by Richard Uhlhorn
Steve Wright, PUD CEO, presented the PUD’s Strategic Planning Process to Chelan City Council back at the January 22 council meeting.
PUD’s CEO Steve Wright gave a powerpoint presentation to the Chelan City Council on Tuesday, January 22 regarding the plans to write a new 5-year strategic plan and asked for their input over the next four months before it is completed.
In his opening statement to the Council, Wright said, “We have cut our debt in half one year early.”
“The world is changing rapidly and we need to be ready for that,” said Wright. He stated that the electrical utilities were a rapidly evolving industry. “We are working with other utilities, he said.
Wright’s PowerPoint presentation reviewed where the PUD has been since 2015 and then presented key strategic questions for the next strategic plan that will be concluded in the summer of 2019.
Steve Wright’s presentation reviewed where the PUD has been and where it hopes to go in an ever changing utility market.
Wright mentioned the cryptocurrency industry and how it threw the PUD off course for a couple of years. Stating that the PUD has seen a significant drop off in energy requests, Wright added that the PUD didn’t want to see its rates go up for customer/owners because of the cryptocurrency industry.
However, the PUD has not raised customer/owner rates for seven years even though inflation has increased 40%. PUD rates have been subsidized by wholesale power revenues. Chelan County electrical rates are around 3.1 cents per kilowatt hour as opposed to the State’s average rate of 7.68 cents per kWh and the nationwide average of 10.27 per kWh.
With customer satisfaction at 97 % and the utilities reliably at 98%, Wright explained that the PUD’s vision is to provide the best value for the most people for the longest time.
“We haven’t had to borrow money for 10 years now,”said Wright. “We do worry about the market slowing down and want to be prepared for a variety of different outcomes.”
With aging equipment and the need for new substations because of Lake Chelan Valley’s rapid growth Wright said the new North Substation is currently in the design phase and the PUD would begin building on its acquired property in the next 12 months. “The southshore is up for review,” said Wright.
Over the next period of months leading up to its new Strategic Plan, the PUD will be actively engaging the community with a series of questions.
Steve Wright went through a series of questions the PUD is asking of its customer/owners in preparation of its new strategic plan.
The Key Questions the PUD is considering include:
After seven years without rate increases (and only 9% rate increase since 2000 while inflation has been around 40%), Chelan PUD plans to adopting a long‐term rate plan.
We have questions for our customer‐ owners.
Should this plan: • Include annual electric rate increases at approximately the rate of inflation to avoid the risk of large rate increases in later years
- Display the hydro financial benefit separately in electric, water and wastewater bills to help customers understand the full cost of services • Specify the balance between funding large water and wastewater system improvements from financial reserves and annual rate increases for water and wastewater • Include annual rate increases for the water, wastewater, and fiber business units to meet individual system financial metrics • Change rate design to be responsive to utility industry changes2 Rock Island Relicensing/Early Action
The federal hydropower license for Rock Island Dam that seeks to balance low rates, environmental protection and recreational enhancements expires in 2028 • Should Chelan PUD advance the newly developed federal policy to take “early actions” in advance of a final relicensing decision? • If so, what actions should be considered that support recreational or environmental enhancements and what considerations should the PUD seek in return?..
3 Wholesale vs. Retail Marketing •
Currently, Chelan PUD retail rates are subsidized by wholesale power revenues. Should Chelan PUD reduce emphasis on wholesale marketing and focus more on growing retail loads and local economic development?
4 Growth •
Should Chelan PUD lean toward growth pays for growth (supportive of lower rates for existing customers) or toward economic development (supportive of more jobs in the community)?
5 Aesthetics •
Who pays for aesthetic improvements (e.g. undergrounding of power lines) when it can increase costs by 2‐10 times compared to above ground facilities ‐ all customer owners or just those who benefit?
6 Public Power Benefit Program •
Should Chelan PUD continue to fund a public power benefit program that has been used for the fiber expansion and park passes? • If so, what activities within our statutory authority should be considered for funding?
Process & Timeline •
Phase 1 – Explain current status / key questions •
Phase 2 – Explore key questions with dedicated customer‐owners •
Phase 3 – Community‐wide engagement •
Phase 4 – Draft and finalize strategic plan • Conclude in Summer 2019
We want to hear from you!
On February 15, Chelan County PUD put out a message on Facebook asking customer/owners to provide input and guidance as the utility moves towards completion of its new five-year strategic plan.
“In 2015, we adopted a five-year strategic plan after a vigorous public outreach process with our customer-owners. Our purpose was to identify how our actions as a public power utility could accomplish our mission statement to enhance the quality of life in Chelan County.
Once again, we’re calling upon our customer-owners to provide informed input and guidance as we plan Chelan PUD’s future. We want to share what has changed since we wrote our existing 5-year Strategic Plan – and what we’ve already achieved – as we chart our course for 2020 – 2024.”
Visit www.ourpublicpower.org to sign up for updates!