The Grays Harbor PUD Board of Commissioners have approved a $126-million budget for 2019 that reflects an improving financial situation and a dedication to improving the utility infrastructure.
“This budget shows us that the PUD is on the right track,” said Board President Arie Callaghan. “We continue to live within our means and as district finances improve, we can put additional resources into the utility system that will improve safety and reliability for the PUD’s customers. That is what they expect and what this budget accomplishes.”
The budget calls for the PUD to spend $9.1 million on capital projects. Nearly three quarters of every dollar spent on capital improvements will go to the replacement of aging equipment, including aerial and underground transmission and distribution lines, hundreds of utility poles, and substation transformers and circuit breakers.
Roughly 56% of the the budget will go to power purchases from the Bonneville Power Administration, and renewable energy contracts including the Nine Canyon Wind Project, the Coastal Energy Project and Sierra Pacific Industries. Utility operations and maintenance costs make up just 21% of the district’s spending.
Because of increased power costs of over a half-million dollars and a projected 5% increase in BPA costs in October, customer rates are proposed to increase 2.5 percent beginning on April 1, 2019. The delay will allow the PUD to assess any weather or market changes that take place over the winter and make any needed adjustments.
“Rate increases are not something the utility or the board take lightly,” said Commission Vice President Russ Skolrood. “As power costs rise, so to do the costs for the PUD. However, we continue to work with Bonneville and other power providers to ensure that the needs of our customers are known and that we provide power at the lowest cost we can afford.”
Next month, the Grays Harbor PUD Board of Commissioners will consider a budget for 2019 that will include $9.1-million in capital expenditures. The budget outlines costs for the maintenance and upkeep of the PUD system, new customer connections, the installation of new equipment and improvements to utility facilities.
"While the total capital investment makes up less than 10% of our overall budget, that amount is what makes so much of what we do possible," said General Manager Dave Ward. "The safety and reliability of the PUD system is at the core of our mission to our customers. Our capital budget makes that happen."
Nearly three quarters of every dollar spent on capital improvements will go to the replacement of aging equipment, including aerial and underground transmission and distribution lines, hundreds of utility poles, and substation transformers and circuit breakers. In 2019, the utility plans to invest $2-million into the PUD transmission system, $3.9-million into the distribution system and $1.4-million into its substation network
"Our engineering and operations crews have worked together to identify the work that needs to be addressed now to keep our system working in the way our customers expect," said Engineering Director Schuyler Burkhart. "Our budget team started with a $14.8 million proposed cost and worked it down to the more affordable amount we had planned for the year."
The remainder of the proposed capital budget is dedicated to general plant improvements, including telecommunications, facilities, IT systems, fleet and tools, which will see a total investment of $1.75-million. These improvements will be partially funded with grant dollars, secured by the utility to improve the telecom network used by local internet service providers.
Overall, the proposed 2019 capital budget shows an increase of 11.5% over 2018, which is a reflection of gradual improvements in the PUD's financial state. While the needs, value and estimated life of the system call for the PUD to spend between $12-million and $13-million on its upkeep, the utility is recommending that the Board gradually work toward that total as finances improve, rather than increase spending in a way which would mean a larger increase in customer rates.
The commissioners are expected to approve the 2019 budget in November. It will take effect on January 1.
Citing an unclear rule making procedure, loss of local control and the desire for a legislative answer to carbon emissions, the Grays Harbor PUD Board of Commissioners have passed a resolution opposing Initiative 1631. The initiative, which will appear on the November ballot, would attach a fee to carbon emissions if approved by a simple majority of Washington voters.
“We recognize that carbon emissions have a damaging impact on our environment and take pride in our environmental leadership through the PUD’s reliance on emission free hydro-electric and nuclear power,” said Commission President Arie Callaghan. “However, this initiative paints an unclear picture of our future. It wrests local control away from public utilities and places it in the hands of an appointed board without any assurance of utility input. That goes against the the core principal of a PUD.”
“We want to work with the environmental community to find a solution to carbon emissions, but the best solution would come through a joint effort with the Washington State legislature, not an initiative that was written without input from all the parties involved,” said Commission Vice President Russ Skolrood.
“While there are some positive points to a fee on carbon emissions, there are too many unknowns in I-1631 for the utility to support it,” said Commission Secretary Dave Timmons. “Let legislators work with utilities, industries and the environmental community in 2019 to come up with a solution to carbon emissions that the entire state can rally behind and continue Washington’s positive role in environmentally friendly energy production.”
A review of the Grays Harbor Public Utility District’s accountability and financial statements resulted in no significant findings and a clean report from the Washington State Auditor’s office.
At the audit exit conference on Tuesday, the state reported to the utility that no significant issues were found in the area of accountability following a review of utility insurance, procurement, net metering credits, review and testing of surplus property procedures, open public meeting minutes, fuel mix disclosure, financial condition and fiscal sustainability.
The audit of the utility financial statements also resulted in a clean report as the PUD was found to have “no instances of non-compliance or other matters that are required to be reported.”
“This report makes me very proud of the work put in by our PUD staff,” said Commissioner Dave Timmons, who attended the exit conference. “The public puts its faith in the utility to responsibly manage their PUD and this report shows that their faith and trust is justified.”
Effective Monday, September 24, 2018, your Grays Harbor PUD Energy Services Department will be housed in the PUD Dennis Nichols Building located at 220 Myrtle Street, Hoquiam. The Energy Services Department addresses questions regarding energy conservation, residential and commercial energy efficiency rebates, appliance rebates, home weatherization, heat pumps, energy audits, and more, and is open from 8 a.m. to 5 p.m., Monday through Friday, closed from 1 p.m. to 2 p.m. daily for lunch.
As a part of this relocation, your PUD Board of Commissioners’ offices will be moving into the Administration Department in the main building located at 2720 Sumner Ave, Aberdeen. Regular meetings of the Board of Commissioners will continue to be held in the Nichols Building Meeting Room.