Your PUD
News Release
PUD commissioners hear choices for District’s financial future
Chelan County PUD
News Release
3/19/2007
General Manager Rich Riazzi outlined for PUD commissioners on Monday three possible approaches to Chelan County PUD’s finances for the next five years.
The presentation was made at the third in a series of community strategic planning sessions held at the Confluence Technology Center. The approaches included detailed analysis of the impacts from choices ranging from raising electric, water and sewer rates to slowing the fiber build-out and what effect the choices would have on key financial measurements through 2012.
Riazzi said he welcomed the chance to discuss the choices with PUD commissioners and the community.
“We think we have heard some clear preferences expressed (at earlier meetings),” he said. “We will now choose wisely based on the best information, the best analysis and the best input from our customer-owners.
“As a result, the PUD’s financial future will be more certain, and we will be able to serve the community better as it changes.”
About 100 people attended Monday’s meeting.
At earlier strategic meetings, Riazzi reviewed the PUD’s financial past and looked at forecasts for the future. He discussed gaps in revenue that have developed and how those gaps will likely grow if the PUD continues to rely so heavily on revenue from surplus wholesale power sales.
The action plans presented Monday reflected different approaches to managing risk. The plans were developed based on assumptions about possible policy decisions PUD commissioners could make and the financial impacts that would result. The plans are:
- Continuing to rely heavily on wholesale revenue – which is what the PUD does now - to cover revenue gaps but which will result in greater financial uncertainty and higher risk for the PUD.
- Relying more on retail rates – less risky for the District but which will require higher rates.
- Taking a balanced approach – with limited risk and moderate electric rate increases from 5 percent to 9 percent a year, along with other impacts.
Riazzi said aligning policy and action is critical. Managers will watch indicators such as operating ratio, debt coverage ratio, cash reserves, debt levels and cash flow volatility to monitor the impact of future decisions.
Comments from the public included questions about PUD finances after 2012 when long-term contracts for power produced at Rocky Reach and Rock Island dams expire; support for continuing the fiber network build-out; concern about line extension costs; and a request for uniform rate increases so businesses can plan for them.
Industrial customer representatives, from a group working with the PUD on possible rate changes for large power users, presented a set of principles for discussion and will provide more details at a future board meeting.
PUD commissioners will discuss the aspects of each plan in detail at study sessions in April. Commissioners will be asked to decide on an approach at a fourth strategic session in mid-May.
A recording of Monday’s meeting is available on the PUD Web site, www.chelanpud.org, along with the slide presentation. Recordings and slides from the earlier meetings are also posted on the PUD’s Web site.
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The next regular meeting of the PUD commission is at 10 a.m. on Monday, March 26, 2007, at the Rocky Reach Visitor Center. The business session will continue at 1 p.m. in the boardroom at PUD headquarters, 327 N. Wenatchee Ave., including the public hearing on proposed increases in electric, water and sewer connection fees.
Most PUD commission meetings are recorded, and a link to the audio is available on the PUD’s home page at www.chelanpud.org.
Kimberlee Craig
Public Information Officer
661-4320, direct line
679-6858, cell
kimc@chelanpud.org