

Payback on fiber-optics could take longer

General Manager Rich Riazzi and John Smith, PUD Networks director, recently outlined factors affecting construction costs and the payback period for the PUD’s wholesale fiber-optics communications network. Riazzi said the analysis of the fiber system is part of the overall look at District finances he and the board have launched for the community strategic planning meetings.

PUD commissioners in December 2002 authorized construction of the system to reach 55 percent of the county by 2012. A 2004 decision was made to accelerate construction to reach 95 percent of the county by 2012. Access to the Internet, telephone and television services over PUD fiber is now available to 17,500 homes and businesses. There are 4,250 end-users buying services from 14 private service providers.

Construction costs have been higher than forecast since 2004 in part because many high-demand neighborhoods are served by power lines buried directly in the ground and not in conduit, Smith said. That has required trenching and boring to install fiber lines, increasing costs.

The plan approved in 2004 estimated the system would be cash-flow positive by 2013 and pay for itself by 2026. Updated information now puts the cash-flow positive date in 2018 and payback in 2037. Total investment in the fiber system is forecast at $140 million.

Riazzi said he and the Networks team will look at ways to increase revenue and cut costs to bring the plan closer to original estimates. Possibilities include using wireless technology to bring access to high-cost and rural areas and seeking other wholesale customers for video services provided by the PUD.

Learn more about the fiber network.

PUD sets 2007 budget targets

Targets, timelines and some of the challenges involved in balancing the PUD’s 2007 spending plan were discussed with commissioners on Monday.

The budget is being developed with a goal of holding increases in operation and maintenance costs to 5 percent over 2006, said TJ Farrell, budget supervisor. Finding the balance between that goal and rising material and fuel costs, increasing health care benefit costs and offering competitive salaries is the challenge, she said.

Other goals for next year’s budget include setting cash reserves at a minimum of $75 million, maintaining the District’s AA bond rating and keeping a strong debt coverage ratio.PUD commissioners will see a draft of the 2007 budget on Oct. 30. The final budget will be presented on Dec. 4, and approval requested on Dec. 11. Public input is welcomed.

More money will go to wind, solar producers

Commissioners have approved a program to redirect PUD money paid in state utility taxes instead into the pockets of local people who produce alternative energy from sources such as wind and solar. Under a new state program the move will make about $9,000 more available this year to be shared among the producers in the PUD’s SNAP program (Sustainable Natural Alternative Power). If the program grows, the maximum payout would be $92,500. Commissioners also approved offering SNAP producers an option to use net metering, which would allow them to use the power they generate for their own home and get a credit on their power bill.

Check for fiber availability

Residents of Chelan County can now find out in seconds if they are in a fiber-optic build zone. Click on the map to access the PUD’s fiber-optics mapping feature.