Rate Workshop 2013 Thank You Ron Smith Greg Hamilton Tom - - PowerPoint PPT Presentation

Okanogan County PUD No. 1

Rate Workshop

2013

Thank You

• Ron Smith
• Greg Hamilton
• Tom Berschauer
• Jeff Brender
• Lyle Oberg
• Richard Thomason
• Greg Moser
• Dennis Carlton

view where we have been. “To see where we are going, it is often necessary to re ”

• In 2010, R.W. Beck (now SAIC) completed a

comprehensive review of the District’s finances.

• This review, known as the 2010 Equity Management

Plan (EMP), noted significant rate changes were needed to maintain the District’s fiscal health.

• Three rate scenarios designed to provide the

minimum revenue increases needed were proposed.

EMP Scenario 1: 12% Increase in 2010 20% Increase in 2012 10% Increase in 2014 EMP Scenario 2: 8.5% Increase in 2010 8.5% Increase in 2011 3.6% Yearly Thereafter EMP Scenario 3: 6.5% in 2010 6.5% in 2011 6.5% in 2012 4% Yearly Thereafter

• W

W W Wh h h ha a a at t t t w w w wa a a as s s s n n n ne e e ee e e ed d d de e e ed d d d b b b by y y y 2 2 2 20 01 1 1 12 2 2 2: : : :

• 2010

12%

• 2011

0% 34.4% Compounded

• 2012

20%

What was done:

• 2010

6.5%

• 2011

6.5% 20.8% Compounded

• 2012

6.5%

We knew revenue would be tight by 2013. Assuming that wholesale power sales would remain stable and retail growth would increase moderately, we moved forward.

Average Annual Usage Per Customer Measured in kwh, 2007 ­ 2012

5000 10000 15000 20000 25000 30000 35000

2007 2008 2009 2010 2011 2012

Residential: Total:

2007 2008 2009 2010 2011 2012 Residential 17722 18039 18543 17183 19213 17037 All Classes 30939 31317 30913 27728 29608 27998

Operating Revenues, 2007 ­2012

$50,000,000 $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0

$ $ $ $4

4 4 43 3 3 3. . . .5 5 5 5 M M M Mi i i il l l ll l l li i i io

• n

n n n $ $ $ $3 3 3 39 9 9 9. . . .9 9 9 9 M M M Mi i i il l l ll l l li i i io

• n

n n n $11.9 Million $3.5 Million

2007 2008 2009 2010 2011 2012

Other Operating Revenue Retail Sales Wholesale Sales

2007 2008 2009 2010 2011 2012 Wholesale Sales $11,989,607.00 $11,263,827.00 $ 4,198,885.00 $ 5,801,904.00 $ 6,741,527.00 $ 3,531,677.00 Retail Sales $30,864,028.00 $31,725,275.00 $30,564,661.00 $29,102,332.00 $33,355,832.00 $35,588,404.00 Other Operating Revenue $ 690,773.00 $ 719,607.00 $ 1,031,632.00 $ 992,133.00 $ 923,768.00 $ 829,906.00 Total Operating Revenue $43,544,408.00 $43,708,709.00 $35,795,178.00 $35,896,369.00 $41,021,127.00 $39,949,987.00

Operating Expenses, 2007 ­ 2012

CPI Increased

$45,000,000

13.77%

$40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 2007 2008 2009 2010 2011 2012

Taxes Depreciation Purchased Power Other Operating Expenses

2007 2008 2009 2010 2011 2012 Purchased Power $ 24,247,310.00 $ 24,460,386.00 $ 21,822,350.00 $ 23,895,599.00 $ 24,060,574.00 $ 22,284,245.00 Taxes $ 1,891,836.00 $ 1,916,749.00 $ 1,865,660.00 $ 1,829,073.00 $ 2,127,436.00 $ 2,209,633.00 Depreciation $ 2,535,046.00 $ 2,698,018.00 $ 2,852,766.00 $ 3,067,104.00 $ 3,755,679.00 $ 3,866,405.00 Other Operating Expenses $ 8,699,227.00 $ 10,872,989.00 $ 11,487,688.00 $ 11,760,223.00 $ 11,271,201.00 $ 12,570,840.00 Total Operating Expenses $ 37,373,419.00 $ 39,948,142.00 $ 38,028,464.00 $ 40,551,999.00 $ 41,214,890.00 $ 40,931,123.00

H H H Ho

• w

w w w D D D Di i i id d d d W W W We e e e R R R Re e e es s s sp p p po

• n

n n nd d d d? ? ? ?

2007 2008 2009 2010 2011 2012 Total Operating Revenue $43,544,408.00 $43,708,709.00 $35,795,178.00 $35,896,369.00 $41,021,127.00 $39,949,987.00 Total Operating Expenses $37,373,419.00 $39,948,142.00 $38,028,464.00 $40,551,999.00 $41,214,890.00 $40,931,123.00 $50,000,000.00 $45,000,000.00 $40,000,000.00 $35,000,000.00 $30,000,000.00 $25,000,000.00 $20,000,000.00 $15,000,000.00 $10,000,000.00 $5,000,000.00 $­

Revenue vs. Expenses

Operating Revenues, 2007 ­2012

14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 2007

W W W Wh h h ho

• l

l l le e e es s s sa a a al l l le e e e S S S Sa a a al l l le e e es s s s

$11.9 Million $3.5 Million

2008 2009 2010 2011 2012

07 08 09 10 11 12

Interest Earnings, 2007 ­ 2012

$2,500,000.00 $2,000,000.00 $1,500,000.00 $1,000,000.00 $500,000.00 $­

$ $ $ $1 1 1 1. . . .9 9 9 92 2 2 2 M M M Mi i i il l l ll l l li i i io

• n

n n n $ $ $ $4 4 4 44 4 4 4, , , ,2 2 2 21 1 1 15 5 5 5

2007 2008 2009 2010 2011 2012

Number of Accounts, 2007 ­ 2012

25000 24000 23000 22000 21000 20000 19000 18000

20,681 20,106

2007 2008 2009 2010 2011 2012

The District experienced an average customer account growth of .5% per year from 2007­2012.

2007 2008 2009 2010 2011 2012 Number of Accounts 20106 20425 20617 20560 20617 20681

07 08 09 10 11 12 13 07 08 09 10 11 12

Fleet Vehicles

200 150 100 50

134 126

78

64

2007 2008 2009 2010 2011 2012 2013

Total Vehicles In Fleet Vehicles On Road $1,000,000 $1,200,000 Fleet Costs: $800,000 $600,000 $400,000 $200,000 $0

2009 2010 2011 2012

* * *T T T Th h h he e e a a av v ve e e er r r ra a a ag g g ge e e e a a a ag g g ge e e e o

• f

f f f f f f fl l l le e e ee e e et t t t v v v ve e e eh h h hi i i ic c c cl l l le e e es s s s i i i is s s s 1 1 1 10 0 y y y ye e e ea a a ar r r rs s s s o

• l

l l ld d d d. . . . * e av

2007 2008

Number of Employees, 2007 ­ 2013

120 110 100 90 80 70 60 50

90 87

2007 2008 2009 2010 2011 2012

Important Points:

• The District has only increased 3 filled positions since 2007.
• Several positions were budgeted but not filled.
• The EMP addresses electric operations only; however this graph

includes Telecom employees.

EMP 2013 Cash Requirements

$0.44 $0.13 $0.05 $0.09 $0.04 $0.03 $0.04 $0.19

Purchased Power & Other Power Supply Transmission & Distribution Consumer Accounting & Customer Service General Administration Taxes Debt Service ­ Principal Debt Service ­ Interest Net Capital Outlay

E E E Es s s st t t ti i i im m m ma a a at t t te e e ed d d d C C C Co

• s

s s st t t ts s s s f f f fo

• r

r r r S S S Sp p p pe e e ec c c ci i i if f f fi i i ic c c c A A A Ac c c ct t t ti i i iv v v vi i i it t t ty y y y/ / / /P P P Pr r r ro

• j

j j je e e ec c c ct t t t: 2013 Wage Costs $0.13 2013 Transportation Costs $0.01 2013 Building Costs (Int/Depr) $0.01 Future Enloe Capital Costs $0.04

$0.04

EMP 2013 Cash Requirements

$0.51 $0.14 $0.06 $0.11 $0.05 $0.03

Purchased Power & Other Power Supply Transmission & Distribution Consumer Accounting & Customer Service General Administration Taxes Debt Service ­ Principal Debt Service ­ Interest General Funded Plant Investment E E E Es s s st t t ti i i im m m ma a a at t t te e e ed d d d C C C Co

• s

s s st t t ts s s s f f f fo

• r

r r r S S S Sp p p pe e e ec c c ci i i if f f fi i i ic c c c A A A Ac c c ct t t ti i i iv v v vi i i it t t ty y y y/ / / /P P P Pr r r ro

• j

j j je e e ec c c ct t t t:

$0.07

2013 Wage Costs $0.15 2013 Transportation Costs $0.02 2013 Building Costs (Int/Depr) $0.01 2013 Debt Funded Plant $0.15 Future Enloe Capital Costs $0.05

How Do We Compare Nationally?

Residential PUD customers pay roughly half half half half

• f the

National Average for their electricity.

How Do We Compare State­Wide ?

We continue to provide the lowest­priced electricity in the State, among utilities who don’t generate their own hydropower.

10 9 8 7 1 2 3 4 5 6

*Average = 7.532 cents / kwh

How Do We Compare Locally?

Average Energy Rate ($/kWh)

Average Energy Rate Comparison Residential Customer Class with 9.5% District Rate Increase in 2013 1,400 kWh usage per Month

0.12 0.11 0.10 0.09 0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0.00

Chelan Grant Benton Franklin Ferry Nespelem Okanogan Valley Co­Op Okanogan Current Okanogan September 2013 Proposed Douglas

Questions?