Your PUD
News Release
Commissioners discuss 2008 spending plan
Chelan County PUD
News Release
10/29/2007
PUD staff gave commissioners details on the proposed 2008 budget Monday. The spending plan holds next year’s operation, maintenance and tax expense increases to 3.7 percent over 2007 projected results and reflects 5-percent electric and 9-percent water and sewer rate increases.
Early water supply forecasts and market volatility require staff to plan for wholesale power sales revenues that could range from $32 million to $78 million in 2008.
Capital spending is budgeted for $105.7 million. Budget Manager T.J. Farrell noted challenges faced in planning for next year, including:
- Costs of putting the new Lake Chelan Hydro license into place, plus the new license for Rocky Reach expected to be approved in 2008
- Repairs needed for aging electric and water systems, hatcheries, parks and equipment at the dams
- Increases in health care and pension benefits; increases in the cost of fuel, steel and copper
- The impact of fewer contractors bidding on projects
- Wholesale revenue volatility
Director of Strategic Financial Planning Kelly Boyd walked commissioners through charts showing how PUD finances are forecast through 2012.
“For 2008 we’re on track,” said Boyd, “…but we’re still reliant on those wholesale sales to fill the gaps, and those are still volatile.”
The District is expected to end 2007 with about $250 million in cash reserves, but the 2007 balance could change depending on results of debt and contingency planning. Cash reserves are expected to decrease over the next three years as they are used for capital expenses and overall utility operations.
Total debt outstanding is expected to decrease about $13 million next year.
Commissioners will host a public budget hearing on Nov. 26, and staff will ask for approval of the 2008 spending plan at the Dec. 3 meeting.
In other business, PUD commissioners:
- Added a rate for higher-speed services over the PUD’s wholesale fiber-optic system.
- Extended the closing date for the purchase of the city of Cashmere’s electric system six months, to June 30, 2008. Commissioners also extended a PUD feasibility study 90 days, to the end of January.
- Adopted a memorandum of understanding, statement of values and guiding principles as part of an effort to get Chelan County PUD, Chelan County and the Port of the Chelan County together to talk about planning and improve the cost-effectiveness of collaborative projects.
- Set a special meeting for 5:30 p.m. on Nov. 5 at the Confluence Technology Center to discuss the proposed power sales contract with Alcoa.
- Moved the start time of the Nov. 19 Commission meeting to 9 a.m. in the Wenatchee Headquarters boardroom to discuss the proposed power sales contract with Alcoa. Regular business will begin at 1 p.m.
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Commissioners will hold a special meeting at noon on Thursday, Nov. 1, at Cashmere's Walnut Cafe to meet with members of the Cashmere Customer Partnership Group.
The next regular meeting of the PUD commission is at 1 p.m. on Monday, Nov. 5, in the boardroom at PUD headquarters, 327 N. Wenatchee Ave. A special meeting will start that evening at 5:30 p.m. at the Confluence Technology Center to discuss a potential Alcoa power-sales contract.
Most PUD commission meetings are recorded, and a link to the audio is available on the PUD’s home page at 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