Commission recap, 7/24/2024 — New rate-setting proposal seeks fair treatment for all. More...

Thursday, 25 July 2024

(Editor's note: We'll add timestamps as soon as the meeting recording is available. Sorry for the delay. )

Proposed changes to Grant PUD’s rate-setting policy would preserve the lowest-cost power for “core” residential, irrigation, agricultural and commercial customer classes and create new parameters for how much all customers pay for their electricity.

Grant PUD staff shared the draft proposal with commissioners Tuesday after public meetings April 16, May 21 and June 4 to hear concerns and suggestions from customers of all rate classes. Outreach also included an online survey that until early July had garnered 103 responses.

The draft proposal is a work in progress and will likely change with further discussion and feedback. It contemplates all input from both in-person meetings and digital survey responses. The draft is built on three policy “guiding directives:

Protection of core customers
Rate making based on social fairness
Rate making aligned with the utility’s load growth strategy, especially for industrial customers.

In a key change, the draft would replace the old rate-setting “targets,” in effect since 2015, that established that rates will be adjusted over time so that by the end of 2024 no rate class would pay more than 15% above Grant PUD’s cost to generate and deliver their electricity, nor less than 20% below that cost.

The draft proposal relies on a new set of rate increase “bands.” No customer class would receive a compound rate increase of more than approximately 22% — or less than 5% — over a five-year period, assuming an average rate increase of 2% per year.

Commissioner Larry Schaapman urged staff to return in a future meeting with more specifics on that aspect of the draft, considering the high public interest in rate setting.

After the presentation, Chuck Sutton and Ryan Beebout, president and secretary of the Grant County Industrial Alliance, also commented that the proposal left them “with a lot of uncertainty” and in need of more detail.

“This is a critical time. I can’t emphasize that enough,” Schaapman said. “I don’t want any surprises.”

General Manager and CEO Rich Wallen agreed. “This process will be nothing but transparent.”

Other proposed changes to policy include:

Grant PUD will continue to use a cost-of-service study as a tool to help determine rate setting, but it won’t be the only factor. This was important to many customers at the workshops.
Enables “non-core” (industrial and large commercial) customers to continue to benefit from the portion of low-cost power generated by Grant PUD’s Priest Rapids and Wanapum Dams that isn’t used by core customers.
Rates of industrial and other “non-core” customers can be adjusted, even when an overall rate increase is not approved for a given year.
Consideration of contracts or other alternative ways to bill particularly large, non-core customers to ensure the rates they pay fully cover the electricity they use and the cost of any additional assets needed to supply their power.

Commissioners will accept further customer comment on the proposed changes at their meetings Aug. 13 and Sept. 10 in their Ephrata Headquarters boardroom, 30 C Street SW. Commissioners will receive and discuss a revised draft Sept. 24 and continue discussion toward a vote on or before Dec. 10.

View the full presentation and digital survey results on pages 29-59 of the presentation materials. Hear the discussion at 44:15 on the commission audio.

Solar, battery storage and other resources considered to help Grant PUD meet its growing power load

Grant PUD commissioners were informed of how Grant PUD is planning to provide power for its growing customer load over the next decade during a public hearing for the utility’s updated Integrated Resource Plan, which is expected to be finalized later this year.

The Integrated Resource Plan (IRP) is required by state law to explain the mix of generating resources that utilities like Grant PUD intend to use to meet their customers’ electricity needs.

According to the 2024 IRP, Grant PUD intends to participate in the Western Resource Adequacy Program (WRAP) in 2027. Participating in the WRAP will help widen availability of power resources that can be coordinated with other participating members to the benefit of Grant PUD’s customers. Grant PUD will also continue to utilize sales of “slices” of the Priest Rapids Project generation and reservoir pooling agreements when they are beneficial to customers.

Along with existing generation, Grant PUD will be considering other sources of power added incrementally between 2026 and 2042 as part of the 2024 IRP update, including:

1,170 megawatts (MW) of solar power

370 MW of four-hour battery storage

40 MW from a Bonneville Power Administration Tier 2 Contract

28 MW in a demand response program for retail customers. Under “demand response,” Grant PUD pays agreeable customer groups to reduce energy usage during parts of the day to free up electricity for other customers.

10 MW of wind power

These power resources will likely come from a mix of generation projects owned and operated by Grant PUD, plus power purchased from others via long-term wholesale agreements. Grant PUD is still exploring Small Modular Reactor (SMR) nuclear technology as a possible solution for additional generation in the next decade, stated Lisa Stites, Lead Financial Analyst.

See the full presentation on pages 117-160 of the presentation materials. Hear the discussion at 1:02:22 on the commission audio.

Commissioners also:

Heard that Grant PUD Treasury staff propose to take advantage of existing market conditions to refund a series of “Build America Bonds” early for an approximately $500,000 to $600,000 average annual cashflow savings, plus the release of nearly $9.9 million in reserves set aside until the bonds were paid off. They also seek to tender and refinance two earlier bond issuances at a better rate for estimated savings of just over $2 million. The commission is set to vote on the proposal at its next meeting, Aug. 13. View the full presentation and digital survey results on pages 19-28 of the presentation materials. Hear the discussion at 45:55 on the commission audio.
Unanimously approved Resolutions 9058 and 9059 that increase fees for service providers and other wholesale users of the Grant PUD fiber-optic network. For more information see pages 8-25 of the commission packet.
Unanimously approved Motion 3483 to create a new, restricted fund exclusively for current and future proceeds from the “cap-and-invest” auction created under the state Climate Commitment Act. The funds, which are currently deposited in Grant PUD’s Reserve and Contingency Fund, will be held in the new spend-restricted fund. Energy Supply Management, Accounting and Treasury have developed a process for review and approval of spending for applicable expenses. For more information see pages 27-28 of the commission packet.
Unanimously approved Motion 3484 to receive $1.1 million in grant funding from the state’s Department of Commerce to purchase home electrification and appliance rebates for qualifying Grant PUD customers. For more information see pages 29-53 of the commission packet.
Received a Power Delivery update. Grant PUD is still achieving its goals for the average duration of power outages and number of outages per customer during the year. See the full presentation on pages 60-78 of the presentation materials. The portion of the audio containing this discussion was not recorded due to a tech glitch.
Heard during the quarterly Power Production that Priest Rapids and Wanapum dams both exceeded their plant performance targets for May and June. See the full presentation on pages 79-94 of the presentation materials. The portion of the audio containing this discussion was not recorded due to a tech glitch.
Received a quarterly retail power load variance report. See the full presentation on pages 96-116 of the presentation materials. The portion of the audio containing this discussion was not recorded due to a tech glitch.