Strong year-end puts Chelan PUD in best financial shape in more than a decade

WENATCHEE — Chelan County PUD finished 2025 about $18 million ahead of budget with a bottom line of $176 million, cash reserves totaling $584 million and a debt ratio just under 11 percent, a financial position staff said supports the utility’s AA credit rating and gives it flexibility for future projects.

“The district is in a really strong financial position, very supportive of the strong AA rating that we have,” Mark Mullins, who oversees the PUD’s budgeting process, told commissioners. “Low debt leverage and high debt service coverage provides us the financial flexibility that we need going forward.”

Mullins presented the year-end financial report Monday to board chair Kelly Allen and commissioners Steve McKenna, Randy Smith and Carnan Bergren in the boardroom, with Commissioner Garry Arsenault attending via Zoom.

“From a bottom line perspective, really strong at 176 million dollars, 18 million dollars better than budget,” Mullins said.

The year-end results came despite lower-than-expected returns in some areas.

“Net market-based revenue, 20 million dollars below budget,” he said. “Energy production is about 88 percent of where we expected to be and also market prices are coming in lower.”

Additional revenue from auctions under the state’s Climate Commitment Act and a federal tax credit for hydropower generation helped offset those shortfalls.

“We did apply for that tax credit and we were successful,” Mullins said.

From his Zoom screen, Arsenault asked to pause on the financial slide.

“Mark, can I just make a comment? I just can’t let that slide go by without saying something. It’s the finance guy in me,” he said.

He contrasted the current numbers with the utility’s position little more than a decade ago.

“It wasn’t that many years ago, 15, 13 years ago, when this was not the financial condition that the PUD was in. It was absolutely the opposite from what we have today and we are definitely blessed.”

Arsenault said the turnaround reflected years of staff work and tight financial controls.

“This didn’t happen by accident. It happened because of a lot of hard work from an awful lot of people who had input and fiscal responsibility and recognizing the fact that every single penny that we touch in this organization does not belong to us, it belongs to our rate payers,” he said.

He added that even if the utility paid off all of its outstanding debt, it would still hold hundreds of millions of dollars in cash.

“Just to make a point and drive this point home, if we paid off all of our debt we would still have about 385 million in cash and that’s unheard of for utilities,” Arsenault said.

Arsenault asked that the recognition be passed along to employees throughout the organization.

“Please relay that to everyone in your group, everyone that you talk to, and Kirk Hudson, please pass that on to every single employee,” he said. “They’ve done a wonderful job to get us here. This was not easy. It took a lot of work and a lot of people all pulling in the same direction.”

The year-end discussion placed the current results within the longer arc of the PUD’s finances, from a period of heavy borrowing tied to major capital projects to its current position of lower debt, higher reserves and increased financial resilience.

No action was required on the report.

Andrew Simpson: 509-433-7626 or andrew@ward.media