Commission recap, 1/23/2024 — Average 3% rate-revenue increase to begin April 1. More...
Commissioners Tuesday approved a 3% average increase to electric-rate revenue, effective starting April 1, 2024.
The increase will add an estimated $3.50 to the average monthly bill of a residential customer and just over $10 to the average monthly bill of a small business. Learn more about why a rate increase is necessary here.
“We’ve had quite a bit of discussion on this resolution,” Commission President Tom Flint said, referring to past, well-attended commission meetings and workshops, before calling for the vote.
Commissioners were unanimous on the need for a rate increase but differed over how to allocate the increase across customer groups. The approved average increase affects each rate class differently, depending on the cost to provide electric service to each customer group (see table, below). Commissioner Nelson Cox abstained. Commissioner Flint opposed, stating in past rate discussions that he instead favored an across-the-board, 3% increase for all rate classes.
The remaining three commissioners voted in favor of the average 3% increase, saying in past meetings that it was aligned with the existing, cost-to-serve-based rate-setting policy. They all intend to review and update that policy over the coming year.
The increase is needed to cover inflation-driven operational costs related to power generation and distribution, help fund necessary projects and ensure continued financial strength.
The increase will add an estimated$6.8 million to the current average annual rate revenue of $226.5 million. Each customer class is affected as follows:
Rate increases are governed by rate-setting parameters approved by the commission in 2015 as Resolution 8768.
The resolution establishes a series of gradual rate adjustments until no retail rate class would pay more than 15% above its cost of service, nor 20% below cost of service. The resolution designates rate schedules 1, 2, 3 and 7 as “core customers,” entitled to below-cost rates. Other rate classes pay above cost.
The approved new rates are unchanged from the staff proposal reviewed during a well-attended commission workshop on Nov. 21, 2023.
Commissioners will study the current rate-setting policy over the coming year to determine how much affect cost of service will have in future rate setting.
For more detail about the increase to each rate class, see pages 8-37 of the commission packet. No further discussion about the increase took place prior to the vote.
— Heard that the Power Delivery team – line crews, engineers, dispatchers and support teams are seeing a compounding amount of work due to both electric-system expansion and maintenance of our older equipment. Teams, both union and non-union, are working more than 40 hours a week, Director of Power Delivery Ron Alexander and Senior Manager of Power Delivery Chris Heimbigner told commissioners.
Plans to ease the workload through improved work-management and tracking technology and additional hiring is underway. Despite the challenges, reliability metrics for both the number and duration of power outages continue to outperform targets, they said. Maintenance work continues ahead of last year’s pace and is on budget.
“The workload is more. We need more workers,” Commissioner Larry Schaapman said. “Let’s figure out a way to do it better, safer and smarter.”
Commissioners thanked the Power Delivery, Power Production, Facilities, Transportation crews for their quick and professional performance during the recent cold snap, which caused slippery roads, scattered outages, snapped power poles, and brutally cold working conditions around Grant County.
— Heard the plans and timeline for an upcoming audit of financial statements for the year ending December 2023. A team from independent auditor MossAdams told commissioners the audit will happen in February and March with the final report presented to the commission in April. The audit will focus on areas that include, subscription-based IT contracts for cloud-based software, capital assets and construction projects, power sales transactions, retail energy sales, internal financial controls and procedures to reduce risk/fraud. “We find your work very valuable for us,” Commission President Tom Flint said. “It’s an independent look through fresh eyes.
— Learned Grant PUD’s power customers used less power than was projected for 2023, according to a report given by Shaun Harrington, senior financial analyst. The actual load was 678 average megawatts, which ended by being 5.5% lower than the forecast of 718 average megawatts. The bulk of the difference came from the commercial sector, including large general service, industrial customers and ag food processing. In 2022, the average load was 667 average megawatts.
— Heard generator rehab at Priest Rapids ahead of schedule. Dale Campbell, Senior manager of Power Production, told the commissioners that the rehabilitation of Unit No. 5 at Priest Rapids Dam was completed over 30 days ahead of schedule, during a Power Production quarterly update. Unit No. 5 was the fifth generating unit at the dam to be rehabilitated. Contractor Voith is now halfway done with the project to rehabilitate all 10 of the dam’s units. Unit No. 1 is the next to be rehabilitated.
— Approved 4-1 to purchase 3.69 acres of land owned by Friehe Holding LLC for $38,500 to build a new substation next to the Ruff Substation, in eastern Grant County to provide power for a pumping plant for the East Columbia Basin Irrigation District for the East Low Canal Water Expansion Project. Commissioner Larry Schaapman voted against the proposal, stating that he believed the appraised valuation for the land at “highest and best use” was too high a price for the utility to pay. After discussion with staff, the board agreed to purchase the land, but also to revisit a long-standing commission resolution calling for the PUD to purchase land at appraised values. See page 67 of the commission packet and hear the discussion at 3:08:43 on the commission recording.
— Voted to approve an update of Grant PUD’s strategic plan and to review it every six months to make sure the plan includes relevant information, photos and graphics. See page 38 of the commission packet.
— Voted to update rates and fees for Grant PUD’s Wholesale Fiber Network. Service connections will increase $2.50 for participating Internet Service Providers. There are also updates to special VLAN (virtual local area network) services. See page 52 of the commission packet.
— Awarded a change order of $3 million to Arch Staffing and Consulting increasing the not-to-exceed contract amount to $4.95 million. Arch Staffing and Consulting provides services for the Enterprise Technology and Project Management Office and other business units. See page 82 of the commission packet.
— Approved a three-year contract with CxTec for $1.316 million for the Fortinet digital security infrastructure service. See page 89 of the commission packet.
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