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Commission recap 4-27-2021: Wholesale fiber on track to meet 2021 priorities

Expanding and maintaining Grant PUD's fiber-optic network does not come without challenges along the way. However, despite the various hurdles Senior Manager of Wholesale Fiber, Russ Brethower told Commissioners that the fiber system is "looking good."

Brethower updated the Commission regarding the group's 2021 priorities. Priorities include upgrading hardware and other technology components of the network's core and oldest hubs to increase overall data capacity. Other goals include expanding the footprint and the number of customers using the network.

Crews recently completed construction expansion to the Gloyd to Stratford area north of Moses Lake. The group is on schedule to complete construction to four additional areas of its pre-defined expansion sequence list in 2021. At the end of the year, construction is set to be complete in 19 of the 40 areas of the expansion sequence.

Project Manager of Grant PUD's Fiber Network, Jeremy Conner, told Commissioners one of the biggest challenges facing the department's construction efforts has been the unpredictability of obtaining permits from outside agencies that allow crews to cross highways, railroads and interstate roadways during construction.

Permitting holdups have resulted in construction delays in two expansion areas that were slated for completion last year.

Billed revenues of the network through the first quarter of 2021 are $2.9 million, slightly above the quarterly target of $2.7 million.

The end of the year system-wide take rate goal, or the number of households and business utilizing the network, is 67%. Through the first quarter, 812 new customers were added to the network with an end of March take rate of 64%.

See the quarterly business report to the commission on pages 66-81 of presentation materials and hear the discussion beginning at 3:22:40 of the commission audio.

Projects and technology expected to reduce outage time, increase reliability

Upgrades to substations, new substations, more transmission line, better electric-system mapping and new system for getting work orders to crews in the field are all planned or underway to reduce outage time and improve service reliability for Grant PUD customers, Jeff Grizzel, managing director of Power Delivery, told commissioners.

Serving rapid customer growth over the last decade has resulted in deferred maintenance on some parts of Grant PUD's electric system. Reliability remains high and is getting even better, but remains below Grant PUD's goal of 99.985% system availability. Likewise, average outage time is low, but remains approximately 30 minutes higher than Grant PUD's goal of 110 total minutes, Grizzel said.

Crews also continue to replace the ceramic fuse-holders, known as "cut-outs", on thousands of poles with polymer ones to reduce pole fires and related outages county wide, Grizzel said.

Grant PUD expects to spend $64.2 million this year on these and other capital improvements, Grizzel said.

See the full report on pages 16-29 of the presentation materials. Hear the discussion at 59:22 on the commission audio.

Retail rate revenue through March right on forecast

Grant PUD earned $52.6 million through March in retail revenue from electricity sold to customers throughout Grant County, coming in almost exactly on budgetary forecast.

Residential and Commercial loads and revenues were below forecasted levels driven primarily by mild weather during the first quarter.Large agricultural processing was 6.8% below load forecast, related to just a few customers with either reduced operations or temporary business interruptions.

Evolving industry loads came in slightly above forecast, while Industrial consumption was also above forecast, led by stronger than forecasted data center growth.

See the full report on pages 30-51 of the presentation materials. Hear the discussion at 3:02:45 on the commission audio.

Commissioners also:

-Heard that independent auditor, Moss Adams, completed their review of Grant PUD's 2020 financial statements and internal controls over financial reporting. According to the auditing firm's final report, Grant PUD received a clean financial report with no findings or deficiencies noted regarding the utility's financial statements or internal controls.

Laurie Tish, partner in the Moss Adams firm highlighted the areas of emphasis of the audit during the organization's presentation to the commission. Tish indicated that personnel from across the utility were responsive throughout the process and fulfilled requests in a timely manner.

The audit began in January and Commissioners shared their appreciation for the work of Moss Adams and Grant PUD's internal team involved in the audit.

Commissioner Tom Flint said that Moss Adams' independent review is important for the utility and that getting a clean report is always positive news.

See Moss Adams report to the commission on pages 52-65 of presentation materials and hear the discussion beginning at 1:44:50 of the commission audio.

-Unanimously approved a resolution designating the General Counsel of Grant PUD as General Counsel/Chief Legal Officer. The title change reflects the "C Suite" terminology used for executive management at Grant PUD and is in accordance with the designation utility peers around the country are using for their top legal officer. See page 9 of the commission packet.

-Unanimously approved a change order on an existing contract with North Sky Communication, LLC. The change increases the not-to-exceed amount of the contract by $18.4 million and will provide funding to continue expansion efforts of designing and constructing Grant PUD's wholesale fiber network. The change order is for a 12-month period beginning in July 2021.See pages 49-57 of the commission packet.