Chelan PUD commissioners Monday approved a spending plan for 2012 that calls for keeping a close eye on expenses while forecasting continued improvement in the bottom line.
After three years of “preservation mode” budgets due to the struggling economy and two years of below-average runoff and depressed wholesale prices, the 2012 budget includes a 3.1-percent increase in operating expense to $117.5 million and the elimination of the temporary electric surcharge. Mark O’Bryan, strategic financial planning director, told commissioners the increase meets the established target and was primarily driven by expenditures that had been delayed in previous years.
Funds for major projects are down slightly to $53.5 million to cover work including continued modernizing of units in the first powerhouse at Rock Island Dam; a new transmission line, switchyard and substation to improve service in the Entiat Valley; and construction of the Okanogan Avenue Substation in Wenatchee to increase reliability and handle load growth.
Next year will also bring a fundamental change in revenue for the PUD as long-term power sales contracts expire and the District is able to sell more of its power at market rates. With that change, continued cost-containment and average snowpack, the PUD expects to end 2012 with a positive bottom line of $72.2 million, compared with about $12 million for 2011.
Those results will help the utility stay on track to meet the financial objectives of its Strategic Plan and:
- Pay down debt
- Keep rates affordable and increases, when needed, modest and predictable
- Maintain its dams and power lines
- Boost its rainy day fund
In other business Monday, commissioners:
- Set the District’s 2012-13 conservation target at 3.3 average megawatts as required by the state Energy Independence Act (I-937) and approved an updated 10-year conservation potential plan.
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