Commission Summary 11-9-2021: Transmission rates and changes proposed
Staff presented commissioners with a slate of proposed changes to how Grant PUD bills for the power that travels over its transmission lines but doesn't originate from a Grant PUD-owned generation source, like one of its dams.
The changes include a proposed Rate Schedule 34 for transmitting federally sourced power for the federal Bureau of Reclamation and the irrigation districts that supply the Bureau's Columbia Basin Project water to Grant County farmers. Commissioners agreed to a request by the Bureau and irrigation districts to eliminate the "return on customer-funded equity (capital)" charge that was part of the original rate proposal.
The new Rate Schedule 31 changes the rate structure for the smaller loads of the Bureau and irrigation districts using fixed monthly charges and a delivery charge for the services included under this rate schedule. The proposed changes will result in small billing increases for some of these transmission customers but is designed to be overall revenue-neutral to Grant PUD.
Other proposed changes include a new rate for transmitting power generated by solar farms – an expected growth industry in Grant County – and a separate rate schedule for billing all transmission customers for the host of ancillary services required of Grant PUD to support a reliable transmission service.
Commissioners will review the proposal again at their Nov. 23 commission meeting and plan to vote on the proposal at their Dec. 14 meeting.
Latest forecast projects $2.9 million in additional budget expenditures
The third-quarter budget-to-actuals report projects Grant PUD will spend $2.9 million more than originally budgeted this year, pushed by higher labor and capital expenditures, commissioners learned.
Expenditures for 2021 are now expected to end the year at $258.1 million, up just over 1% from the budgeted $255.2 million.
Labor costs are expected to end the year at $83 million, up 3% more than the originally budgeted $80.4 million. Capital costs excluding labor are now projected to be $115.6 million, up 2% from the original $113.1. Operations and maintenance costs are now projected to end the year at $59.6 million, down 3% from the originally budgeted $61.7 million.
Much of the increase comes from scope changes and timing of capital projects and an increase in overtime pay, as projects continue to expand transmission and distribution capacity throughout the District ,rehabilitate turbine/generator units at Priest Rapids Dam, and a project begins to reinforce the Yakima County-side earthen embankment of Priest Rapids Dam.
Impacts of a July power outage reviewed with commissioners
Details surrounding this summer's July 31 outage near Winchester that impacted more than 9,200 customers was reviewed by Asset Management Coordinator Danna Carvo. Five transmission poles that carried transmission, distribution and fiber services collapsed that evening.
The group's analysis showed that one of the transmission poles contained a 'rot pocket' and fell during a microburst of wind, which also caused four additional transmission poles to fall.
Carvo said the issue was compounded because the pole had been located near a surface irrigated agricultural field.
In total more than 350 staff hours were spent restoring service to 9,297 customer connections which cost $79,496 for time, materials and other expenses. Due the coordinated efforts of station operators and dispatchers, service was restored to 8,913 of those impacted by the outage within approximately 77 minutes. However, a few hundred customers were without power for nearly four hours, many of those were irrigation customers. Five customer connections remained without power for almost 10 hours and the final two customers were restored after about 19.5 hours.
This single outage accounted for approximately 20% of the utility's annual allowance towards its service reliability measure, known as the Average Service Availability Index or ASAI. A rating that measures the total time that service is available to customers during the year.
Commission President, Larry Schaapman said the outage impacted thousands of acres during the heart of the growing season because a local pumping station lost electrical service. He added that as an irrigation customer of Grant PUD it's important that irrigators are also doing their part to ensure they are not unduly impacting their neighbors service, especially as the utility is focusing on ways to increase power quality.
Historically the utility hasn't enforced how close irrigation service is to power poles. Opportunities to alleviate the impact of future outages due to these types of issues will continue to be explored.
Senior Manager of Power Deliver & Construction, Ron Alexander also provided the commission with an update about a variety of other proactive efforts the Construction and Maintenance Department is addressing to help avoid any major impacts to a customer's electrical service, power quality and fiber service including:
- Pole fire mitigation. To date 2,343 poles have addressed.
- A variety of efforts to address power quality issues on the electrical system.
- Fiber operations and maintenance work to ensure uptime goals of the network are met.
- Planning for the new wood pole sustain program that will look at replacing up to 200 of the most high-risk poles in the county based on age and conditions.
- Continued work to protect transformers in the Quincy area from bird intrusions and potential outage issues.
– Congratulated Bonnie Overfield who has been named Grant PUD's interim chief financial officer as the utilitysearches to find a replacement for former CFO Jeff Bishop, who accepted a job for a Nebraska public utility.
Bonnie joined Grant PUD in July 2004. She has held a number of senior leadership financial positions, most recently as senior manager of Treasury, overseeing the utility's investment portfolio and debt program. She holds a bachelor's degree in Business Administration and Management from Eastern Washington University and a masters degree in Business/Finance from City University of Seattle.
She holds leadership positions with the Large Public Power Council, Washington Public Treasurers Association and Women and Public Finance. She serves the community on the Columbia Basin Cancer Foundation board, is vice-president of the Longview Elementary PTA and is leader of her sons' Cub Scout pack.
"I'm excited to jump in and see what I can do in the interim role," she told commissioners.
"We're happy with you Bonnie. We think we have the right person in place for the interim. Go get 'em," Commission President Larry Schaapman said.
– Heard about a variety of state, regional and federal legislative topics including relevant rulemaking activities occurring for Washington's Clean Energy Transformation Act and its Cap and Invest Bill.
Senior Manager of External Affairs, Andrew Munro and Senior Policy Analyst, Cliff Sears talked about the group's collaborative efforts of working with industry partners to educate policy makers on relevant items and tracking of key issues.
See the full presentation on pages 84-97 of the presentation materials and hear the discussion which begins at 3:34:00 on the commission audio.
– Received an update on the components of the 2021 Audit Plan. Results will guide Grant PUD to implement industry best practices and standards, remain consistent with organizational goals and evaluate internal controls for adequacy, effectiveness and efficiencies, Internal Audit Manager Dmitriy Turchik told commissioners.
"We want to concentrate on the areas that present the highest risk and have the highest likelihood of occurrence," Turchik said.
– Unanimously approved a resolution establishing Grant PUD's 10-year Conservation potential Plan and Two-year Conservation Target. Read more on pages 9-16 of the commission packet.
– Unanimously approved a motion to adopt Grant PUD's Clean Energy Implementation Plan for 2022-2025. See the details of the plan on pages 17-107 of the commission packet.
– Unanimously approved a change order to an existing contract with Henley Leadership Group. The new not-exceed contact was increased by $325,000 and extended to February 28, 2023. Learn more on pages 115-126 of the commission packet.
– Unanimously approved a five-year contract with the Central Washington Management Group for operational management and maintenance of the Crescent Bar Recreation Area. The contract is for $7,929,525. Since 2016, Central Washington Management Group has operated
and maintained the CBRA, most recently under a three-year contract that expires on
December 31, 2021. Read more on pages 127-261 of the commission packet.
– Commissioners unanimously agreed to postpone approval of a change order to a contract with Arch Staffing and Consulting to allow new interim CFO Bonnie Overfield additional time to review.
– Selected board officers and association representatives for 2022. On the commission, Judy Wilson will be president; Nelson Cox, vice-president; and Tom Flint, secretary.
Nelson Cox will be Grant PUD's main representative for Washington PUD Association (WPUDA). Tom Flint will represent Grant PUD at Energy Northwest.Terry Pyle will represent Grant PUD at the once-yearly meeting of the Central Washington Power Agency (comprising only Grant PUD and Kittitas County PUD). Judy Wilson and Terry Pyle will represent Grant PUD on the Financial Advisory Committee.