Chelan PUD Gets Good Financial Review

At Monday's Chelan PUD Board meeting, it was time for a 1st quarter financial review for Commissioners.

Chelan PUD reported in a press release that Kelly Boyd, PUD chief financial/risk officer told the board the higher electric revenue due to colder weather and lower than expected costs resulted in positive a bottom line, $6.5 million better than budgeted for the first quarter of 2017.  Boyd said based on first-quarter results, the District is forecasting to finish the year with positive bottom line results of $93.5 million, about $8 million better than budget. That forecast includes the current modernization of hydro units and debt reduction of an additional $52 million this year.

Janet Jaspers, Energy Planning and Trading manager, also reported net wholesale revenue from power sales is about $2 million ahead of budget. Jaspers said the forecast for Columbia River flow through July is 128 percent of average.

Boyd told Commissioners the district is on track to achieve a debt ratio target of less than 35 percent by 2019, as well as all other financial objectives. Boyd noted, however, that long-term, bottom line results are forecast to decline to about $44 million a year by 2021 as market prices for power are moving lower. Reserves are forecasted to be lower, but still strong, when the PUD plans to use cash to reduce debt and pay for major projects.

With the favorable outlook, Boyd recommended staying the course on the District’s strategic priorities of reinvesting in core assets and people, debt reduction and continuing the Public Power Benefit program as funds allow. PUD commissioners also reviewed the Public Power Benefit program that uses revenue that is already earned and available after all District financial metrics have been met for projects to enhance the quality of life in Chelan County.  Based on 2016’s strong financial results, staff recommends continuing the program with $4 million for 2018 projects, but not expanding it given forecasts for the long-term decline in the bottom line.  Commissioners will consider a funding decision and projects at the June 5 board meeting.

In other business Monday, commissioners reviewed the conversations held so far with more than 400 customer-owners on advanced two-way digital metering. Andrew Wendell, Customer Service director, said PUD staff has held 18 community meetings to provide information and answer questions about potential use of the meters. Information also was sent to more than 33,000 customer-owners. Wendell told Commissioners response has been mostly supportive of the new technology and see value in the ability to monitor their power use, faster response to power outages and reduce PUD operating costs. Wendell said customers opposed to the technology cited health, data and network security and fire risk concerns and those customers strongly support an opt-out policy. Commissioners will be asked for a decision on proceeding with plans for the new meters at the June 5 meeting.

PUD staff also updated the board on the search for a new substation site on the north shore of Lake Chelan that has narrowed to areas near the load center and north of the Chelan-Wapato transmission line. For the Leavenworth location, the staff endorsed making the preferred alternative a recently acquired property along Chumstick Highway.