Fiber up for vote again

PUD commissioners reject fast build out

MOSES LAKE — A 3-2 commission vote Monday rejected a motion for fast build out construction in 2006 of the Zipp fiber optic network after two senior Grant County Public Utility District staff members exchanged views with two members of the ratepayer action group FiberActive earlier in the meeting.

Commissioner Tom Flint said he introduced the motion because the PUD is in the budget process and district ratepayers need to know where the individual commissioners stand on fiber build-out.

In March, the commission adopted a "stand pat" position on the fiber system to halt build out.

On Monday, Commissioners Bill Bjork, Randy Allred and Greg Hansen voted against the fast build out motion and said it was not the right time to be voting on that particular issue.

"It's the wrong time to be doing it," Allred said. "We haven't even gotten through the budget."

"The only purpose I can see (for the vote) is to put the commissioners on the record," Hansen said, and added that the vote was only for the benefit of FiberActive. The group is made up of 26 members from throughout Grant County who share a common vision for complete fiber build out.

"We can bring it up at every meeting for the rest of the year," and the position of the commission majority will be the same, Allred said. "I'll have a lot shorter patience on this matter in the future." Commissioners Vera Claussen and Flint voted in favor of the motion.

Earlier in the meeting, which was held at the Moses Lake National Guard Armory, both PUD General Manager Tim Culbertson and Treasurer-Controller Nick Gerde responded to questions from Al Brower of Moses Lake, and another member of FiberActive who said the PUD needs to continue build-out in 2006.

"We're sitting on our hands while the rest of the world passes us by," Brower said. "We had a good start, we had a visionary past management and now we have basically nothing."

Culbertson said he would not recommend a continued build-out of the fiber system with existing cash until he is sure the PUD's financial health is strong enough to weather unforeseen circumstances.

"At this point in time, we are not well prepared with our reserves now and working capital now to weather a bad water year," Culbertson said.

During the last 16 years, 12 have been below average water years, Culbertson said, and if the utility has to go to the market to buy some of its power, it will be financially exposed to those prices.

Gerde said that even though the district is currently having a good financial year, it only has about $17 million that it could use in a critical water year. He said that amount would only last about four or five months, or less than half of a critical water year. The PUD needs about $30-35 million per year it can consume if it doesn't have enough water from the Columbia river to generate the electricity it needs for district ratepayers, Gerde said.

"Two bad water years in a row is what we need to be prepared for from a financial management standpoint," Gerde said.

By the end of the year, the PUD may have enough in funds to make it through one bad water year, he said.

The fiber system was a drain on cash and could have negatively impacted the utility's standing in financial markets and bond rating before the commission voted to "stand-pat," Gerde said.

"If we commit to spending a significant amount of capital, I believe, in the fiber system in 2006, we would have to share that with the rating agencies … and they won't like it."

Gerde said investment in the fiber system next year must be considered in the context of high relicensing costs for the two dams, cost commitments for fish bypass and paying for new turbines and generator rebuilds.

"This is the first time these dams have been rebuilt since they were first built," Gerde said. "We're in the business of generating electricity and distributing it to our customers, so we're looking at those assets to ensure that they maintain their quality and they maintain their capacity."

"But we also need to have a visionary outlook on the utility and what it might and can offer for the future," FiberActives's Brower said.