ßETJTOil Bnxrol\t PIID zo2o PnnLIMI\TARY BuucET PueLrc HrnRrNc NovEMBER 6, 201,9
P nES ENTTATIO}T App ROACH Budgets are "full of numbers" o Numbers without context can lack meaning a We will attempt to provide meaning through context a r Challenges & strategic focus r Current financial position r Long term cost trends r Benchm ark utility comparisons r Year over year comparison o I ññ 2020 Budget Hearing - November 6,20L9 -D
AcnNDA 1. Overview 2. Strategic Context 3. Financial Metrics 4. Power Costs S. lt[on-power Costs 6. Summary & lttext Steps 7. Final Commissioner Questions/Comments B. Final Public Questions/Comments o lfrt 2020 Budget Hearing - November 6,20L9 -D
3 14 r-.{ t FI o
BUUGET DEvELoPMEltr ScnE DULE, Oct22 Dec 10 Nov 6 Nov 12 Nov 26 Pu blic Commission Commission Final Distribute 2020 Budget Meeting Meeting, High-Level Hearing: Public Considered Preliminary Preliminary for Adoption 2020 Budget Comment 2020 Budget Period lnformation Glosed Public Comment Period Opened o ffi 2020 Budget Hearing - November 6,2019
2o2o Pnn LIMIIrARY BUnGET 2O2O Preliminary Budget is a Draft Budget o r Ongoing review of assumptions fo r all budget categories r Final budget recommendation on December 10th Final Budget will Reflect: o r Public comment r Commission direction o .¡:ñ 2020 Budget Hearing - November 6,2019 ¡fi?¡
2o2o P npLIMI\IARy BUpGET AssuMprlolts No planned rate increase o [\o budgeted increase in 2O2O o Likely need for retail revenue increase in 2O2L Planned reserve drawdown of $3.0 million o nË 2020 Budget Hearing - November 6,2019
SrnerEGIc CoxrEXT o CUnRENT BTxNTIUM 2or8 -2o19) ( o ÌrTnxr Brcx\TIUM 2o2o-2ozr) (
Power Supply . Public Generating Pool - PGP Electric Svstem . Leslie Sub & Feeders . Clean Enerry Transformation Act . Orchard View Sub Bay 2 & Feeders . California markets . Benton City Sub rebuild . BPA cost trendline . Chevron Sub transformer purchase . Transmission projects design n Technol Broadband Svstem i . Cybersecurity . Access internet program . Resiliency . L4o/o revenue increase since 2OLT . Data analytics Cunnu\T BrnNNruM Communitv Education . Salmon in the Schools . Energ¡/ Experience . RiverFest/Snake River Dams Customer ProÉrams . Payment kiosks . lmmediate service restore . Prepay . Low income veterans Stewardship . Rates in lowest third of benchmarks . Low income workshop . Strong audit results o . Fitch Ratings upgrade . Employee driven safety culture
l{E xr B t E I{NTI uM (zo 2o - 20 2L) o1 Resource Adequacy o2 Value of Hydro 03 Power Contracts & Markets o4 Wffid ric System Investments I I I 05 Stewardship & Rates $ ffi ffi 2020 Budget Hearing - November 6, 2019
Fwe¡ucIAL METRIcS
AvERAGE Rnrerr, Rannsl 2or8 REpoRT oN AvEnacE REvnNUE (Cervrs PER xWH) 2 lndustrial Residential Commercial Total 5.5 8.6 6.8 Benton PUD 7.L 9.2 5.1 7.9 7.5 WA Publicly Owned 9.9 10.6 7.9 WA lnvestor Owned 1-0.0 9.r 8.3 8.1 6.5 WA Cooperatives ro.7 10.5 12.9 6.9 National Average 18.8 16.3 16.6 California 1.3.2 1 Revenues - includes all charges to customer 2 American Public Power Association @ I 2020 Budget Hearing - November 6,2019
MO\TTHLY BTLL CONNPARISOI{ Rns¡rE¡vrur October L,2OL9 kwh Average Monthly Bill 1,350 $200 $180 Energy lndependence Act (ElA) eslimqled impoct on Benton PUD rqtes =$3.00 per month $160 L¡J $14o $119 $120 ¡¡M¡d-c" ul $roo UJ UJ $ao $oo UJ Benlon PUD hqs been ql or $+o below lhe mediqn since 2005 Itlt tl $zo $o ."ôS' Average bill information has been calculated by Benton PUD staff from publicly available information from other utilities'weþsifes. Calculation is Benton PUD's best effott to provide comparable information. ffi 2020 Budget Hearing - November 6,20L9
DEgr Pnn CUSTOME,R WPTIDA' Sr¡nvny - DncnrusvR 2o1B (DtsrRrBUTro¡¡ SrsrEMS Oxrv) lWâshington PUD Association Source.'WPUDA Source Book (Sepf 2019) $4,OOO $3,500 Median for suruey $3,OOO respondents Benton PUD ($7,450) Projected 2079 $2,500 ($e04) s1,807----- $2,OOO $1,500 $992 $1,OOO $5oo ""$-""0N-ñ."";"*".""$-"ñ'*!ee"o"-*-.-os'*"c.g".iu5¡n"*ð*.."s District below the median and average of Washington PUDs @ m ffi$ 2A20 Budget Hearing - November 6,2019
Dner SnnvIcE, ScnEDULE, 120!6 E2OII I2O1.O --AvÉAnnual $ 5,0 qt ,9 > Ø 2020 Budget Hearing - November 6,20L9
Devs Cesn oN Hexn (RnsERVEs) WPUDA' Sunvny - DncnrungR 2o7B (DtsrRIBurIo¡¡ SvsrEMS Owrv) lWashington PUD Association Source.' WPUDA Source Book (Sept 2019) Currentforecast shows a two 350 year drop in reserves with Benton PUD Median for survey reserves levelin{, out and 300 Projected 2079 respondents sllghtly rebuildin{ in 2022 (705) (763) 250 ag,o 200 150 100 50 o ,Þ.t Þ$ :::$.,{-"ç5*o oñ Measures the number of days utility can cover its operatinS,expenses using unrestricted reserves and assuming no additional revenue @ . .*ù.- ffi I 2020 Budget Hearing - November 6,2019 I
CnexGE r\r Nnr AssETs 2o2o PnnrrMn{ARy Buncnr vs. 2o1g Orucnvdr BUDGET 20!9 2020 lncrease/ Preliminary Original (Decrease) Dollors in thoussnds Budget Budget Revenues (less sales for resale) Sreg,re+ i 52,979 S141,163 i Expenses 72,5t4 BPA Power & Transmission 71,450 1,,O64 3r,576 30,557 Other Purchases & Services 1,O1,9 (8e8) Net Conservation 339 L,237 Less: Sales for Resale 2 84,010ì 86,062ì Net Power Supply l2,O52l 25,766 24,358 Operations a nd Mai ntenance 1,,408 14,689 14,349 340 Taxes Depreci a ti on/Amorti zati on L0,055 56 10,111, I nterest Expense/Other 5t,42L 49,758' Non-Power Expenses 1,663 2,364 Net lncome Before Contributions 3,368 5,732 Ca pita I Contributions 2,065 (263r' 1,,802 Change in Net Assets (Net lncome) Sz,sg¿ Sq,qzg S3,1os itl,zgE. Srg,775ì (5z,4çzl ital nditures Gross Ca @ BETTOT flru ä.u-D ffi 2020 Budget Hearing * November 6,2019 x9?*
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ExpE,\TSE,S ANTD EXPE\TDITURES l{nr Powøn Expnxsn 2020 Preliminary Budget Total Net Expenditures $146.1 million* et Supply 57.5o/o $84.O M o&M L7.60/o $25.8M Net Capital Taxes/Other tO.60/o Debt Service $14,7M $15.5M 4,2o/o $6.2M * /Vef of secondary market sales of $20.4 million, capital contributions of $1.7 million, @ and Build America Bonds subsidy of $0.4 million I rË 2020 Budget Hearing - November 6,20L9 -d
Gnoss PowER SUpPLY CosT BY SouRcE BPA Power Gross Power Supply 58.2o/o $104.4 million BPA Transmission Ll.3o/o Ancillary Services Frederickson* 2,60/o t7.2o/o * Gross cost excludes the estimated secondary market sales from Frederickson of $11.7 million. @ ffi I 2020 Budget Hearing - November 6,20t9
BUUGET AssuMPTIol{s TNCLUDES BPA AnoprED Rtrns FoR 2o2o (nppncrIvg OcronER 7, zotg) BPA Power & Transmission Description BP-20 Power - Base 0.0% Power - FRP* Surcharge !.5% Transmission 3.6o/o As applied to Benton PUD Annual $ lncrease $0.8M Ann ual % lncrease I.2o/o *Financial Reserve Policy o ãõ l$t 2020 Budget Hearing - November 6,20L9
BUoGET ASSUMPTIO}TS INCLIIDES BPA 2O2O WATNN FONNCAST % Generation Type Received BPA Forecasted 2O2O Monthly Generation Shaping Block (Fixed) L.48o/o 12,ooo Slice (Variable) r.370/, Net Cost lmpoct: $sOOk - Benton PUD Total 2.85o/o $1.3M per yetlr 11,OOO BPA Forecasted 2O2O Annual Generation 9,500 1_0,000 I,t24 9,000 8,802 = 9,o00 8,500 (u 8,000 == ,500 Two Fqctors: (o I ) Climqte 7,000 7,000 2) Court Ordered Spill 6,500 6,O00 6,000 Jan Feb r BPA WY19 Study I BPA WY2O Study @ EET|OT äü.0 2020 Budget Hearing - November 6,2019
BUUGET ASSUMPTIO}TS Powan Supprv Br RncuuroRY r No BPA Cost Recovery Adjustment Clauses (CRACs) r BPA Financial Reserve Policy Surcharge $580k r Frederickson fixed cost recovery of 34o/o r Compliance with EIA renewable mandate r Lïo/o mandate costs $3.2M in 2020 up from 9o/o or $2.6M in 2019 r No cap & trade or carbon tax policies r Power cost risk modeled at the 25th percentile 8EJrnl @ ffi æ.u.0 2020 Budget Hearing - November 6,2019
2o2o PowER SUpPLY ScpNARIos Budget (October Proiection) 25ü percentile = S84.0tl
NET PowE,R COSTS+ç 20tg October Forecast Worse than 5th percentile . BPA power rates increased by 33% since 2Ot1, . lncludes BP-20 Adopted rates . Assumes future BPA increases of 4% every other year n ifica n t Un certa in ty Sig $-85 .4 _t__ '$84.0 -'c; -$80s $83.6 .a a -.5'-'-' -$8zo- a $.80.9 $80;f- ,j :l $86.1 $78.5 a a a o &77-2- $73.8 P $75 -$7-L9. 3 szo t Better $ October 2OLg Projection 5 sos (2020 Prel i m i na ry B udget) $59-5 25th percentile $60 20tg Original Budget $55 25th percentile $50 $46J- $45 $40 .FetS "df"dP #rdÈ ,Ëù"f ,SrS"flordg"f {-Actual --aF2O!9 Original Budget ' Ç ' Forecast * Net powercosfs (NPC) = gross power cosfs (including power and transmission) tess sales for resale. lr/PC ís þased on the 25th percentitefor 2020 and the 50th percentilefor 2021-2024 @ ffi I 2020 Budget Hearing - November 6,20t9
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