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Commission Recap 04/09/2019, Efficiency gains, solar energy in California puts downward pressure on wholesale energy

Increasing energy efficiency and a reduced need for California to buy electricity from the rest of the region are contributing to the lower price Grant PUD and other utilities are getting on the regional wholesale market from the sale of surplus electricity.

A proliferation of solar energy in California has reduced the state's energy consumption at peak times of the day by about 1,000 average megawatts, Devon Williams, Grant PUD's manager of Enterprise Risk Management, told commissioners Tuesday. Energy sold during peak times of the day fetches the highest prices on the wholesale market. The higher the price, the better for Grant PUD's surplus sales.

The population of California increased by 3 million to 4 million people between 2007 and 2018, and its economy grew by more than 15 percent. Yet its need to buy electricity from the rest of the region has declined from more than 7,400 average peak megawatts per hour in 2014 to 6,600 average peak megawatts last year, Williams said.

Many factors, including a glut of natural gas on the market, contribute to the revenue Grant PUD gets from the sale of its surplus electricity, making it hard to calculate a potential revenue impact, Williams said, but the downward price pressure is expected to continue.

Gains in energy efficiency in everything from appliances and televisions to the shift from incandescent to LED lightbulbs is also reducing the need for electricity across the region. Both Seattle and Portland have seen reduced load and demand for growth, Williams said.

That assessment was part of Williams' second quarter enterprise risk update for commissioners.

Most of Grant PUD's revenue comes from retail energy sales to Grant County homes, businesses, irrigators and industry. More than $211.3 million is expected in 2019 from retail energy sales. Just over $49.4 million is budgeted to come from net wholesale market and other power-sales, and $26.4 million from sales to Grant PUD's own wholesale customers. (The presentation begins at 02:03:00 of the commission audio and pages 26-62 of presentation materials)

Grant PUD gets clean financial audit

Grant PUD's 2018 financials, including internal controls and compliance over financial reporting, received a spotless report from independent auditor Moss Adams.

According to the auditing firm's final report, Grant PUD, auditors noted no material weaknesses, no significant deficiencies nor compliance findings. The auditing took place in March.

"This was a very clean report… It couldn't be better," Laurie Tish, firm partner, told commissioners, citing a "tone" from top managers that include an "ethical mindset" and "openness."

Tish called the final report "boring" for lack of findings.

"Well, boring is good," said Commissioner Larry Schaapman. "Thanks for the work you did."

Commissioner Tom Flint agreed. "In your report it was very refreshing to hear 'transparency.' That's part of our strategic plan… We value your independence. Your assurance is very valuable to us."

Grant PUD Chief Financial Officer Jeff Bishop thanked the entire financial team for their good work, getting prepared for the audit and helping to meet an early deadline for the audit's completion. (Hear the report to the commission at 02:30:15 of the commission audio and see the presentation on pages 26-62 of presentation materials)

Commissioners also:

Heard that performance at Priest and Wanapum dams are beating target estimates for the first quarter of 2019. According to Managing Director of Power Production Rich Wallen, the aggregate power production target from both dams has exceeded the 86 percent availability for the first three months of the year.

Wallen also reported that availability of power generation at the dams is up 1.68 percent this year compared to the same time period in 2018.

The quarterly report further highlighted safety improvements for the left bank attraction water supply at Priest Rapids Dam. Crews installed a temporary stair case allowing easier access for maintenance work within the section while it was dewatered.

The two days it took to install the temporary structure have been more than made up by increased efficiencies in the crews' ability to access the area. Previously personnel would use manned baskets to lower workers into the section to perform maintenance. At times safety concerns due to high winds or other weather conditions would prohibit the use of the manned baskets, hampering work progress.

Wallen noted that the use of the staircase structure shows the crew's commitment to safety, innovation and teamwork.

Power Production has also begun to use more of the tools available in the utility's asset-management software, Maximo. The goal is to have all hourly Power Production employees using Maximo's electronic timekeeping feature by the end of June. Doing so will allow for more accurate tracking of tasks related with project work. The transition from paper timesheets to the electronic system is currently underway. Several groups are already using the system which has eliminated the need to send individual handwritten paper timesheets to Human Resources for payroll processing. (01:13:10 of the commission audio and pages 01-16 of presentation materials)

Heard that Lands and Recreation received approval from the Federal Energy Regulation Commission (FERC) for the utility's Recreation Resource Management Plan. The plan sets the course for the department's recreation projects and activities for the next decade. Shannon Lowry, manager of Lands and Recreation, also reported to commissioners that to date there were no regulatory filings in 2019. Although next quarter, the department plans to submit three FERC filings.

Preparation for the 2019 recreation season is well underway. Recruitment of 10 additional crew members to help support the department this summer is complete. Campers will also find a revamped campground reservation system for Priest Rapids Recreation Area and Sand Hollow Campground. The updated online system launched in late March and provides users with greater ease of use as they look to make a campground reservation at those two sites.

Find the new reservation system here www.grantpud.org/visit-us (Hear the full departmental quarterly report starting at 01:42:40 of the commission audio and pages 17-25 of presentation materials).

Unanimously approved defense and indemnification for expenses that could result from the commissioners being named as defendants in a lawsuit filed by Columbia Riverkeeper in U.S. District Court for the Eastern District of Washington. Commissioners voted on five motions, one for each of them. In each motion, the commissioner named in that motion abstained from the vote. The motions authorize Grant PUD to use its own funds to pay for the commissioners' cost of defense, attorney's fees and any obligation for payment arising from the suit. (Hear the discussion starting at 02:55:52 of the commission audio and pages 01-02 of commission packet)