Safety Report February 2020 - Grant PUD · Power outage caused system failure alarms, weinformed...

Safety ReportFebruary 2020

Incidents ReportedDate Injury Description: Causes: Prevention:

1/21/20 Slip Employee slipped on ice and fell hitting their head and face Slick walking surface Caution and Awareness, Ice cleats, Salt

1/30/20 Cut Employee cut their hand with a razor knife while stripping 4 gage wire Line of fire Wear cut resistant gloves, use right tool for the job

Monthly and Year to Date2020 January YTD

Total Incidents Reported 2 2

Recordable Case(s) 0 0

Restricted Duty Case(s) 0 0

Lost Workday Case(s) 0 0

Vehicle IncidentsDate Vehicle Driver’s Account: Prevention

1-28-20 476 Rock Chip NA

1-27-20 378 Backing up to turn around sun was in the mirror and hit a rock with the rear bumper

Awareness of surroundings, do not move the vehicle if your vision is obstructed without a spotter.

Close CallsDate Location Description

1-7-20 WD Wind Sock was found laying on the ground, post had snapped during windy conditions

1-7-20 Royal City Failed to notify Safety department as required to review contractor site specific safety plan and crane lift plan prior to mobilization of contractor

1-13-20 Wanapum Indian Village Lighting fixture was damaged by the wind and found hanging by a single wire and was removed ASAP.

1-14-20 EHQ

Two foremen had a hot line on the same breaker with different work locations, dispatch office was loud and distracting, when first foreman was releasing his hot line the dispatcher read off the prewritten switch order to turn on reclosing forgetting about the second hotline holder. The foreman switching replied back there was still a hot line tag for the other foreman so the order was revised to remove only his hotline tag and leave the breaker on non reclose for the remaining hotline still in effect.

1-13-20 PRD GE employee was distracted and partially threaded a picking eye that was then used to lift a thrust block, the picking eye did not hold and the block fell 4 inches while trying to lift it.

1-15-20 Highway 243 While driving an oncoming service truck had a tire come off and nearly hit truck 355

1-18-20 Nelson Rd Substation Accidentally left substation man gate unlocked, returned and found that security had found the unlocked gate and locked it.


1-17-20 USBR Employee slipped on stairs due to wet shoes from snow, no injuries

1-21-20 HOB Light fixture was smoking, electrician was called to fix

1-21-20 MattawaWhile removing the piece of tie wire with a shot gun, tie wire came in contact with the base of the glass less then six inches away from conductor, the pole went to ground causing breaker to lock out causing a power outage and damage to the wire. Clearance was taken, repairs were made and power was restored.

1-21-20 WD Welding cart with 3 wheels is unstable, request to modify cart and add fourth wheel. Cart is out of service.

1-2-20 Quincy and Ephrata Two employees of the districts fiber contractor slid on ice while driving, one slid off the road with no injuries or damage to the vehicle and one slid into another vehicle causing small fender bender.

1-23-20 EHQ Employee using cross walk was almost hit by a car, cross walk lights not working

1-23-20 MLSC A vault was found opened along Nelson Rd and was reported by an ex-employee, serviceman was sent out to close and secure the doors, non local crews were working in the area so it is unknown who opened it or when.

1-21-20 ESC Had to avoid an oncoming vehicle sliding in icy conditions

1-21-20 EHQ Slipped and nearly fell while crossing the crosswalk


1-28-20 EHQ Leg broke off rolling chair while employee was in it, did not fall and was not hurt

1-29-20 WDRope Lighting was not working, GFI was reset, ballast began smoking and arcing in wet environment. GFI Breaker tripped again. Circuit de-energized, Work Order was created and Chief Clearance was placed on the feeder breaker in the Lighting Cabinet.

1-30-20 Heritage Center

Power outage caused system failure alarms, we informed dispatch, called facilities electricians to correct issues caused by the outage and check for damage/failures. Restarted systems, had main exhibit issues, in the resource center we had no access to certain rooms to look for damage or potential fire hazards caused by the power surges. Resource center has no redundant power source like the rest of the building. which make it more susceptible to damage from this type of outage.

What To Do If Labor & Industries Shows UpAdvanced preparation is key to a smooth and efficient compliance inspection. Upon arrival please do the following:Be courteous! Request that the compliance officer wait until management is contacted and the primary site contact arrives.

Then immediately contact:• Agency Plant-Specific Contact (name, title, phone)• Plant Manager or area Sr. Manager (or designee)• Safety Sr. Manager or Geographical Safety Coordinator

(You can also call 4110 – Safety Hotline)

Level O - Other – Close Call

Level 1 – Serious Close Call

Level 2 – First Aid Case(s)

Level 3 – Recordable Injury Case(s)

Level 4 –Restricted Duty Case(s)

Level 5 – Lost Work Day Case(s)

Level 6 – Fatality or Hospitalization

19

0

2

0

0

0

0

Employee Safety

2020 incidents Year to Date Summary

20202019

67

7

11

0

8

5

70 Recordable Cases TTL.

20 Recordable Cases TTL.

Level O - Other – Close Call

Level 1 – Serious Close Call

Level 2 – First Aid Case(s)

Level 3 – Recordable Injury Case(s)

Level 4 –Restricted Duty Case(s)

Level 5 – Lost Work Day Case(s)

Level 6 – Fatality or Hospitalization

19

0

2

0

0

0

0

Leading & Lagging Indicators

12 Month Rolling – Recordable Injury Rate 2019 vs. 2020

Powering our way of life.

Thank You


Commission Workshop

02/25/2020

GRANT PUD

GIS/Work Order Design Replacement Project

OverviewSCOTT TOMLINSON,

CCMVANIR Construction

Management

STANLEY CONSULTANTS

1. Project Scope Review

2. Project Staffing

3. High Level Project Plan

4. Project Cash Flow Summary

5. Project Economic Analysis

6. Project Uncertainty Analysis

7. Project Affirmation Document (PAD)

Project Scope Review1. Electric GIS

2. Fiber GIS

3. Electric Work Order Design

4. Fiber Work Order Design

5. Data Migration

6. Staff Augmentation

7. Various Interfaces

8. Field Audit

Project StaffingSCOTT TOMLINSON,


Management

STANLEY CONSULTANTS

Roles and Responsibilities Document

Steering Committee

Selection Committee

POWER Engineers Grant PUD Schneider Avineon Field Audit

Executive Sponsor

Project Director



Management

STANLEY CONSULTANTS


Steering Committee

Selection Committee


Executive Sponsor

Project Director

Derin Bluhm

Jeff Grizzel

Jesus Lopez

LeRoy Patterson

Russ Brethower



Management

STANLEY CONSULTANTS


Steering Committee

Selection Committee


Executive Sponsor

Project Director

Rich Wallen



Management

STANLEY CONSULTANTS


Steering Committee

Selection Committee


Executive Sponsor

Project Director

Jeff Grizzel



Management

STANLEY CONSULTANTS


Susy Anderson John Butterly Troy Holt Pete D’Arcy Gerry Duff

Nick Sickels Chris Buchman Herman Silva Mike Lanes Cade Kiehn

Lisa Anderson Tom Schwiesow Eric Anderson Amanda Anthony

Steering Committee

Selection Committee


Executive Sponsor

Project Director



Management

STANLEY CONSULTANTS

Rachelle McGillivray - PM Robert Krisher Chris Erpelding

Steering Committee

Selection Committee


Executive Sponsor

Project Director




Management

STANLEY CONSULTANTS


Susy Anderson* John Butterly* Troy Holt* Justin Piturachsatit* Randy Weisheit

Phillip Pennington Eric Anderson* Amanda Anthony Janine Swedberg

Plus other stakeholders as needed

Steering Committee

Selection Committee


Executive Sponsor

Project Director

*Core Team Members



Management

STANLEY CONSULTANTS


Lisa Clark

Project Manager

Additional Staff TBD

Steering Committee

Selection Committee


Executive Sponsor

Project Director



Management

STANLEY CONSULTANTS


Steering Committee

Selection Committee


Executive Sponsor

Project Director

Martin Roche

Rick Jahoda

Anil Jayavarapu

Brooks Kelly



Management

STANLEY CONSULTANTS


Vendor and Staff TBD

Steering Committee

Selection Committee


Executive Sponsor

Project Director

M J J A S O N D J F M A M J J A S O N D J F M A M J

High Level Project Plan

Critical Path Schneider Electric – S Grant PUD – G POWER Engineers – P Avineon – A Field Audit - F

Initiation(S/G/P/A)

Analysis and Design(S/G/P/A)

Build/Develop(S/G/P)

SAT Planning(S/G/P)

Install Test(S/G/P)

Data Migration(A/G/P)

System Testing(S/G/P)

User Training(S/G/P)

Go-Live(S/G/P/A)

Field Audit Planning(G/F)

Field Audit(G/F)

Tasks 2020 2021 2022


High Level Project Plan - Electric

Schneider Electric – S Grant PUD – G POWER Engineers – P Avineon – A Field Audit - F

Initiation(S/G/P/A)



SAT Planning(S/G/P)

Install Test(S/G/P)




Go-Live(S/G/P/A)


Field Audit(G/F)

Tasks 2020 2021 2022


High Level Project Plan - Fiber

Schneider Electric – S Grant PUD – G POWER Engineers – P Avineon – A Field Audit - F

Initiation(S/G/P/A)



SAT Planning(S/G/P)

Install Test(S/G/P)




Go-Live(S/G/P/A)


Field Audit(G/F)

Tasks 2020 2021 2022

Project Cash Flow SummarySCOTT TOMLINSON,


Management

STANLEY CONSULTANTS

Appendix Packet Link – Project Cash Flow Summary

Project Economic Analysis - Overall

Appendix Packet

Link - Project

Economic Analysis

Support

Project Economic Analysis - Electric

Appendix Packet

Link - Project

Economic Analysis

Support

Project Economic Analysis – Fiber

Appendix Packet

Link - Project

Economic Analysis

Support

Capital CostsSCOTT TOMLINSON,


Management

STANLEY CONSULTANTS

Vendor Service Cost Uncertainty

Schneider Electric Software and Implementation $ 1,404,148 +/- 10%

POWER Engineers Staff Augmentation 830,000 +/- 10%

Avineon Data Migration 479,000 +/- 40%

Vendor TBD Field Audit 1,000,000 +90% / -10%

Grant PUD Internal Labor 1,576,000 +/- 35%

Total $ 5,289,148 $4.4M - $7.2M

SCOTT TOMLINSON, CCM

VANIR ConstructionManagement

STANLEY CONSULTANTS

Capital Cost Uncertainty AnalysisSCOTT TOMLINSON,


Management

STANLEY CONSULTANTS

Schneider Electric+/-10%

POWER Engineers+/-10%

Avineon+/-40%

Field Audit TBD+90% /-10%

Internal Labor+/-35%

Capital Cost Uncertainty Analysis

SCOTT TOMLINSON, CCM

VANIR ConstructionManagement

STANLEY CONSULTANTS

Project Affirmation DocumentSCOTT TOMLINSON,


Management

STANLEY CONSULTANTS

PAD

Questions / Comments?SCOTT TOMLINSON,


Management

STANLEY CONSULTANTS


Process Co-Leads:

Clark Kaml and Louis Szablya

Presented by:

Louis Szablya and Baxter Gillette, Large Power Solutions

February 25, 2020

Rate Schedule 172019 Update:Results and Recommendations

2

Resolution 8891 - Rate Schedule 17 (RS17)

Available to Evolving Industry (EI) customers

EI rate class criteria• No less than annually, a team composed of Grant PUD staff will review the

El Rate Class to recommend if it is appropriate for a customer's industry to move into, or out of the El Rate Class

• The team will be composed of representatives from Large Customer Care (now called Large Power Solutions), Customer Solutions, Engineering, Rates, and Finance/Accounting

3

RS17 Team MembersName Role

Dave Churchman Executive Sponsor

Louis Szablya*/Clark Kaml Co-Lead Large Power Solutions/Rates

Baxter Gillette Update Manager**

Terry McKenzie Customer Service

Mike Facey Accounting

Jesus Lopez Engineering

Bonnie Overfield Finance

Paul Dietz Risk Management

*Prime** Subject Matter Expert

4

RS 17 Update Team Charter Objectives Concentration and EI Assessment

• Assess for concentration risk• Requests from nascent uses or industries new to Grant PUD – active new electric service requests• Current EI Class – current load and future requests• Existing customers with nascent uses – current load and future requests

• Then, as appropriate, assess the other criteria• Regulatory risk• Business risk (including nascency)

Assess if RS17 billing rates require adjustment• Update assumptions – current market conditions• Internal team discussion to confirm the model and assumptions• Replace any information, assumptions or data that is no longer available with available

information, if necessary• Recalculate 2021 RS17 (the target rate) if any parameters have changed• Recommend changes to the RS17 billing rates or trajectory as appropriate

Industry or Use AssessmentConcentration Risk

6

Evolving Industry Assessment

Determine what uses and / or industries to include in the Evolving Industry Class

For retail customers whose energy load activity and / or industry has meets the criteria established by resolution 8891

• Concentration Risk – the sum of existing loads plus new electric service request queue compared to total Grant PUD load

• Business Risk – including price volatility of primary product, nascency and Porter’s Five Forces

• Regulatory Risk - pending state or federal legislation or regulation and feedback from investment banks

7

Concentration Risk Threshold

• There was only a 10% change in the concentration risk threshold since the original calculation

• The size of the new electric service request queue changed proportionally between the two periods

• The composition of the new electric service request queue has changed drastically with the Evolving Industry queue going from 402.0 MW to 89.5 MW while the traditional queue went from 112.5 MW to 477.5 MW

• Recommendation – use 57.8 as the threshold number for the concentration risk calculation

Concentration Threshold Calculation

2017 2019 % ChangeLoad aMW 537.0 589.5 9.8%Queue MW 514.5 567.0 10.3%Sum 1,051.5 1,156.5 10.0%

5% 52.6 57.8 9.9%

8

Concentration Risk Assessment

8.722.5

402

89.5

410.7

112

57.8 57.8

0

50

100

150

200

250

300

350

400

450

2017 2019

Cryptocurrency Mining / Cryptomining

Actual aMW Queue MW Total 5% Threshold

All energy load activities and / or industries within Grant PUD’s service territory were assessed

• Cryptomining is the only nascent industry that exceeds the threshold of 57.8

Industry or Use AssessmentBusiness and Regulatory Risk

10

Nascent Industry Characteristics

Factors that affect nascency• Extensive parallel or sequential technological experiments • Bottlenecks and problems, which may not be well understood until after

development of various versions of the entire system • Substantial efforts devoted to designing and establishing complementary

systems• Commercial viability of a new industry may still not be evident until technological,

demand, social, and institutional uncertainties are resolved. From invention to first commercialization

• 3 studies range 13.6 to 21.8 years average; range 1-140 years• Dropping over last century

From commercialization to commercial viability• Can take over a decade

1Goldfarb, Brent. 2017. Time to Commercial Viability in Nascent Industries: A Historical Study. SSRN Electronic Journal.

1

From Invention to Commercial Viability

RIVALRY AMONG EXISTING COMPETITORS

• Brand loyalty• Barriers to exit• Number of competitors• Diversity of competitors• Industry concentration• Quality differences• Switching costs

a

Porter’s Five Forces

11

THREAT OF SUBSTITUTE PRODUCTS

• Number of substitute products available

• Buyer propensity to substitute• Relative price performance of

substitute• Perceived level of product

differentiation• Switching costs

BARGAINING POWER OF SUPPLIERS

• Number and size of suppliers• Uniqueness of each supplier’s

product• Company’s or industry’s ability to

substitute

BARGAINING POWER OF BUYERS

• Number and size of customers• Size of each customer order• Difference between competitors• Price sensitivity• Buyer’s ability to substitute• Buyer’s information availability• Switching costs

THREAT OF NEW ENTRANTS

• Barriers to entry• Economies of scale• Brand loyalty• Capital requirements• Cumulative experience• Government policies• Access to distribution channels• Switching costs

Cryptocurrency: An Evolving Industry

12

RIVALRY AMONG EXISTING COMPETITORS

• Miners in pure competition• Mining pools concentrated• No brand loyalty to miners• Brand loyalty to

currencies• Barriers to exit are low

a

Although cryptocurrencies are expanding and resilient,

they continue to be a volatile, evolving industry.

BARGAINING POWER OF BUYERS

• Exchange listings: BTC on CME and ICE

• 85% annualized volatility• Over 42 million blockchain wallets • Top 0.55% of wallets (150k) have

86% of BTC• 0.1% BTC purchase has sent prices

up 20%• SEC repeated refusals to list ETFs

THREAT OF SUBSTITUTE PRODUCTS

• Competing currencies, algorithms, and ASIC resistance

• Precious metals and fiat currencies• Governments, banks and

companies• Stablecoins and virtual banking

BARGAINING POWER OF SUPPLIERS

• CPU to GPU to ASIC• High machine turnover (efficiency

and difficulty)• 20+ firms globally, $3-4B/yr in sales

THREAT OF NEW ENTRANTS

• Suppliers becoming competitors• Cryptojacking• Scandals: 51% attacks, wallet

hacks, Ponzi schemes

13

2019 Rate Schedule 17 Update

Current Evolving Industry uses and / or industries• Cryptocurrency mining

No new uses and / or industries were identified

Assessment of cryptomining• Concentration risk is greater than the 5% threshold

• Business risk is high and qualifies it for the Evolving Industry Class

• Regulatory risk was reviewed and not considered onerous at this time

Recommendation – Cryptocurrency / cryptomining should remain in the Evolving Industry Class

Pricing Model ReviewRate Schedule 17 Billing Determinant Rates

15

Revisiting Rate Schedule 17

2017 methodology and models reviewed• Data sources – availability, quality and resolution

• Confirm methodologies used and enhance where appropriate

• Calculations verified

Assessed components of RS17-2017• Three components are unchanged

• Two components have had significant changes to inputs

Confirmed data sources and were able to improve resolution and separation of components to model better detail

Description Inputs Recommendation/Notes

1) Basic Energy 2017 COSA Unchanged

2) Transmission Acceleration Capital CostsLoad-Duration StudyPeak Load StudyCoincidental Peak*Strike, MarketVolatility

UnchangedAdopt Load-Duration StudyAdopt Peak Load StudyUse Coincidental Peak Studied*Use Calculated EI and EmbeddedUnchanged based on NEPOOL Data

3) Distribution System Engineering Estimate Unchanged

4) Lost Retail Revenue Recovery

Retail Rate CalculationWholesale PricesRetail LoadProbability of Departure*

Use State-level Competitive Analysis*Update Price Data*Use Updated Actual LoadsAdopt Enhanced and Updated Spread Analysis

5) Additional Assessment % Commission Unchanged

16

RS17 Calculation Components

*Enhancement

17

Transmission Acceleration Assessed the timing when new transmission capacity is needed on a

pro-forma basis Potential transmission projects unchanged

• The timing of need is independent of the timing to construct facilities• Transmission capital cost is a proxy to calculate rate impacts and is not tied to or

associated with any specific planned construction project Assessed the expected cost of acceleration on rates

• Two inputs have greatest impact• Size of the queue and• Time when incremental transmission is needed with Evolving Industry compared to without it

• Added a module that calculates impact as a function of size and timing• Uses forecast information• Uses estimate of coincidental peak (enhancement)• Allows for different System and Evolving Industry characteristics and queues

18

Timing of Need – Non-Coincidental jpg

2023 Peak = 75.9 MW 2023 Peak = 1,408.2 MW 75.9 + 1,408.2 = 1,484.1

19

Timing of Need – Coincidental

20

Transmission Call EI Impact - Minimal

2022 - 0.99%

2023 – 12.74%

21

Calculation of Transmission Acceleration

Basic components

• Cost per MWh of embedded transmission for all customers - unchanged

• Cost per MWh of incremental transmission allocated between System use and Evolving Industry pro-forma use - enhancement

• EI Loads use the transmission first, system takes advantage of unused capacity - enhancement

• Capital cost of incremental transmission projects - unchanged

• Black-76 Model inputs using direct data or proxy data - unchanged

Transmission acceleration RS 17 Transmission Acceleration ($/kWh)

17aProposed $ 0.001921 Original $ 0.019200 Change $ (0.017279)Percent Change (90.0%)

22

Departure Cost Due to Competition Lost revenue recovery

• 12 month period studied to match Grant PUD’s 12 month hedge horizon - unchanged• Expected revenues based on RS17 retail forecasted sales - unchanged• Loss of revenue mitigated by selling undelivered retail energy wholesale - unchanged• Wholesale value is 12-month, 24 x 7 x 365, delivered at Mid-Columbia strip - unchanged• Wholesale price is Heavy Load and Light Load weighted average - unchanged

Expected retail revenue• Retail revenues at the typical Evolving Industry load factor – unchanged (load factor

updated)

Competitive markets• Increased resolution to state level competition - enhancement• Included data back to 2010 - enhancement

23

Departure Cost Due to Competition Departure probability

• Based on the competitive state identified – enhancement over regional

• Uses historic volatility of Washington State and the state identified – enhanced by using longer history

• Specific calculation of monthly departure verses annual – enhancement but minor impact

Revenue recovery due to departure

Rate Schedule 17 Departure Due to Competition Recovery ($/kWh)

Revenue Recovery17a 17b

Proposed $ 0.016836 $ 0.003963 Original $ 0.022200 $ 0.011000 Change $ (0.005364) $ (0.007037)Percent Change (24.2%) (64.0%)

24

Overall Rate Recalculation (2021 rate)

Rate Schedule 17 Proposed 2019 Update ($/kWh)

Rate Schedule 17b Rate Schedule 17ar & 17ac31.00% Assigned Additional Assessment 31.00% Assigned Additional Assessment

$0.028068 Rate 14 Cost to Serve $0.063100 Blended (RS 1 &2) Cost to Serve$0.001921 Transmission Acceleration $0.001921 Transmission Acceleration$0.003365 Distribution Adder $0.003365 Distribution Adder$0.003963 Departure Liquidation Cost $0.016836 Departure Liquidation Cost$0.011568 Additional Assessment $0.026419 Additional Assessment$ 0.048885 Target for RS17b $ 0.111641 Target for RS17a

$0.060610 11/25/2019 Workshop $ 0.106500 11/25/2019 Workshop$0.080800 Original 2021 Target $0.138200 Original 2021 Target

25

Comparison to Current RS 17

Rate Schedule 17 Proposed 2019 Update ($/kWh)

Rate Schedule 17a Rate Schedule 17bProposed November Original Component Proposed November Original Component

31.00% 31.00% 31.00% Assigned Additional Assessment 31.00% 31.00% 31.00% Assigned Additional Assessment$0.063100 $0.063100 $0.060700 Blended (RS 1 &2) Cost to Serve $0.028068 $0.028068 $0.028100 Rate 14 Cost to Serve$0.001921 $0.000749 $0.019200 Transmission Acceleration $0.001921 $0.000749 $0.019200 Transmission Acceleration*$0.003365 $0.003365 $0.003400 Distribution Adder $0.003365 $0.003365 $0.003400 Distribution Adder$0.016836 $0.014086 $0.022200 Departure Liquidation Cost $0.003963 $0.014086 $0.011000 Departure Liquidation Cost**$0.026419 $0.025203 $0.032705 Additional Assessment $0.011568 $0.014343 $0.019116 Additional Assessment

$ 0.111641 $ 0.106503 $ 0.138205 Target for RS17a $ 0.048885 $ 0.060611 $ 0.080781 Target for RS17b

Dimmed text shows unchanged components

26

Current Rate Schedule 17

Current RS 17

Current

RS17a RS17b

2019 2020 2021 2019 2020 2021Base $5.00 $7.50 $10.00 $500.00 $750.00 $1,000.00Energy $0.054480 $0.081650 $0.122090 $0.022190 $0.024650 $0.035180Demand $8.00 $19.00 $30.00

Proforma Customer

RS17a RS17b

2019 2020 2021 2019 2020 2021Base $152.08 $228.13 $304.17 $500.00 $750.00 $1,000.00 Energy $1,103.63 $1,654.02 $2,473.24 $30,081.56 $33,416.43 $47,691.27 Demand $0.00 $0.00 $0.00 $16,000.00 $38,000.00 $60,000.00 Bill Total $1,255.71 $1,882.15 $2,777.40 $46,581.56 $72,166.43 $108,691.27 All-in Rate $0.061988 $0.092911 $0.137105 $0.034361 $0.053234 $0.080177

Target $0.138200 $0.080800

27

Recommended Rate Schedule 17

Current RS 17

Current

RS17a RS17b

2019 2020 2021 2019 2020 2021Base $5.00 $7.50 $10.00 $500.00 $750.00 $1,000.00Energy $0.054480 $0.081650 $0.122090 $0.022190 $0.024650 $0.035180Demand $8.00 $19.00 $30.00

Proforma Customer

RS17a RS17b


Target $0.138200 $0.080800

Recommended RS 17

Recommended

RS17a RS17b

2019 2020 2021 2019 2020 2021Base $5.00 $7.50 $10.00 $500.00 $750.00 $1,000.00Energy $0.054480 $0.075588 $0.096626 $0.022190 $0.013039 $0.003888Demand - - - $8.00 $19.00 $30.00

Proforma Customer

RS17a RS17b


Target $0.111641 $0.048885

28

2019 RS 17 Update Team Findings

Confirmed cryptocurrency mining / cryptocurrency should remain in the Evolving Industry Class

No new energy load activity and / or industries meet the concentration threshold

It is appropriate to update the rates for the energy billing determinants

The impact of the Evolving Industry Class on the need for incremental transmission given the current loads and queues is less than 12 months

State level retail competition is at a par with Grant PUD for the most competitive states as evidenced by some cryptomining companies opening new facilities in the competing states

29

2019 RS 17 Update Team Recommendations

Updated Rate Schedule 17 as recommended by the 2019 Rate Schedule 17 Update Team

Review the energy component of the rate annually in addition to the inclusion or removal of certain energy load activity and / or industry from the Evolving Industry Class

Adopt a resolution implementing the recommended rates

The RPIC administers the District 401(a) and 457(b) deferred compensation plans

Members of the committee are appointed by the Manager (some District positions require committee membership).

Current Members:◦ Jeffery Bishop, Chief Financial Officer*◦ Darla Stevens, Manager of Human Resources*◦ Dmitriy Turchik, District Auditor*◦ Brian Owens, Manager appointee◦ Rod Noteboom, Manager appointee◦ Dawn Woodward, Retiree, Manager appointee

*Required committee members2

Supplemental retirement and/or post employment income Part of overall compensation package of a competitive

employer Tax advantages Many employees do not work at Grant for a full career◦ Deferred comp is more portable than a pension◦ All funds in deferred comp are immediately vested

A 401(a) plan is a Governmental Profit-Sharing retirement plan that is set up by an employer. The plan allows for contributions by the employer, the employee or both. Contribution amounts are either dollar-based or percentage-based and the sponsoring employer establishes eligibility and the vesting schedule. Withdrawals incur a 10% federal penalty unless the employee is 59 1/2, dies, retires, is disabled or rolls over the funds into a qualified IRA or retirement plan.

A 457(b) plan is a deferred compensation plan established by state and local governments and tax-exempt governments and tax-exempt employers. Eligible employees are allowed to make salary deferral contributions to the 457 plan. Earnings grow on a tax-deferred basis and contributions are not taxed until the assets are distributed from the plan.

4

401(a): Eligible participants choose a contribution percentage within 60 days of fulltime regular employment status. Beginning 4/1/2020 an employee can choose a contribution percentage from 1% to 20% (of gross pay). The current limits are from 4% to 20% of gross pay. This is an irrevocable election that cannot be changed or inactivated. Beginning 12/27/2019 all employees began to receive a 3% contribution from the District that is not dependent on an employee contribution.

457(b): Eligible participants may elect any amount (flat amount or percentage) and may change their contribution any time throughout the year. The current Federal annual limit is $19,500 (age 50 and over annual limit is $26,000).

5

Currently - total plan fees are 10.5 basis points (0.105%)◦ ICMA Share 6.4 bps◦ District Share 4.1 bps

Beginning 4/1/2020 – total plan fees will be $88 per account per year◦ ICMA Share $54◦ District Share $34

These fees are for the operation of the plan and do not include the management fees charged by the funds in the plan

6

457(b) 401(a)

Eligible Employees 648 648 As of 12/12/19

Participating Employees 446 563* As of 12/31/19

Percent Participation 69% 87% Approximate due to dates shown above

Total Participants including those not 698 784 As of 12/31/19currently employed by the District

Number of Investment Options 30 30 As of 12/31/19

Plan Balance on 12/31/19 $70,835,40 $60,331,928

*401 participation does not include the added accounts on 12/27/19 where all employees receive a contribution. These accounts had zero balance on 12/27/19. Participation in the 401 is now 100%

7

Summary of some of the issues addressed by the IPS

Purpose Statement◦ establishes and implements policy to assist in selection and monitoring of investment

options

Role of the Deferred Compensation Committee◦ meets quarterly to develop and implement investment policies◦ reviews, adds and removes investment providers and investment options◦ select investment advisors, managers, or consultants to assist Committee

Role of Investment Adviser◦ recommendations and insights on investment policies◦ Information and advice on fund performance and other relevant metrics◦ Review plan utilization◦ Review plan communications◦ Guidance on changes to law, public policy, and market circumstances◦ Guidance on a variety of topics related to the operation of the plan

8

Summary of some of the issues addressed by the IPS

Design of investment menu◦ Track Record

Fund management personnelPerformanceAdherence to stated investment style Risk adjusted returnFees and expenses

Criteria for monitoring, adding and removing funds

9

The District uses ICMA-RC for record keeping, educational, and outreach services.

The ICMA-RC contract is re-evaluated on a regular basis and the committee can choose to change the record keeper upon conclusion of the contract term.

Tasks performed by the record keeper include Individual account recordkeeping Contribution and distribution administration Fund transfers Loans Fee collection General communication Education and outreach One on one participant consultations including financial planning

10

The committee utilizes a consultant to ensure the District is following best practices for deferred compensation plans.

Cammack Larhette Advisors, LLC is our advisor. Cammack’sadvise includes but is not limited to: Regulations Monitoring the investment performance Investment menu including changes to funds in the plan Fees Communication with participants Following the IPS New legislation and issues that need to be addressed

11

District and individual committee members have fiduciary responsibility.

The Commission has fiduciary responsibility based on global oversight of District activities.

The District provides insurance to cover fiduciary responsibly of the District and the individual employees who are fiduciaries.

The District has an indemnification resolution #3311. Advisor also carries insurance and acts as a co-fiduciary.

12

Participants may keep their accounts in the District program during retirement

Total fees within the District program will typically be much lower than fees in a managed account.

Fund fees will typically be lower in the District program compared to a discount broker since the District program has access to institutional shares, which have lower fees for the exact same fund compared to shares available to individual investors

The District is able to negotiate lower institutional share fees with higher balances, and thus all the participants benefit when retirees keep their funds in the District program.

13

Quarterly Commission Update 2/25/2020


Project Management Office

2020 Q1 Review

• Purpose and Goal• Structure and Personnel• Safety Update• Budget Update• Department Updates

• 2019 Accomplishments• 2020 Initiatives• 2020 Projects

Acronym List

• ET Enterprise Technology• PMO Project Management Office• PP Power Production• PD Power Delivery

Department Purpose and GoalProject Management Office = Strategy Execution Office

Purpose• Provide a framework that will support all stakeholder and projects teams to improve the probability of

successful project delivery, ultimately creating greater business value to Grant PUD.• Over time, the PMO will become the source for guidance, documentation and metrics for the practices

involved in managing and implementing projects within Grant PUD.

Goal• Cultivate a business driven PMO that enables consistent, reliable data and outcomes

• Standardized business driven project management framework• Consistent and reliable project health data and outcomes• Project resourcing and training

The success of the PMO is derived exclusively from achieving greater business value to the utility.

Structure and Personnel

Senior Manager PMOJulie Pyper

Manager Power Production

ProjectsAaron Kuntz

Administrative Assistant

Project ManagersOutage Coordinator

Project Services Supervisor

Dustin Bennett

Project CoordinatorsConstruction Inspectors

Lead Project Manager

Randy Weisheit

Manager IT Projects

Chris Roseburg

Project ManagerProject

CoordinatorsSenior Training

Coordinator

Manager Power Delivery

Russ Seiler

Project ManagersProject

Coordinators

Business Analysts

Administrative Assistant

Safety Update: Safety Meetings

Attendance Goal = 100%

Annual Average = 96%

Safety Update: Job Site Reviews

• Projects Managers• Minimum 2 per active project per month

• Inspectors• Minimum of 1 per month per assigned project

• Enterprise Technology projects• Requirement to do is on a project by project basis

• Next QBR provide year to date data

Safety Update

• Q4 2019 Recordable incidents• Zero

• Q4 2019 Vehicle incidents• Zero

• Emphasis on job site reviews and contractor safety• Goal: increase quality of job site reviews, recognize good

behavior/conditions, suggestions for areas of improvement

2019 Budget versus ActualsCAPITAL O&M TOTAL

DIRECTSBUDGET $34,928,995 $148,805 $35,077,800

ACTUAL $36,270,110 $182,779 $36,452,889 % SPENT 104% 123% 104%

LABORBUDGET $2,256,934 $911,914 $3,168,848 ACTUAL $1,941,466 $1,257,831 $3,199,297 % SPENT 86% 138% 101%

TOTALBUDGET $37,185,929 $1,060,720 $38,246,649

ACTUAL $38,211,576 $1,440,610 $39,652,186 % SPENT 103% 136% 104%

* Preliminary December Actuals

Enterprise TechnologyChris Roseburg - Manager

Department Services & Team

• Responsible for delivery and oversight of the enterprise technology roadmap of projects, including development of the organizational change management capability for the PMO.

• Team Composition• (1) Project Manager• (2) Project Coordinators, (1) temporary Project Coordinator• (1) Organizational Change Management Practitioner• (4) Contracted Project Managers

2019 Accomplishments• AMP - Automated Metering Program completed and transitioned to O&M.• ARCOS Mobile Workbench – Replaced the Trouble Reporting System and

delivered the capability to electronically assign work to field crews.• myHR – First phase of the Human Capital Management System (HCMS)

project went live for core HR and Payroll.• Oracle CCS – Kicked off the customer and billing system upgrade to

migrate from an in-house to a cloud solution.• ESRI GIS – Completed and RFP to select a electric and fiber GIS and

work order design solution.• Office365 Migration – Launched the migration of the Microsoft business

line technology and application stack to the Office365 cloud platform.

2020 Initiatives• Development of the Enterprise Technology components of the PMO

standardized project framework.• Develop a pilot Agile project management treatment for technology

projects.• Mature the PMO Organizational Change Management (OCM) capability

and integrate it with the PMO project framework.• Develop standardized onboarding plan for contractors to improve process

efficiency.

2020 Projects• Oracle CCS – CIS migration projected to go-live of September 2020.• ESRI GIS and Work Order Design – Project initiation, planning, and

implementation scheduled to commence in Q1 2020.• myHR – Completion of final project phases for HCMS. Currently projected

to complete in early Q3 2020.• Office365 Migration – Complete the migration of the SharePoint platform

and remaining in-house infrastructure to the Office 365 cloud. Projected to complete in late Q3 2020.

Power DeliveryRuss Seiler - Manager

TeamSheila Wald

Greg Cardwell

Jeremy Conner

David Klinkenberg

Vangie Crago

2019 Accomplishments

Fiber Buildout• Added 150 miles of Fiber Plant• 2,500 New Passings

Design Build 2• Owner’s Engineer Selection• State Project Review

Committee• Design-Builder Selection Randolph Rd Sub

2020 Initiatives

• Technical Project

Management

• Contractor Safety

• Project Delivery

2020 Projects (Q1 and Q2)

Fiber Buildout• Complete 2019

Builds• Design,

Procurement, Permitting for 2020 Builds

• Break Ground on 2020 Builds in April

Design Build 2• Design, Procurement• Negotiate

“Guaranteed Maximum Price”

• Break Ground in Early Summer

Quincy Transmission Expansion• Line Route Selection• Project Scoping,

Planning• Property Rights

Planning

Project Support ServicesDustin Bennett - Supervisor


• Provides a variety of support services to Project Managers on an as-needed basis. Current services include construction inspection, coordination of turnover deliverables, and management of third party inspection service contract.

• Team composition:• (3) Senior Construction Inspectors• (2) Construction Inspectors• (2) Project Coordinators

2019 Accomplishments• Consolidated inspection services into one department• Developed a project for continuing to mature the PMO project

management capabilities

2020 Projects• Project Management Moving Forward - Contracted Senior Project

Manager Brent Gregory to help PMO implement the first steps of the PMO Moving Forward project

Quality AssuranceRandy Weisheit - Lead


• Evaluate and monitor project management rigor• Team composition

• Quality Assurance Lead

2019 Accomplishments• Coaching and mentoring activities for projects managed within and

outside of the PMO• Implemented the PMO project management portfolio performance

dashboard• Implemented project Quality Assurance reviews for select projects

managed by the PMO

2020 Initiatives• Extend project Quality Assurance reviews to more projects managed

within the PMO• Consistency in monitoring all key projects managed within the PMO

Active Projects – Portfolio View

Organizational Change Management

Why Change Management?

• Increases the probability of project success

• Manages employee resistance to change

• Builds change competency in the organization (increasingly important as we deal with the increasing rate of change)

Change Management

Connects the change to business results

Why are we changing?What we are changing?Who will be changing?

DecreaseProductivity lossEmployee dissatisfactionPassive resistance

IncreaseSpeed of AdoptionUltimate UtilizationProficiency

Project Success

How do we feel about change?

Change Impact

Expectations

Productivity Resistance Communication

The feelings you experienced in the simple exercise we did are compounded in our organization. These are the areas

change management targets.

Productivity

Resistance

Communication

2019• Started building a foundation

• Training• Change Management Network• Coalitions of Change Champions for projects

• Introduced change management in select projects

2020• Develop and implement a roadmap

• Continue to expand change management capabilities within the utility

• "Baking" change management early into projects and initiatives

The good news...

MEMORANDUM February 20,2020

TO: Jeffrey Bishop, Chief Financial Officer

FROM: John Mertlich, Sr. Mgr Financial Planning & AnalysisJeremy Nolan, Lead Financial Analyst

SUBJECT: 4*^ Quarter 2019 Financial Forecast Update

Purpose: Provide Highlights of the Q4 Financial Forecast

Metrics:

• The District has in place interim and long-term annual target milestones for five financial metricsthrough 2024 (Exhibit C).

• Over the 5 year forecast (thru 2024} the current metrics indicate (Exhibits A & B):o The following long-term targets are met through 2024 for:

• Liquid Cash >$105 Million,• Debt to Net Plant < 60%, and

• Debt Service Coverage > 1.80x

o Return on Net Assets meets the interim target in 2019 and the long-term target In2020, 2022, and 2023, v^/hile missing the target in 2021 and 2024.

o Retail Operating Ratio (ROR) meets the interim target in 2019 and 2021. The RORmeets the long-term target in 2020, and then 2022 and beyond.

• Comparisons between the 2019 Budget and Q4 2019 Forecast can be found in Exhibit D.• Debt to Net Plant Illustrative Example - Historic Cost vs Fair Market Value comparison found in

Exhibit I.

Notes of Interest:

• Keyforecast updates:o 2019 Actual data is from Accounting's 2019 December Consolidated Financial

Statement.

o 'EUDL CRAC revenue has been incorporated into the Retail Revenue of the FinancialForecast to cover the incremental cost differential of power supply beyond existingcapabilities.

o Cash Optimization was executed in January 2020 and the results incorporated into theforecast for 2020 and beyond, including additional new capital fundings to utilize cash.

• Retail Revenue rate adjustment assumption are: 0% in 2020, and 0.1% for all years thereafter.• Wholesale Price volatility has had a large impact on the Financial Forecast results over the last

year for both Net Income and the Metrics:

Wholesale prices through 2022 are up from a year ago when the 2019 Budget wasconstructed, although down for 2023 and beyond. The prices are also down from the

2019 Q3 Financial Forecast update, as shown in the table below.

2

Impact of Updates from prior quarterly report (Exhibit E): • Net Wholesale Impact – includes wholesale price movement and market position changes

o 2020: improvement of $7.1M due to market positions taken that offset lower price and affects of SENA contract

o 2021: reduction of $0.8M o 2022-2024: reduction of $16.3M due to price reduction, combined with timeframe

beyond point of market position and no post-shell contract in place • Cash Optimization and Debt Structuring – use of $80M cash for PRP debt defeasance and new

debt for refunding existing debt in PRP and Electric System completed in January 2020, compared to the forecast Cash Optimization and Debt Structuring in the Q3 Financial Forecast

o Electric System: 2020: increased outstanding Par amount of debt by $7.4M vs Q3 estimate of

$11.1M 2020: reduction of $0.8M debt service vs Q3 estimate of $1.4M reduction 2021: reduction of $0.3M debt service vs Q3 estimate of $2.3M reduction 2022-2024: reduction of $1.5M debt service vs Q3 estimate of $4.3M reduction

o PRP: 2020: refunding added $9.6M outstanding Par amount of debt vs Q3 estimate

of $23.7M and defeasance reduced $76.1M of outstanding Par amount of debt vs Q3 estimate of $83.3M

2020: combined debt service reduction of $3.3M vs Q3 estimate of $4.7M reduction

2021: combined debt service reduction of $13.9M vs Q3 estimate of $15.1M reduction

2022-2024: combined debt service reduction of $27.4M vs Q3 estimate of $34.8M reduction

• O&M, Labor, and Capital o No changes for 2020-2024

• Interest Income has been updated to reflect actual 2019 Year End balances in cash and investment accounts

Scenarios: • All scenarios start with the Base assumptions • Five Scenarios were run for the 2019 Q4 Forecast:

o Wholesale Price Increase (P85)

3

o Wholesale Price Decrease (P15) o Low Load Growth at ½ Base o Low Load Growth at ½ Base and Wholesale Price Decrease (P15) o Low Water (P15)

• Scenarios and Debt Service Coverage (Exhibit F) o Debt Service Coverage (DSC) is adversely affected in all scenarios through 2024 except

higher wholesale energy prices. o Low Load growth scenario when combined with low wholesale energy prices and the

Low Water scenario create the two largest negative impact to DSC, indicating that growing profitable loads and reducting Water risk are key controllable business drivers.

• Scenarios and Excess Liquidity (Exhibit G) o Excess liquidity dropping below $0 in any year would require the District to raise rates,

cut expenses and/or borrow more to avoid consuming working capital and reserves. o With Cash Optimization, Excess Liquidity is targeted to be put to work early in every

year, so there will show some cash accumulation at the end of every year, but much lower than previously shown.

• Scenarios and Debt to Net Plant (Exhibit H) o Debt to Net Plant is adversely affected in all scenarios through 2024, except higher

wholesale energy prices. o Cash Optimization reduces Debt to Net Plant below previously targeted 55% threshold.

Conclusions and Path Forward:

• Growing profitable loads is a key controllable business success driver. • Lower wholesale prices combined with low load growth are a threat in the 2020-2024 period.

Recommendation:

• For your information.

4

EXHIBIT A – Summary of Budget Items (in thousands of dollars)

5

EXHIBIT B – Consolidated Operational Performance (in thousands of dollars)

6

EXHIBIT C - District Annual Financial Metric Targets

7

EXHIBIT D - Comparison between 2019 Budget and Q4 2019 Financial Forecast

8

EXHIBIT D - Comparison between 2019 Budget and Q4 2019 Financial Forecast (con’t)

9

EXHIBIT E - Comparison between 2019 Q3 Financial Forecast and Q4 2019 Financial Forecast

10

EXHIBIT E - Comparison between 2019 Q3 Financial Forecast and Q4 2019 Financial Forecast (con’t)

11

EXHIBIT F- Scenarios: Debt Service Coverage Ratios

12

EXHIBIT G - Scenarios: Excess Liquidity

13

EXHIBIT H - Scenarios: Debt to Net Plant

14

EXHIBIT I - Debt to Net Plant Ratio Illustrative Example – Historic Cost vs Fair Market Value


February 2020

Treasury Quarterly Report

2

PORTFOLIO

• Ending cash/investment portfolio $566.2M (market based)

• Jan 2nd outgoing bi-annual debt service payment of $59.2M plus defeasance transaction

• Jan 28th- $90.2M reduction in cash due to debt defeasance

Cash & Investments -Quarter Review

3

• The Fed Funds target range was adjusted three times in 2019, the current range is 1.50-1.75 (no change at Jan meeting)

• GCPUD’s policy and strategy focuses on diversification, market averaging, and duration targets over a fixed income program following state requirements

• Return is dependent on the current rate environment

MARKET


1 Mo 2 Mo 3 Mo 6 Mo 1 Yr 2 Yr 3 Yr 5 Yr 7 Yr 10Yr

20Yr

30Yr

1/31/2019 2.42 2.43 2.41 2.46 2.55 2.45 2.43 2.43 2.51 2.63 2.83 2.993/29/2019 2.43 2.44 2.4 2.44 2.4 2.27 2.21 2.23 2.31 2.41 2.63 2.816/30/2019 2.18 2.15 2.12 2.09 1.92 1.75 1.71 1.76 1.87 2 2.31 2.528/7/2019 2.02 2.04 2.02 1.95 1.75 1.59 1.51 1.52 1.6 1.71 2.01 2.2210/31/2019 1.59 1.59 1.54 1.57 1.53 1.52 1.52 1.51 1.6 1.69 2 2.1712/31/2019 1.48 1.51 1.55 1.6 1.59 1.58 1.62 1.69 1.83 1.92 2.25 2.39

1

1.5

2

2.5

3

3.5US Treasury Yield Curve-2019 Significant Dates

4


Portfolio Holdings Data as of 12/31/19

• Effective Duration of Portfolio 2.066

• Years to Final Maturity 3.351

5

Portfolio Diversification

• In April 2019 the District updated strategy to include investing a larger portion in the Washington State LGIP, resulted in increased earnings over prior strategy and ability to manage to liquidity call for bond defeasance

• State LGIP Dec Yield 1.77%

• State LGIP Q4 Yield 1.88%

• Intentional shift to reduce reliance on overnight repo and manage to tighter cash balances

6

Debt Management• Total outstanding external debt as of 12/31/19: $1.3 billion

• Last debt issuance (new money) was Q4 of 2017

• Weighted average coupon rate of fixed debt: 4.9%

• Effective cost of debt for entire portfolio (net of interest rebates and sinking fund principal benefits): 3.6% (pre-transaction as of 12/31 was 3.95%

• Weighted average life of portfolio 12.09 years

Total Consolidated Outstanding Debt$1,269,395,000

• Total par Junior Lien Bonds (JLB) internal cash financing of PRP capital ( to be repaid to Electric) = $327 million (not included in external amount in graph)

• June 2019 - $110 million transfer to PRP to fund capital

• The short term debt program makes up $150 million of the total portfolio (11%)

1. ES 2017-M: Senior Lien- Fixed – 9/20 maturity, 2% fixed coupon

2. ES 2017-N: Subordinate Lien- Variable/Libor – 12/20 maturity, 47.5 + Libor

3. ES 2019-P: Subordinate Lien- Variable/Libor – 7/21 maturity, 37+ Libor

7

Debt- Refunding - January 2020PRP 2020Z Pricing Results:

• 11.32% NPV in aggregate, $14.2M NPV savings, $25.2M in nominal gross reduced debt service savings

• PRP 2013A - 11.58% NPV, $8.05M PV savings, $13.05 gross savings

• PRP 2013Z – 17.01% NPV, $4.55M PV savings, $8.98M gross savings

• PRP 2012A – 6.94% NPV, $1.46M PV savings, $3.18M gross savings

ES 2020Q Pricing Results:

• Refunded one series 2013-J:

• 9.35% NPV, $8.1M NPV savings, $10.8M gross savings

Overall Refunding Outcome:

• Average cost of new debt 3% (replacing 5% prior coupons)

• Overall refunding (gross savings) $36.0M, NPV of $33.3M

• Refunded 4 series in total (3 PRP and 1 Elec) for a total par amount of refunding bonds of $202.1M

• All refunding candidates were in excess of District refunding policy of > 3% NPV savings

• Strategic planning of structure of transaction leading into pricing, timing, and market environment lead to a significant reduction in overall debt service

8

Debt- Defeasance - January 2020Defeasance Outcome:

• Total reduction of $190.7M of future debt service payments

• Includes $8.6M of interest costs thru the escrow call date (net of interest due and earned)

• Debt liability (balance sheet) reduction of $76.4M effective 1/29/20

• Fully defeased 3 PRP series:

• PRP 2014B $52.0M• PRP 2015B $16.3M• PRP 2010A $6.3M

• Partially defeased 1 series (remainder refunded)

• PRP 2012A $10.4M

Structured escrow to reduce bond reserves by $14.1M to increase debt reduction

10

Debt Service Payments • Interest payments are due on Jan 1st / July 1st for fixed rate date and monthly on variable rate debt

• CREB’s and BAB’s interest rebates return to the District following the Jan/July interest payments

• 2019 sequestration rate of 6.2%, 2019 rebate = $10.55M

• 2020 sequestration rate of 5.9%, estimated 2020 rebate = $10.53M

• The Utility targets 1.8x consolidated minimum debt service coverage as a financial metric

• Specific coverage and other requirements for individual liens/notes

• Debt Service includes principal payments (due Jan 1st on fixed rate debt) annually

• With exception the CREBS principal of $222M is self managed in sinking funds up to the maturity dates

• Every 6 months the sinking fund contribution is updated based on current market conditions, January 2020 update resulted in ~$2.11M reduction: decreased by $178k in years ‘20-26, $91k in years ’27-31, and $51k in years

’32-39.

• Short term debt (both fixed and variable) contain specific provisions on principal repayment

11

Debt Management- Credit Ratings• During December the Utility received

credit ratings from Fitch, Moody’s and S&P for the 2020 issuances.

• No change to previous annual review ratings

• Electric System carries a slightly higher rating than PRP at this high investment grade level

13

Appendix- Treasury Personnel- Banking Institutions-Petty Cash Accounts

14

Last Updated On: 8/06/2019

15

*notes:

• US Bank is the safekeeping agent for the state of Washington

• Wells Fargo Trust is the safekeeping agent / “custody” agent for Washington Trust for investments

• The Washington State Local Government Investment Pool is authorized by the state of Washington to manage government funds (not needing separate authorization)


16


MEMORANDUM February 19, 2020

TO: Kevin Nordt, General Manager

VIA: Jeff Bishop, Chief Financial Officer

FROM: Michael Facey, Senior Manager Accountin

Bryndon Ecklund, Financial Reporting Analyst

SUBJECT: Unaudited 2019 Financial Statements and Year End Close Update

Purpose

Circulate preliminary fiscal year 2019 unaudited consolidated financial statements and provide updateon fiscal year end close timeline.

Year End Close Timeline Update

• All transactions and planned entries booked - Complete - 2/14/2020• Prelim Unaudited Statement of Net Position and Statement of Revenues, Expenses and Changes

in Net Position Available - Complete - 2/19/2020• Statement of Cash Flows, MD&Aand Note Disclosures drafted - In Progress

• Moss Adams External Audit - 3/2/2020 to 4/10/2020

o Moss Adams Entrance w/ith the Commission on 3/10/2020o Anticipated Audit Opinion Date of 4/10/2020o Audited Financial Statements and Moss Adams Audit Results - delivered at Commission

Meeting 4/28/2020

Financial Highlights

All comparisons unless otherwise stated are year to date {January through December) of 2019 versus2018. Total operating revenues of $320.7M were $9.4 M (3.0%) higher while total operating expenses of$222M were $19.3M (9.5%) higher than the same period in the prior year. Resulting in a decrease in netoperating income of $9.9M (9.1%) for the same period in the prior year.

Statement of Revenues. Expenses and changes in net position

Operating Revenues

Operating revenues were $9.4M (3%) higher than the same period in the prior year driven by a $5.0M(3.9%) increase in commercial and industrial revenues, which is consistent with growth in our loadforecast for those customer classes. Additionally, residential revenues increased by $3.7M (8.5%) due toa much colder than average first quarter 2019 and a slightly colder than average fourth quarter of 2019.Wholesale revenues, net increased by $2.2M (3.3%) off-set by a $2.2M (7%) decrease in Sales to powerpurchasers at cost. Fiber optic network sales (Wholesale Fiber) increased by $1.2M (14.2%) driven by anincrease in take rate and continued expansion of the network.

Operating Expenses

Total operating expenses of $222M were $19.3M (9.5%) higher than the same period in the prior yeardriven by Depreciation expense {$3.4M or 4.6% increase), Generation expense ($12.6M or 40.8%increase). Distributionexpense ($13.8I\/I or 102% increase), and License compliance costs ($10.1M or50.5% decrease).

Other Revenues and Expenses

Total other revenues and expenses of $23.3M in net expenses were $7.9M (25.4%) less than the sameperiod in the prior year driven primarily by a $10.7I\/I (94,2%) increase in Interest and other income dueto the increase in the unrealized gain on our investment holdings. This increase is in line with marketconditions. Interest rates increased in 2018 lowering the fair value of our long-term investments andinterest rates decreased in 2019 having the opposite impact on the fair value of long-term investments.Thischange in rate environments resulted in an unrealized gain on our investments of $5.2M versus the$2.9M loss that was recognized at the same point in the prior year (difference of $8.1M). Additionally,total interest income of $13.8M was $1.5M (12%) higher than the same period in the prior year drivenby a $34M increase in our investment holdings during 2019. These increases were partially off-set by anincrease in interest expense of $2.6M (4.6%) because no interest was capitalized in 2019 in accordancewith new accounting guidance (GASB 89).

Change in Net Position

Total change in net position of $83.9M is $6M (6.7%) lower than the same period in the prior year. Thisdecrease is largely due to the total operating expenses increase of $19.3M (9.5%)described above, anda decrease of $3.9M (31.2%) decrease in CIAC revenue.

Statement of net position

Current and Noncurrent Assets

Total cash and investments of $565M were $23,4M (4.3%) more than the same period in the prior year.Net Utilityplant increased $116.2M or 5.5%, which is consistent with the continued investment drivenby growth in the Electric System and major turbine and generator upgrades for the Priest Rapids Projectand the change to our FERC licensing obligation estimate discussed below.

Current and Noncurrent Liabilities

Total current liabilities of $150.6M were $11.8M (8.5%) more than the same period in the prior year.This change was driven primarily by Trade Accounts Payable ($11.4M or 50.2% increase), and CustomerDeposits ($7.3M or 53% decrease). The $11.4M increase in Trades Payable was primarily driven by a$3M increase in A/P associated with delivery of inventory in December and $9.1M of accruals.

Total noncurrent liabilities of $1.43B were $31.2M (2.2%) more than the same period in the prior year.This is driven by the $66M (135%) increase in our FERC licensing obligation. The licensing obligationincreased due to a change in our methodology for estimating the liability. Grant continues to anticipatepayments of approximately $2M per year adjusted for inflation through the license term of 2052, but no

longer discount this payment stream at approximately 4% to better align our estimate methodologywith authoritative accounting guidance. Total unearned revenue went up $10M (139%), due tocontributions for expansion from large industrial customers received in the second half of 2019. Theseincreases were off-set by a $33.7M (2.5%) decrease in outstanding bonds and a $7.9M (24%) decrease intotal pension liability.

Recommendation; For your information only.

PUBLIC UTILITY DISTRICT NO. 2 OF GRANT COUNTY

UNAUDITED

STATEMENT OF NET POSITION

December 31,2019 AND 2018

2/18/2020

2019 2018 Difference

CURRENT ASSETS

Cash 104,567 2,822,490.69 (2,717,923)Investments 103,498,886 131,675,640.68 (28,176,754)Restricted funds -

Cash 1,018,719 920,831 97,888Investments 142,728,947 125,860,553 16,868,394

Customer accounts receivable, net 24,981,883 29,849,023 (4,867,141)Materials and suppliesDue from power purchasers

17,428,9880

17,955,612

1,194,120(526,624)

(1,194,120)Other current assets 1,785,764 1,584,123 201,641

Total current assets 291,547,755 311,862,394 (20,314,639)NONCURRENT ASSETS

Investments 13,087,590 21,538,600 (8,451,010)Restricted f\mds

Cash 534,674 144,180 390,495Investments 304,505,209 259,091,904 45,413,304

Conservation loans 397,172 364,947 32,225Demand-sidemanagement 211,389 413,148 (201,758)Preliminary expenses 4,083,016 6,004,787 (1,921,771)

Total other noncurrent assets 322,819,050 287,557,566 35,261,485Utility plant, net 2,213,414,770 2,097,260,603 116,154,168

Total noncurrent assets 2,536,233,820 2,384,818,168 151,415,652DEFERRED OUTFLOWS

Net pension, change in proportion 6,409,454 5,753,562 655,892Other post employment benefitsUnamortized relimding loss

2,276,122

3,499,464 4,374,163

2,276,122(874,699)

Total deferred outflows 12,185,040 10,127,724 2,057,315TOTAL ASSETS AND DEFERRED OUTLFOWS OF RESOURCES 2,839,966,615 2,706,808,287 133,158,328


UNAUDITED

STATEMENT OF NET POSITION

December 31,2019 AND 2018


CURRENT LIABILITIES

Accounts payableTrade 34,169,678 22,746,821 11,422,857

W^es payable 13,486,365 12,742,207 744,159Due to Power Purchasers 2,194,448 - 2,194,448

Accrued taxes 7,513,500 7,431,122 82,378Customer deposits 6,552,522 13,831,566 (7,279,044)Accrued bond interest 28,744,818 29,469,613 (724,795)Unearned revenue 9,501,660 4,981,722 4,519,937

Habitat liability 15,508,571 15,984,784 (476,213)Other current liabilities 39,768 39,768 -

Current portion of licensing obligations 2,283,494 2,283,494 -

Current portion of long-term debt 30,580,000 29,240,000 1,340,000Total current liabilities 150,574,825 138,751,097 11,823,728

NONCURRENT LIABILITIES

Accrued other postemployment benefits 9,690,007 6,977,140 2,712,867Long-term unearned revenue 7,591,377 2,157,258 5,434,119Licensingobligations, less current portion 112,683,015 46,747,953 65,935,062Pension obligations 24,837,391 32,686,126 (7,848,735)Revenue bonds, less current portion 1,238,815,000 1,269,395,000 (30,580,000)

Unamortized (discount) premium, net 32,253,748 36,667,892 (4.414,144)

Total noncurrent liabilities 1,425,870,538 1,394,631,369 31,239,169DEFERRED INFLOWS

Net pension, deferred inflow 15,219,865 13,692,570 1,527,296Total deferred inflows 15,219,865 13,692,570 1,527,296Total liabilities and deferred inflows of resources 1,591,665,228 1,547,075,035 44,590,193

NET POSITION

Invested in capital assets, net of related debt 869,516,411 749,689,492 119,826,918Restricted 333,375,395 303,885,512 29,489,883Unrestricted 45,409,581 106,158,248 (60,748,666)

Total net position 1,248,301,387 1,159,733,252 88,568,135TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NHI'POSITION 2,839,966,615 2,706,808,287 133,158,328


UNAUDITED

STATEMENT OF REVENUES AND EXPENSES AND CHANGES IN NET POSITION

For the twelve months ending December 31, 2019 and 2018


Sales to power purchasers at cost 29,443,007 31,610,564 (2,167,557)Retail energy sales

Residential 46,844,433 43,160,405 3,684,028Irrigation 24,926,524 25,785,050 (858,526)Commercial and industrial 135,432,153 130,389,948 5,042,205Governmental and others 2,692,909 2,056,037 636,872

Sales to other utilities 69,380,764 67,185,683 2,195,081

Fiber optic network sales 9,431,404 8,260,172 1,171,232

Other 2,532,435 2,822,922 (290,487)

Total operating revenues 320,683,629 311,270,782 9,412,847

OPERATING EXPENSES

Generation 43,759,708 31,072,379 12,687,329

Transmission 6,475,707 6,679,185 (203,478)Distribution 27,381,897 13,561,222 13,820,675

Customer and infomiation services 4,302,698 5,766,110 (1,463,413)

Fiber optic network operations 2,721,332 2,265,193 456,138

Administrative and general 33,038,493 33,382,985 (344,493)

License compliance and related agreements 9,882,518 19,945,366 (10,062,848)

Depreciation and amortization 76,588,266 73,234,133 3,354,134

Taxes 17,885,973 16,801,299 1,084,674

Total operatingexpenses 222,036,591 202,707,872 19,328,718

NET OPERATING INCOME 98,647,038 108,562,910 (9,915,872)

OTHER REVENUES (EXPENSES)Interest and other income 22,121,614 11,392,090 10,729,525

Intereston revenue bonds and other, net ofcapitalized interest (59,343,983) (56,746,956) (2,597,027)

Federal rebates on revenue bonds 10,545,371 10,551,974 (6,603)

Amortization of debt discount/premium 3,539,445 3,641,316 (101,871)

Cost of debt issuance (141,109) (33,050) (108,059)

Total other revenue (expenses) (23,278,662) (31,194.626) 7,915,964

CONTRIBUTIONS IN AID OF CONSTRUCTION 8,511,292 12,484,616 (3,973,324)

CHANGE IN NET POSITION 83,879,668 89,852,900 (5,973,232)

NET POSITION

Beginning ofyear 1,159,733,942 1,069,880,352 89,853,590

End ofyear 1,243,613,610 1,159,733,252 83,880,358

Safety Report February 2020 - Grant PUD · Power outage caused system failure alarms, weinformed...

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Transcript of Safety Report February 2020 - Grant PUD · Power outage caused system failure alarms, weinformed...