Your PUD
News Release
Strategies for water system finances discussed
Chelan County PUD
News Release
5/9/2007
Three possible approaches to closing the growing gap between expenses and revenue for the PUD’s four water systems were outlined Wednesday for commissioners.
The review was part of the ongoing strategic planning process that will lead to policy decisions by PUD commissioners for setting the financial direction of the utility through 2012. Commissioners will be asked to make those decisions on June 11 at the fourth community strategic planning session.
The PUD entered the water business in 1974 and now serves about 5,100 customers, most of them in areas surrounding Wenatchee including Sunnyslope, Squilchuck and south and west of town, said Dave Johnson, water and wastewater director.
It also provides water for the PUD’s Eastbank Hatchery, a critical component of the environmental obligations in licenses to operate the District’s dams.
PUD water customers are in suburban and rural areas, with higher service costs and lower density. System demand is growing at about 4 percent a year. Johnson said the PUD will need to find additional water supplies by 2025.
General Manager Rich Riazzi presented three approaches to closing the financial operating gap, along the same lines of options discussed earlier for the electric system and the wholesale fiber network:
- Continuing to rely on wholesale electricity revenue – which is what the PUD does now - to cover operating gaps, but at the risk of surcharges when volatile wholesale revenues are low and increased impact on the District’s overall financial health. Average water rates would stay at about $53 a month.
- Relying just on water rates with increases of 9 percent a year, starting this year, and average rates going from $60 to $85 a month over five years, which would still leave a $16 million cash deficit.
- Taking a balanced approach, with water rate increases of 9 percent a year through 2012, and using $21 million from reserves to reduce the cash deficit to $10 million at the end of five years.
In response to a question, Riazzi said he could not recommend that the PUD get out of water service. Commissioner Werner Janssen asked if electric rate increases could be avoided if the PUD left the water business.
No, Riazzi responded. “We would still have a problem on the power side that needs to be addressed.”
A financial review of the PUD’s sewer systems is planned for next Monday’s board meeting.
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PUD commissioners set a special meeting for noon to 1:30 p.m. on Thursday, May 10, at the Icicle Inn, 505 State Highway 2, to attend the Leavenworth Customer Partnership Group meeting. Commissioners have set eight more special meetings for May through July to attend customer partnership group meetings. Click here for a list of the meetings, which is posted on the PUD Web site.
The next regular meeting of the PUD commission is at 1 p.m. on Monday, May 14, in the 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 http://www.chelanpud.org/.
Kimberlee Craig
Public Information Officer
509-661-4320, direct line
509-679-6858, cell
kimc@chelanpud.org