SMUD Board of Directors Approves 2019 Budget
SACRAMENTO REGION, CA (MPG) - The elected SMUD Board of Directors approved a $1.71 billion budget. The 2019 budget provides funding for all capital and operations and maintenance (O&M) programs needed to meet the Board’s Strategic Directions in the year ahead and in future years.
The 2019 budget is $25 million less than the 2018 budget, which is primarily due to lower planned capital expenditures, though SMUD anticipates an exciting and transformational year as the electric company continues laying the foundation for the future. Next year’s budget includes funding for many industry-leading initiatives and a variety of programs and investments that support the development of SMUD’s load-serving capacity, grid modernizations and compliance with regulatory requirements. Support for outreach and communications to educate customers about SMUD’s move to time-of-day pricing is also included.
Some major capital projects for next year include the rebuilding of three major substations that serve large numbers of residential and commercial customers, hydro generation facilities work and the designing and building of a new energy control facility. Completion of the SMUD Headquarters remodeling project, and new and ongoing technology projects are included as well.
Other major projects include removing and replacing more than 50 circuit miles of cable; automation of a couple of dozen high-voltage switches; upgrades and expansion of the downtown Sacramento electrical distribution network; expansion of the grid into new communities in Folsom and Rancho Cordova; and improvements at a bulk substation that serves the Arden area.
SMUD continues to be in a strong financial position. In 2017, Fitch and S&P upgraded SMUD’s credit ratings to AA, from an already impressive AA-, while Moody’s continues to rate SMUD Aa3. To maintain these credit ratings, which continue to be the highest in three decades, SMUD has a strategic financial target to maintain strong operating cash flow. Forecasted 2019 operating cash flow cover is 1.76 times operating cash flow, which exceeds the SMUD Board’s minimum target of cash flow cover of 1.5 times operating cash flow and supports a higher level of proposed capital spending. The higher credit rating produces a lower cost of borrowing.
SMUD customers continue to pay significantly less for electricity than most Californians, and as of September 1, 2018, more than 30 percent less than customers who are supplied by neighboring PG&E.
As the nation’s sixth-largest, community-owned electric service provider, SMUD has been providing low-cost, reliable electricity for more than 70 years to Sacramento County (and small adjoining portions of Placer and Yolo Counties). SMUD is a recognized industry leader and award winner for its innovative energy efficiency programs, renewable power technologies, and for its sustainable solutions for a healthier environment. SMUD’s power mix is about 50 percent non-carbon emitting. For more information, visit smud.org.
Source: SMUD Media