Chelan PUD Commissioners Endorse Steps toward Financial Stability

Saying they approve of recommendations for working toward a more stable financial future, Chelan County PUD commissioners unanimously passed a resolution outlining new financial guidelines as part of strategic planning.

The four guidelines are intended to: 

• Provide a sufficient rate of return for the PUD so assets can be replaced over time and there will be sufficient income to meet District obligations, even under unusual (low water/low price) conditions; 
• Gradually reduce the debt ratio (percentage of utility assets financed by debt) from approximately 75 percent today to about 60 percent by 2015; 
• Achieve an adequate debt-service coverage ratio to demonstrate that the PUD clearly has the resources to meet debt obligations, even under unusual conditions; 
• Provide financial liquidity (cash reserves and other sources) to cover risks and provide additional financial stability. 

Chief Finance Officer/Chief Risk Officer John Janney told the board the financial objectives are designed to put the District on a reliable, sustainable path over the next several years. These guidelines are also designed to serve as a solid foundation for the longer term. The goals of the plan are paying down debt, building reserves for a rainy day and avoiding large, sudden rate increases--all things that public opinion research has shown most PUD customers strongly favor.

 
Consideration of these financial steps is part of the PUD’s work on revising its strategic plan to build a solid foundation for reliable, sustainable services for the long-term. Commissioners will consider other parts of the strategic plan in September.

Commissioner Norm Gutzwiler said the plan meets the needs of Chelan PUD for the near future as well as the long term.

Return to July 2010 Western Energy News

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