Your PUD
News Release
Second new unit for Chelan powerhouse could go in this year
Chelan County PUD
News Release
5/18/2009
Installing a second new turbine-generator at the Lake Chelan Hydro Project will likely start this year, rather than be delayed, as it will save the PUD money in the long run, increase generating capacity sooner and reduce the risk of a mechanical breakdown.
New 29.4-megawatt units are replacing two 24-megawatt turbine-generators in the historic powerhouse at Chelan Falls. Installation of the first unit started in March and will be finished in September.
Staff recommended installing the second unit sooner during an update Monday for PUD commissioners on the modernization project.
“The quicker we act, the less risk we absorb and the more revenue we gain,” said Dan Garrison, director of the Rocky Reach and Lake Chelan hydro projects. “From a project point of view, it’s best to accelerate.”
As part of ongoing efforts to cut costs, Garrison and John Sagerser, project manager, looked at three alternatives: installing the second unit next year as originally planned, delaying the work until 2012, or starting in November this year since the mechanical parts are already being manufactured.
The PUD had thought of postponing the work until 2012 to save on spending during tight financial times, but that would have increased the overall cost and would have added the risk that something might break down before the work could be finished in three more years.
Getting the second unit online faster will increase revenue sooner. It will require spending about $5.7 million more this year, but reduce spending in 2010. The overall project cost will be the same, about $45 million. The additional capital needed sooner will come from an upcoming bond sale.
Commissioners will be asked to approve contract changes and the request for additional bond funding in two weeks.
Rating agencies review PUD finances
Standard and Poor’s and Moody’s have affirmed the PUD’s double-A bond rating in preparation for an upcoming bond sale. S&P also affirmed a stable outlook. Moody’s changed its outlook to negative based on “the likely lower than originally expected wholesale revenues over the next several years, the limited rate increase taken by Chelan PUD to offset lower merchant cash flows, and negligible hedges for 2010 and onward to minimize the volatility of wholesale revenues. The negative outlook also considers the likely decline in Chelan PUD's credit metrics and significant reserves over the next several years.”
The PUD expects to hear from a third firm, Fitch, by the end of the month.
The District is considering selling $124 million in bonds soon to refinance debt at lower interest rates and $68 million to pay for hydro capital projects.
In other business, commissioners:
- Heard from Accounting Director Diane Cooper that the PUD received a clean opinion on its 2008 financial statements from independent auditors PricewaterhouseCoopers. The auditor’s report is included in PUD’s 2008 Annual Report “Power+,” which is posted on the District Web site.
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Commissioners set a special meeting at 5:30 p.m. on Thursday, May 21, in the PUD Auditorium, 327 N. Wenatchee Ave., to hold a hearing on final assessments for the Monitor Water Local Utility District (LUD).
The next regular PUD commission meeting is at 1 p.m. on Tuesday, May 26, (because of the Monday Memorial Day holiday) in the PUD boardroom at 327 N. Wenatchee Ave.
Commissioners also set a special meeting for 9 a.m. to 3 p.m. on May 28 at the North Central Regional Library, 16 N. Columbia St., to continue strategic planning.
Most PUD commission meetings are recorded, and a link to the audio is available on the PUD’s home page at www.chelanpud.org.
Kimberlee Craig
Public Information Officer
509-661-4320, direct line
509-679-6858, cell
kimberlee.craig@chelanpud.org