Commission recap, 10/10/2023 — Industrial and ag customers seek greater participation in rate discussion. More...

Members of two of Grant PUD’s largest power-consuming customer groups told commissioners Tuesday that they wanted more participation in commissioners’ ongoing discussion about how much to raise rates over the coming years and how the increases would apply to each ratepayer group.

“We’d like to be part of the wrestling match,” Dan Miller, spokesman for the Ag Power Users Group of Grant County told commissioners during the more than 60-minute discussion noted for its respect and cordiality. “It’s a question of you guys telling us your time frame, and we’ll come here and sit down and talk to you.”

“I appreciate the PUD holding this meeting today,” said Ryan Beebout, general manager for Sabey Data Centers, and a leader of the Grant County Industrial Alliance. “I appreciate the open dialog. I think we’ll get a lot farther and find a mutually beneficial solution if we have these open dialogs together. It’s good to see some collaboration between the industrials and ag.”

Central to the discussion is commissioners’ need to revise or replace a rate-setting policy, Resolution 8768, approved by the board in 2015. Based on a Grant PUD analysis of the cost to provide electricity to its different customer groups, the resolution proposed yearly rate adjustments to eventually arrive at the target “goal posts” that no customer group would pay less than 20% below its cost to serve, or more than 15% above its cost to serve by Dec. 31, 2023.

The resolution remains in effect, but commissioners four years ago agreed to depart from the resolution’s annual rate adjustments. Rates have not increased for four consecutive years.

Staff has proposed an average 2.5% or 3% rate increase, starting in 2024, with annual, 2% increases from 2025 through 2028. With strong load growth projected well into the future, a costly need for Grant PUD to develop new sources of carbon-free electricity generation to meet customer demand and changing methods of accounting, commissioners now see the need to modernize the resolution, if not replace it entirely.

Industrial customers, who pay above-cost for their electricity, worry about deviating from a rate plan based on tangible, calculatable costs of service with a gradual predictable schedule of rate increases. Ag customers, who pay below-cost for their electricity, once opposed Resolution 8768 but have warmed to it.

“There was always an assumption made where we were going to hit this magical date, but that can’t happen if you don’t have rate increases,” Commissioner and farmer Larry Schaapman said. “I’d be a proponent of goal posts, but how can we come together and come up with a reasonable solution? We want to represent you well, but we can’t do that if we all aren’t talking. We want to make everyone unhappy equally well.”

Commissioner Judy Wilson disagreed. “I’ve never been a proponent that cost of service is the true way to fix your rates. You can manipulate the cost of service to get the result you want. I look at Resolution 8768 as being outdated.”

General Manager & CEO Rich Wallen suggested both groups attend future commission meetings to stay engaged in the discussion. Commissioner Terry Pyle said they would do a better job assuring the ratepayer groups that commissioners are taking the feedback into consideration.

“In the past, we got into a shouting match (with ratepayer groups), and the decision was made to suppress the discussion because we weren’t getting anywhere,” Commissioner Tom Flint said. “Times have changed. Everyone in the room should have a chance to have input into where we’re going.”

“I think we need to take a little pause,” Commissioner Nelson Cox said. “We’ve taken a giant step today. We’re all here, talking. We can move forward together. I’ve got all the faith in the world about it, with these two entities (industrials and ag) sitting at the table. We don’t have to fight. We can work stuff out. I’ve got faith in us.”

Commissioners’ next budget discussion will be 10/17/2023 at 8:30 a.m. during a workshop in Grant PUD’s Ephrata headquarters’ commission room, 30 C Street SW.

Hear the full discussion at 3:50:56 on the commission audio.

Federal inspectors get good vibe from Grant PUD license compliance record

Federal Energy Regulatory Commission (FERC) inspectors were “very pleased” with what they saw in August during a three-day “environmental compliance” review of all 19 of Grant PUD’s recreation areas, its cultural resource and fish and wildlife programs, and current safety measures in place at the Priest and Wanapum plants.

Shannon Lowry, manager of License Compliance and Lands Services, told commissioners the inspectors reviewed the safety, integrity, and quality of the recreation, environmental, and cultural programs required by Grant PUD’s federal license to operate the dams. The inspectors also visited the Wanapum Heritage Center where they toured the facility and saw presentations of Grant PUD’s cultural resources and fish and wildlife programs. They also visited Priest Rapids Hatchery and entered the powerhouse of Priest Rapids Dam.

“It went really, really well,” Lowry told commissioners. Grant PUD staff spent 454 hours inspecting and prepping the areas subject to inspection prior to FERC’s visit. “We haven’t heard back from FERC yet, but they stated to us they were very pleased with what they saw.”

Lowry said she and her team expect FERC to issue a compliance letter soon noting their findings. FERC last conducted an environmental compliance inspection of the Priest Rapids Project in 2008.

See the full presentation on pages 1-14 of the presentation materials. Hear the discussion at 27:07  on the commission audio.

Forecast shows Grant PUD fiber buildout to be finished in October 2024

All residents of Grant County will have access to fast internet over Grant PUD’s fiber-optic network by late October 2024, Terry McKenzie, senior manager of Telecom and Fiber Services, told commissioners as part of her third-quarter business report.

Through August, more than 29,000 Grant PUD customers, county wide, already subscribe to services delivered over Grant PUD wholesale fiber, for an overall “take rate” of more than 71%, McKenzie said. The goal is for an 80% take rate, county wide.

Six years ago, Grant PUD commissioners launched an initiative to make the network available to every county resident. Buildout to the final unserved areas is expected to be finished by late October 2024. Visit https://www.grantpud.org/getfiber for more information about Grant PUD wholesale fiber and the buildout schedule.

See the full presentation on pages 15-30 of the presentation materials. Hear the discussion at 1:07:14 on the commission audio.

Commissioners also:

— Heard a staff proposal to enter into a three-year contract with highest bidder Portland General Electric for a 20% “slice” of the generation from Priest Rapids and Wanapum dams.

The proposed new contract would run from Jan. 1, 2024 to Dec. 30, 2026.

Under the deal, Portland General Electric would pay a yet-to-be determined price for the carbon-free hydropower generated by the Grant PUD dams. In addition the Portland utility would sell back to Grant PUD, electricity from the regional wholesale market to help supply the energy demand of Grant PUD customers.

Energy purchased from the wholesale market comes from a variety of generation resources, including carbon-producing coal and natural gas. Some energy buyers are willing to pay a higher cost for carbon-free hydropower.

The contracts maximize the financial benefit Grant PUD receives from its dams, lock in a price for the power Grant PUD sells forward, fosters financial stability and reduces risk from drought years, when hydro generation is lower, Flanigan said. These benefits help the utility keep rates lower for its customers.

Grant PUD currently also has similar slice contracts with Morgan Stanley and Avangrid. Commissioners are expected to vote on the proposed contract with Portland General Electric at their Oct. 24 meeting. See the full presentation on pages 31-39 of the presentation materials. Hear the discussion at 1:43:40  on the commission audio.

-- Approved a motion executing Change Order No. 9 to Contract 430-10632 with CDW Government Inc for a contract total of $2,069,269.95 and extends the new completion date to Oct 31, 2023. This contract provides for the licensing and support for all District Microsoft products. A new contract will be in place Nov 1, 2023.  See the full presentation on pages 8-16 of the commission packet.

-- Opened public hearings at 2 p.m. and (virtual) 6 p.m. to review the 2024 Proposed Budget. This public hearing was one of three held per requirements of RCW 54. Next year’s total gross expenses are $466.5m with offsets of $119.3m for a net of $347.2m. The electric system capital budget is $101m, the Priest Rapids Project capital budget is $71.9m and the district’s total operations and maintenance budget is $201.9m. Chief Financial Officer, Bonnie Overfield, along with managers over each of Grant PUD’s functional areas presented the overall and individual area budgets highlighting projects and activities that the budgets are to cover in 2024. The public hearing ended at 3 pm.See the full presentation on pages 40-88 of the presentation materials. Hear the discussion at 2:33:51 on the commission audio.