Proposal includes funds for Pateros-Twisp powerline

By Marcy Stamper

The Okanogan County Public Utility District (PUD) is working on a $51.6 million operating budget for 2018 for its electric power and broadband divisions, plus another $8.7 million for capital projects.

Funding for capital projects includes $263,000 to connect the new Pateros-Twisp transmission line to the powerline that feeds customers of the Okanogan County Electric Co-operative in Winthrop and Mazama, said Don Coppock, the PUD’s director of accounting, finance and administration and the utility’s acting general manager. Staff and commissioners have identified that work as a top priority in the budget, he said.

The cost of the powerline connection will ultimately be repaid to the PUD by the Bonneville Power Administration, which owns the transmission line that serves the upper Methow Valley.

The budget includes another $150,000 for completion of the Methow transmission line, mostly for monitoring and producing final “as-built” drawings and documentation, said Coppock.

The PUD’s wholesale power sales and purchased power have been fairly flat over the past year. A $3.3 million projected increase in retail electric sales in the 2018 budget comes from a 2-percent rate increase that took effect in September.

Wages have gone up by an average of 2 percent, with higher increases in the cost of employee benefits, particularly for health insurance, said Coppock.

The PUD proposes transferring $5.1 million from reserves to current operating expenses, a decrease from this past year. In 2017, they transferred $9 million, most from funds already allocated for the Methow transmission line, which paid for the construction, said Coppock.

Proposed capital outlays for 2018 include $1.2 million for Enloe Dam. That amount covers the cost of keeping the federal license for the dam, said Coppock. If the PUD decided to start construction, the budget would need to be adjusted, most likely upward, he said.

In 2018, $4.8 million for replacements and other regular maintenance have been budgeted as capital outlays, but Coppock said these standard costs should be covered by the operating budget in the future.

Since the 2001 energy crisis and the financial crisis later that decade, the PUD has been trying to get back to a funding strategy that would pay for standard maintenance and replacements from current operations, said Coppock. With anticipated benefits from the PUD’s portion of the Wells Hydroelectric Project and continuing financial recovery, the PUD expects that maintenance will be covered by the regular operating budget within the next few years, he said.

Other capital projects planned for 2018 include replacing aging transformers in Ellisforde and Whitestone, and initial design and engineering for a new transmission line from Okanogan to Ophir (north of Brewster) and for a substation in Tonasket. The budget includes $1.3 million for those four projects in 2018.

The PUD hopes that the Ellisforde and Whitestone transformers can be installed next year, but that work depends on delivery time for the transformers, which must be designed and built to exact specifications. While that ordinarily takes about six months, with damage to power infrastructure around the country from recent natural disasters, there could be a delay, said Coppock.

The PUD expects to borrow $10 million for the Okanogan-Ophir powerline and Tonasket substation in 2019, so that amount is not reflected in the 2018 budget, said Coppock. The 2-percent rate increase that took effect in September was conceived in large part to pay for these improvements over time, said Coppock.

The PUD has held two budget workshops so far, focusing on wages and benefits and on engineering and operations. The next workshop is Monday, Nov. 20, at 6 p.m. at the PUD’s headquarters in Okanogan, when they will discuss power supply and Enloe Dam.

The board plans to review the budget at its Dec. 4 meeting and approve the document at its Dec. 18 meeting.