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Clark Public Utilities commissioners consider 2011 budget proposals
November 16, 2010
No change in electric rates is expected under proposed Clark Public Utilities budgets for 2011, CEO/General Manager Wayne Nelson told the utility’s board of commissioners today.
Nelson said with the current economic conditions, it was essential to keep expenditures as low as possible without reducing the service provided to customers. "As the economy worsened earlier this year, we took several major steps to reduce staffing and spending."
Nelson said one unknown is the size of an expected increase in power costs from the Bonneville Power Administration in October 2011. "Until we know the amount of the BPA increase we can’t know the impact on our retail rates," he said.
In reviewing budget details, Director of Finance Rick Dyer told commissioners the budgets were developed using the utility’s basic principles of providing customers with outstanding service, high reliability and doing so while controlling costs.
The proposed budgets for the utility’s Electric and Water systems assume a continuation of the region’s sluggish economic conditions. Electric System customer growth is anticipated to be about 0.5 percent, with the number of new water customers to be up about 1 percent.
The budgets assume sales to commercial and industrial customers will remain about the same as in 2010.
Electric System expenses for 2011 are expected to be about $373 million. That’s down from $388 million planned for 2010, but the final total is expected to be about $362 million after the cuts made earlier this year. As has been the case historically, about 69 percent of the budget is the cost of power the utility generates or purchases for sale to its customers.
The cost of natural gas used to produce electricity at the River Road Generating Plant is expected to be lower in 2011, but those savings will be offset by higher costs of power purchased from the Bonneville Power Administration and the purchase of wind energy.
Investments in energy conservation of $3.8 million were expected to be funded by rates in 2010, but the utility was able to fund $7.4 million in conservation projects from outside funding. About $2.1 million is budgeted for 2011 conservation projects, after accounting for funds from outside sources.
The wind energy and conservation spending is required by Initiative 937, which was passed by voters in 2006.
Spending on construction projects will fall to about $22.3 million, a drop of about $4 million from 2010. The reduction reflects the slow growth in the number of new customers as well as reduced electricity sales.
Dyer said the utility’s commissioners would consider several budget options for the Water System. Water System expenses are expected to be between $13.7 million and $14.7 million, depending on the option selected.
Construction spending would increase to about $4.7 million from $4.3 million in 2010.
Utility commissioners will hold a public hearing on the proposed 2010 budgets on Tuesday, November 30. The meeting will be held in the utility’s Electric Center, 1200 Fort Vancouver Way, beginning at 9 a.m. The commission is scheduled to consider budget approval at its December 14 meeting.
Clark Public Utilities is a customer-owned public utility district that provides electric service to more than 183,000 customers throughout Clark County. The utility also provides water service to about 30,000 homes and businesses in the Hazel Dell, Salmon Creek, Lakeshore, Hockinson, Brush Prairie, La Center, Meadow Glade, Amboy and Yacolt areas.
Clark Public Utilities was ranked highest in customer satisfaction among midsize utilities in the west by J.D. Power and Associates in 2008, 2009 and 2010.