Commission recap 5-25-2021: First-quarter financials hold relatively firm to forecast
Grant PUD's 2021 adjusted forecast for total expenditures and net operating income remain largely on track through March, commissioners learned Tuesday, amid projections for stronger-then-forecast revenues from wholesale power sales, but a decline in net income.
Total expenditures this year are now forecast at $278.3 million, only slightly below the budgeted $278.4 million.
A $5.8 million reduction in net income is now forecast due to:
- Shift in labor costs from capital projects to operations and maintenance, offset by stronger wholesale market activity.
- Some customer-funded electric system upgrade projects budgeted for 2021 were completed in 2020, moving offsetting income from 2021 to 2020.
- A decline in interest earnings.
Grant PUD is meeting or exceeding its targets for liquidity, debt-service coverage and debt-to-plant ratios through 2026. Two other metrics – return on net assets and retail operating ratio — both measures of profitability – continue to fall short of long-term targets.
Days cash on hand has been recast from the budgeted 412 to the forecast 283.
Grant PUD will not issue new debt this year but will refinance $50 million in existing debt next month. Current plans call for $40 million in new debt next year and $50 million more in each of the following years to fund capital projects.
Commissioners meet 'TRi Energy' partners
On Tuesday Grant PUD Commissioners virtually met with the leadership groups involved in the TRi Energy Partnership. Members from Energy Northwest and X-energy expressed to the commission their excitement of the recently signed memorandum of understanding between the three organizations.
The TRi Energy Partnership is one option Grant PUD is exploring in the advanced nuclear field to potentially support Grant County's continued growth by offering an affordable and reliable carbon-free energy source.
Learn more about the TRi Energy Partnership and memorandum of understanding here.
Hear the conversation beginning at 1:46:45 of the commission audio.
- Heard from Julie Pyper, Senior Manager of Enterprise Project Management Office and Organizational Change Management provided an overview of the department's efforts to decrease project delivery risk while producing safe and quality outcomes of the utility's projects.
Pyper noted that in 2021 the department continues to mature since its formation in 2019. One accomplishment that shows this growth was the launch of the Project Management Framework in March. The document defines the operating procedures the department uses for managing projects.
The District's Organizational Change Management program is maturing as well with continued development of the framework and supporting over 11 change events in the utility.
The group is currently overseeing 33 active projects with approximately 20 more in the pipeline that the department anticipates initiating this year as the business line needs dictate.
-Unanimously approved an update to Grant PUD's Strategic Plan. The strategic plan is reviewed every six months by the commission. Updates to Tuesday's approved version include a new mission statement that emphasizes the district's commitment to providing fiber optic broadband services for our customers as well as updates to the vision statement description to affirm the importance of safety.
View the strategic plan on pages 8-34 of the commission packet.
-Unanimously approved a new 3-year, not to exceed $1,136,055 contract with the Washington State Dept. of Fish and Wildlife to conduct monitoring and evaluation of the Priest Rapids Hatchery fall Chinook program. The contract is the most cost effective and biologically prudent option for Grant PUD's Fish and Wildlife Department to achieve its mitigation requirements of the Priest Rapids Hatchery. View the contract and additional details on pages 35-73 of the commission packet.