Commissioners received a report, Aug. 12, that specifically outlined the main reasons for a more expensive power supply in the coming years.
Grant PUD's rate-setting policy ensures that “core customers” -- residential, agriculture and small and medium-sized business -- will receive the lowest rates possible, based on first access to the low production costs from Grant PUD's Columbia River dams, Priest Rapids and Wanapum (collectively known as the Priest Rapids Project, or PRP).
The large industrial customers who are driving the need for more electricity will bear the cost of the more expensive energy resources, like solar and natural gas, acquired or developed. But, for all customers, rising production costs, materials costs and inflation will mean rising rates.
The presentation, given by Lisa Stites and Michael Frantz, both analysts with Energy Supply Management, stressed that several factors will also contribute to likely higher energy costs, including:
- New power resources to augment Grant PUD’s hydrogeneration and serve the county’s growing power needs.
- The state’s clean energy requirements.
- The requirements of the regional Western Resource Adequacy Program (WRAP).
They explained that Grant PUD’s strategy of selling “slices” of its share of power generating capacity of the Priest Rapids Project will need to be adjusted in the coming years. In exchange for the carbon-free hydropower Grant PUD receives revenue used to purchase primarily unspecified-source energy on the wholesale market to supply its retail customers. This provided a significant benefit to Grant PUD over the past five years.
This slicing strategy will likely be less lucrative for Grant PUD in the future because requirements from the state’s Clean Energy Transformation Act will make it necessary for the utility to use its carbon-free hydropower and related attributes to supply its Grant County customers, rather then sell them at a premium to slice purchasers.
Along with the slice sales, Grant PUD, has an arrangement mandated by its federal license to provide 30% of the combined generation of its Priest Rapids and Wanapum dams to regional utilities. Under the arrangement, Grant PUD is allowed to carve back that 30% to serve its growing customer base. A portion of the 30% capacity is auctioned off annually to cover Grant PUD’s Estimated Unmet District Load (EUDL). Grant PUD uses the proceeds to purchase additional market power to meet rising customer demand in Grant County. In the future, demands are expected to exceed the EUDL auction’s ability to provide enough revenue to purchase power to meet customer demand.
Stites said that Grant PUD should participate in WRAP to take advantage of the ability to work with other utilities in the West to have a deep, diverse pool of power resources that can provide efficient generation and power delivery to meet local demands. But it will mean that Grant PUD will need to add as much as 231 Megawatts of power capacity by winter 2031 to meet the WRAP’s capacity requirements. This additional power capacity will come at a premium with the price per megawatt hour being at least double of the cost of generating power at Grant PUD’s Priest Rapids Project dams.
All of this means that there will likely be less revenue from wholesale power sales, more costs that must be passed along to retail customers, and more risk for the utility, Frantz said.
Speaking about the impact to customers, commissioner Larry Schaapman said all power utilities are struggling with higher costs.
“They’re not going to find anywhere else where costs are not going up,” Schaapman said.
He added that Grant PUD has been transparent with the large power-consuming customers, explaining to them that they would need to pay for additional costs when the dams’ resources were no longer enough to regularly serve all of the county’s customer demand.
“These folks have been well aware that this day was coming,” Schaapman said.
See the full reports on pages 97-118 of the presentation materials. Here the discussion at 3:30:25 on the commission audio.
Proposal revised on higher, large-load electric service application fees, process
Staff proposed to commissioners an updated recommendation surrounding electric service application fees for large power customers after fielding months of feedback from Grant PUD’s existing large industrial customers and internal stakeholders.
The revised large electric service application fees are intended to increase certainty around actual power needs within the waiting list or “queue” and remove speculative applications – applications that may not come to fruition and may be inflated – to improve decision-making on long term energy and transmission planning.
Application fees range from $2,500 to $60,000 or more per megawatt. Much of the application fees paid would be applied towards project costs. The application fee would be paid at the time of application to secure a spot in the queue – then a larger payment to cover remaining project costs after engineering studies and design are completed and a facilities agreement is signed with the customer.
The updated application fee structure will apply to all new and existing applications without a signed facilities agreement.
Commissioner Larry Schaapman called for an “Eyes wide open, full transparency” approach to ensure large-load applicants wouldn’t be surprised by required payments throughout the process.
Grant PUD recently imposed load growth limits on existing data centers, because their energy-use projections reflected faster-than-expected growth that is projected to exceed the capacity of our current transmission system until several ongoing infrastructure projects are completed.
Hear the discussion at 37:00 on the commission audio. See the full report on pages 9-23 of the presentation materials.
Public comment period
Customers over whose lands Grant PUD seeks easements for its 32-mile Wanapum to Mt. View 230-kilovolt transmission line dominated this week’s public-comment session. Some to express satisfaction in the utility’s ability to work with them to satisfy their concerns. Others expressed frustration about not yet having a chance to discuss their concerns, despite the Aug. 26 deadline to avoid condemnation. Hear the comments at 2:03:53 on the commission audio.
Commissioners also:
--Unanimously approved Motion 3526, authorizing the general manager/CEO to increase a contract with Real Time Research Inc. by $25,796 for a new contract total of $1,004,641, keeping the contract’s completion date of March 31, 2026. The contractor will control birds that prey on young coho, sockeye and summer and fall Chinook that migrate through Priest Rapids and Wanapum dams on their way to the ocean to mature. See pages 14-19 of the commission packet for more information.
-- Reviewed Grant PUD’s proposed budget for 2026, which outlines $661.5 million in total expenditures. After accounting for expenditure offsets such as Contributions in Aid of Construction, Sales to Power Purchasers at Cost, and Net Power adjustments, the net budgeted expenditures total approximately $434.1 million.
This includes $253.1 million for Operations & Maintenance (O&M) and $272.9 million in Capital spending, reflecting continued investment in system reliability and infrastructure.
Public feedback opportunities will be scheduled in October, with the final adopted budget expected by the end of the year. Hear the discussion at 1:28:57 on the commission audio. See the full report on pages 48-57 in the presentation materials.
-- Received a staff proposal to pay off almost $100 million in outstanding bonds by the end of this year. Paying the bonds off early would help Grant PUD save on increasing interest costs and should not have a negative impact to the utility’s financial metrics, Angelina Johnson, Senior Manager of Treasury and Financial Planning, told commissioners.
The first bond series, 2020-R, with a face value of $47.19 million, would be paid off prior to the stepped interest rate increase on Dec. 1, 2025. The second series, 2023-U, with a face value of $49.265 million, could be paid on Dec. 31, 2025, with no penalty, but is required to be paid off or refunded on Jan. 1, 2026. Hear the discussion at 2:49:13on the commission audio. See the full report on pages 67-86 in the presentation materials.
-- Heard that a proposed change to Grant PUD’s Customer Service Policy would charge customers who accidentally damage power poles or other parts of the electric system while burning brush or weeds. The change aligns this type of damage with existing rules about damage to Grant PUD property. Other updates limit the adjustments Grant PUD officials can make on customer billing or for courtesy waivers. Commissioners are slated to vote on the updates at their next meeting, Aug. 26, 2025. Hear the discussion at 55:49:06 on the commission audio. See the full report on pages 24-46 of the presentation materials.
-- Heard that years of planning have yielded some advanced analysis into how to better sell Grant PUD hydropower and gain access to new sources of energy as our county’s demand for electricity grows beyond the capacity of our Priest Rapids and Wanapum dams to provide for it.
Commissioners had a conversation with General Manager & CEO John Mertlich about an emerging strategy to add and sell new forms of generation. That could include natural gas as a “bridge” to increase power supply on an interim basis as we navigate the state mandate to eliminate carbon from the state’s energy supply by 2045 and continue to provide safe, reliable electric service for our customers.
More information will be available in future weeks as plans solidify. Listen to the discussion at 11:48 on the commission audio. Also refer to this week’s top news item, above, and a related discussion on energy markets at 22:08 on the commission audio and on pages 1-6 of the presentation materials.
Questions? Please contact Christine Pratt, Grant PUD Public Affairs,