Thursday, February 22, 2024

Chelan PUD celebrates reaching key financial mark

Utility assets financed by debt drops below 35 percent level


ENATCHEE – Chelan County PUD, rated as one of the financially strongest public utilities in the country, has achieved another of its goals: a debt ratio below 35 percent.

Kelly Boyd, chief financial/risk officer, and Heather Irelan, Treasury senior analyst, delivered the good news to PUD commissioners Monday. (at 00:45 on the meeting recording)

“It’s taken discipline and commitment across the District to reach this goal. Our customer-owners asked us to reduce debt and strengthen our finances. With your leadership, and the focus of all employees, we have,” Boyd said.

The target was set to be less than 35 percent by 2019. It is one of four key measures of the PUD’s financial strength. Financial results already exceed the other targets.

Chelan PUD has cut its debt nearly in half since 2010. The year-end balance is forecast at $513.5 million. Reducing debt is one of three strategic priorities, and responds to our customer-owners’ request that it be paid down.

Customers benefit from less debt that helps keeps utility rates low. It also gives the District flexibility to meet challenges such as paying for repairs of aging dam turbines and generators and managing for lower wholesale market prices, Boyd said.

Just like at home, if your mortgage is paid down it’s much easier to handle other expenses that may come up, without borrowing, she added.

 Following a round of applause, Board President Dennis Bolz thanked staff for staying focused on the target and bringing policies forward that keep the District on track to meet its financial objectives.

 “At one point the PUD’s debt was the major topic in town,” said board President Dennis Bolz. “It is a great success story and certainly worth telling.”

 Commissioner Steve McKenna said the accomplishment is inspiring and brought cake to celebrate. “To me, this is a big, big deal.”  

 In other business, commissioners:
• Reviewed comments received so far on a proposed rate for cryptocurrency and similar operations and heard from 11 people who spoke Monday. Commissioners extended the application moratorium and scheduled more discussion at the Sept. 17 board meeting. (02:05).
• Reviewed possibilities for reducing the risk of fire damage to the high-voltage lines that bring power into the Chelan-Manson area. As part of the strategic priority to invest in PUD assets, customers asked the PUD to look at replacing or rerouting transmission lines at high risk from fire and storms. A study shows the two lines, which run side by side for 3.5 miles from Chelan Falls to Chelan, are in a high-risk fire zone. Steve Wickel, Transmission engineering manager, outlined possible approaches for “hardening” the line by replacing wood poles with steel. Staff plans to talk with the community before putting a project in the 2019 budget. (01:08)
•  Reviewed previously evaluated options for the strategic facilities plan that show the best long-term value is in a combined operations, service center and headquarters building at a location north of the Wenatchee River Bridge. Commissioners asked for the review after hearing concerns at their last meeting from a community member about the PUD leaving downtown Wenatchee. (01:40)  
• Accepted the proposal of Lydig Construction, Spokane Valley, for General Contractor/Construction Manager services for facilities improvements to support hydro operations at Rock Island and Rocky Reach dams. The cost is not to exceed $220,000 for this first step to finish design and negotiate a guaranteed maximum price for the construction projects. Staff will return to the board for approval to move ahead with construction, based on that price. (03:03)
• Heard that whitewater boating is suspended this year due to the unstable slope above Reach 2 in the Chelan Gorge. (01:50)
• Received an update on federal legislation that PUD staff is closely watching to provide additional protection for salmon returning to Columbia River spawning areas from predator sea lions. The bill is set for a vote this month in the U.S. Senate and action is coming in the House.

Upcoming events:
• Sept. 4 – Commission meeting, 10 a.m., boardroom (rescheduled due to Labor Day)
• Sept. 14-15 – Fiestas Mexicanas, Lincoln Park, Wenatchee
• Sept. 17 – Commission meeting, 10 a.m., boardroom, moratorium discussion at 1 p.m.
• Oct. 1-6 – Public Power Week
• Oct. 1 – Commission meeting, 10 a.m., boardroom
• Oct. 5 – Public Power Week customer-owner Thank YOU!, 10-2 p.m., treats in office lobbies
• Oct. 6 – Hydropower Celebration, 10 a.m.-1 p.m., Pybus Public Market, Wenatchee.


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