Your PUD PUD News Line

11/29/2006

Work begins to prepare for possible surcharge

PUD commissioners have given staff the go-ahead to start planning for a possible electric rate surcharge to increase revenue next year if the PUD is faced with a significant drop in its wholesale power sales revenue from a low-water year. Commissioners made it clear that their action was not a decision to approve a surcharge. That decision would come no earlier than mid-February 2007, and only if snowpack and runoff estimates continue to be below normal.

The board asked staff to look at a flat percentage surcharge on all electric bills before taxes.

The utility is expecting runoff of about 84 percent of average for 2007, netting $35.9 million in wholesale revenue. This year, the water supply was 102 percent of average, netting a projected $58.1 million. The projected drop in wholesale revenue could also affect the PUD’s debt-coverage ratio, which the PUD would like to keep at 1.75 to assure a continued AA bond rating.

A timeline proposed Monday by General Manager Rich Riazzi calls for public meetings to be held in early January in Wenatchee, Chelan and Leavenworth before a formal hearing later that month. The board would not be asked to make a final decision on a surcharge until Feb. 12, which then would be put into place by March 1 and expire no later than Dec. 31.

New 50-year license in place for Lake Chelan Hydro Project
While commissioners accepted the new license, they also decided to ask federal regulators to take another look at three issues that were changed from a previous settlement agreement -- cost caps on recreation improvements, considering project boundaries and requiring whitewater boaters to have liability insurance before kayaking the Chelan Gorge.

Though a rehearing has been requested, the PUD will begin putting the license issued on Nov. 6 into place, including work on new fish habitat below the powerhouse and changes to the dam to provide year-round flow in the Chelan River.

The license contains requirements for operating the 48-megawatt Lake Chelan Project that are estimated to cost Chelan County PUD approximately $53 million over the next 50 years, including provisions for a year-round minimum flow in the Chelan River, maintaining existing parks, regulating lake levels, fish habitat enhancements in the Chelan River, adding a trail that improves access to the Chelan River, and a variety of other actions.

For more information on the relicensing process click here. To see the FERC license order, click here.