Commission summary, 7/26/2022 — Retail energy sales below budget, April-June. Solid future growth expected

Retail customer electricity sales ended the year's second quarter about 2% less than budget forecast, commissioners heard Tuesday. Year-to-date through April, sales are about one-half percent above budget and are forecast to stay strong, longer term.

Colder-than-expected spring weather increased energy consumption from residential customers, and higher than normal precipitation decreased energy use for irrigation.

Energy use by medium-sized business billed under "Large General Service" Rate Schedule 7 ended the quarter 14.7% above budget forecast, attributable to an increase in cryptocurrency mining and one new customer in Moses Lake that isn't included in the budget forecast.

Chief Customer Officer Dave Churchman told commissioners that an internal team is currently analyzing cryptocurrency energy use in Grant County and expects to recommend in September that cryptocurrency and any other Grant PUD customer that qualifies as "evolving industry" under Grant PUD rate policy, be moved to the higher-cost Rate Schedule 17.

The analysis team is also considering proposing policy changes for commission review that would retain the Evolving Industry customer classification in Rate Schedule 17 until the affected customers no longer meet all the Evolving-Industry criteria of concentration risk, business risk and regulatory risk,Churchman said.

Many of the cryptocurrency mining businesses are now billed under Rate Schedule 7, which according to current policy is a preferred, below-cost rate for traditional or "core" larger businesses.

"Cryptocurrency does not belong in Rate Schedule 7," Commissioner Larry Schaapman said, pointing to the new and evolving status of crypto.

Large industrials came in a little above budget. Energy use in Ag Food Processing, Rate Schedule 16, was down almost 16% compared to the budget forecast, due to lower-than-forecast energy use.

The 2023 budget forecast anticipates an approximate 40% growth in demand for energy by 2033 in Grant County. The fastest growth is expected over the next five years. Energy use by residential, irrigation, streetlights and agricultural processing are expected to remain similar to the current year's growth projections.

Energy use by larger commercial businesses (Rate 7), and industrial customers as a whole, is forecast to come in higher than the 2022 budget forecast, pushed by data center growth.

"In a lot of places there's no growth and a stagnant economy," Commissioner Tom Flint said. "It's pretty exciting to see where we are. We're growing and expanding and making good use of our resources, which is good and challenging at the same time."

See the full report on pages 38-96 of the presentation materials. Hear the discussion at 1:33:54 on the commission audio.

Integrated Resource Plan outlines how Grant PUD can meet growing demands

Since 2008, Grant PUD has published an Integrated Resource Plan every two years. The plans, a requirement by state law, are meant to outline what power generation resources utilities will need to provide power to their customers for the next 10 years.

Earlier plans produced by Grant PUD staff were straight forward as they described how the utility would rely on power generated through Priest Rapids and Wanapum dams, as well as smaller hydro and wind assets that were a part of the utility's power portfolio, explained Rich Flanigan, Senior Manager of

Wholesale Marketing and Supply during a public hearing on the Integrated Resource Plan held during the commission meeting on Tuesday, July 26.

Flanigan said the growing demand for power to serve customers means Grant PUD must now consider other power generation resources in addition to those that are presently controlled by the utility, as a part of the 2022 Integrated Resource Plan.

Grant PUD is currently investigating the need to acquire power from other generation resources, including hydropower from the Bonneville Power Authority, as well as power that may come from solar, wind and natural gas generators. Along with purchasing power in the short term, Grant PUD will explore developing more of its own generation resources, including the possibility of nuclear power from Small Modular Reactor technology.

Tim Culbertson, former Grant PUD general manager, attended the meeting and asked what kind of power resources the utility would want to consider developing. Commissioner Tom Flint said it would be important for the generation resource to provide "firm" or reliable power to meet expected demands.

"Firm energy is so important," Flint said.

With the public hearing complete, commissioners will review the proposed 2022 Integrated Resource Plan during its next commission meeting on Aug. 9 and is scheduled to take action on the plan during the Aug. 23 meeting so it can be filed with the Washington State Department of Commerce by Sept. 1. 

See the full report on pages 56-69 of the presentation materials. Hear the discussion at 3:07:41 on the commission audio.

Commissioners also:

Learned that Grant PUD is exploring two different metrics to track electric-system outage metrics. For several years, Grant PUD has used the Average System Availability Index (ASAI) and Customer Average Interruption Duration Index (CAIDI) to measure the reliability of its power service to Grant County customers. Both measurements are used as a metric in Grant PUD's Strategic Plan, which is adopted by the commissioners. Ron Alexander, Managing Director of Power Delivery, said his team is exploring two different metrics, System Average Interruption Duration Index (SAIDI) and System Average Interruption Frequency Index (SAIFI). He said they are determining if both would be more appropriate in measuring Grant PUD's system reliability because they more readily identify issues Grant PUD can respond to and they are used by neighboring utilities. See the full report on pages 56-69 of the presentation materials. Hear the discussion at 3:07:41 on the commission audio.

Heard that the first section was completed in June of a new concrete barrier to improve the seismic strength of the embankment on the Yakima County side of Priest Rapids Dam. The completed section is approximately one-quarter of the full project, which should be finished in Jan. 2024. Ty Ehrman, managing director of Power Production, also said that rehab work on the fourth of the 10 turbine/generating units at Priest Rapids Dam will be complete in early August. Work on the fifth unit will begin shortly after. All 10 units are slated for rehabilitation. All 10 units at Wanapum Dam have already been rehabilitated. See the full report on pages 14-37 of the presentation materials. Hear the discussion at 1:00:43 on the commission audio.

Unanimously approved a $2.05 million contract with Del Sol for cleaning services through June 2025. Discussion of this motion happened at the July 12, 2022 meeting. For more information, see pages 7-29 of the commission packet.

Unanimously approved a $1,050 purchase-and-sale agreement with the City of Ephrata for 0.16 acres adjacent to existing Grant PUD land to support future build-out of the South Ephrata Substation. For more information, see pages 30-47 of the commission packet. Hear the discussion at 2:51:14 on the commission audio.

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