PUD's year-end financial report released

EPHRATA — The year-end 2006 financial report on Grant County PUD and its individual operating systems shows the utility's financial status exceeds expectations set during the year's annual budgeting process.

Jim Bunch, the PUD's acting treasurer/controller, said Monday the utility's staff members made great progress toward reaching the electric system goals of having $35 million in available working capital, which allows for short-term operational flexibility.

Bunch said they also made similar progress toward having $70 million in the utility's reserve and contingency fund, which can provide longer-term stability in situations of insufficient water and unexpected pricing environments

At the urging of PUD Commissioners Randy Allred, Greg Hansen and former PUD Commissioner Bill Bjork, the PUD reduced long-term electric system debt by $57 million in January.

The utility reached approximately $49 million available working capital, more than $14 million above the goal of $35 million, the PUD reports.

The PUD swept $23 million into the reserve and contingency fund in 2006 for a total of $42 million. The money brings the utility closer to the goal of $70 million in the fund.

The utility plans to continue working toward these objectives in 2007 and 2008.

The excess power costs incurred during the 2001 and 2002 energy crisis, $48.9 million in 2001 and $43 million in 2002, were deferred and amortized over a four-year period ending in 2006.

Deferring these costs enabled the PUD to maintain its debt service coverage ratio as specified in the electric system's bond covenants.

The PUD's status on the bond market grew in 2006, with improved ratings from Moody's Investors Service, Fitch and Standard & Poor's.

Positive factors during 2006 include favorable progress on the federal relicensing of Priest Rapids and Wanapum dams and the implementation of new power-sales contracts with the utility's power purchasers.

"Each of these efforts reflects the utility's strategic goal of maintaining a strong financial position," Bunch said.

PUD staff members review the utility's expenditures with the commission on a monthly basis and provide a more extensive financial report on a quarterly basis.