Commission recap, 11/14/2023 — 2024 budget approved w/funding to finish fiber buildout
Commissioners Tuesday unanimously approved a $347.2 million expense budget for 2024 that fosters continued financial strength, ensures continued reliable service for Grant PUD customers and completes a milestone, 24-year effort to make the Grant PUD fiber-optic network available to every resident of Grant County.
“Fiber for everyone who wants it was a commitment we made as a commission in 2000,” said Tom Flint, the board’s longest-standing member and a consistent fiber advocate. “At times, it didn’t seem as if we’d get there, but it sure looks like it’s going to happen by late next year. That’s good to see.”
The 2024 budget includes a rate increase. Commissioners continue working with staff to determine how much a rate increase is needed to maintain the utility’s financial health and how the increase will affect each individual rate class.
Future rate discussions will be scheduled to give customers ample chance for input before the new rates are expected to take effect on April 1, 2024.
Total budgeted expenditures in 2024 are 9.5% higher than the $317 million in total spending originally budgeted in 2023. The increase is driven by 7.3% increase in operations and maintenance expenses, from $188.2 million in 2023 to $201.9 million, and a 11.6% increase in capital spending, from $155 million in 2023 to $172.9 million.
Cost drivers include the lingering effects of inflation and major capital projects that, aside from the forecasted fiber buildout, include:
- Continued rehab of the turbine/generator units at Priest Rapids Dam. Each unit requires 14 months to rehab.
- A host of projects to increase electric-grid capacity, including construction of the new Red Rock Transmission Line to Royal City and additional planning for a new transmission line from Wanapum Dam to Quincy’s Mt. View Substation.
- The design phase for a new Ephrata Service Center building, with construction slated for 2025-2027. The center includes office space, line services, transportation, warehousing and equipment storage.
With all expenses and revenues taken into account, including revenues of $313.3 million from retail power sales, Grant PUD expects to end 2024 with a change in net position of $118.6 million.
See the detailed, 2024 budget presentation here: https://tinyurl.com/2p94rdnj Questions? Contact Grant PUD Public Affairs,
— Heard a staff proposal for a new $6.6 million contract with Brazil Quality Services for continued inspection services for all the turbine/generator components needed for the unit upgrade at Priest Rapids Dam. Components for both Priest Rapids and Wanapum dams have been manufactured in 10 countries around the world. Brazil Quality Services has had an inspection-services relationship with Grant PUD since 1989 and has representatives around the world who can work with Grant PUD staff to ensure quality control and monitoring at these manufacturing sites. The contract was not competitively bid, although the company’s rates appear roughly in line with Power Production’s other contracted inspection costs. “The majority of components are coming out of China right now,” Project Services Supervisor Mike Fleurkens told commissioners. “We really want to stay with the inspectors we have now, who are knowledgeable about the components we’ve got going on, to minimize the risk of having a non-conforming component show up.” Commissioners are scheduled to vote on the proposal at their Nov. 28 meeting.
See the full presentation on pages 1-11 of the presentation materials. Hear the full discussion at 42:26 on the commission audio.
— Heard a staff proposal to execute a joint $3.99 million contract with Absher Construction, Integrus Architecture and Huitt Zollars to refine scope and work requirements and begin pre-design activities for a new Ephrata Service Center. The existing center has become too small, worn and ill-equipped for materials storage, warehousing, transportation shop, training space, and field crews’ locker and meeting rooms. Land for the project has yet to be purchased. The Absher-led team scored the highest of seven respondents based on past performance of projects similar in scope and complexity, their team experience and approach. Grant PUD will manage the project under the state’s “Progressive Design Build” alternative public works contracting process for qualifying projects. Design Build brings engineering, architecture and builders on board at the same time for a streamlined and more efficient decision making and project execution. The team should have refined cost estimates and construction schedule by late 2024, Commissioners are scheduled to vote on the proposed contract at their Nov. 28 meeting.
— Heard that clean up and recovery work is well underway at the Soap Lake Substation, which was destroyed following an arc-flash fire, Oct. 25. Crews are nearly finished with demolition. One of Grant PUD’s mobile substations will be operational at the site within two weeks. The arc-flash generated heat so intense it vaporized the aluminum bus between the transformer and the feeder circuits. This also caused a pressure-release valve on the sub’s transformer to open, spraying hot oil that ignited into a ball of fire and smoke. A detailed root-cause analysis is underway to determine the cause. Early indicators point to a critical battery system remaining offline when a fault occurred, preventing safety equipment from activating to deenergize the substation. Until the mobile substation is operating, power has been rerouted through other substations to serve Soap Lake. Crews have since rewired the battery systems at 35 other substations to prevent similar incidents. General Manager and CEO Rich Wallen praised crews and engineers for their teamwork and quick response to the incident.
— Heard about the upcoming State Legislative session. This year’s short 60-day session is the second in the State’s Legislative Biennium. Some of the key issues that will be followed include:
- Tracking low-income energy assistance statewide plan recommendations. The Department of Commerce is developing recommendations to the legislature on a statewide energy assistance program design.
- Following how the Department of Ecology’s cap and invest auction funds will be allocated. After August’s third quarterly auction, the State has received more than $1.4 billion from the cap and invest program.
- Seeing what legislative action may develop around net metering and protection for solar customers. In 2023, a net metering bill included elements of both. It’s anticipated this year separate bills will be introduced addressing each issue individually.
— Heard about Grant PUD is exceeding its state-mandated conservation target of 40,033 megawatt hours for a total savings of 41,121 megawatt hours for the 2022-2023 biennium. Energy Services Program Supervisor Christopher Buchmann also explained how the state's Clean Energy Transportation Act (CETA) will positively impact Grant County's vulnerable populations and highly impacted communities with outreach, home energy assessments and expanded low-income discounts. The goal is a 6% or less energy burden by 2030 for those most in need.
See the full presentation on pages 79-93 of the presentation materials. Hear the full discussion at 45:41:00 on the commission audio.
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