Citing their importance to system reliability and resource adequacy, the Grays Harbor PUD has offered comments on a state report concerning the Lower Snake River Dams.
The report was the result of a state funded, $750,000 study into the feasibility of maintaining the four Lower Snake River Dams. As sections of the report called into question the dam’s value in terms of the regions power system and costs of maintenance, the PUD jumped to their defense with a response backed by scientific reports from NOAA Fisheries, the Public Power Council, the Bonneville Power Administration and other agencies.
“With production of over 1000 average megawatts of clean and reliable energy (enough energy to power roughly 800,000 homes), the dams have been identified by the Bonneville Power Administration as a key component of the FCRPS (Federal Columbia River Power System) mission of supporting peak power generation,” the PUD response stated.
In terms of timing, the utility response highlighted the retirement of coal generated power facilities in Oregon, Montana and Washington and the loss of over 3000 megawatts of energy in the coming years as ample reason to maintain the reliable power generated by the dams.
“Without reliable resources to replace that energy, a growing population and increased energy use in the residential, commercial and transportations sectors, the region faces the possibility of an energy shortfall, similar to the one that struck the West Coast in 2000-2001. Given that fact, we firmly believe that now is not the time to remove base load resources from the FCRPS.”
The utility comments also touched on the dam’s role in moving the state toward a 100% clean energy portfolio, as required by the passage of last year’s Clean Energy Transformation Act.
“With a goal of 100% clean energy by 2045, the loss of the clean, emission free energy produced by the dams would deal that goal a severe blow and perhaps force the state to seek energy on the market from emitting resources, thereby working against legislation brought about by cooperation and compromise.”
While the state report emphasized that new energy technologies like wind and solar generation may one day be able to fill the void left by the dams removal, the PUD response reminded the authors that new generation has questionable reliability; something hydropower can help to rectify.
“With the clean and reliable energy resources provided by the FCRPS, the energy exists to allow innovation and invention to run its course and for new resources to be perfected and take their place in an integrated energy system that will allow Washington to continue its role as a leader in clean and renewable energy.”
In addition to energy issues, the PUD response also cited the important role the dams play in the everyday life of residents of southeast Washington, including irrigation for farming, navigation for freight and recreational shipping and recreation for thousands of boaters, fisherman, swimmers and campers.
For over 30 years, PUD staff, led by substation and automation engineers have been working to bring all the utility substations under monitoring and control of the “supervisory control and data acquisition” or SCADA system. On January 23rd they reached that goal. With the update to the Central Park substation, all of the utility transmission and distribution substations can now be monitored and controlled by dispatchers in the PUD Power House.
“For our customers, this means we have the ability to do a faster diagnosis of issues on the utility system and to respond quickly,” said PUD Substation Engineering Supervisor Chris Eide.
“This is a great moment for the PUD,” said Engineering Director Schuyler Burkhart. “It’s the result of years of work by engineers, technicians, journeymen, and District employees who worked together to provide this very useful capability on our system.”
The Grays Harbor Public Utility District is notifying customers of a planned power outage beginning at 10:00 AM on Tuesday, December 10, 2019. The outage is expected to last until 3:00 PM on that day and will affect roughly 45 customers. Those impacted are residents of the Viking West Trailer Park at 124 Elma-McCleary Road (excluding slips 10-23) and a handful of customers at the end of Ginny Lane. All impacted customers will receive a notification phone call from the PUD this week and the day before the planned outage.
During the outage, PUD crews will replace an aging pole and equipment which provides power to the impacted area.
In preparation for this outage, customers are advised to take precautions with any electronic equipment such as computers, televisions, and microwaves by unplugging those items. You should leave them disconnected until after the power has been fully restored.
The outage time of five hours is only an estimate and power could be restored at anytime as work is completed. Therefore, it is not safe to do electrical work or repairs during that period.
Back to back years of strong performances, a dedication to stabilizing finances and the expectation of continuing improvement have led Fitch Ratings to raise the Grays Harbor PUD’s financial outlook from ‘negative’ to ‘stable’ and award the utility with a ‘A’ credit rating.
“This is the result of a team effort to develop and then successfully execute a financial plan,” said PUD Board President Russ Skolrood. “This goes to prove that hard work and planning can make a real difference. I am very proud of the PUD staff and their work that brought us to this point.”
In compiling their report, Fitch Ratings examined the PUD’s financial history over the last decade and outlook for the next four years, their ability to respond and adjust to changing power markets and their financial liquidity, including stability in financial reserves.
The Fitch Ratings report credits an improved financial performance in 2017 and 2018, driven by favorable conditions resulting in higher operating income and the utility’s effort to rebuild cash reserves. Perhaps most importantly, the report states Fitch’s expectation that the financial profile will remain supportive of the rating through 2022, when “improvement is expected due to a decline in operating costs from the termination of an expensive power purchase contract. After that point, additional cash flow is expected to be available to fund the utility's needed capex.” This refers to the PUD’s share of the Fredrickson Natural Gas Plant which is expected to cost the utility $8.7-million in 2020. That contract expires in 2022, leaving the PUD with greater flexibility in operating expenses.
“For years we’ve spoken about the Bridge to 2022, when expensive power contracts will begin to expire,” said PUD General Manager Dave Ward. “Fitch’s report tells us that not only is the bridge working and the utility is on firm ground moving forward, but that they are confident that it will continue to work. That shows a confidence in the future of the PUD and the direction in which we are headed.”
The Grays Harbor PUD Board of Commissioners concluded the 2020 budget process on Monday, unanimously approving a $127-million budget for the coming year that maintains utility services, while investing in the energy and system that make those services possible. Over 70% of the 2020 spending plan will go to power purchases, with a further $10-million being spent on capital projects to renew and replace utility infrastructure.
“It comes down to the service and the system that keeps the lights on for our customers. This budget invests in the energy, staff and infrastructure our customers rely on to provide them with high value utility services,” said PUD Board President Russ Skolrood. “This is a responsible budget for the utility and the customers it serves.”
Of the $10-million capital budget, $4.2-million will be spent on the utility distribution system, just over $2-million each on the utility general plant and transmission system and $1.6-million on the PUD’s substations. Notable projects will include replacing aging equipment throughout the utility system, beginning work on replacing the 90 year old Chehalis River tower crossing, transformer and breaker replacement at substations throughout Grays Harbor, the replacement of two utility fleet line trucks and the continued growth of the PUD’s telecommunications system.
“The PUD is responsible for telecom and energy service to over 41,000 customers. To do that we must maintain tens of thousands of transmission and distribution poles, over 1500 miles of overhead and underground lines, 36 substations and hundreds of miles of telecommunications fiber,” said PUD Board Secretary Dave Timmons. “Working together, our staff have put together a schedule and budget that helps grow and maintain a reliable system.”
PUD customers may see a 2% increase in utility rates, beginning in May of 2020. With 72% of utility costs tied to power purchases, PUD Board Vice President Arie Callaghan says the increase will cover the rising costs for those purchases, but will not be implemented until after the cooler winter temperatures have passed and the 2020 financial realities are clearer.
“By waiting until May to actually adjust rates, we allow the high energy usage period to pass before impacting customer costs and allow staff to include seasonal factors that may impact the final size of the rate adjustment,” said Callaghan. “Raising rates is never easy, but by making small adjustments each year, we are able to maintain the long tradition of safe and reliable service our customers expect and deserve.”