Commission Meeting 10-12-2021: Pyle selected to fill commission vacancy
Terry Pyle, of Moses Lake, was unanimously selected by Grant PUD Commissioners to fill the remainder of the late commissioner Dale Walker's term through December 2022. Pyle's official appointment and swearing in will occur during the Oct. 26 commission meeting.
The commissioners interviewed and received public input regarding four different candidates as potential replacements for vacant District No. 2 position on the five-member board. The position represents the southeastern portion of Grant County, including portions of Moses Lake, Warden and surrounding areas.
"We had four great candidates and anyone of them would do a really great job," said Commissioner Tom Flint.
The other finalists were Michael McKee, of Marlin; Ronald Reis, of Moses Lake; and Patti Paris, of Moses Lake.
Each commissioner took the opportunity to share their insight from the interview process and express thanks for those that applied to fill the vacancy.
Commission President, Larry Schaapman said Pyle, who is an instructor at Big Bend Community College, was the top choice among all the commissioners. Schaapman said that during the interview process Pyle showed that he had a well-rounded understanding of Grant PUD including the utility's relationship with the Wanapum, as well as a strong background in both finance and economics.
Pyle said the process allowed him to learn more about Grant PUD saying he was excited to begin. "I'm so appreciative of the opportunity and the confidence that you've expressed," he added.
Hear the full discussion at 3:28:15 of the commission audio.
2022 proposed budget reviewed during public hearings
During Tuesday's Public Budget Hearing, the public received its first review of the Grant PUD's proposed $397.5 million budget for 2022. The budget, which is expected to be adopted during an upcoming commission meeting in November, focuses on providing value to current and future customers while maintaining the organization's financial health.
Senior Manager of Financial Planning and Analysis, John Mertlich told commissioners the proposed budget aligns with Grant PUD's Strategic Plan and top priorities of Grant PUD customers — reliable electric service, good customer service, clear and timely communication and keeping rates as low as possible.
The budget includes $156.9 million in operations-and-maintenance (O&M) expenses, a $13.3 million increase over the 2021 budget. Power production – expenses that go toward the generation of electricity – account for 36% of the total O&M. Administrative and general expenses account for 42% and power delivery — the electric grid and infrastructure – accounts for 22%. See pages 17-20 of the budget presentation for a further breakdown of budgeted O&M expenditures.
The proposed 2021 capital budget of $145.4 million is a $2.1 million increase over the 2021 budget. The electric system accounts for $90.1 million of the total, driven mainly by the need to meet retail growth through the ongoing efforts of several significant electrical system expansion projects which are part of Design Build 2 and the Quincy Transmission Expansion Project. Power production accounts for $55.3 million, with major drivers that included for right-bank (Yakima County-side) improvements at Priest Rapids Dam and continued unit rehabilitation there.
Total expenditures of $397.5 million are offset by $112.3 million in revenues that include money paid by customers to build infrastructure and wholesale power sales, both by contract and on the regional wholesale market. The budget total of $285.3 million reflects these offsets.
Load growth — demand for electricity within Grant County — is forecast to outpace previous forecast and grow at an average of 4.2% annually through 2030, well above the historic average of 3.6%, Mertlich told commissioners. The growth is associated mainly with new larger industrial customers.
Retail energy revenues – sales to Grant County customers – is budgeted at $236.1 million in 2022, up from the current 2021 year-end projections which is forecast at $227.3 million.
Grant PUD sells excess power not needed to serve Grant County customers on the regional wholesale market, resulting in net wholesale revenues. Net wholesale revenues are forecast at $81.5 million in the 2022 budget, up from $77.8 million in the original 2021 budget.
Overall, Grant PUD expects to see a change in net position of $76.2 million for 2022.
Commissioners expressed their appreciation to the financial planning group for their effort preparing the 2022 budget. Commissioner Tom Flint saying this year's review was a more in-depth look than in years past.
Learned about some of the highest risk challenges that may face the utility in the coming years during a presentation given by Paul Dietz, manager of Enterprise Risk Management, in the commission meeting on Tuesday, Oct. 12.
Dietz said that the Enterprise Risk Management Committee worked with Percipio Consulting Group to conduct a recent risk assessment. The assessment looked at a variety of scenarios and gauged them on a scale of being very unlikely to happen to highly likely to happen. Then they looked at the scenarios and gauged them from being not significant with an impact of less than $500,000 to greater than $100 million. Once all the scenarios were considered through those parameters, the members of the assessment team then looked at how Grant PUD is positioned to mitigate specific risks.
Once all the factors were considered, the top 10 risks to the district are:
- 1.Capital Markets Risk
- 2.Commodity Price Risk
- 3.Human Capital Risk
- 4.Customer Technology Obsolescence Risk
- 5.Commission Governance Risk
- 6.Business Interruption Risk
- 7.Cyber Security Risk
- 8.Small Modular Reactor (SMR) Risk
- 9.Health and Safety Risk
- 10.Strategic Planning Risk
Dietz explained that once the risks have been identified, the utility can work to continue to monitor and mitigate against these risks. He added that the risk assessment will be updated annually or as the risk profile of the organization changes.
Click here for full presentation and go to slides 1 – 19. Hear the full discussion beginning at 40:30 of the first commission audio file.
In other business:
- Commissioners heard from Ty Ehrman, Managing Director of Power Production, who during his quarterly presentation noted that a recent insurance inspector described the housekeeping and cleanliness of both Priest Rapids and Wanapum dams as "exemplary" and that he was going to use their condition as a model for other power plants undergoing upgrades. Ehrman added that the rehab work on Priest Rapids Unit No. 4 should be completed by May 2022. He also mentioned that construction began on the Priest Rapids Right Embankment Improvement Project on Oct. 4. See the presentation on pages 20-38 of presentation materials. Hear the discussion beginning at 1:40:25 of the first commission audio file.
- Cleanliness was also a big topic for folks who took a survey while visiting Grant PUD's recreation sites this summer. Ross Hendrick, senior manager of Environmental Affairs, told the commissioners that the cleanliness of the recreation sites earned the highest praise during the survey during his report. He mentioned that the full survey results will be presented to the commissioners in a future commission meeting. See the presentation on pages 39-53 of presentation materials. Hear the discussion beginning at 2:10:20 of the first commission audio file.
- Commissioners tabled the vote of approving a $3.779 million contract for telecommunications upgrades with Nokia Networks for the fiber optic backbone equipment until the Oct. 26 meeting.