Commission Recap 05/14/2019, Grant PUD eyes expansion of transmission system to support county growth

Grant PUD eyes expansion of transmission system to support county growth

Load growth was the topic of Tuesday's transmission workshop held during the commission's regularly scheduled meeting. While many utilities around the country struggle with flat or reduced load growth, low-cost power has helped foster economic growth throughout Grant County.

Based on the large electrical service applications it has received, Grant PUD is forecasting an annual five-year average load growth of 9.7 percent.

The question before the commissioners regarding this anticipated growth is the impact it will have within the Quincy area. Currently Grant PUD's general queue for requests for large electrical service is 423 megawatts, with 279 MW of the requests occurring within the Quincy area, where existing infrastructure isn't sufficient to meet this demand.

The Quincy area, which has the capability of importing 310 MW through existing 230 kV transmission lines, would require nearly 589 MW capability to reliably service the needs of anticipated growth.

The 230 kV transmission system provides the backbone of the electrical system, said Louis Szablya Senior Manager of Large Power Solutions. Along with moving large amounts of power into and throughout the county, its primary purpose is to enhance reliable electrical service for customers.

In the 1990's, Grant PUD began building and investing in its own 230 kV transmission system. The system provides service to Grant PUD customers and transports federal Bureau of Reclamation power to local irrigation districts. It also interconnects with the Bonneville Power Administration's electric system at multiple locations.

The investment has provided higher reliability at lower costs for Grant PUD customers by providing the utility more autonomy in its operations and reducing reliance on Bonneville for transmission service, says Szablya.

Growth within the county is inevitable and when managed thoughtfully benefits all customers. Grant PUD has policies in place to protect the interests of its core residential, small commercial and irrigation customers by helping them enjoy long-term low rates.

Current board policy specifies industrial customers will pay no less than 15 percent above their cost of service. Tuesday's presentation showed an estimated cost of the transmission line expansion of $139 million, the project has an anticipated break-even point occurring in 2034.

Getting timely electrical service is critical. Lead time for construction transmission infrastructure ranges anywhere from three to seven years.

The workshop provided an opportunity for commissioners to hear in-depth details. They agreed that staff should continue studying the proposed project. They will continue discussion and learn additional details during future meetings.

See the full presentation on pages 01-82 of the commission workshop materials and hear the discussion beginning at 00:02:45 of the commission audio.

Big improvements coming to customer service and billing system

Grant PUD will move its customer billing and information system to "the cloud" for big anticipated cost savings, as well as gains in efficiency, security and flexibility for both staff and customers, commissioners learned Tuesday.

The $5.2 million move from the utility's traditional, outdated, in-house-managed system to the Oracle Cloud should be finished by mid-2020, Chief Technology Officer Derin Bluhm and Sr. Manager of Customer Solutions Terry McKenzie told commissioners.

General Manager Kevin Nordt said the change would transform Grant PUD's current system "of multiple computer systems, fax machines and hand-delivered paper" at a cost that would be nearly $400,000 lower than the needed upgrade to the current system.

The cloud-based Oracle system combines customer billing and care with Grant PUD's new advanced-meter system to provide powerful tools to analyze energy use and provide customers reports on their usage patterns and daily usage — useful for those looking for ways to lower energy bills.

The cloud-based Oracle system is more secure from cyber data attacks and has tools for customer outage notification, including customer-accessible maps of areas affected by power outages, and better handling of customer service requests.

Blume said the move eliminates the costly need for Grant PUD to upgrade and maintain its own computer and software systems. Oracle handles the upgrades and employs the staff to keep the system secure, updated and available. Over 10 years, the switch to the cloud is estimated to save Grant PUD approximately $11.5 million. View the commission presentation here, pages 1-9. Listen to discussion beginning 02:35:10 on the commission audio.

Legislative recap highlights good outcomes for energy, broadband

Grant PUD, working on its own and together with PUDs across the region, made positive contributions to state and federal lawmaking this season to further local interests in energy and broadband, especially o the state level.

"This has been one of our better sessions in terms of outcomes," Andrew Munro, senior manager of External Affairs and Communications told commissioners.

PUD lobbying gains include the Rural Broadband bill, that will provide grant and loan funding to extend broadband internet to unserved areas, Munro said. PUD efforts to make the Governor Jay Inslee's Clean Energy Standard bill more manageable for public electric utilities by including a cost cap and "alternate compliance" — the ability to pay a fee or invest in clean-energy activities to offset up to 20 percent of the energy mix provided by carbon-emitting sources. The governor has already signed both bills into law.

The PUDs continue to work with state and federal lawmakers to put clean, sustainable hydropower on an equal footing with wind, solar and other renewable energies when it comes to tax parity and creating investment incentives, Munro said.

Other new laws of interest include HB1512, which allows PUDs to invest in electric vehicle infrastructure, when cost effective, and SB5588, which authorizes production, distribution and sale of renewable hydrogen. The 2019 Washington State legislative session ended April 28. View the commission presentation here, pages 30-36. Listen to the discussion beginning at 04:38:25 on commission audio.

Commissioners also:

— Heard that through the first quarter of 2019, expenditures are currently forecast to be $12.2 million less than the budgeted amount for the year. This is mainly driven by capital expenses, which as of the first quarter are 11 percent of their total 2019 targeted budget.

Chief Operations Officer, Kevin Marshall says a few key projects are behind their anticipated schedule which has resulted in capital expenditures trending below their planned spend. Budgeted capital expenditures for 2019 are $121.3 million.

Total budgeted expenditures for 2019 are $245.6 million. Through the first quarter, 16 percent or $38.5 million has been spent.

The first quarter report shows that year-end projections for both operations and maintenance and labor expenditures are anticipated to finish near their budgeted targets of $53.6 million and $70.7 million respectively. See the full budget to actuals report for quarter one on pages 12-19 of presentation materials and 03:59:55 of the commission audio.

— Approved to appoint Dmitriy Turchik as Grant PUD auditor. The commission is responsible for appointing the district's auditor.

Turchik has been with Grant PUD since June of last year, after many years at the state Auditor's Office. Commissioners recently interviewed Turchik reviewing his qualifications and experience. Based on his expertise in the auditing field, combined with recommendations from the general manager and chief operations officer, commissioners approved the motion officially appointing him to the position during Tuesday's business meeting.

Hear the discussion of the appointment at 03:31:30 of the commission audio.

— Approved a proposed application to amend the Priest Rapids Project License to include the planned modifications to the right bank of Priest Rapids Dam which includes the construction of a new, secondary, permanent structure to help improve seismic stability. An amendment to the license is required to include the proposed new roller-compacted concrete dam embankment and its connection to the existing embankment of Priest Rapids Dam.

The amendment and subsequent FERC approval are required prior to making substantial changes to Priest Rapids Dam. See full details on pages 09-32 of the commission packet.

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