CRPUD Adopts 2020 Budget, Becomes Debt-Free
Deer Island, OR – December 26, 2019 – The Columbia River People’s Utility District Board of Directors has adopted a budget for 2020 that calls for the utility to pay off the remainder of its outstanding debt. The PUD’s $42.5 million Operating and Capital Budget will also keep rates stable in 2020.
“This budget reflects our continuing commitment to providing safe, reliable, and affordable energy and services to our customers. Keeping an eye on the future and being fiscally responsible will allow us to become debt-free by the end of 2020. This is a huge accomplishment,” said General Manager John Nguyen.
Historically, the only time CRPUD has taken on debt has been to purchase facilities from PGE. This occurred in 1984 when the PUD first energized, and again in 2000.
In 2015, the PUD refinanced the debt it had incurred in 2000 when it acquired the island cities of St. Helens, Scappoose, and Columbia City from PGE. The 2020 Budget will allocate $859,000 to pay off the balance of this refinanced loan, leaving the utility completely debt-free.
The PUD will continue its practice of paying cash for improvements to its electrical system. The 2020 Budget includes $5.4 million in capital projects. The major driver for these projects is improving reliability throughout the PUD’s service area, and increasing electrical capacity.
Major repairs are planned within the St. Helens Substation. The PUD plans to upgrade its substation transformer, steel structure, and circuit breakers.
The utility has budgeted funds for the construction of a new substation at the location of the PUD headquarters in Deer Island. This will be CRPUD’s 10th substation. It will allow for system load growth, and will increase reliability and redundancy for customers in the northern part of the PUD’s service territory.
Several projects are planned in Scappoose to reduce the number of tree-caused outages during storms. The PUD plans to move overhead power lines underground on Apple Valley Road, Armstrong Road, and Siercks Road. The PUD also plans to upgrade the overhead power lines on Callahan Road to increase system reliability.
In Rainier, power line upgrades are planned on Parkdale Road and Pellham Hill Road.
The 2020 Budget will also include a new bucket truck to replace one from 1997 that has reached the end of its useful service life.
A significant portion of the 2020 Budget will include an allocation for the Public Employees Retirement System (PERS). In November, the Board approved a one-time payment of $1.6 million to be applied to the PERS Side Account. This will reduce future PERS rates by an estimated 3.07%, and allows the PUD to receive $400,000 in matching funds from the State of Oregon.
It is estimated that the one-time payment to PERS will save CRPUD approximately $1.46 million in future contributions over the next 20 years, giving the PUD a projected $1.86 million return on investment.
Year-End Cash Balance
Projections show the PUD ending 2019 with cash reserves of $10.3 million. With the adoption of the 2020 Budget, the reserves will be at $7.2 million at the end of 2020. This falls below the minimum year-end cash balance of $8 million previously established by the Board of Directors. The Board has directed the PUD to restore those funds to the minimum within two years.
“As usual, (the Budget) it’s done so thoroughly and so well thought out. It’s so professionally presented. It’s just a great, great piece of work,” said Board Member Rob Mathers.