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State of the PUD Connell Community Center June 16, 2008 Working in Partnership with Our Community Presented by: Ed Brost, Interim Manager.

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Presentation on theme: "State of the PUD Connell Community Center June 16, 2008 Working in Partnership with Our Community Presented by: Ed Brost, Interim Manager."— Presentation transcript:

1 State of the PUD Connell Community Center June 16, 2008 Working in Partnership with Our Community Presented by: Ed Brost, Interim Manager

2 The District

3 Board of Commissioners Elected Board of 3 Commissioners Serve 6-year staggered terms from three districts Stuart Nelson Vice President since 2003 Bill Gordon President since 2003 Chuck Hall Secretary since 2005

4 District’s Mission Statement Franklin PUD provides quality services and achieves efficiencies that benefit our community

5 District’s Key Focus Areas Rates Reliability Relationships Blanton Road Substation under construction

6 Franklin PUD Serves 2/3 of Franklin County population 1,067 miles of transmission and distribution lines 20 substations 93 full-time employees and 1 part-time employee Bonneville preference customer (Slice/Block) 2007 revenues: $81.8 million Continued growing local economy in 2007 25,328 meters 21,299 customers

7 Service Area

8 Local Economy Continued unprecedented growth in 2007 $106 million in new private investment for 518 single family homes $81 million in new commercial and industrial projects permitted in Pasco 25 new distribution miles added in 2007 County’s population growth fastest in State Franklin County population over 67,000, an increase of 37% since 2000 City of Pasco has 50,210 residents as of end of 2007

9 2007/2008 Highlights

10 2007 Highlights Jan 1, 2007 5% rate decrease Strategic decisions Purchased power from two wind projects Nine Canyon, Phase III White Creek Reserves at an all time high

11 2007 Highlights Reliability exceeds industry standard Moody’s bond rating upgrade from A to 2a System improvement projects completed in 2007: Overhead to underground conversion at: East Lewis Street, Burden Boulevard Terra Vita Sunrise Estates

12 2007 Highlights Broke ground for Blanton Road Substation Completed design for 115kV line in Connell Commercial projects completed in 2007 (Lowe’s Home Improvement Warehouse, Miscellaneous commercial growth in Road 68 area (retail & office), Multiplex theatre, Twin City Foods and ConAgra expansions, Bybee Foods Freezer building expansion, and Freeze Pak)

13 2007 Highlights Strong 2007 retail sales $61.6 million Exceeded revenue forecast by $3.6 million Continued strong load growth (4.9% in 2007) Revenue levels sustained even with a 5% rate decrease for all classes in 2007 3.8% average growth over last three years 620 new accounts in 2007 New connection charges billed to customers $2.4 million in 2007

14 2008 Highlights – to date Completed Blanton Road Substation Standard and Poor's bond rating upgraded to an “A” Rate decrease May 1, 2008 – 4% overall Residential Exchange rate credit 3% effective for one year (May 1, 2008)

15 District’s Growth Projects planned or announced for 2008 (Syngenta Seeds, Inc.(food processing plant), Coyote Ridge Corrections Center, new high school in Pasco, additional retail and commercial buildings, medical and professional office buildings)

16 2008 District Projects 15 subdivisions being developed in Pasco and Connell Connell/Kahlotus transmission line Headquarters remodel AMR system Accounting/Work Management System

17 Customers and Rates

18 2007 Load by Customer Class

19 2007 Energy Sales Revenue

20 2007 Operating Expenses

21 Electric Rates DateChange January 1, 2003+11.5% January 1, 2005+10.5% January 1, 2007-5.0% May 1, 2008 May 1, 2008* -4.0 % -3.0 % Changes in Franklin PUDs Electric Rates * 3% credit for approximately 1 year.

22 Rate Strategy Rate Advisory Committee recommends long term rate stability Goal is to sustain these decreases while meeting challenges due to state/federal mandates Continue to seek reductions Board commitment to financial integrity and to District financial policies

23 Power Supply

24 Power Supply Overview Diversified power supply Block and Slice customer of Bonneville Under critical water Bonneville contracts meet 93% of District load (100 of 107 aMW) Thermal resources meet incremental load requirements and serve as a hedge against low stream flows Wind power purchases Packwood hydro Developing an Integrated Resource Plan (IRP)

25 Other District Resources Owned Resource: Pasco CT22 MW Contracted Resources: Frederickson (Aug 2022) 30 MW Packwood Hydro (firm) 3 aMW Nine Canyon Wind Project (2030) 3 aMW White Creek Wind Project (2027) 3 aMW

26 25 Estimated Monthly Energy Loads & Resources 2012

27 26 Estimated Monthly Energy Loads & Resources 2022

28 Regional Issues

29 Key Regional Issues Post 2011 BPA contracts Residential Exchange Fish costs – Biological Opinion Increasing legislative mandates impacting costs Climate Change, Initiative 937 Transmission reporting requirements

30 Post 2011 contracts with BPA Regional Dialogue process – secure benefits of Federal System for the Northwest 20-year contracts Rates uncertainty Cost control and dispute resolution are important issues yet to be decided Contracts to be offered by August and signed by December 2008

31 Residential Exchange Program 1980 NW Power Act established the Residential Exchange Program (REP) Increase parity between the private and preference customers’ wholesale power costs Share benefits of federal power system with private residential and small farm customers Private benefits passed on to their customers in form of a credit on their bills The Act specifically stated public power customers would not have to pay for this benefit received by private customers

32 The Court Ruling in 2007 May 3 rd, 2007 Ninth Circuit Court ruled BPA violated law BPA suspended payments to private utilities Public Power has had significant rate increases due to unlawful agreements over last 6 years Important to reach regional agreement regarding level of benefits – while honoring NW Power Act provisions

33 BPA Proposed Settlement February 8, 2008 BPA issued settlement provisions and initiated formal rate proceeding Cash payments to public’s and private’s for 2007 and 2008 Provides $620 million in future rate relief to publics over 20 years (2009 – 2028) for unlawful payments Re-establishes REP payments and program at approximately $210 million a year. Expected decision by September 2008

34 Fish Costs & River Operations - the $800 million question


36 PUD member of NW RiverPartners Regional organization advocating rational, scientific approach to fish recovery that preserves & enhances values of our river system

37 RiverPartners builds awareness Provides a unified voice for values of the Columbia and Snake rivers. Effective means to promote good stewardship and cost efficient salmon restoration programs. Active in number of forums: litigation, technical, political, press/media and member communications. Green Dams/Blue Skies pro-active campaign in support of the Snake River dams.

38 Renewable/Conservation Standards Meeting I-937 renewable requirements Triggers at 25,000 customers (expected 2012) First threshold met 6% of resources acquired from renewable resources I-937 conservation requirement: “all cost-effective” will be a challenge 2007 accomplishments 5.9aMW at $54.97

39 Climate Change Continues to evolve regionally and in DC, and will impact our power costs Our costs will go up – question is, how much

40 Summary

41 2008 continues the strong trends of 2007 Thriving service territory Positive trends in key financial indicators Key issues facing the PUD affecting our future Well postured to meet significant challenges (BPA contracts, climate change, growth, I-937) Engaged and responsive Board Customer service is our number one focus

42 Questions? Blanton Road Substation

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