Commission recap, 5/27/2025 -- Credit rating upgraded. Finances on target. More...

Grant PUD’s continued strong financial indicators have earned a credit rating upgrade from Aa3 positive to Aa2 stable from Moody’s Ratings, commissioners learned Tuesday.

The rating applies to the $575 million in Grant PUD debt rated by the agency. The improved rating helps ensure lower finance costs on future borrowing needed to fund capital projects. It comes at a time when the utility is investing heavily to increase the capacity and reliability of its electric system and explore investments in new energy resources to supplement its Columbia River dams, Priest Rapids and Wanapum.

“That’s fantastic,” Commission President Terry Pyle said amid a smattering of applause from his fellow commissioners. “That’s really a fantastic job, and we appreciate the diligence you exhibit in your work.”

In its own May 22, 2025 news release, Moody’s pointed Grant PUD’s consistently strong financial metrics, which include plenty of cash resources to cover its debt service, a low ratio of debt to the value of its assets, large amount of liquid reserves, and revenues from wholesale power sales that have far exceeded budgeted expectations. The rating agency also pointed to the utility’s low electric rates and the willingness of management and commissioners to raise rates when needed. A 3% rate increase took effect April 1. 

“This rating upgrade reflects our team’s commitment to fiscal responsibility and delivering affordable, high-quality service to our customers,” Angelina Johnson, Grant PUD’s Senior Manager of Treasury and Financial Planning, said after Tuesday’s commission meeting.

Read the full Moody’s news release here. See the full Treasury presentation on pages 89-101 of the presentation materials. Hear the discussion at 3:04:08 on the commission audio.

 
Forecast shows most targets met, no immediate need for new debt

The year’s first financial forecast through 2029 shows Grant PUD meeting most of its targets, with no expected need for new debt until 2028.

Targets to have at least $150 million in easy-to-liquidate investments and at least 250 days of cash on hand to keep the utility operating are both exceeded through 2029. 

Liquidity sufficient to pay for at least 1.8 times debt service also easily exceeds its target, as well as the ratio of total debt to the value of Grant PUD assets. At a forecast of 38% this year, consolidated debt-to-assets ratio easily exceeds the target of 60% or greater through 2029.

On the profitability side, “return on net assets” hits the target only through 2027. Retail operating ratio continues to lag throughout the entire period. 

The forecast shows the utility issuing its next bond issues in 2028 and 2029, for $110 million and $50 million respectively, to supplement revenues in capital-project funding going forward. The utility seeks to refinance or pay down some existing debt later this year.

Stronger-than-expected financial performance is expected this year, due to revenue received by selling a portion of Grant PUD’s state Climate Commitment Act (CCA) credits  at auction. The use of these funds is restricted to uses that benefit customers with an emphasis on low and moderate income. For 2026 through 2030, the outlook is challenged by an expected downward trend in energy prices on the wholesale market.

See the full presentation on pages 103-116 of the presentation materials. Hear the discussion at 3:18:33 on the commission audio.

Commissioners also:

-- Heard first-quarter financial business reviews from 16 departments, including the District as a whole, Financial Services, Customer Experience, Fiber/Telecom, Executive, Energy Supply Management, Transmission Strategy and Development, Enterprise Technology, Human Resources, Internal Services, Protective Services, Chief Administration Office, Power Delivery, Power Production, Environmental Affairs and Asset Management.See the full presentations on pages 34-88 of the presentation materials. Hear the discussion starting at 2:02:46 on the commission audio.

-- Received an update on repairs from a wildfire the evening of May 21, 2025, three miles east of Wanapum Dam, that interrupted fiber-optic service to wholesale customers and their retail end-users in the Desert Aire/Mattawa area, as well as to some communication with the dams. Service was quickly rerouted to wholesale customers. Crews worked through the night to completely restore fiber by 8:51 a.m., May 22. The Bureau of Land Management is investigating the fire’s cause. Hear the discussion at 00:00 on the commission audio.

-- Heard a first-quarter business reviews from Operational Excellence. See full presentation on pages 1-11 of the presentation materials. Hear the discussion at 07:58:00 on the commission audio.

-- Heard a first-quarter business reviews from the Enterprise Project Management Office. See full presentation on pages 12-22 of the presentation materials. Hear the discussion at 41:28:00 on the commission audio.

-- Heard a first-quarter business reviews from Enterprise Technology. See full presentation on pages 23-33 of the presentation materials. Hear the discussion at 1:04:52 on the commission audio.

-- Reviewed an amendment to correct the effective date of an increase in wholesale fiber service rates approved May 14 as Resolution 9058. The correct effective date is June 1, 2025.

-- Unanimously approved Motion 3518 authorizing the general manager to increase by $30,500 a contract with Coleman Oil to supply fuel for Grant PUD vehicles. The increase brings the new contract total to $1,029,500. For more information, see the commission packet, pages 18-43.

-- Unanimously agreed to vote on a review item originally scheduled for June 10 to modify “Key Objective 7” in Grant PUD’s Strategic Plan and make other small edits. The objective calls for “Completion and maintenance of a sustainable wholesale fiber-optic network.” The network buildout was completed in December 2024. Commissioners agreed to revise the objective’s wording to include in the 2026 version of the plan. For more information see the commission packet, pages 44-71.