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pudStaff 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: