Columbia River PUD Board Approves $31.3 Million Budget for 2010, Plans No Increase in Rates

December 16, 2009 – At its December 15 meeting, the Columbia River People’s Utility District (PUD) Board of Directors approved a $31.3 million Operating and Capital Budget for 2010, and confirmed that no rate increase is planned for the year.

Although the 2010 budget is 3.9% larger than the 2009 budget, customer rates are projected to remain unchanged throughout 2010. The PUD last changed customer rates in 2006, when it implemented a 4.65% overall rate decrease. The PUD last increased rates in 2001.

The budget includes these major goals:

• Keep electric rates stable.
• Maintain core operations and services for customers.
• Maintain and improve the PUD’s distribution system to ensure continued reliability and minimize outages.

“The sound fiscal policies in our 2005-2009 Strategic Plan were paramount to our ability to stabilize rates now, at a time when our customers need it the most,” said PUD General Manager Kevin Owens. “There will be a time when a rate increase is necessary, but we will delay it for as long as possible.”

Revenues stable, wholesale power costs increasing

Overall operating revenues are projected to remain stable compared with 2009 levels. Industrial revenues, which decreased 18.6% in 2009, will remain flat while residential revenues are projected to grow by 1.6%. Commercial revenues are projected to decrease by 2.6%, following a 3.1% decrease in 2009.

The PUD’s wholesale power costs will increase in 2010. This increase is the result of a 6.95% power cost increase implemented by the PUD’s wholesale power provider, Bonneville Power Administration (BPA), in October 2009. While many area utilities responded to the BPA increase by raising customer rates, the PUD’s Board of Directors has chosen to keep rates stable in 2010.

“Our customers know they can count on us for safe, reliable electric service and excellent customer service,” said Owens. “We are pleased to be able to meet their expectations without a rate increase.”

Operations funded through rates, reserves

The PUD’s core operations and services, including capital improvements, system maintenance, tree trimming, energy efficiency programs and customer service functions, are funded through electric rates and cash reserves. The Board does not plan to issue debt during 2010.

System improvements, building maintenance planned

The PUD plans to spend $2.4 million on system improvement projects in 2010. Installation of a new transformer at Scappoose Substation is the largest single item, accounting for $1.3 million in capital costs. In addition, power line capacity upgrades are planned for Callahan Road in Scappoose, Canaan Road in Deer Island, Gregory Road in Goble, and Jack Falls Road in Rainier.

Cash reserves projected at $10.7 million

The 2010 budget includes a projected decrease of $822,000 to cash reserves. However, the projected year-end cash balance of $10.7 million is still well above the minimum level of $7.5 million set by the Board. This reserve provides contingency funds for rate stability, storms and natural disasters, future power supply opportunities, and long-term capital construction projects.

Budget Advisory Committee essential to the process

Each year the PUD convenes a Budget Advisory Committee to advise the Board on the proposed budget. The 2010 Committee, comprised of 13 customers representing residential, business, governmental, industrial, seniors and low income customer classes, met twice in November to review and discuss the proposed budget and the issues and challenges facing the PUD.

“Our Budget Advisory Committee provides critical input to the Board and staff, helping to keep us focused on what’s important to our customers,” said PUD Board President Darrel Purkerson. “We appreciate their willingness to participate in our budget development process.”