Commission recap, 3/11/2025 — Strong financial year to end $2.9M below budget

Careful budgeting and disciplined spending resulted total expenditures of $464.4 million in 2024 – only $2.9 million below that year’s original budget forecast, according to the latest figures, shared with commissioners Tuesday.

Operations and maintenance expenses should end the year at $198.04 million, slightly below the budgeted $201.9 million, while capital expenses – money spent on work to add or expand existing infrastructure – is forecast to end the year at $174.7 million, slightly above the budgeted $172.9 million. Upgrades to the electric system dominated the 2024 capital budget, consuming $118.8 million of the total, compared to $55.9 million for upgrades at the dams and related projects.

On the revenue side, the year’s budget bottom line is getting a big boost from power sales, both to Grant PUD’s own, long-term power purchasers at cost and shorter-term contracted sales to power resellers who purchase Grant PUD’s carbon-free hydropower in exchange for mixed-source market power. In our region, mixed-source power is still dominated by hydro but can also include other renewables, as well as coal and natural gas generation.

These wholesale and contracted power sales are expected to end the year at $286.5 million, 218% -- $196.3 million – above budget. Other revenue offsets to 2024 expenditures include $24.3 million in contributions from Grant PUD customers who pay for electric system upgrades needed to supply their industries, and $26.7 million from sales to Grant PUD’s longer power purchasers at cost. Both of these additional revenues are also coming in over budget by $12 million and $9.8 million respectively.

Retail power sales to Grant PUD’s in-county customers are expected to end 2024 at $283.4 million, about $30 million (10%) below budget.

The strong revenue year, combined with careful budgeting and spending, reduces 2024’s preliminary budget bottom-line expenditures to $126.9 million. Final figures for the 2024 budget will be presented to commissioners in May but are not expected to vary by much.

For more information, see pages 70-95 in the presentation materials. Hear the discussion at 1:49:48 on the commission audio.

Commissioners also:

--Unanimously approved Resolution 9083, to allow Grant PUD to expand use of an existing letter of credit, which has been used as collateral for power-purchase and other contracts. The change will enable Grant PUD to also use the letter of credit as collateral to pursue contracting with the Southwest Power Pool’s “Markets+” implementation. For western states only, Markets+ would give its members access to new day-ahead and real-time markets for their power. This market is a more efficient use of the power grid, resulting in lower prices and increased efficiency for its participants. Grant PUD has agreed to help fund “Phase 2” of the new market and is considering joining the Power Pool. For more information, see pages 16-24 of the commission materials.

--Unanimously approved Motion 3512 to increase a contract with UKG Inc. by $150,826.56 to cover estimated incremental fees through the end of the contract term of Nov. 20, 2026. UKG provides the Human Resource Information System used by Grant PUD to process payroll, employee time keeping and other human resource services. The added fees correspond to the estimated increase in the number of Grant PUD employees during that period. For more information, see pages 25-31 of the commission materials.

-- Unanimously approved Motion 3513 to execute a new contract agreement with Methow Salmon Recovery Foundation for $1,250,222.00 to purchase 7.86 acres of land adjacent to the Twisp River for habitat restoration, creating improved rearing and spawning conditions for salmon and steelhead. The contract will help Grant PUD meet its federal requirements to bolster populations of migratory fish.

-- Commissioners also received quarterly business reports from the departments of Business/Finance Services, Energy Supply Management, Enterprise Technology (27:54 on the audio), Human Resources (39:33 on the audio), Executive (41:40 on the audio), Internal Services (44:38 on the audio), Protective Services (52:58:06), Chief Administrative Officer (1:07:01), Customer Affairs 1:10:23), External Affairs (1:14:13), Telecom & Fiber Services (1:21:21), Power Delivery (1:33:51), Power Production (33:01), Environmental Affairs & Cultural Resources, Asset Management (1:41:17), and Accounting/Treasury (16:06 and 1:49:48) on the commission audio. For more information, see pages 5-69. Hear the discussion at the timestamps in parenthesis, above, on the commission audio.