Your PUD News Release
Updated 2009 budget still tight
Chelan County PUD
News Release
11/24/2008
PUD commissioners Monday reviewed an updated 2009 spending plan that reflects a further drop in expected revenues from wholesale power sales, but shows a slight improvement from earlier estimates in year-end Utility Services net assets.
TJ Farrell, budget manager, told commissioners that Utility Services net assets are now predicted to drop about $3.1 million, compared with figures from a few weeks ago that forecast a decline of $3.8 million. Change in net assets for the PUD is a financial measure similar to net income or loss for a private company.
“It’s an improvement, but we’re still in the red,” said Farrell.
The draft 2009 budget puts controllable operations and maintenance spending at $153.4 million, and it includes a portion of an overall increase of 2.5 percent in electric revenues, 6.9 percent for water revenue and 6.5 percent for sewer, based on a new rate structure effective in April. The total budget is estimated at $331 million, but that is likely to change by Dec. 1, when commissioners will hold a hearing on the final spending plan.
If the PUD has a normal year for snowpack and power prices, there should be no need for an electric power surcharge to customers. If conditions do become unusually low, a surcharge could be around 10.5 percent.
Wholesale power sales revenue is projected at around $50 million in 2009, slightly higher than the $47 million now predicted for the total at the end of this year but down significantly from the 2007 total of $63.9 million.
Capital spending for 2009 is forecast at $92.9 million, which is also below an original target of $106.3 million. Treasurer Debbie Litchfield explained that rather than trying to market long-term bonds right now or issue more short-term financial notes in these tight credit markets, the PUD received permission from power purchasers to use accumulated reserves from Rocky Reach to pay back about $45 million to the PUD’s own consolidated system. That repaid money will then be loaned for big capital projects at Rock Island Dam and at Lake Chelan.
In addition, the timing on some capital projects has been shifted to put more work in 2011-2013 instead of doing it earlier.
“We’re in a strong financial position,” said Kelly Boyd, financial planning director. “We’re still on the path where we want to go.
“If things continue as expected, there won’t be a surcharge. If there is that unexpected case, we have contingency plans.”
Commissioners will be asked to approve the 2009 budget on Dec. 15.
In other business, commissioners:
- Were asked to consider holding evening public meetings starting in January to keep customer-owners updated on changing financial and water supply conditions. “In these uncertain times…we’re trying to err on the side of providing as much information as possible,” said General Manager Rich Riazzi. No dates were set.
- Heard an update on conservation programs for 2009 and beyond from Customer Service Director John Stoll as the PUD prepares to meet requirements of Initiative 937. The PUD must have programs in place by December 2009, when the law calls for utilities to hold a hearing on conservation measures.
- Approved water system efficiency goals as required by state law for the small water systems operated by the PUD at Dryden, Ollala Canyon, Chelan Ridge and Chelan Falls.
- Approved a resolution which adds options for the PUD in selling the environmental attributes of its renewable hydropower.
- Reviewed proposed changes to the resolution spelling out how the District responds to requests to form local utility districts (LUDs). Commissioners will consider acting on the changes next week.
- Canceled the Dec. 22 commission meeting.
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The next regular commission meeting is at 11 a.m. on Monday, Dec. 1, 2008, in the PUD boardroom at 327 N. Wenatchee Ave.
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
509-661-4320, direct line
509-679-6858, cell
kimberlee.craig@chelanpud.org