Between the lines: A crystal ball
By Gwen Kautz, General Manager
gkautz at dawsonpower.com
If you can predict the future, we’d like to hire you. I suppose if you could do that, you could work for anyone, anywhere and make a fortune.
So, for now, Dawson PPD will have to settle on the same planning and utility predictions everyone else must use. Sigh. It’s not an exact science and after some critical assumptions are laid out, we are planning to give you a glimpse at the next few years regarding rates.
First, credit is due to Nebraska Public Power District for their ability to hold rates steady for the past few years. They have changed the way they bill us, which means we need to follow suit. The changes are small but will be impacting because our small power and commercial customers will need to adjust to a demand component on their future bills.
NPPD made some critical decisions that allowed them to hold rates by tackling cost components which included reducing their workforce. Dawson PPD made that difficult choice as well when we opted to close the customer service piece of our North Platte and Kearney offices. Customer traffic had declined significantly due to the options our customers have to pay their bill or interact with us.
We had a hurdle or two to get over in 2018 and it required us to think outside the box regarding revenue requirements. Had it not been for the cash reserves we had in place, the significant drop in irrigation sales due to a wet season could have been very detrimental. It demonstrated the importance of having reserves for times just like this. We made adjustments in our budget but those weren’t enough.
At the January 2019 meeting, the directors were introduced to a three-, five-, ten- year plan for rates. This is a decidedly different approach than we’ve taken before, and our customers should know it cannot be etched in stone. The one factor that has the biggest impact on Dawson PPD is something we have no control over: the weather.
The multi-year strategy uses financial metrics that the directors feel is crucial to the district as it relates to safety, reliability, affordability and sound business practices for this industry. It changes our plans for system improvements to reduce our financial liabilities. It strives to consider long-term rate impacts on customers and adjusts how we bill customers based on how we are billed by NPPD.
In the next few months, look for this blueprint to be introduced to you in a structure that defines the objectives in more detail. This is a new approach to customer communication. We believe the more you know, the better you can plan.