Your PUD
News Release
Budget hearing: 2008 on track for strategic planning goals
Chelan County PUD
News Release
11/26/2007
PUD staff shared with commissioners the latest look at the proposed 2008 budget Monday, showing a 2-percent reduction in overall spending compared with the 2007 budget.
The $297 million spending plan holds increases in next year’s operation, maintenance and tax expense to 3.7 percent over 2007 projected results, below the target of 5.3 percent. It also reflects 5-percent electric and 9-percent water and sewer rate increases. Nine new positions are included to meet needs in specific departments, but overall full-time regular employees are down from 751.3 (FTEs) this year to 743.2.
Early water supply forecasts and market volatility require staff to plan for wholesale power sales revenues that could range from $33 million to $77 million in 2008. At this point, an average water year is expected.
Capital spending is targeted at $97.3 million, slightly below this year’s $98 million. Large projects will include ongoing modernization at Rock Island and Lake Chelan dams.
Budget Manager T.J. Farrell noted challenges faced next year, including costs of putting the new Lake Chelan Hydro license into place and the new license for Rocky Reach, which is expected to be approved in 2008. Other spending will cover repairs needed for aging electric and water systems, hatcheries, parks and equipment at the dams, and increases in the cost of fuel, steel and copper.
Director of Strategic Financial Planning Kelly Boyd also walked commissioners through forecasts of PUD finances through 2012. Strategic planning sessions completed earlier this year led to 2008 budget targets, which, as a whole, were met. “2008 is on track,” said Boyd. Forecasts for 2009-2011 show the PUD will still be vulnerable and will have to rely on surplus power sales to cover financial gaps.
The budget discussion began Monday with a proposal to save the PUD money and lower risk by restructuring internal debt and transferring funds to a rate-stabilization fund. That fund can be used to help avoid surcharges on customer bills in years with less water flows or low power prices.
Staff will ask commissioners to approve the 2008 spending plan at the Dec. 3 meeting.
In other business, PUD commissioners:
- Heard from PUD External Affairs staff on efforts to help shape public policy and anticipate emerging issues and trends related to legislation and regulations affecting the utility. On the radar now are climate change policy and regulations, renewable portfolio standards (RPS), conservation requirements, state procurement statutes, federal fish recovery plans and treatment of hatchery populations, water quality compliance, and regional transmission planning and integration of renewable resources.
- Heard from General Counsel Carol Wardell that the PUD has been dismissed from a $10-million lawsuit brought by Michael Ryan Pattison, who was injured in a May 2005 swimming accident at Don Morse Park in Chelan.
- Moved the start time of the Dec. 10 commission meeting to 9:30 a.m. to conduct regular business in the board room. The meeting will continue at 1:30 p.m. with Chelan County commissioners in the Chelan County Chambers.
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The next regular meeting of the PUD commission is at 9 a.m. on Monday, Dec. 3, in the boardroom at PUD headquarters, 327 N. Wenatchee Ave., to discuss a proposed power-sales contract with Alcoa. Regular business will start at 1 p.m.
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