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Commission recap 01-14-2020: Priest Rapids embankment work expected to cost less

Managing Director of Power Production Ty Ehrman told commissioners Tuesday that the low bid to build a secondary embankment on the Yakima County side of Priest Rapids Dam came in at $33.4 million, almost $13 million less than the engineer's estimate.

Staff is recommending the low bidder, IMCO Construction of Ferndale, WA., for the job. Work is expected to begin by early March and be finished by May 2023. Commissioners are expected to vote on awarding the bid at their next meeting Jan. 28 at Ephrata headquarters. The Priest Rapids right-bank project is a federal requirement to improve the dam's seismic resistance.

Ehrman also reviewed the highlights of 2019, including unit available at Priest Rapids and Wanapum dams.

The percentage of time turbine/generator units were available to generate electricity was far below target last year, he said. Unexpected unit outages at Priest Rapids Dam are mainly to blame.

The aged units at Priest Rapids Dam are undergoing a 10-year rehabilitation process to replace or repair decades-old equipment. Unexpected outages happened at five of the dam's 10 units last year, including a fire in each of two of the units' exciter cabinets. Ehrman attributed the fires to inadequate record keeping that resulted in a lack of needed maintenance to the two units. Efforts are underway to improve.

"It's safe to say we had a rough year," Ehrman told commissioners. On the fires, he added, "This is a very good example of the need to be clear and crisp in documenting our maintenance program."

View Erhman's presentation here, pages 1-17. Listen to it at 1:13:08 on the commission audio.

Commissioners also:

— Learned that the Lands and Recreation Department capped a busy 2019 that included a major effort to use global information system technology to document the shoreline area around Priest Rapids and Wanapum Dams. Shannon Lowry, manager of Lands and Recreation, called the summer of 2019 a "baseline year" for Grant PUD. Record crowds visited the utility's 20 shoreline-area recreation sites, yet utility staff received no negative comments from any member of the public.

"It takes good team work to keep the public satisfied and safe," Lowry said.

She pointed to good results working with the community of Columbia Cliffs, just upriver of Crescent Bar, to remove encroachments of their private property onto Grant PUD's public shoreline. Community members have done everything the utility has asked, Lowry said. "They saw the vision they wanted to maintain over time, but also respect our policies. We're in very good shape at Columbia Cliffs."

Encroachments could be structures, including docks and buildings, not allowed on Grant PUD's public lands. Lands and Rec staff last summer spotted a yurt that someone had built on the public shoreline between Sunland Estates and Crescent Bar. They contacted the yurt's owner, Lowry said, who apparently thought he'd built the yurt on private land. Grant PUD is currently working with the owner to have the yurt removed.

Plans for 2020 include rebuilding the Buckshot Recreation Area near Priest Rapids Dam. The area's boardwalk and duck blind burned in a wildfire in 2018. Other plans include dredging in the Priest Rapids Recreation Area near Desert Aire and repair of the Upper Wanapum Boat Launch.

View Lowry's presentation here, pages 18-27. Listen to the discussion at 1:42:20 on the commission audio.

— Heard that Grant PUD plans to replace a power-purchase contract with Shell Energy with three smaller contracts. Negotiations and discussions are underway. More details will be available at a future meeting. The Shell contract is for 53 percent of the output of Priest Rapids and Wanapum dams. It expires in September 2020.

See the full presentation here, pages 29-40. Listen to the discussion at 2:15:25 on the commission audio.

— Got an update from Grant PUD Compliance Program Manager Gene Austin on efforts to create a reorganized Reliability and Compliance program to ensure the utility meets all federal requirements for reliable system operations and cyber security. The goal in 2020 is a clean triennial compliance audit, scheduled for mid August.

See the full presentation here, pages 41-58. Hear the discussion at 2:30:00 on the commission audio.

— Heard a quick recap from Chief Financial Officer Jeff Bishop and Treasurer Bonnie Overfield about last week's successful refinancing of $200 million in bonds and pay-down of $85 million in total debt. The refi and pay-down together are expected to save Grant PUD $125 million in reduced or avoided debt service over the coming decades. See a news release here. Listen to the discussion at 1:06:19 on the commission recording.

— Unanimously approved a request to transfer funds from the Electric R&C funds for the purpose of paying down some of the utility's outstanding debt. The transfer is per the Grant PUD finance plan and will be for whichever is less —$28 million or excess balance above $100 million from the Electric R&C fund. See details on pages 60-61 of the commission packet.