At the Oct. 12 meeting of the Okanogan County PUD commissioners, staff presented a balanced draft 2021 budget to kick off the annual budget hearing process.
General Manager Steve Taylor said that the district met with rating agencies S&P and Moody’s the week before; both agencies complimented the district on its strong financial position. Specifically, the agencies praised the district’s financial policy, rate structure and rate stabilization fund.
After months of work by staff, commissioners approved Resolution 1730 Oct. 12, authorizing the issuance of bonds up to $40 million.
In a special meeting Oct. 5, commissioners and staff had discussed bonding and finances. Due to the critical need of several large capital projects and the historically low interest rates, now was determined to be a good time to borrow money.
The bonds will be used for a projected $35 million in capital projects, such as rebuilding and upgrading the fire-damaged Okanogan-Brewster transmission line at $13 million. The line was set for replacement in the next few years, but has been accelerated after the Cold Springs Fire destroyed about 40 percent of it. The upgrades will allow for greater capacity from Wells Dam, which is the district’s least cost power source. The currently wooden poles will be replaced with steel poles to protect against future fire damage.
Other capital projects include rebuilding the Tonasket substation at $4 million to improve reliability and capacity, and purchasing several substation power transformers for $3 million. The remaining funds will be used for various projects across the system over the next three years and refinancing previously incurred debt at the lower interest rate.
The draft budget also includes a projected 3.25 percent revenue increase April 1, in line with equity management planning. The exact amount of the revenue increase and how it would be applied to rates is yet to be determined. Okanogan PUD’s rates are about fifth lowest in Washington State, while Washington has among the lowest average rates in the nation.
To alleviate the burden caused by the COVID-19 pandemic, commissioners had cancelled the 2 percent rate increase intended for 2020.
Members of the public can listen and join in on the 2021 budget discussion at future meetings via telephone. Agendas and other documents will be posted on the district’s website.
Upcoming meetings include:
- Oct. 26: 3 p.m. regular meeting & 6 p.m. generation and power supply workshop
- Nov. 9: 3 p.m. regular meeting & 6 p.m. engineering and operations workshop
- Nov. 23: 3 p.m. regular meeting & 6 p.m. operations and maintenance trends, human resources, broadband and information systems workshop
- Dec. 7: 3 p.m. regular meeting
- Dec. 21: 3 p.m. regular meeting, anticipated budget adoption
In other business, the board heard from Director of Power Resources and Broadband Services Ron Gadeberg that wholesale power sales were above budget, but retail was again below budget. The total for power revenue is about $1.5 million under budget year-to-date. Telecom, however, continues to add more connections, with 3,579 end users on the system and 14 free hotspots still operating.