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Utility Successfully Amortizes Deferred 2001 and 2002 Energy Costs
September 11 , 2006
EPHRATA - Grant PUD financial staff reported this week that as of August 31, 2006 all of the $91.9 million in purchased power expense deferred in 2001 and 2002 has been fully amortized as an expense over the past four years. The $7.5 million remaining balance amortized in August brings to a close the financial impacts experienced in the volatile energy markets during the 2001/2002 energy crisis period.
The excess power costs incurred during the 2001 and 2002 energy crisis, $48.9 million in 2001 and $43 million in 2002, were deferred and amortized with available revenues over the four year period 2003 to 2006. Deferring these cost enabled Grant PUD to maintain its debt service coverage ratio as specified in the utility’s Electric System bond covenants. The deferral of these costs is permitted by the Statement of Financial Accounting Standards Board No. 71 (SFAS).
Historically, Grant PUD has maintained a healthy financial record with high debt service coverage ratios as required in bond borrowing documents. By deferring these unusually high expenses in 2001 and 2002 Grant’s financial status remained in good condition through the period of dramatic power costs.
“We are pleased that the amortization of these expenses is complete,” said Commission President Randy Allred. “This process helped us maintain strong financial operations through the last decade.”
Media Contact:
Rita Bjork
(509) 766-2530
rbjork@gcpud.org
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