Staff proposes revised measurements now that initial targets have been met
WENATCHEE – Now that Chelan County PUD has achieved the financial targets set during strategic planning in 2010, commissioners are looking ahead to future measurements to make sure District finances remain sound through 2019 and beyond.
Chief Financial/Risk Officer Kelly Boyd, Treasurer Debbie Litchfield and Mark O’Bryan, strategic financial planning director, talked with PUD commissioners Tuesday about revised targets for the key financial measurements of liquidity, rate of return, debt ratio and debt coverage.
Reducing long-term debt remains a high priority, both for PUD customer-owners and because it improves three of the four financial measurements, Litchfield said, while maintaining strong reserves.
“Debt reduction benefits current customers by helping to maintain low electric rates,” she said, adding that the value of a $1 million drop in interest costs is roughly equal to a 2-percent rate impact.
The District accelerated debt reduction in 2013 by paying off $27 million more than the $41 million that was budgeted. Plans are to reduce long-term debt by about $80 million this year.
Litchfield said the District’s strong reserves (measured as “liquidity”) offer the continued opportunity to pay down debt ahead of forecasts in the next five years and beyond. Benefits of this approach include helping to maintain low electric rates, while offering flexibility in paying for ongoing operation costs, she said.
O’Bryan said discussions on the proposed changes to the financial policies are scheduled to continue at the April 21 board meeting. Plans are to ask commissioners to set revised measurements at the May 19 meeting.
In other business Tuesday commissioners:
- Received an update from General Manager Steve Wright on the Salmon Passage Forum hosted with Grant County PUD on Monday. Representatives from 15 state, federal and Canadian agencies and tribes came to see the work being done to make sure there is safe passage for the record number of adults expected to migrate up the Columbia River this spring despite the impacts on river levels from the spillway fracture at Wanapum Dam. Attendees toured Grant PUD’s Priest Rapids and Wanapum dams and heard their plans to trap spring Chinook at Priest Rapids and truck them upriver while modifications are made to the fish ladders at Wanapum Dam. They also toured Chelan PUD’s Rock Island Dam to see the work being done to extend three fish ladder entrances to make them accessible during varying water levels and flows. A roundtable discussion to share information and concerns followed the tours. Wright said the forum was valuable in “building relationships with people we will be working with extensively over the next few months.” There is a need for great communication, he added, which will be aided by the relationships forged Monday. “In that regard, the day was really a great success,” Wright said.
- Heard from Commissioner Norm Gutzwiler that he will not seek re-election for a third, six-year term on the PUD board. Gutzwiler joined the board in 2003 and was re-elected to represent District 1 in 2008. He will complete his current term by serving through the end of the year. (Commissioner Gutzwiler’s picture is available in the PUD’s online photo gallery.)