Chelan County PUD commissioners Monday got the good financial news that the utility ended 2016 with bottom line results that were $20 million more than budget for the year. The strong results mean the District is able to invest in major upgrades at Rocky Reach and Rock Island dams without borrowing or raising rates in 2017.
A combination of higher revenues and fewer expenses were the main reasons for the $95.7 million bottom line results, said Chief Financial/Risk Officer Kelly Boyd. The PUD also ended the year with $483 million in cash, $46 million more than budget.
The results exceeded District’s financial targets including debt ratio, now at 42.8 percent (target was less than 50 percent) and on track to be less than 35 percent next year – a year earlier than the current goal, Boyd said.
Last year also was the fifth straight year without a general electric rate increase, Boyd said. Chelan PUD’s residential rate is 3.2 cents per kilowatt hour. The state average is 9.1 cents/kWh and the national average is 12.7 cents/kWh.
Boyd said forecasts show bottom-line results going down to about $85 million this year and to about $50 million by 2020, emphasizing that prudent long-term financial planning is important.
In other business Monday, commissioners:
- Approved a wholesale broadband rate package that will simplify rates and better match costs with the network use that drives them. The new rates also encourage retail service providers – by giving them added flexibility - to offer low-cost internet access for their customers who use less bandwidth and for those who can’t afford standard packages.
- Approved moving ahead with design and engineering to replace two vital communications systems. ADCOMM Engineering, which studied project feasibility under a $140,000 contract, was retained to design and engineer replacement for the microwave and two-way radio systems for $810,000. The total cost of these upgrades will be in the range of $9 million. Other alternatives were evaluated and were determined not to meet PUD needs.
- Ratified a one-year agreement with Local 77 of International Brotherhood of Electrical Workers that represents about 400 PUD craft employees. Lorna Klemanski, Human Resources, Labor and Safety managing director, said the agreement includes a 3-percent general wage increase. It is effective April 1, 2017-March 31, 2018. Klemanski said the parties collaborated on a one-year agreement due to uncertainty over impacts to health benefits under the Affordable Care Act.
- Heard that benefits likely exceed costs to install advanced two-way metering and meter data management systems. Dale Pennington of UtiliWorks outlined the findings of the in-depth study. A key next step will be to engage the community before a late April decision whether to implement this technology.
- Rescheduled the Feb. 7 board workshop to 9 a.m. on March 30 due to weather.
- Invited customer-owners and community members to meetings on Feb. 15 and 16 to learn more about the proposed recreation area along the Columbia River south of the Odabashian Bridge and to help decide a name for it.
- Feb. 13 – Leavenworth substation meeting, 6-8 p.m., Leavenworth City Hall
- Feb. 15 – Odabashian property meeting, 6 p.m., PUD Wenatchee Auditorium
- Feb. 16 – Odabashian property meeting, 6 p.m., Douglas County Public Works Auditorium
- Feb. 20 – Presidents Day holiday
- Feb. 21 – Board meeting, 9 a.m. (note earlier start & being Tuesday due to Presidents Day holiday)
- Feb. 22 – Chelan substation meeting, 6-8 p.m., Chelan City Hall
- March 6 – Board meeting, 10 a.m.
- March 20 – Board meeting, 10 a.m.
- March 30 – Board workshop, 9 a.m., Wenatchee boardroom (rescheduled from Feb. 7)
The next regular Chelan PUD commission meeting starts at 9 a.m. Tuesday, Feb. 21, 2017, in the boardroom at 327 N. Wenatchee Ave.