$52 million payment keeps District on track to meet debt ratio target a year early
Chelan County PUD commissioners Monday received the good financial news that District net debt was reduced by another $52 million this year as planned. Treasurer Debbie Litchfield reported the principal payments made July 1 put the District’s ratio of debt to equity at 38 percent and keeps the PUD on track to achieve the target of less than 35 percent by 2019 – and perhaps a year earlier if plans continue as forecast. In addition, the District continued to pay for capital improvements with cash while keeping the District in a strong financial position.
Reducing District debt was identified by customers and confirmed by commissioners as a strategic priority. By the end of this year, debt is forecast to be about $537 million, a significant reduction from several years ago when it topped $1 billion.
“Outstanding! Good job,” said Commissioner Garry Arsenault and echoed by other board members.
In other business Monday, commissioners:
- Reviewed findings of a feasibility report that points to PUD-owned property on Chumstick Road as the site for a new substation in Leavenworth that will offer customers the most reliable and cost-effective service to meet the community’s future power needs. Community members are invited to hear the study results that led to the recommendation of the Chumstick site as the PUD’s preferred alternative at Tuesday’s Leavenworth City Council meeting, 6:30 p.m. at City Hall, 700 Hwy 2.
- Continued discussions on long-term financial guidance for the PUD’s retail electric division to use for planning and forecasting after 2019, when the current strategic plan ends. Kelly Boyd, chief financial/risk officer, said updating the guidance would:
- Enable early recognition and modest rate steps over time, if needed
- Creates the opportunity to put in place smaller rate changes through time and avoid large rate changes as customers said they prefer
- Makes clear the total cost of service for retail electric customers
Boyd said the amount of District revenue needed to support retail electric operations is increasing, while District revenue is forecast to decrease due in part to declining wholesale market prices for power. Chelan PUD uses revenue from market sales to keep electric rates low for customer-owners. Board members will be asked to confirm guidance on long-term revenue planning and related metrics at the July 24 meeting.
- Heard that Benefits Manager Beverly Freeman was re-appointed to a three-year term on the state’s Select Committee on Pension Policy
- July 24 – Board meeting, 10 a.m. (rescheduled)
- July 27 – Wenatchee Valley Chamber “Business After Hours”, 4 p.m., Rocky Reach Visitor Center
- Aug. 1 – PUD at Wenatchee’s National Night Out, 6-8 p.m., Centennial Park
- Aug. 5 – PUD at Columbia Valley Community Health’s Back to School Health Fair, 9 a.m.-noon, Orondo Avenue clinic
- Aug. 7 – Board meeting, 10 a.m.
The next regular Chelan PUD commission meeting starts at 10 a.m. on Monday, July 24, 2017, in the boardroom at 327 N. Wenatchee Ave.