Grant County PUD details 2015 budget

MOSES LAKE - The Grant County PUD is projecting it will spend about $237.8 million in 2015, when all the bills and income are added up. Utility district officials reviewed the 2015 budget for PUD customers at a public hearing in Moses Lake Thursday night.

Total expenditures were projected to be $374.5 million with a projection of $136.6 million for revenues that doesn't come from customers. That includes sales of electricity already under contract and sales of electricity produced that's in excess of demand.

The utility district's strategic plan calls for a revenue increase of about 2 percent from each class of customers, said Kevin Nordt, the PUD's chief financial officer. That doesn't mean each class of customers or each customer will get a 2 percent rate increase, Nordt said. Rate increases will be a little bit more or a little bit less than that, as long as the overall goal of 2 percent is met.

The proposal ranges from five tenths of 1 percent to 3.5 percent, depending on the rate class, according to materials presented at the Oct. 14 PUD meeting.

Currently the utility is investing a lot of money in replacing turbines and generators at both its projects, Wanapum and Priest Rapids dams, Nordt said. The turbine replacement at Wanapum Dam is almost complete, and the next step will be to replace the generators, Nordt said. The turbine project is just beginning at Priest Rapids Dam, he said. One turbine or generator is replaced each year, he said.

The utility district plans to spend about $5 million in 2015 to expand its fiber optic system, Nordt said. Upgrades are planned in electrical lines to Warden, along with improvements around Quincy and the Rocky Ford substation.

Grant County is growing, and with it the demands on the electrical system, Nordt said. The projection is that large industrial customers will drive most of that growth, he said.

There's still plenty of PUD-produced power to meet the growth, Nordt said, and utility district officials will increase capacity slightly with the new turbines and generators, and upgraded fish bypass systems.

The goal of utility district officials is to be in a financial position where the PUD could pay for a sudden emergency without a big effect on rates or the district's finances, Nordt said. The sudden emergency came earlier this year when PUD employees discovered a crack in one of the spillway supports at Wanapum Dam. The investigation into the reasons for the crack found an error in the original design calculations, which prompted repairs to all spillway supports.

The crack required lowering the Columbia River behind the dam by 26 feet, Nordt said, decreasing the dam's generation capacity by about 45 percent. The actual repairs will cost an estimated $42 million, he said.

Total cost of fixing the problem was estimated at $69 million, Nordt said. That includes the lost electrical sales, the cost of finding the cause and all the repairs. Utility district officials built some provisions into the power purchase contracts that helped spread some of that cost, he said.

The PUD should be ready to start raising the water before the end of the year, Nordt said. The dam should be back in full operation by spring 2015, he said.

The PUD was able to absorb the costs; the utility's bond rating will remain unchanged. That was confirmed by three major bond rating agencies earlier this month, Nordt said.