Commissioners Tuesday appeared ready for a Dec. 12 vote on both their own directive to add $7 million to the 2018 budget to expand the fiber network and a staff proposal that would increase the wholesale fees the internet service providers (ISPs) pay to sell internet and other services over Grant PUD’s High-Speed Network.
Fees these companies pay for wholesale fiber basic and premium access would increase by $3 per month. The staff proposal would also create a new “re-transmission” (aka retransmit) policy and fee to ensure the PUD is reimbursed by those ISPs or individuals who provide multiple customers with wireless internet service from a single fiber connection.
The fees, all part of Rate Schedule 100, would take effect March 31, 2018 to give local ISPs time to determine how any increases will be implemented and passed on to their customers.
The retransmission policy and fee is something commissioners requested from staff months ago and is fairly typical for wholesale providers, according to Grant PUD Fiber Project Specialist Russ Brethower. The ISPs have been part of the process throughout the year to modify the current rate schedule and also address the retransmission issue.
Retransmission generally describes any situation in which a customer or carrier takes service from Grant PUD and then subsequently transmits it on to other customers. Retransmission typically occurs when a service provider takes fiber service from Grant PUD and then retransmits it wirelessly to multiple wireless customers while paying only a standard single customer subscription fee. This results in a lost revenue opportunity for Grant PUD to cover the expenses of operating the High Speed Network.
Based on consultation with telecom engineers and service providers, staff proposed changes to the customer service policy to restrict retransmission unless a service provider agrees to pay the new retransmission rate.
The retransmission rate — called an “off-network” rate — provides for the retransmit of signal using wireless or other means while charging a premium rate and limiting the total amount of data that can be transmitted at any given time. The service will be offered with a maximum bandwidth of 50,100, or 1,000 Mbps with associated rates of $75, $150, and $500 per month. This product and rate schedule will be evaluated annually to ensure a balance of competitive product offerings and associated pricing.
Commissioners’ discussion Tuesday also included their own directive that staff take $7 million from existing Reserve and Contingency (R&C) Fund reserves for continued expansion of the High-Speed Network in 2018, as long as the R&C fund level doesn’t drop below the $120 million target.
PUD General Manager Kevin Nordt shared that staff would be back in early 2018 with a plan for how best to utilize the additional funding. “We know how to build out (fiber) but we want to build it out in areas that are the most efficient,” said Nordt.
In other news…
2018 Budget Update (TIMESTAMP 2:39:00): Commissioners were updated on a $10.5 million increase to the 2018 preliminary budget of $263.8 million. Chief Financial Officer Jeff Bishop explained that the reasons for the change to the budget centered around changes to “CIAC revenues” (the contributions individuals, developers and companies make to expand or upgrade their electric service), net wholesale power sales revenues and an additional $7 million in capital to fund fiber expansion in 2018. The board is expected to take action on the 2018 budget at their next regularly scheduled business meeting on December 12.
Resolution 8863 (TIMESTAMP 4:23:15)- Resolution adopting a Crescent Bar comprehensive water system plan: This plan, required by the state departments of health and ecology, authorizes crews to proceed with the construction of the remaining water system improvements at Crescent Bar. Now that the board has approved the plan, it is anticipated that the Washington State Department of Health will issue approval of a water system plan by the end of the year. The improvements underway at Crescent Bar resolve outstanding issues associated with water pressure, supply, quality, reliability and fire protection in time for the 2018 recreation season. Per the settlement agreement with island leaseholders, the costs associated with operating the Crescent Bar water system are borne by the users of the water. Currently, costs associated with water service are included in leaseholder payments and are split with 90 percent of the cost for improvements going to leaseholders and 10 percent to Grant PUD. The resolution passed unanimously.
Resolution 8864 (TIMESTAMP 4:24:00)- Resolution accepting a Bid for Awarding contract 430-077770 for Crescent Bar Water System Stage 2. This resolution paves the way for final completion of the Crescent Bar Island water system. Specific improvements under the contract include: a new potable water system well house, inwell pumps, motors and controls, new chlorination equipment, installation of new water meters, backflow preventers, leaseholder connections, and installation of fire hydrants throughout the leased area. The new water system rectifies existing water system deficiencies and satisfies requirements of the Washington State Department of Health, Grant County Fire Marshal and the Federal Energy Regulatory Commission (FERC). The contract for the work was slightly below the engineers estimate and awarded to low bidder, KRCI LLC of East Wenatchee for a not to exceed amount of $1,804,947.61 and has a completion date of July 27, 2018. The resolution passed unanimously.
Resolution 8865- Resolution establishing Rate Schedule No. WD1: This rate schedule follows months of conversation with both the U.S. Bureau of Reclamation (USBR) and the Columbia Basin Irrigation Districts and spells out new cost-based charges for wholesale wheeling services. Under the former contract which expired earlier this year, USBR was not charged for these services, and going forward will be charged per the rate schedule No. WD1. Darvin Fales of the Quincy Columbia Basin Irrigation District provided public comment in advance of the board’s consideration of the resolution and requested that the board not act on the resolution until local irrigation districts and the USBR have time to review and sign a temporary MOU extending service into late 2018. This extension would allow the USBR, local Irrigation Districts and Grant PUD additional time to work toward finalization of a long term wheeling agreement. After discussion among the commission, it was determined that the resolution would be tabled until the December 12 meeting.
Resolution 8866 (TIMESTAMP 4:26:50) – Resolution of Public Utility District No. 2 of Grant County, Washington, Providing for the Issuance of Electric System Revenue and Refunding Bonds of the District in the Aggregate Principal Amount of not to Exceed $80,000,000 for the Purpose of Refunding Certain Electric System Bonds and Financing Capital Improvements to the Electric System; and Delegating Authority to Approve the Final Terms of the Bonds: With recent developments regarding tax reform, staff recommended moving up the refunding that was scheduled for Q3 of 2018 to the current month’s (December) financing effort. Commissioner Schaapman commented that, “I would like to thank staff for their due diligence on having forward thinking and getting some of this retired prior to the year…We had some tax benefits that we were concerned about so kudos for being ahead of schedule.” The resolution passed unanimously.
Motion 3227 (TIMESTAMP 4:41:29) Commissioners approved indemnification of Chris Heimbigner and authorized Steve Winterbauer and Winterbauer and Diamond to defend Mr. Heimbigner in pending litigation filed by Wayne Black against Grant PUD and Mr. Heimbigner. The motion passed unanimously.