Chelan PUD outpaces budget through first half of 2026

WENATCHEE — Chelan County PUD is running well ahead of budget halfway through 2026, but officials say delayed project spending and softer wholesale power markets are expected to erase that advantage before year's end.

The district reported a $74.6 million bottom line through June 30, about $14 million ahead of its budgeted $60.6 million. Operating expenses totaled $163.8 million, approximately $24.5 million below budget, more than offsetting operating revenues that came in $9.7 million below expectations.

"Our Q2 year-to-date quarterly financial results are coming in strong," Strategic Financial Planning Manager Nathan Townsend told commissioners on August 3. "Our bottom line is $74.6 million, or about $14 million over budget."

Townsend said the favorable midyear results were driven primarily by lower-than-expected operating costs, while emphasizing that much of the difference reflects the timing of planned work rather than permanent savings.

"We will meet our spending goals by the end of the year," Townsend said. "We're just a little bit behind on the timing."

That shift is reflected in the district's updated forecast. While the first half of the year outperformed expectations, officials now project a year-end bottom line of about $109.2 million, roughly $14 million below the original budget forecast of $123.2 million.

Lower wholesale power prices and milder-than-normal weather both contributed to revenues falling short of budget through the second quarter. At the same time, the district expects capital construction and operating projects delayed earlier in the year to move forward during the second half of 2026.

Cash remained strong at $580 million through June, while total outstanding debt stood at $221.8 million. The current financial forecast assumes no new external debt, with planned capital projects funded from existing cash reserves.

That outlook prompted Commissioner Carnan Bergren to question whether continuing to reduce debt should remain the district's long-term strategy as it prepares for future infrastructure needs.

"At some point in this scenario as we go forward, when are we gonna address that?" Bergren asked. "Really, are we trying to be debt-free?"

Bergren said borrowing can be an appropriate way to spread the cost of long-lived infrastructure between current customers and future ratepayers who will also benefit from those investments.

"We have substantial risks ahead of us when it comes to fire, and we're experiencing that right now," he said. "I think it's appropriate for this board to look at that and strategize down the road and how that's gonna affect our ratepayers today and future ratepayers in the future."

Townsend said those questions will continue to be part of the district's long-range financial planning. While the forecast assumes no additional borrowing, he said the PUD's strong financial position and very high credit ratings leave it well positioned to access capital if future strategic priorities require it.

The district also reported $58.9 million in capital expenditures through the second quarter, about $29 million below budget because of project timing. That figure is expected to reach approximately $173.1 million by year's end as work accelerates on substations, hydroelectric facilities, transformer purchases and other planned capital improvements.

Despite the lower year-end forecast, Townsend said the district continues to meet all of its long-term financial targets, including debt ratios, debt-service coverage and cash-on-hand goals.

"Our recommendation is to stay the long-term course," Townsend said.

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