Commission recap 7-28-2020: New options discussed to help COVID-impacted customers

Three different proposed options to help residential customers most financially impacted by the effects of COVID-19 could be on the way.

Senior Manager of Customer Solutions, Terry McKenzie said the first two options would broaden Grant PUD's Share the Warmth offerings.

Share the Warmth is a community-sponsored program administrated by Grant PUD to aid those struggling to pay their electric bills. Currently it is limited to an individual household that earns no more than 150% of the published federal poverty guidelines, based on the number of people within their residence. Each qualified household may receive up to $300 during a 12-month period.

McKenzie explained the first opportunity would expand Share the Warmth by reducing the current three-month income verification criteria to just a one-month. The second option would increase the maximum 12-month support offering by an additional $150 per household.

McKenzie said, both Share the Warmth opportunities would be limited to a maximum of $25,000 per program and would be offered to customers on a first come, first served basis.

The third option would provide a 20% discount to low-income families. Grant PUD currently offers a 20% discount to low-income seniors and low-income disabled customers. The proposed discount option would align with the current process. Initial discussions during Tuesday's presentation centered around offering the possible discount through the end of the year.

The utility could utilize any or all of the options in an effort to address the direct impact some residential customers may be experiencing if they lost a job or are seeing their work hours reduced hours due to COVID-19, said McKenzie.

"The end game is to try to help people that really need help," said Commissioner Tom Flint.

Commissioners will review the proposed options and consider implementation at future commission meetings.

Listen to the discussion beginning at 3:20:50 on the commission audio.

Integrated Resource Plan gets public hearing

Commissioners Tuesday hosted a public hearing for Grant PUD's Integrated Resource Plan, a key planning tool for ensuring a reliable supply of electricity for the next decade.

The plan, updated every two years, is a state requirement and product of months of staff analysis. It looks 10 years into the future to identify key challenges to Grant PUD's energy supply and establish an action plan to address them.

Identified challenges include load growth, regulations, environmental legislation, the changing power market and availability of hydropower, solar, wind, and other energy resources needed to meet the county's demand.

Load — county-wide demand for electricity — has grown an average of 3.1% annually and is expected to increase to 4.9% on average in the coming years, pushed mainly by Grant PUD's largest industrial customers, Phil Law, Grant PUD term marketer, told commissioners.

According to the plan, Grant PUD will be able to meet the county's energy needs with the physical power and financial benefit of Priest Rapids and Wanapum dams until 2028, when it will need to find additional sources of energy to meet load.

Given state legislation to eliminate carbon from the energy supply by 2045, Grant PUD will likely turn to a combination of carbon-free solar power and carbon-producing (but cleaner) natural gas to meet load.

The utility will continue to encourage its customers to conserve electricity but will likely need to buy "renewable energy credits (RECs) beyond 2025 to meet a state quota to have renewable energy in the fuel mix. RECs are tradeable certificates linked to generation of carbon-free power, like solar or wind.

No member of the public commented during Tuesday's hearing. Commissioners are scheduled to vote on the draft Integrated Resource Plan Aug. 25.

Listen to Tuesday's discussion beginning at 3:45:15 on the commission audio. View pages 58 to 199 of the presentation materials for the full plan and Tuesday's plan summary.

Electric system improvement plan in the works

The Power Delivery group will create a 10-year electric system improvement plan to ensure Grant PUD continues to deliver safe, reliable power to its customers, Jeff Grizzel, managing director of Power Delivery, told commissioners Tuesday as part of his second-quarter business report. The plan should be ready early next year.

The electric system performed well from May through June, Grizzel said, missing its goal of being available 99.985% of the time only in May. Power-outage time, averaged over all Grant PUD customers, underperformed the goal of 110 minutes per month in April and June.

"We have relatively few outages in June, but the ones we had were longer," Grizzel said.

Customer wait times for service connections have increased during the COVID-19 pandemic, as the number of crews in the field at once have been reduced by half to reduce potential exposure to the virus. Work is underway to try to reduce wait times, despite COVID, Grizzel said.

Major, second-quarter spending includes $3.34 million on customer line extensions and distribution feeders and $1.02 million on the Quincy Plains substation project. Other projects include "Design-Build 2," a package of 10 system improvements bundled into an expedited build plan; more transmission for Quincy; and an electric-system mapping project.

"Despite COVID, we continue to produce fairly timely, high-quality work," he said.

Commissioner Larry Schaapman suggested Grizzel and his team also work to improve the quality of electricity to ensure the delivered power stays within an acceptable range of voltage. Variations can cause automated irrigation to kick off, requiring reset, he said.

Hear the full discussion beginning at 1:01:45 on the commission audio. See pages 14 to 27 of the presentation materials.

Subscriber growth for the fiber network exceeds expectations

The onset of COVID-19 and its impact leading to more people working from home and students transitioning to at-home learning, were both key factors leading to a record number of subscribers connecting to Grant PUD's high-speed fiber-optic network.

"We are connecting people at a rate we have never seen before," said Senior Manager of Wholesale Fiber, Russ Brethower as he shared the Wholesale Fiber Group's quarterly update with the commission.

Through June, the year-to-date growth of new subscribers using the network was 2,173 customers.With more than 400 new customers receiving a fiber connection during each month of March, April, and May. The total new subscriber growth through June is just shy of the yearly goal for all of 2020, which is 2,475.

When the group was busiest with new customer requests, crews were working six days a week connecting customers to the network so they could begin their service, said Brethower.

The year-to-date "take rate" – the percentage of users with access to the fiber network connecting via one of the independent service providers – is also ahead of the targeted yearly goal of 60%. Brethower told commissioners that even as new areas are released throughout the remainder of the year, he anticipates eclipsing the annual "take rate" goal.

Construction efforts to expand the network continue and the group is still expecting to finish construction on the next fiveareas slated as part of the 2020 build by year's end and estimating the final two areas that are part of the 2020 build to be complete in early in 2021.

The project contractor, North Sky Communications, is now entering its second full year of construction expansion efforts and the learnings gained throughout the past year are leading to positive movements in terms of the project's build-out schedule, said PMO Manager, Russ Seiler whose Project Management Group works daily with the contractor's teams.

Seiler said that 2019, the first year of the five-year expansion efforts, was not without its challenges. However, he noted that collectively the group has been able address many of those challenges and these efforts are translating to positive results related to the 2020 construction schedule and beyond.

Commissioner Tom Flint said that the utility has been through "the good, the bad and the ugly" as it relates to building the fiber network. He shared his appreciation for the combined efforts to ensure the remaining expansion efforts are successful.

Seiler explained to the commission that the cost of project is trending about 20 percent more than the budgeted amount of $70.2 million. Which he attributed mostly to the need to do more underground installation than initially planned. However, his group will have a better sense of how overall costs are heading as they complete the 2020 build-out schedule.

The group continues to target the end of 2023 for completing construction to all 40 build-out expansion areas.

View the presentation on pages 28-45 of the commission presentation materials. Listen to the discussion beginning at 1:20:20 on the commission audio.

Also on the agenda:

Work on the 2021 budget is well underway with more refined data about costs and spending. Commissioners and the public should get their first look at the draft budget at the Aug. 11 and 25 commission meetings. Three public hearings will happen in October toward a planned final commission vote on Oct. 13. All commission meetings and hearings are taking place virtually until further notice.

Hear the discussion at 2:59:55 on the commission audio. See pages 47 to 55 in the presentation materials.

Commissioners discussed with Senior Treasury Manager Bonnie Overfield an upcoming resolution to authorize as much as $175 million for bonding transactions. Of the total request, $100 million would be used to refinance at a lower interest rate two series of bonds coming due this year. The refinancing transaction is made up of two, separate $50 million bond series. One series will be at a fixed rate for five years. The other at an adjustable rate for three years. Interest rates are at an unprecedented low and could decline even more before the bonds would be issued, Overfield told commissioners. The short-term debt is intended to protect Grant PUD from any potential rate shock. The total request would give the Treasury team ability to issue through year's end an additional $75 million in new debt, if needed, to help cover capital spending. Commissioners will vote on the resolution Aug. 11. See a summary of the bond plan on pages 211-212 in the commission packet.

Commissioners heard that overall electrical retail loads and retail energy revenue are tracking well compared to the April 2020 forecasted totals. Retail load — energy demand by Grant PUD customers — came in 1.2% below second quarter expectations. While retail revenue, the electricity Grant PUD sells to residential, commercial, industrial, irrigation and other customers in Grant County was .6% below second quarter estimates.

Although actual loads and revenues came in just below forecasted totals, Baxter Gillette of the Large Power Solutions Group highlighted the significant variations within individual rate schedules during the quarter.

Gillette said the load within the Evolving Industry Rate Class was 55.5% below forecasted estimates – which he attributed to a combination of the reduction in the reward system offered by the largest cryptocurrency, as well as the April increase in the rate schedule's electrical rates.

Irrigation loads, which comprise Grant PUD's Rate Schedule 3, were 15.9% higher than forecasted. Gillette said even when considering weather impacts – precipitation totals and wind speeds – the rate schedule's load was still approximately 13% higher than what would have been expected. He added that billing timings may have also impacted actuals and noted the group will continue to investigate.

Customers used 537 average megawatts during the second quarter of 2020. During the same period, total revenue from retail sales was $48.5 million.

View the presentation on pages 200-213 of the commission presentation materials. Hear the discussion beginning at 4:17:25 on the commission audio.

ACTION ITEMS

Motion 3335. Unanimously authorized the general manager/CEO, on behalf of Grant PUD, to execute Change Order No. 3 to Contract 430-09950 with Arch Staffing & Consulting, increasing the not-to-exceed contract amount by $1,000,000.00 for a new contract total of $1,750,000.00 and resetting the delegated authority levels to the authority granted to the general manager/CEO per Resolution No. 8609 for charges incurred as a result of Change Order No. 3.(3335). Arch provides Grant PUD with contracted personnel whose skills and capacity are needed in Information Technology, project management and other Grant PUD business units. For more information see the Commission Packet, pages 8 to 14.

Motion 3336: Unanimously authorized the general manager/CEO, on behalf of Grant PUD, to execute Change Order No. 3 to Contract 130-08756 with North Sky Communications, LLC, increasing the not-to-exceed contract amount by $13,400,000.00 for a new contract total of $33,900,000.00 and resetting the delegated authority levels to the authority granted to the General Manager/CEO per Resolution No. 8609 for charges incurred as a result of Change Order No. 3.(3336). This change order provides funding for North Sky to continue fiber-optic network design and expansion for the 12-month period beginning late August 2020. For more information, see the Commission Packet, pages 15 to 27

Motion 3337: Unanimously authorized the general manager/CEO, on behalf of Grant PUD, to execute Change Order No. 2 to Contract 130-09724 with Quanta Electric Power Construction, LLC, increasing the not-to-exceed contract amount by $3,442,954.31 for a new contract total of $5,736,295.26 and resetting the delegated authority levels to the authority granted to the General Manager/CEO per Resolution No. 8609 for charges incurred as a result of Change Order No. 2.(3337). This is a planned change order as part of the Design-Build process to design and build 10 projects to rehab and/or expand the Grant PUD electric system. Design-Build is an expedited bidding/construction model authorized in RCW 39.10. For more information, see the Commission Packet, pages 28-137.