At the July 11 board meeting, commissioners endorsed General Manager Frank Lawson’s draft strategic plan, and provided guidance to staff for developing the 2018 budget.
Commissioners suggested some minor modifications to the draft strategic plan, and commended the GM for creating a document that is simple and consistent with the Board’s direction and views on where EWEB should be heading. In the plan, Frank defines the two most critical issues facing the utility in the next decade and outlines a high-level, three-phase roadmap for the next 10-12 years.
“Over the last year, I’ve been listening to issues the board has brought forward, working with staff in a variety of areas, and all of that has been building into this plan.” said Frank. “The document will help staff focus our work, and will provide a basis for the board to evaluate decisions moving forward.”
The most significant decisions confronting EWEB in the next decade–what Frank refers to the two “Big Ones”–involve, (1) our electric resource portfolio, including the renewal, replacement or termination of major electric generating resource contracts, and (2) emergency preparedness/disaster recovery efforts for both water and electric.
“Defining the issues is only part of the work,” Frank said. “There are things we have to do to position ourselves over time, and build toward addressing these issues.”
To that end, the draft strategic plan defines a sequence of efforts that move EWEB toward what Frank describes as a “resilient delivery” business model. “Our future success depends on our ability to synchronize power and water resources with changing customer needs under a variety of conditions, including emergencies and natural disasters,” he said.
The three strategic phases are defined as:
1.Foster customer confidence through focused performance, especially related to costs and service responsiveness
2.Create consumption flexibility through smart infrastructure investments, and by enlisting customer involvement in specific programs and services
3.Create a more resilient grid and water network to better synchronize supply and demand
For the next 3-5 years, the focus will be on the first two phases, particularly efforts to foster customer confidence.
“We need customers to help us understand and potentially adjust consumption patterns in the future,” Frank said. “Widespread customer trust is essential.”
A critical piece of building that widespread trust is cost improvement.
“We need to deliver our products safely and reliably, and for a cost that’s affordable and aligned with what our customer-owners expect,” said Frank.
As staff begins the annual budget process, initial indications are that 2018 will be another step in that direction.
At the July 11 meeting, staff presented and commissioners supported, a set of financial assumptions that will allow the utility to begin building a 2018 budget that includes no overall average electric price increase, a dividend to electric customers, and a 3 percent water decrease.
Commissioners were enthusiastic about the possibility of stable or decreasing prices next year. Commissioner Mital applauded, saying “It’s kind of an amazing thing that we’re talking about a $5 million dividend to customers.”
If approved, commissioners will provide direction on the dividend amount and how it will be distributed among our approximately 83,000 residential customers.
Discussions will continue over the next several months, and will include opportunities for public input. Commissioners will approve the final budget in December, and price changes will take effect in February 2018.
In addition to the budget process, there are several big questions for the GM, staff and commissioners to tackle during the next several weeks and months, including:
•What is the future of our efforts to develop alternative water sources?
•What community programs will EWEB offer and how will those programs be structured and funded?
•Should the utility consider alternative implementation strategies for the Advanced Metering Infrastructure (AMI) project that could be more affordable and efficient?
•How do results from the Early Voluntary Retirement Incentive (EVRI) affect the workforce transition plan and what are the next steps?
The Executive Team met for an all-day retreat on Friday, July 14 to review the early retirement requests and work through resulting adjustments to the workforce transition plan. Staff can expect to learn more about any revisions to the transition plan and next steps within the next few weeks, according to Frank.
At the next board meeting on Aug. 1, Frank will bring back the updated strategic draft, and ask commissioners to formally approve the plan.
The Aug. 1 meeting will also include a discussion of alternative water sources. The 3 percent decrease in 2018 water prices is based on a staff proposal to defer construction of a Willamette River water filtration plant. Commissioners will discuss the AMI project again in the fall, and the GM plans to address the future of EWEB’s community programs as part of the budget process over the next few months.