Your PUD
News Release
Wastewater system finances discussed
Chelan County PUD
News Release
5/14/2007
After a short presentation on PUD wastewater service history, staff discussed with commissioners the costs to operate and maintain the PUD’s three wastewater systems and offered three possible approaches to closing the growing gap between expenses and revenues.
The review was part of the ongoing strategic planning process that will lead to policy decisions by PUD commissioners in the next month setting the financial direction of the utility through 2012. Commissioners will be asked to make those decisions on June 11 at the fourth community strategic planning session.
The PUD entered the wastewater business in 1977 and now serves about 450 customers, at Lake Wenatchee, Peshastin and Dryden, said Dave Johnson, Water and Wastewater director.
Challenges facing the wastewater systems include growing expenses for operations and maintenance, regulatory pressures and capacity issues. “We’re operating an urban system in a rural setting,” said Johnson.
There is also a need to work with Chelan County more closely on issues that affect the systems and their customers.
General Manager Rich Riazzi presented three approaches to closing the financial operating gap, along the same lines of options discussed earlier for the electric system, water system and the wholesale fiber network:
- Continuing to rely on wholesale electricity revenue – which is what the PUD does now - to cover operating gaps, but at the risk of surcharges when volatile wholesale revenues are low. Average wastewater rates would stay at about $64 a month.
- Relying just on wastewater rates with increases of 20 percent a year, starting this year, and average rates going from $86 to $178 a month over five years.
- Taking a balanced approach, with wastewater rate increases of 9 percent a year through 2012, and using $2 million from reserves as a one-time cash infusion.
PUD revenues up; Riazzi cautious about volatility
Joe Jarvis, chief financial officer, reported to commissioners Monday that PUD assets are $9.6 million greater than budgeted after the first three months of the year. Revenues are up primarily due to wholesale power sales that have been better than expected.
“We got lucky this year,” cautioned General Manager Rich Riazzi, “and from a financial prudency standpoint, it’s not always a good idea to run your business on luck.”
Executive Manager of Energy Resources Randy Lowe reported that wholesale power sales were $12.4 million as of March 31, $10.3 million ahead of budget projections. Lowe warned, however, that power prices have been lower recently and remain volatile, as do other energy sources including crude oil and natural gas. The 2007 budget forecasts $35.3 million in wholesale revenues for the year.
The financial update included a few expenses that are over budget, specifically January wind storm damages of about $2 million.
In other business, PUD commissioners:
- Met with customer-owners from Plain, Coles Corner and the ChumstickValley, who presented petitions with more than 300 names and requested a study of a second transmission line to serve the area. Weather-related power outages have hit the area hard in past years, and a new transmission line could provide more reliability. The PUD proposed adding a transmission line to serve the area in 2001, but residents rejected the plan.
- Heard that the PUD has contracted with NOANet as a trusted third party in compliance with the Communications Assistance for Law Enforcement Act of 1994 (CALEA). CALEA allows law enforcement agencies, with proper legal documentation, to access data. The contract with NoaNet provides for a one-time $1,000 charge, and a $350 monthly service charge for an initial term of three years.
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The next regular meeting of the PUD commission is at 10 a.m. on Monday, May 21. Note the early start.
PUD commissioners have set special meetings for noon to 1:30 p.m. on the following dates:
- Tuesday, May 15, at the Warm Springs Inn, to attend the Monitor Water System Task Force meeting
- Wednesday, May 16, at the Wenatchee Roaster, to attend the Medical Customer Partnership Group meeting
- Thursday, May 17, at the Wenatchee Roaster, to attend the Wenatchee Customer Partnership Group meeting
- Commissioners have set more special meetings for May through July to attend customer partnership group meetings.
Commissioners will also meet with Chelan County commissioners on Tuesday, May 22, from 1-3 p.m., to discuss issues of joint concern. They will meet in the county commission chambers at the Courthouse, 350 Orondo Ave., in Wenatchee.
Most PUD commission meetings are recorded, and a link to the audio is available on the PUD’s home page at http://www.chelanpud.org/.
Christy Shearer
Communications Audio-visual Specialist
Chelan County PUD
509.661.4258 office
509.421.4258 cell
509.661.8133 fax
christy.shearer@chelanpud.org