Chelan PUD continues stable revenue outlook with slice power auction
With another successful auction, Chelan County PUD has locked in additional predictable revenue of $83.2 million from Jan. 1, 2013, through the end of 2017, in exchange for a share of future power (a slice) produced by Rock Island and Rocky Reach dams that is surplus to local needs.
Successful bidders Feb. 14 were Constellation Energy Commodities Group, Inc., and Morgan Stanley Capital Group, Inc. They have committed to pay a combined total of $83.2million. Each will receive 2.5 percent of the combined output of Rocky Reach and Rock Island dams from Jan. 1, 2013, to Dec. 31, 2017.
The PUD expects that having a base level of predictable power sales revenue during the next several years will help avoid large swings in power rates charged to local customers and help stabilize overall revenues.
A slice means that purchasers are not guaranteed a specific number of megawatts, but, in exchange for fixed payments to the PUD, they will receive a percentage of hydropower production under whatever generating conditions exist at the time. This arrangement is designed to provide more predictability in future revenues for the PUD and decrease the risk from below-average stream flows and low wholesale electricity prices.
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