Board Adopts $40.37 Million Operating & Capital Budget
December 13, 2018 – The Columbia River People’s Utility District Board of Directors adopted a $40.37 million operating and capital budget for 2019 at the December 11 board meeting. The 2019 Budget highlights the PUD’s ongoing commitment to investing in its infrastructure.
More than $1.6 million will go into improvements at two PUD substations, including $1.3 million in upgrades to the St. Helens Substation and $350,000 for the completion of the new Betsy Johnson Substation in Scappoose.
“The budget reflects a really good thought process. Great, great work by the staff,” said PUD Board Member Rob Mathers.
The PUD expects a 3.4% increase in wholesale power costs and a 2.4% increase in transmission costs from its wholesale power provider, Bonneville Power Administration (BPA). The PUD also expects an additional increase of approximately 3% in power costs from BPA due to the ending of the PUD’s Residential Exchange Credit beginning in October 2019.
As a result, the PUD’s 2019 Budget includes a projected 6% overall increase in rates effective October 1. Net power costs are expected to be $21.44 million, or 53% of the PUD’s budget. The PUD will conduct a Cost of Service Analysis in 2019 to determine whether rate changes will be implemented.
The new Betsy Johnson Substation is expected to be operational in March of 2019, increasing capacity in the Scappoose area. It is located near the Scappoose Industrial Airpark, an area poised for substantial growth and the need for additional load.
The PUD plans to replace a 55-year-old transformer at its St. Helens Substation. The current transformer has a capacity of 16.8 MVA; the new transformer will likely be a 25MVA model. This allows the PUD to accommodate future load growth in St. Helens.
These improvements will benefit customers throughout the PUD’s full service territory by allowing the PUD more flexibility to reroute power within its distribution system in the event that an entire substation experiences an outage.
“This approach ensures that should we have a major equipment failure, it would not result in a long outage for our customers,” said Engineering Supervisor Branden Staehely.
The PUD has plans in 2019 for improving its infrastructure outside of the substation fences, too. Three projects in Scappoose include the conversion of overhead power lines to underground lines on Siercks Road, Apple Valley Road, and Armstrong Road. These projects will reduce the number of tree-caused outages during storms.
Additional plans to increase reliability include upgrading overhead power lines on Gable and E. Kappler Roads in St. Helens, and E. Columbia Avenue in Scappoose.
“I’m very proud of the work we have done for next year’s budget. We have spent $2.3 million annually over the last five years on system improvements to replace aging infrastructure, as well as adding capacity to the PUD’s electric distribution systems. In 2019, we will continue our efforts to be fiscally responsible and to improve safety, security, and reliability of service to our customers,” said General Manager John Nguyen.
New Enterprise System on the Horizon
In addition to utility system upgrades, the PUD anticipates rolling out a new enterprise system near the end of 2019. This is the utility-wide software used by employees and customers alike to conduct the PUD’s day-to-day business.
The new system will include the SmartHub app, which allows customers greater ease of access to electric data, billing information, and other helpful features.
Year-End Cash Balance
The PUD forecasts its 2018 year-end cash balance to be $9.6 million, with plans to draw from cash reserves throughout 2019 to cover substation improvements and system upgrades.
“Any time you have a budget of 40 million dollars, you always have something that’s going to throw you a curve. We know what it’s called, it’s called the St. Helens Substation. That’s 1.3 million that we didn’t anticipate 12 months ago,” said Board Member Craig Melton.
“When you have a 1.3 million hit that you didn’t anticipate, usually we have to go below the suggested cash reserves. We’re not. That just shows the frugality of you guys. I really appreciate it,” Melton said.
The PUD strives to utilize cash for all large projects to avoid accrual of additional debt. This allows the utility to keep rates down and save money for PUD customers.
Each year, the PUD’s Board of Directors establishes a minimum year-end cash balance. The minimum for 2019 is set at $7.8 million. The 2019 year-end cash balance is projected to be $8.3 million.