Chelan PUD 2024 Budget Projected To Have $125 Million Surplus
Next year's budget for the Chelan County PUD will go before a vote of PUD commissioners next week.
The budget is forecast to have a surplus of $125 million, which is about 22% higher than the budget adopted last year.
That figure reflects the increasing value of hydropower in the energy market, where Chelan PUD sells about 80% of the energy it generates. Sales of excess power is projected to generate about $297 million in 2024.
It also includes Service Revenue of about $137 million, which comes electricity sold to county residents as well as services such as water, wastewater and fiber. As well, there's Other Operating Revenue of almost $29 million and Non–Operating Activity generating almost $6 million.
Also figuring into the bottom line of the $125 million surplus are operating expenses, which are projected to cost the PUD almost $264 million, and taxes estimated to be slightly more than $80 million.
The budget includes a spending plan totaling more than $523 million, which covers capital expenses, debt payments, principal payments, interest payments and operating expenses, according to Chelan PUD manager of strategic financial planning David Nelson.
PUD spokesperson Rachel Hansen says it includes money to pay for major upgrades at both the Rocky Reach and Rock Island Dams.
"That's what we're dedicating a good part of our capital budget on right now, is reinvesting in those dams to make sure that they service well for many years to come."
About $218 million of the budget is going to pay for capital projects, such as Rock Island Dam modernization, including multiple generating units at Powerhouse I and Powerhouse II (nearly $87 million).
It’s also being used on equipment upgrades and refurbishment at Rocky Reach dam, including replacement of a large gantry crane -nearly $17 million - which also includes $4 million for the Chelan Falls Hatchery Abatement Pond.
In addition, there’s $14 million to finish out construction work at the PUD's new $165 million headquarters at Olds Station.
There's also $9 million to help pay for two new power substations in Leavenworth and Chelan.
“The Bavarian Substation and the North Shore Substation,” Hansen said. “And those two are to help with reliability to accommodate growth and to ensure that we have enough capacity systemwide to handle any kind of growth or emergencies, that sort of thing.”
The Bavarian Substation project is getting $7 million in 2024 (Total project $11 Million), while there’s $2 million set aside for the North Shore Chelan Substation $2 million (Total project $3 Million).
Another major capital project is the Jumpoff Ridge Switchyard, which is getting $36 million next year (Customer funded total project $86 million).
The budget also includes $10 million for Public Power Benefit projects, including the continuation of fiber expansion, parks improvements and preparing the Fifth Street campus for redevelopment.
The PUD says it's reaching is financial policy thresholds as well.
It's liquidity target is $175 Million and is calculated to be roughly $245 Million in 2024. Liquidity is cash not tied up or restricted in any way.
The PUD's target debt ratio is under 35 percent, while the ratio is forecast to be 13.1 percent in 2024. Debt ratio measures the amount of leverage used by a company of total debt against total assets.
The combined cover is a measure of how much income adjusted to meet debt service covers debt service requirements. Next year's budget projects income available to cover debt payments to be double the debt payment requirements.
The budget also projects the PUD will have cash on hand in 2024 to last in excess of 250 days (about 8 months).