Your PUD News Release
Chelan PUD outlines stable financial approach for the future
Chelan County PUD
News Release
6/7/2010
With the goal of paying down debt, building reserves for a rainy day and avoiding large, sudden rate increases, Chelan County PUD commissioners were offered four key elements of a strategic financial plan on Monday.
The presentation by Chief Financial Officer/Chief Risk Officer John Janney was part of the PUD’s work on revising its strategic plan to build a solid foundation for reliable, sustainable services for the long-term. Commissioners will consider other parts of the strategic plan in September.
General Manager Rich Riazzi is describing the PUD’s approach to strategic planning in a letter to all customers in this month’s utility bills. He plans to send updates to customers in July and August as well.
In his presentation of financial targets, Janney explained the goal is to put the PUD on a reliable, sustainable path for the future. He said the PUD has heard in its customer research that most people want to avoid large sudden rate increases and that they would like to reduce PUD debt. Janney said future surplus power sales are still a good opportunity for the PUD to increase its rate of return and accomplish those goals.
The four goals for a solid financial future, as proposed by Janney, are:
- Increase the rate of return so assets can be replaced over time and there will be sufficient income for unexpected circumstances;
- Lower the debt ratio from approximately 75 percent to about 60 percent over time (total debt compared to total debt plus net assets);
- Increase the debt-coverage ratio to demonstrate that the PUD clearly has the resources to meet debt obligations;
- Improve financial liquidity (cash reserves and other sources) to cover risks and provide additional financial stability.
Janney summed up for the board by saying the targets and policies are designed to put the District on a reliable, sustainable path for the future. Reminding commissioners of the benefits of taking steps now to ensure reliable service and affordable rates in the future, Janney said if the District adopts these financial guidelines, the PUD’s financial position should improve over the next several years.
Commissioners will discuss the financial parts of the strategic plan again next Monday and consider a formal resolution adopting the steps at the following meeting. The rest of the strategic plan will be ready for board and public review in September, prior to budget considerations for 2011.
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The next regular commission meeting is at 1 p.m. on Monday, June 14, 2010, 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.
Steve Lachowicz
Communications director
509-661-4639, direct line
509-679-0148, cell
steve.lachowicz@chelanpud.org