Commission recap, 2/27/2014 — Fiber build, unit-rehab on track. More...

During their Feb. 27, 2024 meeting, Grant PUD Commissioners:

—  Heard from Aaron Kuntz, Senior Manager of the Enterprise Project Management Office that:

• Work to upgrade the #6 turbine/generate unit at Priest Rapids Dam is currently 7 days ahead of schedule. The unit is now disassembled and will be rehabbed over the year. Rehab work is finished on five of the dam’s 10 units. All 10 units are planned to be rehabbed.
• Buildout of the fiber-optic network to the remaining customers of Grant County continued through most of the winter and is on track to be finished by year’s end.
• A contract to design and build a new Ephrata Service Center — a homebase for area line and electronics crews, warehouse, transportation shop, materials yard and more — was executed under the state’s “Progressive Design Build” process. The site of the new center has yet to be finalized. The existing center is aged and too small.
• Grant PUD project managers are currently shepherding 34 projects related to Power Production, Enterprise Technology, Facilities, and Power Delivery through various stages of the project management process – initiation, planning, execution, and closing. 

See the full presentation on pages 40-63 of the presentation materials. Hear the discussion at 1:17:42 on the commission audio.

— Heard that the finance and energy-supply-management teams are requesting commission approval for a proposal to protect Grant PUD from the volatile pricing on future electricity purchases needed to ensure a reliable electric supply for its customers. 

Grant PUD’s federal license to operate Priest Rapids and Wanapum dams entitles the utility to 63.31% of the dams’ physical generation of electricity and up to 30% of the financial (market) value of the generation from the dams.   The market value is realized through an annual auction process.  From the auction proceeds, Grant PUD receives cash to purchase power on the open market to serve its customers. 

Grant PUD expects in-county electricity demand will begin to outgrow the utility’s physical and financial share of the dams in 2026-2027. Grant PUD’s share of the financial value is $307 million for 2024. Based on forecasted market prices, next year’s total is estimated at $297 million. 

Grant PUD has entered into agreements which will allow financial hedging  to secure prices the utility can count on for future energy purchases in the wholesale market. These contracts allow for Grant PUD to post collateral through letters of credit from an approved bank.  Staff’s proposal is to allow for the establishment of a line of credit with JP Morgan which would back any subsequent letters of credit that may be necessary to secure financial purchases.

These types of transactions and the associated collateral are standard processes for businesses of all types, commissioners learned, but commission approval is needed for Grant PUD to proceed with securing the line of credit. Commissioners are expected to vote on the proposal at their March 12 meeting.

See the full presentation on pages 65-75 of the presentation materials. Hear the discussion at 1:58:08 on the commission audio. 

Commissioners also:

— Approved purchasing 3,000 45-foot and 200 50-foot Western Red Cedar power poles from Stella-Jones Corporation for a total not-to exceed price of $4.905 million. Stella-Jones’ bid was lower than the engineers’ estimate of $5.990 million. The poles will be used for new line extensions, upgrading and replacing aging poles and for inventory during emergency situations. For more information, see page 8 of the commission packet. 
 

— Approved a $200,000 change order with Associated Underwater Services for a not-to-exceed amount of $1.119 million to provide dive services as needed for multiple areas in the district, including dam safety, environmental and general preventative and corrective maintenance. The contract ends on May 31, 2025. For more information, see page 61 of the commission packet. 

— Approved the purchase of $20,313.10 to pay an invoice for oil needed for the auto transformer at the Ancient Lake Substation from Chelan PUD. For more information, see page 168 of the commission packet. 

— Passed a resolution to transfer any proceeds from Cap and Investment Auction of Climate Commitment Act credits received to be recorded in the Reserve & Contingency fund until clear governance and procedures have been developed to manage the funds. For more information, see page 66 of the commission packet.