Grant PUD reserves at risk

EPHRATA — Grant County PUD expects to use $31 million in reserves next year to balance its budget with the expectation of lower Columbia River stream flows.

Grant PUD owns two hydropower producing dams on the Columbia River. River flows and water availability factor into power production and prices.

The PUD is expecting a $12 million to $15 million decrease in revenue due to water and price, said the utility’s Treasurer/Controller Jim Bunch on Wednesday.

As a result, revenue projections and the load forecast for 2009 were changed.

The changes include a lowered load projection by 10 average megawatts, which decreases the market power price from $48 per megawatt hour to $35.3 per megawatt hour, he said.

The lowered generation is based on 84 percent Columbia River flows, which is a 16 percent decrease.

If the load projection was decreased by 20 megawatts, market prices would be expected to lower from $49 per megawatt hour to $42.6 per megawatt hour.

In 2007, the PUD began its working capital fund with $63 million and ended with $61 million.

Last year, the fund started with $61 million and ended with $35 million.

This year, the utility will start its working capital fund with $76 million and end with $35 million.

In 2010, Bunch said he anticipates bringing money out of the reserve and contingency fund to balance the total receipts  from 2010 to 2013.

The PUD’s total receipts are less than its expenditures, he noted.

The key points to recognize is the reserve and contingency fund is to be used during a bad water year, he noted. Money is placed into the fund during a good water year.

Grant PUD General Manager Tim Culbertson said the utility is making its best assumption on the expected conditions.

Commodity prices were “clobbered” because of the recession, which collapsed power prices, said Joe Lukas, a senior policy advisor with the utility.