Commission recap 4-28-2020: Fiber network and subscriber growth continue

Even in the face of the Coronavirus (COVID-19) pandemic, expansion work for Grant PUD's high-speed fiber-optic network continues to progress. While at the same time more customers continue subscribing for fiber service.

"This pandemic has really highlighted the importance of our fiber-optic internet services," said General Manager Kevin Nordt, who filled in and provided the quarterly fiber update to the Commission on Tuesday.

The number of subscribers on the network is up 32.6% during the first quarter of 2020 compared to the same timeframe in 2019. A quarterly increase of 847 new customers included a record number of subscribers in March, which saw more than 400 new customers receive a fiber connection during that month.

Grant PUD has been able to provide a quality fiber internet service that's as good as any rural county, Nordt told the commission. He went on to say that these efforts are providing users with multiple opportunities to work and stay connected all while keeping socially distanced during the coronavirus pandemic.

Commissioner Tom Flint said it's nice to see the benefits the fiber service brings to residents and business throughout the county, especially during this time. Which shows in today's world why it's on par with other key utilities he added.

Even with subscriber growth and continued construction efforts, fiber expansion isn't without challenges. Getting the necessary materials and permits has been an issue for select expansion areas.

The final three construction areas that were originally slated as part of the 2019 build, were all hampered by at least one of these situations. However, these three holdover areas are each scheduled for completion in the upcoming weeks.

The group continues working with permitting agencies and improving internal processes to further streamline future expansion efforts.

Looking ahead for the rest of 2020, Nordt told commissioners there is no reason to believe the six areas targeted for construction shouldn't be completed by the end of the year.

He added that the group is staying focused on its commitment to finish building-out the entire fiber network service for the county by the end of 2024.

(View the presentation here on pages 54 to 67. Listen to the discussion beginning at 3:33:05 on the commission audio.)

Weather and economic impacts of coronavirus contribute to lower energy use and sales

Warmer than expected temperatures in January, combined with the governor's COVID-19 directed "Stay Home, Stay Healthy" order in March, are credited with below targeted electrical retail loads and retail energy revenue during the first quarter of 2020.

Commissioners heard that retail load — energy demand by Grant PUD customers — came in 9.7% below first quarter expectations. While retail revenue, the electricity Grant PUD sells to residential, commercial, industrial, irrigation and other customers in Grant County was 7.2% below first quarter estimates.

Shaun Harrington, Grant PUD senior analyst, told commissioners that it's too early to know the full impact COVID-19 and how it will affect retail load going forward. Although he said data from March shows some impacts. One such example were energy loads within Grant PUD's commercial rate class, one of the classes whose businesses had their operations most directly impacted by the state's quarantine order. Energy loads within that rate class were 17% below forecast for the month.

Industrial loads were also below first quarter expectations, which Harrington attributed to delays or changes in construction projects for a few customers within the rate classes. These construction schedule adjustments, combined in reduced operations for a small number of other industrial manufacturing customers, led to the loads falling below initial estimates.

Bob Brill, Grant PUD economist, also said the weather temperatures throughout the entire quarter were warmer than normal, which impacted retail load.Highlighted most by temperatures in January that were 9% percent warmer than average.

Each factor helped to contribute to quarterly revenue coming in below estimates across most rate classes. Including a 3.1% decrease in residential rate revenue targets, a 7.6% decrease in commercial rate revenue targets, a 21.3% decrease in industrial rate revenue targets and a 7.5% decrease in large industrial rate revenue targets.

Total retail rate revenue for the first quarter was budgeted at $54.6 million. Actual retail rate revenue for that period was $50.7 million — $3.9 million under the budget estimate.

(View the presentation here on pages 6 to 77. Listen to the discussion beginning at 3:50:18 on the commission audio.)

Commissioners reviewed the following:

— Mandatory Covid-19-related sick pay Heard from Senior Manager of Human Resources Darla Stevens about the Families First Corona Response Act, a new, temporary federal law that requires mandatory, employer-funded, paid sick leave for employees who miss work because:

• They are quarantined and/or experiencing Covid-19 symptoms and seeking medical diagnosis.
• They have a bona fide need to care for an individual subject to quarantine or a child whose school or child-care provider is unavailable for reasons related to Covid-19.

These Covid-19-related federal pay requirements expire Dec. 31, 2020.

In the event a Grant PUD employee needs additional time beyond what the new federal act requires, Grant PUD would additionally grant the employee paid administrative leave above what employee accrues on the job as part of their personal leave benefits or benefits they'd receive under short-term disability. Stevens said the extra pay is justified because it:

• Removes incentive for employees to report to work even though they are sick or showing COVID-like symptoms during the pandemic. This is important for both the employee's health and the health of coworkers.
• Mitigates the risk of exposure and helps Grant PUD control costs that would be associated with spread of COVID-19 to other employees.

Read more on pages 1-5 in the Presentation materials. Hear and see the discussion at 41:20 the commission video.)

— Carbon content of Grant PUD energy Grant PUD will use the most current information available to estimate the carbon content of the electricity it sells to its customers, with priority given to data produced by Washington State, commissioners learned.

Grant PUD's "core customers" — residential, small- and medium-sized businesses and irrigators — will continue to be first in line for Grant PUD's available zero-carbon hydropower not already purchased by those Grant PUD customers who pay extra for Rate Schedule 13SSspecified source" carbon-free power.

Grant PUD has sold and is planning a potential future sale of its physical share of generation from Priest Rapids and Wanapum dams through "pooling" and/or "slice contracts."

Power purchased back as part of these contracts, and power Grant PUD purchases on the wholesale market to meet load are considered "unspecified source" and may contain electricity generated from carbon-producing sources, including coal and natural gas. That means the power sold to most Grant County PUD customers may not be 100-percent carbon-free hydropower.

The preponderance of carbon-free hydropower in this region of the country helps minimize the amount of carbon-generated power delivered to Grant PUD customers, even from wholesale power purchases.

Based on data from 2018, the carbon content of Grant PUD's core customers contains 0.076 metric tons of carbon per megawatt hour. Non-core customers who do not pay under Rate Schedule 13SS receive power with 0.184 metric tons per megawatt hour but can receive even greener power depending on the size of their specified source purchase. The overall average carbon content for total customers0.117 metric tons per megawatt hour.

Retail customers have requested updated carbon-content information within 60 days of year's end.

"This methodology goes a long way to achieving that the core customers have first access," General Manager and CEO Kevin Nordt told commissioners. "It preserves and protects the core customers' rights as part of (Grant PUD rate-setting Resolution) 8768."

Read more on pages 6-12 in the Presentation materials. Hear and see the discussion at 57:07 the commission video here)

— Grant PUD's COVID-19 response Grant PUD's Manager of Emergency Preparedness Dave Ponozzo described the planning, risk forecasting, multi-departmental information sharing, logistical coordination and joint communications of the Incident Management Team created in March to oversee Grant PUD's response to the COVID-19 coronavirus.

Ponozzo leads the team, which also participated in a county-wide "shared operations center" that included representation from the Grant County Sheriff's Office, Grant County Health District and Samaritan Healthcare of Moses Lake.

Work focused on analysis and action to keep employees safe and healthy so they could safely continue working to keep critical services of electricity and fiber-optics operational for Grant County residents and keep vital infrastructure and support services intact.

The utility developed a system of criteria and measurements to determine levels of operational risk. Analysis is ongoing to determine when the current level "severe" could be downgraded to "moderate." A downgrade could mean more employees would begin returning to their conventional work areas. No time estimate was given for when that could happen.

Grant PUD senior managers on March 10 ordered all employees — except those essential to core operations — to stay home after a contractor reported having contact with someone who'd tested positive for COVID-19. That contractor never tested positive for the virus, but the event triggered a District-wide scramble to disseminate the computers and other equipment necessary to allow employees to work remotely.

"The steps Kevin Nordt and the executive team took early on were instrumental," Ponozzo told commissioners. "I don't know if we'll ever be able to measure how many employees we prevented from getting sick. We might have been in a much different situation than what we have here today."

"Effective and efficient. I think that little phrase hits the Incident Command System folks really well," Nordt said. "All 700 folk in the Grant PUD family responded really well. We've done a good job keeping people safe, but also in getting a great deal of work done."

Read more about Grant PUD's incident command team and the COVID-19 response on pages 13-24 of the Presentation Materials. Hear and see the discussion at 1:16:30 on the commission video.

— Power Delivery quarterly report Managing Director of Power Delivery Jeff Grizzel said average electric-system availability just missed the target of 99.985% in March after exceeding the goal in February but falling short in January.

Grizzel's quarterly business report showed that outage duration around the county averaged about 100 minutes in March, below the 110-minute target. The average outage duration was close to 150 minutes in January and February.

The department has spent 17.4% of its $46.1 million annual budget to date. Grizzel said interruptions from the COVID-19 response will likely make it difficult to finish all the capital improvements planned for the year, but all the most needed work would be prioritized and completed.

Department highlights include a soon-to-launch new Geographical Information System (GIS) system that maps all electric system assets, down to every substation, transformer, pole and pole attachment.

Grizzel also reviewed measures the department took to protect employees from Covid-19, including creating a one-person-per-vehicle rule, sanitizing workspaces and vehicles, staggering work shifts, instating a health-screening protocol and creating a plan for sequestering system operators, if necessary, to provide continuity of operations. Sequestration has not been necessary to date.

Read more on pages 41-52 in the Presentation Materials. Hear and see the discussion at 2:53:40 the commission video here)

Commissioners also:

— Unanimously approved a resolution amending Grant PUD's strategic plan to have it better reflect ongoing work to improve the utility's overall organizational performance through better job satisfaction and opportunities for employees. The organization's Strategic Plan reviewed every six months by the commission.See full details on page 7 to 20 of the commission packet.

— Unanimously approved a change order increase to an existing contract in the amount of $329,619 with the Washington State Department of Fish and Wildlife for monitoring and evaluation at the Priest Rapids Hatchery. While also extending the term of the contract for one-year, until June 30, 2021.

Grant PUD is required to conduct monitoring and evaluation of the Priest Rapids Hatchery fall Chinook salmon program and its ability to meet the utility's hatchery mitigation requirements. This contract outlines the scope of work and budget for the Department of Fish and Wildlife to perform the monitoring and evaluation work. See full details on page 21 to 28 of the commission packet.