From a press release – Chelan County PUD commissioners Monday heard the good news that two new power sales contracts will boost forecasted PUD revenue by $40 million starting in 2019. Each sale is for a 5-percent “slice” of power generated at Rocky Reach and Rock Island dams.
Gregg Carrington, Energy Resources managing director, said the sales are for five years to Avangrid Renewables LLC of Portland, Ore., starting in 2019 and for 10 years to Avista Corp., based in Spokane, starting in 2021. The sales extend the PUD’s successful hedging strategy that returns value to customer-owners by locking in revenue, reducing risk from price swings in the wholesale market, variable streamflow and from operations, which help keep electric rates stable.
“This is good news for customers and for continued financial strength for the District,” Carrington said.
The report came as Energy Planning and Trading updated board members on second-quarter results. So far for 2017 net wholesale revenue and other energy-related revenue is forecast to end the year at $124.2 million, which is $ 2.3 million ahead of budget.
In addition, overall financial results exceeded budget through June. Forecasts call for the PUD to end 2017 with bottom-line results nearly $10 million better than budget and meeting or exceeding all fiscal targets. Debt to equity is forecasted to end the year at 37.8 percent, exceeding this year’s target and nearing the goal of less than 35 percent by 2019. Long-term, District financial policies are on track for managing declining bottom-line forecasts due to anticipated lower market prices through 2021.
Revenue so far is higher due to below-average winter temperatures and the cost-plus long-term power contracts, while operating costs have been lower. Finance staff recommended staying the course on strategic priorities of investing in key assets and employees, paying down debt ($52 million in 2017) and continuing the Public Power Benefit program.