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Chelan County PUD expecting another stressed budget year in 2010
Mon, Sep 28, 2009

Chelan County PUD expecting another stressed budget year in 2010

Chelan County PUD
News Release
9/28/2009

Although the price of wholesale surplus power is expected to improve slightly next year, Chelan County PUD still expects to have a stressed year financially that could result in another decline for the bottom line in 2010. The PUD expects to remain in “preservation mode,” holding the line tightly on costs and delaying any spending that can wait a few years.

Commissioners were told Monday that it’s too early to tell whether another surcharge or rate increase will be requested. There are too many unknowns at this point.

The budget continues an existing 9-percent electric-bill surcharge through April 2010 and then implements new conservation-incentive rates for the rest of the year among other changes. Those redesigned rates that cost high energy users more were approved in 2008, but were put on hold due to this year’s surcharge. If customers use the same amount of power in the future, the PUD would see a 2.5-percent overall increase in revenue per year, even though bills would go down for many customers who use less power.

Kelly Boyd, director of the Strategic Financial Planning Division, walked commissioners through the preliminary schedule that will culminate with board action on a final budget by Dec. 7. A preliminary budget is planned to be presented Oct. 26, but some commissioners said they may be absent, and the date may have to change.

While not knowing how much snow will accumulate in the mountains and what the price of wholesale power will be next year, first estimates show a wide range of possible wholesale revenues between $69 million and $34million. That translates to a potential increase in net assets for the PUD’s Utility Services of $10 million all the way to a loss of $27 million. The decline in net assets this year is forecast to be $18 million to $20 million.

Major capital projects for the PUD in 2010 include continued modernization of Rock Island Dam ($20 million), finishing modernization at the Lake Chelan Project ($9 million), upgrading parts of the local electric system ($7 million) and continuing in-fill of fiber-optic services in areas already served ($5 million).

No new bond issues are expected in 2010, but finance staff said existing bonds could be refinanced if conditions were favorable to save the PUD money.

In other business, commissioners:

Scheduled three special meetings for Customer Partnership Groups:

Wenatchee, noon to 1:30 p.m., Oct. 21, Roaster at Coast Wenatchee Center
Peshastin-Dryden, noon to 1:30 p.m., Icicle Ridge Winery, Peshastin
Leavenworth, noon – 1:30 p.m., Icicle Inn, Leavenworth

***

The next regular commission meeting is at 1 p.m. on Monday, Oct. 5, 2009, in the PUD boardroom at 327 N. Wenatchee Ave.
Most PUD commission meetings are recorded, and a link to the audio is available on the PUD’s home page at www.chelanpud.org.

Steve Lachowicz
Communications director
509-661-4639, direct line
509-679-0148, cell
steve.lachowicz@chelanpud.org

Link to board meeting.

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