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

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

• 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 Wh W W ha h h at a a t t t w w w wa a a as s s n s n n ne e ee e e e ed d de d ed e e d d d b by b b y 2 y y 2 2 20 01 0 0 1 12 1 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 35000 30000 25000 20000 15000 10000 5000 0 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 $ $ $ $ 4 4 4 43 3 3 3. .5 . . 5 M 5 5 M M Mi i i il ll l l li l l io i i o on o n n n $45,000,000 $3 $ 39 9. .9 9 M Mi il ll li io on n $ $ 3 3 9 9 . . 9 9 M M i i l l l l i i o o n n $40,000,000 $11.9 Million $3.5 Million $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 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 Ho ow w D Di id d W We e R Re es sp po on nd d? ? H H o o w w D D i i d d W W e e R R e e s s p p o o n n d d ? ? Revenue vs. Expenses $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 $­ 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

Operating Revenues, 2007 ­2012 W W Wh W h ho h o ol o l l le e e es s sa s al a a l le l e S e e Sa S S a al a le l l es e e s s s 14,000,000 $11.9 Million $3.5 Million 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 2007 2008 2009 2010 2011 2012

Interest Earnings, 2007 ­ 2012 $2,500,000.00 $ $1 $ $ 1 1 1. .9 . . 9 92 9 2 2 2 Mi M il ll li io on n M M i i l l l l i i o o n n $2,000,000.00 $1,500,000.00 $1,000,000.00 $500,000.00 $4 $ $ $ 4 44 4 4 4 4, ,2 , , 2 21 2 15 1 1 5 5 5 $­ 2007 2008 2009 2010 2011 2012 07 08 09 10 11 12

Number of Accounts, 2007 ­ 2012 25000 24000 23000 22000 21000 20,681 20000 20,106 19000 18000 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

Fleet Vehicles 200 134 150 126 100 78 64 50 0 2007 2008 2009 2010 2011 2012 2013 07 08 09 10 11 12 13 Total Vehicles In Fleet Vehicles On Road $1,200,000 Fleet Costs: $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 07 08 09 10 11 12 2007 2008 2009 2010 2011 2012 * *T * * T T Th h h he e e av e a av a ve v er e e r ra r a a ag g g ge e e e a a ag a g g ge e o e e o o of f f f f fl f f l l le e e ee et e e t t v t v ve v e e eh h hi h i i ic c cl c l l le es e e s s i s i i is s s s 1 10 1 1 0 0 y 0 y y ye ea e e a a ar r r rs s s o s ol o o l ld l d d. d . . .

Number of Employees, 2007 ­ 2013 120 110 100 90 90 87 80 70 60 50 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 Purchased Power & Other Power Supply $0.13 Transmission & Distribution $0.05 Consumer Accounting & Customer Service General Administration $0.44 $0.09 Taxes $0.04 Debt Service ­ Principal $0.03 Debt Service ­ Interest $0.04 Net Capital Outlay $0.19 Es E E E st s s t t ti i im i m ma m a at a t te t e e ed d d d C Co C C o o os s st s t ts t s f s s fo f f or o o r S r r S Sp S p p pe e e ec c c ci i i if f f fi i i ic c c A c A Ac A ct c c ti t t i iv i vi v v i i it t ty t y/ y y /P / / P Pr P r ro r o oj o je j j ec e e ct c c 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

EMP 2013 Cash Requirements Purchased Power & Other Power Supply $0.14 Transmission & Distribution Consumer Accounting & Customer Service $0.06 General Administration Taxes $0.11 $0.51 Debt Service ­ Principal Debt Service ­ Interest $0.05 General Funded Plant Investment $0.03 $0.04 Es E E E s st s t t ti i im i m ma m a at a te t t ed e e d d C d C C Co o o os s st s ts t t s s s f f fo f or o o r r S r S S Sp p p pe e e ec c c ci if i i f f fi i i ic c c A c Ac A A ct c c ti t t iv i i vi v v i it i t ty t y/ y y /P / / Pr P P ro r r oj o o je j j ec e e ct c c 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 of 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 6 5 4 3 2 1 0 * Average = 7.532 cents / kwh

How Do We Compare Locally? 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 Average Energy Rate ($/kWh) 0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0.00 Okanogan Okanogan Douglas Chelan Grant Benton Franklin Ferry Nespelem Okanogan Current September 2013 Valley Co­Op Proposed

Questions?