Your PUD Strategic Planning Guiding Principles

At the strategic planning session June 11, 2007, guiding principles, governing policies and staff actions as read into the record by general counsel and amended by commissioners were adopted as follows:

Guiding Principles:

  1. We can best serve our customers by providing multiple utility services and utility infrastructure improvements
  2. We should implement annual financial plans to achieve a combined (as a whole) positive “Change in Net Assets” (positive bottom line)
  3. As a whole, we should manage rates to cover operating costs as measured by an acceptable operating ratio
  4. A surcharge is an appropriate way to manage risk and volatility if necessary
  5. Utility Services cash reserves should be available to fund the capital needs of any District utility service
  6. Cost control and efficiencies should be a component of annual financial plans
  7. Debt should be managed within established parameters

Governing Policies:

  1. Utility services should be provided as an integrated utility service provider for electricity, water, wastewater, and networks
  2. Utility services overall operating ratio should be 80%-100% by 2011 at a 50% confidence level
  3. Annual financial plans for utility services should target a combined positive “Change in Net Assets” (bottom line) by 2011 at a 50% confidence level
  4. The potential surcharge should be limited to 14% at a 90% confidence level (and  0% at a 50% confidence) to meet a 1.25 debt coverage requirement
  5. Capacity reservation funds should be available to all utility systems to cover internal commitments and capital funding requirements to 2012 (Electric $53M, Wastewater $2M, Water $21M and Networks $18M)

Staff Actions for Financial Plans:

  1. Proceed with the Networks business line using the current build with emphasis on deployment in rural and remote areas
  2. Proceed with the Water business line using the balanced strategy
  3. Proceed with the Wastewater business line using the  balanced strategy
  4. Proceed with the Retail Electric business line using the balanced strategy
  5. Initiate the public process required for rate increases (revenue requirement) in the recommended amounts of 5% for Electric, 9% for Water, 9% for Wastewater and the embedded 2% for Networks to be effective January 1, 2008 and to be applied equally to all rate classes. In addition, next steps include the following actions:
    1. Develop and implement a plan to perform a cost of service study for 2009
    2. Utilize information gathered from cost of service study to develop a rate design recommendation for 2009 and future years
    3. Review low income and disabled ratepayer discounts in conjunction with rate design