Chelan County PUD commissioners reviewed a preliminary budget for 2023 that “delivers on a bold capital project plan with higher-than-forecasted revenue” from a strong market for its hydropower production.
Chelan PUD is a consumer-owned utility with nearly 100% of its electricity generation coming from hydropower. Revenues are expected to increase, as are operating expenses as the utility carries out the priorities in its five-year business plan and the 2020-2024 strategic plan, which include:
- Increase reliability with improvements to the electrical distribution system and a $3 million effort to prune trees and shrubs away from powerlines
- Invest in its assets with maintenance projects at the Rocky Reach, Rock Island and Tumwater dams
The preliminary 2023 budget includes about $215 million in the capital plan, including several large capital projects:
- Modernization of generating units at Rock Island Powerhouses 1 and 2, including developing the PUD’s first air-filled turbine hub
- Finishing construction of the Service Center and operations buildings
- Construction of substations in Leavenworth, Chelan and Malaga
- Installing advanced meters
The turbines in Powerhouse 2 at the 624 MW Rock Island hydroelectric project on the Columbia River are 42 years old and will be rebuilt one by one starting in 2022, Hydro Review previously reported, with all eight expected to be complete in 2030.
Construction is in full swing at the 19-acre Service Center campus after challenges with supply-chain issues, a labor shortage and the discovery of cultural artifacts. After this discovery in 2021, Chelan PUD paused groundwork for nine months while staff consulted Confederated Tribes of the Colville Reservation, Yakama Nation, the Wanapum, and the Washington State Department of Archaeology and Historic Preservation. The additional investigations and monitoring resulted in a new cultural excavation permit that allowed the PUD to move forward with groundwork in July 2022. Combined with inflation, supply-chain issues and labor shortages, the setbacks are expected to increase the $139 million cost by about $25 million.
Chelan PUD expects to wrap up 2022 with a $150.5 million bottom line, about $89 million more than budgeted due to surplus energy sales and the increasing value of hydropower as a carbon-free, renewable energy source. Part of that revenue will be used to cover the $25 million increase through the board-designated Strategic Facilities Fund.
