Commissioners back continued funding for fiber build out
After months of study and deliberations, receiving feedback from customers and recommendations from staff, Grant PUD’s board of commissioners came to a preliminary consensus on how to fund fiber expansion for 2018.
Chief Financial Officer Jeff Bishop presented to the board the current financial condition of the fiber network (a negative cash-flow of $1.86 million in 2016, not including interest, depreciation and cost of existing backbone fiber), and also presented options to pay for expansion of the fiber foot-print (currently available to 70% of the county) by either deferring capital projects (which would result in increased risk and cost of keeping the electric system reliable) or raising rates on the electric system. He also presented staff’s proposal of using revenues or cost savings generated by the fiber system above the $1.86 million subsidy to pay for expanding the fiber system to the remaining 30% of the county.
Following Bishop’s presentation, the board discussed ideas for expansion. Commissioner Tom Flint said he believed the utility needed to follow through with building out fiber to those who do not have access to a broadband service.
Commissioner Bob Bernd said the PUD needed to deliver on its promise of bringing fiber to locations who early on had overwhelmingly said they wanted fiber and were still waiting for it, especially in portions inside the city limits of Ephrata and Moses Lake.
Commissioner Terry Brewer said he agreed that Grant PUD should consider expanding if it could do so without being a financial hardship on the utility or mean that needed projects are delayed or deferred.
Commissioner Dale Walker said he believed that the utility had the money in cash reserves to fund expansion.
Chief Executive Officer Kevin Nordt suggested that the board look at money in the Reserve and Contingency Fund and use money above the target of $155 million to pay for expanding the network.
That decision would be reviewed annually until the fiber expansion is complete. Nordt said he would have staff determine what that amount would be at the end of this year and then those dollars will be budgeted for fiber expansion in 2018. Staff would present the commissioners with a plan for funding and expansion for their approval in an upcoming meeting.
Commissioner Larry Schaapman said that he would like to try this approach for a year and then have it reviewed annually to make sure it does not harm the utility’s financial position.
Brewer asked if the utility would be able to physically deploy fiber expansion in 2018 even if there is funding. Nordt said the Network staff has developed preliminary plans by looking into locations that would be the least costly to reach and should be able to have recommendations for expansion areas in a timely manner.
The commissioners stated that they wanted to see the utility work with Internet Service Providers and customers on the build out so there was some assurance that fiber is going to areas where there will be a high take rate and commitment from prospective customers.
“We need to take fiber to places where the people are going to use it,” Flint said.
In other business:
- The Grant PUD Safety Continuous Improvement Team No. 2 members were introduced to the board. Members are Mike Bradshaw, Luis Sanchez, R.J. Fronsman, Jared Mooney, Joe Boitano, Russ Seiler, Brian Black, Tim Crawford, Kevin McAlexander, Ryan Roeder, Jared Youngers, Susy Anderson, Rob Sage and Nels Hanson. Board president Larry Schaapman thanked the team and others involved in improving the safety culture of the utility. “Hats off to you guys and the work you’re doing and follow up follow through is key,” he said.
- The commission passed resolution 8862 – Resolution of Public Utility District No. 2 of Grant County, Washington, Providing for the Issuance of Electric System Revenue Refunding Bonds of the District in the Aggregate Principal Amount of Not to Exceed $50,500,000 for the Purpose of Repaying the Electric System Revenue Bonds, Series 2014‐K; and Delegating Authority to Approve the Final Terms of the Bonds.
- The commission also passed a motion authorizing the General Manager, on behalf of Grant PUD, to execute Change Order No. 20 to Contract 330‐4018R with Knight Construction and Supply, Inc., for work on the Wanapum Dam Spillway Gate Painting and Trunnion Rehabilitation project, increasing the not‐to‐exceed contract price by $302,665.00 for a new contract total of $15,913,565.00, modifying the completion date in accordance with change order documents, and resetting the delegated authority levels to the authority granted to the General Manager per Resolution No. 8609 for charges incurred as a result of Change Order No. 20. (3223)
- The commission approved a motion authorizing the General Manager, on behalf of Grant PUD, to execute Change Order No. 8 to Contract 230‐4201 with Long Painting, increasing the not‐to‐exceed contract price by $607,473.00 for a new contract total of $3,270,091.67, to remove the lead paint on the generating units at Priest Rapids Dam and recoat them, revising scope of service, modifying contract completion dates in accordance with change order documents, and resetting the delegated authority levels to the authority granted to the General Manager per Resolution No. 8609 for charges incurred as a result of Change Order No. 8. (3224)
The commission approved payment of Cave B invoice dated September 27, 2017, in the amount of $15,409.94. The amount pays for Grant PUD’s expense in hosting the 2017 Shoreline Management Workshop in September.