Commission Meeting Recap May 8, 2018

DURING TUESDAY’S MEETING COMMISSIONERS

– Grant PUD commissioners unanimously agreed on May 8 to move forward to create a new customer rate class for cryptocurrency miners that would protect the interests of the utility’s existing customers. (Discussion and vote begins at the 3:07:43 on commission recording)

By adopting this policy, the board also affirmed its position that core irrigation, residential and commercial customer groups –– will continue to be first in line for access to the benefits of low-cost energy generated at Grant PUD’s hydro facilities. The policy also creates a priority status for traditional commercial and industrial customers who are waiting for power service. The new “Evolving Industry” rate class provides more certainty of costs and waiting periods to the large number of cryptocurrency firms interested in service.

“I think it’s important that we adopt this resolution … at this time we haven’t defined the rate yet or the particulars of the class policy, but setting aside a new class is important so that we can go ahead with our traditional lines of business, the existing agricultural processing and large industrial sector etcetera,” said commission president Terry Brewer.  “People that have had growth plans before us for two or three years will be able to move forward while we put the (Evolving Industry) policy together. The thing that we’re all concerned about is protecting the district from any adverse risk and at the same time allowing our traditional customer base to function and grow as they intend to.”

With the new plan, cryptocurrency firms would pay a rate — to be determined — that covers both Grant PUD’s cost to provide their electricity and any elevated risks they pose to the utility’s other customers.  Similar to the pricing for current large industrial customers, the new policy requires these emerging businesses to pay more, so core residential, irrigation and commercial customers can continue to pay below-cost rates. Evolving Industry customers would cover extra costs if Grant PUD has to pay more to bring additional power resources into the county to serve their load.

By July 1, Grant PUD plans to begin processing applications for traditional commercial and industrial customers, who have been waiting for electrical service since last fall, while staff developed this new policy. The utility is expected to implement the new Evolving Industry rate class by Aug. 1.

A product of six months of research and analysis, the new Evolving Industry rate would apply to businesses:

  • Whose primary revenue stream is evolving and unproven.
  • Whose ability to pay power rates long term is uncertain or at risk, compared to traditional customer classes.
  • Who are vulnerable to extreme value fluctuations of their primary output.
  • Who are at risk for detrimental changes in regulation.
  • Who could become part of a large concentration of power demand in Grant PUD’s service area.

Early on, cryptocurrency firms will likely be the only members of the Evolving Industry customer class, but the class will apply to all businesses that meet the same proposed risk criteria.

Evolving Industry customers would be placed in a secondary waiting queue for service and traditional commercial and industrial customers’ applications will be processed first. As with Industrial rate class customers, Evolving Industry customers would also pay an application fee and expenses to reimburse engineering costs, plus up-front costs to cover infrastructure upgrades needed to serve them.

Since summer 2017, Grant PUD has received an unprecedented 125 new service requests that total above 2,000 megawatts of electricity. This is more than three times the electricity needed to power all Grant County homes, farms, businesses and industry. One average megawatt of electricity provides enough energy to serve about 450 homes in Grant County. Approximately 75 percent of these requests are from cryptocurrency firms.

 In other business:

Commissioners approved a change order with North Sky Communications, increasing the not-to-exceed price by $4 million for a new contract total of $5.9 million for work to install fiber optic service in the fiber build out areas in northern Moses Lake and George. (03:14:00)

Approved a contract change order with the Washington Department of Fish and Wildlife to increase the contract price by $324,580 for a new maximum contract price of $2.338 million and extend the term from July 1, 2018 through June 30, 2019. The work is for monitoring and evaluation studies to fulfill Grant PUD’s obligations for fall Chinook salmon propagation at the Priest Rapids Hatchery. (03:15:18)

The commission also received reports about the following topics:

  • A quarterly financial budget update (0:56:30pages 1-15)
  • A review of the 10-year anniversary of Grant PUD’s license from the Federal Energy Regulatory Commission for the Priest Rapids Project (01:32:30pages 16-44)
  • An introduction and recognition for the Grant PUD’s Safety Continuous Improvement Team (02:07:40pages 45-55)
  • A semi-annual internal audit report (03:26:00pages 56-65)
  • A legislative report from external affairs (03:51:00pages 66-73)

Next commission meeting: June 12, Ephrata Headquarters

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