Business Briefs

Fitch raises PUD financial outlook to stable, awards A-rating

Back-to-back years of strong performances, a dedication to stabilizing finances and the expectation of continuing improvement have led Fitch Ratings to raise the Grays Harbor PUD’s financial outlook from ‘negative’ to ‘stable’ and award the utility with a ‘A’ credit rating.

“This is the result of a team effort to develop and then successfully execute a financial plan,” said PUD Board President Russ Skolrood. “This goes to prove that hard work and planning can make a real difference. I am very proud of the PUD staff and their work that brought us to this point.”

In compiling their report, Fitch Ratings examined the PUD’s financial history over the last decade and outlook for the next four years, its ability to respond and adjust to changing power markets and its financial liquidity, including stability in financial reserves.

The Fitch Ratings report credits an improved financial performance in 2017 and 2018, driven by favorable conditions resulting in higher operating income and the utility’s effort to rebuild cash reserves. Perhaps most importantly, the report states Fitch’s expectation that the financial profile will remain supportive of the rating through 2022, when “improvement is expected due to a decline in operating costs from the termination of an expensive power purchase contract. After that point, additional cash flow is expected to be available to fund the utility’s needed capex.” This refers to the PUD’s share of the Fredrickson Natural Gas Plant, which is expected to cost the utility $8.7-million in 2020. That contract expires in 2022, leaving the PUD with greater flexibility in operating expenses.

“For years we’ve spoken about the bridge to 2022, when expensive power contracts will begin to expire,” said PUD General Manager Dave Ward. “Fitch’s report tells us that not only is the bridge working and the utility is on firm ground moving forward, but that they are confident that it will continue to work. That shows a confidence in the future of the PUD and the direction in which we are headed.”

Ocean Spray credit union seeks merger

Merrimack Valley Credit Union (MVCU), one of the 10 largest credit unions in Massachusetts, and Ocean Spray Employees Federal Credit Union have proposed merging to create one organization. Ocean Spray Employees Federal Credit Union provides financial services to Ocean Spray Cranberries Inc. employees, contract-member growers and their families, offering a variety of savings and loan products to its 1,100 members nationwide. Ocean Spray Employees Federal Credit Union and Merrimack Valley Credit Union members will vote on the proposed merger on Monday, Dec. 9.

Workers’ comp prices dropping for third year in a row

TUMWATER — For the third year in a row, the price of workers’ compensation insurance is dropping in Washington.

Today, the Department of Labor & Industries (L&I) announced a 0.8% decrease in the average amount employers will pay for the coverage in 2020. L&I cut rates by 5% in 2019 and 2.5% in 2018.

Under the lower 2020 rate, employers will pay an average of about $15 less per employee for a year of workers’ compensation coverage. As a result of the reduction, as a group, employers will pay $21 million less in premiums next year.

Workers will see a very small increase in what they pay for workers’ comp insurance because the average wage for workers in Washington has gone up. The new rates take effect the first of the year.

L&I made the final decision on rates after taking public input, including hosting three public hearings around the state.

L&I determines the proposed rate for the following year by looking closely at expected workers’ compensation payouts, the size of the contingency reserve, wage inflation and other financial indicators.

Rate decreases in the last two years, along with some small increases in premiums since 2014, have kept rates steady and predictable, making it easier for employers to budget for workers’ compensation costs while keeping the system healthy and stable.

The 0.8% rate decrease is an average. An individual employer’s actual rate change may be more or less depending on that employer’s industry and claims history.