Draft budget foresees positive bottom line results, with no electric rate increase
Chelan County PUD’s 2019 budget proposes continued investments at the dams, in substations and technology; paying down debt by another $41 million and no electric rate increase for the seventh year in a row. (at 02:00 on the board audio recording)
PUD commissioners reviewed the preliminary budget figures at a hearing on Monday. Next year’s spending plan is based on five-year business plans and supports strategic priorities to:
- Invest in employees and assets
- Keep the debt-to-equity ratio below 35 percent
- Continue the Public Power Benefit program
The draft 2019 plan includes continued, significant investments in capital projects of about $153 million, an increase from last year and perhaps the largest annual investment in the hydro projects and facilities since original construction, said Craig Kunz, strategic financial planning manager. Some projects originally planned for 2018 were delayed and are now set for 2019, contributing to the higher total.
The top projects include (see attached graphic):
- Modernizing cranes and hydro units at Rock Island Dam
- Upgrading warehouse, work space and crew buildings at Rock Island and Rocky Reach dams
- Continuing large unit repairs at Rocky Reach
- Building new substations to meet growth
- Installing a new Customer Information System to offer customers more ways to manage their utility accounts
Chelan PUD expects to end 2019 with a budgeted positive bottom line of $78 million, up from this year’s budget of $72 million. Expenditures of $403 million include paying down debt by another $41 million and the major investments at the dams and in the power grid to serve forecasted growth in the county. Total 2019 spending and debt reduction are about 10 percent more than the 2018 budget.
Continued expansion of the fiber network and day use passes for PUD parks operated by the state remain as part of the Public Power Benefit program in the proposed 2019 budget, Kunz said.
Commissioners also reviewed positive financial results through this year’s third quarter, which puts the District in a strong position heading into next year. (00:47)
The better-than-budget results so far in 2018 are the combination of higher electric revenues, lower overall operations and maintenance expenses and Alcoa surplus proceeds, said Mark Mullins, Enterprise Risk Planning director. Forecasts call for the PUD to end this year with a $99-million positive bottom line, about $27 million more than budget.
A second hearing to gather comment on the proposed 2019 budget is set for Nov. 19. Staff will seek commission approval for the budget on Dec 3.
Before the budget discussion, commissioners received an update on Rock Island Dam projects. Dan Garrison, Hydro Operations director, and Brett Bickford, Engineering and Project Management director, recapped accomplishments (00:13) and lessons learned so far during rehab of units in the first powerhouse (00:23). Challenges with additional repairs for those units have led to delays in 2018 and likely will increase costs, Bickford said. He also reviewed a revised schedule for finishing the work.
In other business, commissioners:
- Reviewed the presentation on proposed rates for cryptocurrency mining operations that staff will present at Wednesday’s information meeting at 5:30 p.m. at Confluence Technology Center. (02:40)
- Heard an update on the North Mid-Columbia Joint Transmission project and concurred with staff’s recommendation to move ahead on the 9-mile line with BPA and Grant and Douglas PUDs to reduce regional transmission congestion and provide capacity for growth. (01:09)
- Reviewed progress on the District’s performance plan through the third quarter of 2018. The PUD is on track to finish about 73 percent of the work planned by the end of the year. Response to cryptocurrency issues took focus away planned work, but there is an end in sight with proposed new rates set for board action by the end of the year, said General Manager Steve Wright. (01:21)
- Celebrated the news that Corporate Communications Manager Suzanne Hartman is the 2018 recipient of the Jay Rockey Lifetime Achievement Award from the Public Relations Society of America, Pacific Northwest chapter. Hartman was named to the national PRSA College of Fellows earlier this year.
- Set special meetings for 5:30 p.m. on Nov. 13 to meet with Mid-C PUD managers and board members at Tijuana’s Restaurant, 709 1st Ave. S.E., Quincy; and at 1 p.m. on Nov. 20 for the Tri-Commission meeting at Chelan County offices, 400 Douglas St., Wenatchee.
- Nov. 7 – Cryptocurrency rate information meeting, 5:30 .m., Confluence Technology Center
- Nov. 12 – Offices closed for Veterans Day (observed)
- Nov. 14 – Careers After School, Line Operations, PUD HQ
- Nov. 19 – Cryptocurrency rate & moratorium hearing, 1 p.m., PUD board room
- Nov. 20 – Tri-Commission meeting, 1 p.m., Chelan County commission offices, 400 Douglas St., Wenatchee
- Nov. 22 – Thanksgiving holiday, offices closed
- Dec. 3 – Cryptocurrency rate and 2019 budget resolutions
- Dec. 14 - Fiesta Decembrina, 8-10 p.m., Wenatchee Valley Chamber Visitor Center
The next regular PUD commission meeting is at 10 a.m. on Monday, Nov. 19, in the boardroom at 327 N. Wenatchee Ave.
Chelan PUD records most commission meetings, and a link to the audio is available on the PUD’s home page at www.chelanpud.org. Find us on Facebook.com/ChelanPUD and follow us on Twitter @ChelanPUD.
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