Your PUD News Release

PUD financial picture improves; still down for year

Chelan County PUD
News Release
8/2/2010

By trimming spending and taking advantage of high-than-expected recent river flows, Chelan County PUD has improved its overall financial outlook for the year by about $4 million from the previous forecast, commissioners were told in a quarterly financial update Monday afternoon.

Instead of seeing a projected loss of about $27 million for the year, the projected number is now down to about $23 million. The shortfall is covered by PUD unrestricted cash reserves, which now stand at about $190 million. When the 2010 budget was adopted last December, the 2010 change in utility services net assets was forecast between $6 million positive and $32 million negative, depending on water supply, power prices, interest rates and other influences.

Kelly Boyd, director of Strategic Financial Planning, told PUD commissioners Monday she was more comfortable forecasting a shortfall of between $20-$25 million rather than landing on a precise number. ‘There is still a lot of time left in the year,” she said, “and things could change.”

A report from Energy Planning and Trading Manager Janet Jaspers showed that water runoff forecasts have bumped up to about 77 percent of average for the Columbia River at Grand Coulee Dam, from a previous forecast of 67 percent. Lake Chelan’s runoff forecast has gone from 83 percent up to 101 percent of average, but much of that water had to be spilled because of modernization work on one of the two turbines in the Chelan Falls powerhouse.

Despite the additional water lately, the first few months of the year were abnormally dry. Jaspers showed that the amount of surplus power available for sale has only been 49 percent of what was budgeted, and the revenue resulting from power sales (due to low prices) has only amounted to 53 percent of budget.

In an effort to stabilize revenues in the future and provide a more stable financial foundation, the PUD has begun selling power at auction for several years into the future. Sales for 2012-2013 have gone well, said Gregg Carrington, managing director of Energy Resources. The first four-year slice auction is taking place over the next few weeks.

In other action Monday, commissioners:

• Got to look at the updated draft plan for having adequate power supplies for the next 10 years (the Integrated Resource Plan). It shows adequate power supply to meet local load and to allow for continuing surplus power sales in the future. It estimates the potential increase in peak load from electric vehicles at no more than two megawatts, based on the calculation that no more than 4,500 plug-in hybrid electric vehicles would be in use in Chelan County by 2020. The PUD has an average production of about 1,000 megawatts at any one time.

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The next regular commission meeting is at 1 p.m. on Monday, Aug. 9, in the PUD boardroom at 327 N. Wenatchee Ave. Commissioners have also scheduled a special meeting to begin at 10 a.m. Tuesday, Aug. 3, at the PUD boardroom to continue discussing how to name the next general manager.
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