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Age: 69 Occupation: Incumbent PUD Commissioner/Retired PUD Employee Town of residence: Sacheen Lake/District 1
Editor’s note: Candidates were asked to answer in no more than 650 words total for all three questions. For instance, they can use 300 words on one question, 200 for another and 150 for another question or other combinations, not to exceed 650 words total.
Question: What would you do to ensure the long-term fiscal viability of the PUD considering anticipated increases in power demands, as well as increases in operational and regulatory costs?
Answer: I once quoted in a public Board Meeting that this Board must
Onley be like “Jack,” Nimble and Quick with decisions financial and otherwise to move the PUD forward in a positive direction.
We are currently, with a consultant’s assistance, evaluating an upward glide path to ensure that the reserves are stable to maintain, upgrade, and perform cost-conscious improvements to the system where necessary. Back to being Nimble, the Board has the authority to raise rates at any time and as often as might be necessary. If there is a huge catastrophic event, and we have had them, like a windstorm, after a quick analysis by the PUD team a rate increase could be proposed in the next Board Meeting and then followed by the process of hearings implemented very quickly.
It could be a significant rate increase. Opposite of that, if things are going well, the Board has considered a rate decrease in 2022 and settled for a no increase and again in 2023 the Board voted for a no rate increase as the upward trajectory of the PUD reserves was still on the rise and has yet to dip even in these struggling inflationary times.
Question: Should the PUD continue to use some of its cash reserves to keep from raising electric rates to balance the budget, as it did last year? Won’t that lead to larger rate increases in the future? Why or why not?
Answer: Yes, the PUD should consider reserves when considering rate adjustments! The PUD has approximately 10 thousand dollars for every customer sitting in the bank, too much. The reserves are increasing at an alarming rate over the past decade with hardly ever a down tick.
The money needs to be put to use for Capital Projects and also Rate considerations.
Probably not larger rate increases in the future when the appropriate trajectory of our finances is established by consensus of the Board. The Board needs to set a comfortable, but not have an excessive, cash-on-hand metric, for example 180 days, maybe even 270. With an agreed target we then can use the excess reserves of the target days cash-on-hand amount to consider rate relief (small or no increase as in 2022 and 2023) and then adjust periodically with rate increases that maintain that level of reserves. PUD staff is working along with a consultant to develop a systematic rate increase system, where small rate increases are programmed in the beginning to occur annually, without hearings or Board blessings. That is smart, but it also must be understood that it too must be visited often to adjust upward or downward the proposed rate increases as the dynamics of finance will change.
Question: Which is preferable, funding capital projects by selling bonds or using the cash reserves? Why?
Answer: I don’t like to borrow money, although admittedly I have in the past for a home, car, college, etc. I bring that personal belief to the Board.
So, the answer from my perspective, most projects should be cost conscious and should be self-financed. Very large projects may require a hybrid of self-financing and bonds. It does not excite me to strap our children, grandchildren, etc. with debt. However, I do realize that there are certain large capital expenditures that may require some debt financing. Like someone buying a home, I would prefer to see a large down payment of 20 to 40 percent or more toward the project financing with little debt left to our future generations.
