[PPT] - 2020 Q2 BUDGET TO ACTUALS August 11, 2020 8/5/2020 1 Grant PUD

SLIDE 1

2020 Q2 BUDGET TO ACTUALS August 11, 2020

8/5/2020 1

SLIDE 2

Grant PUD | BUDGET TO ACTUALS Q2 2020

8/5/2020 2

At the end Q2 2020, O&M has spent 39% of its annual budget target, while Labor has spent 49% of its target
As a comparison, at end of Q2 2019 the O&M spend was 39% of budget and Labor was 50% of budget
Capital is at 34% of total 2020 confidence budget target at year-end
Year End Projections for Capital is currently expected to be 4% over the 2020 confidence budget
As a comparison, at end of Q2 2019, Capital spent was at 28% of its budget target
Year End net direct charges (O&M, Labor, Capital) are forecast higher than the 2020 budget by $3M, which is due

primarily to higher than planned Capital spending

2020 DIRECTS YEAR-END PROJECTION OVERVIEW

2020 Budget 2020 YTD % of Annual Budget 2020 Year-End Projection YEP Variance $ YEP Variance % Under Budget / Over Budget Direct O&M 54,632,583 $ 21,129,842 $ 39% 53,914,910 $ (717,673) $

1%

Under Budget Direct Labor 77,100,957 $ 37,610,466 $ 49% 76,169,132 $ (931,825) $

1%

Under Budget Direct Capital 105,249,571 $ 36,193,893 $ 34% 109,944,363 $ 4,694,792 $ 4% Over Budget 2020 Directs Total 236,983,111 $ 94,934,202 $ 40% 240,028,406 $ 3,045,295 $ 1% Over Budget

SLIDE 3

Grant PUD | BUDGET TO ACTUALS Q2 2020

8/5/2020 3

2020 YEAR-END DIRECT O&M BY FUNCTIONAL AREA

At end of Q2 2020, Direct O&M has spent 39% of its annual budget target. Year End Projection for 2020 Direct O&M

spending is under budget by $0.7M

As a comparison, at end of Q2 2019, Direct O&M spending was at 39% of the budget target
Overall Travel and other O&M expenses are down due to Covid-19 restrictions
Chief Customer Officer group: HR up $250k for addition of management consulting to support streamlining payroll
Chief Operations Officer group: PP WD expects $400k in overages for dam safety spillway gate and foundation drain
cleaning. PMO Strategy Consulting Fees up $206k. FW canceled White Sturgeon and PR Lamprey Adult Passage

Study $188k. Expect FERC License fee lower by $400k

Chief Financial Officer group: Internal Services $239k over due to Covid-19 expenses. Security up $300k for Security

Risk Assessment and $330k increase in GuardForce contract. Expect more Technology Roadmap expenses to move from O&M to Capital by year end

Direct O&M by Group

Functional Area 2020 Budget 2020 YTD YTD % of Annual Budget 2020 Year End Projection YEP Variance $ YEP Variance % Under Budget / Over Budget Board of Commission 91,000 $ 6,117 $ 7% 66,613 $ (24,388) $

27%

Under Budget General Manager 754,208 $ 402,837 $ 53% 779,981 $ 25,773 $ 3% Over Budget Attorney 881,960 $ 125,475 $ 14% 881,960 $ $ 0% Under Budget Chief Customer Officer 4,505,109 $ 3,096,971 $ 69% 4,685,037 $ 179,928 $ 4% Over Budget Chief Operating Officer 30,978,971 $ 10,183,298 $ 33% 28,505,175 $ (2,473,795) $

8%

Under Budget Chief Financial Officer 17,301,365 $ 7,287,192 $ 42% 18,929,532 $ 1,628,168 $ 9% Over Budget Merchant Wholesale Telecom 119,971 $ 27,953 $ 23% 66,613 $ (53,359) $

44%

Under Budget 54,632,583 $ 21,129,842 $ 39% 53,914,910 $ (717,673) $

1%

Under Budget 2020 Direct O&M

SLIDE 4

Grant PUD | BUDGET TO ACTUALS Q2 2020

8/5/2020 4

At the end of Q2 2020, the forecast for both FTR and FTE head count is below budget target
Total head count, as of 7/27 is 641 FTR and 76 FTE
For comparison, FTR head count was 606 at the close of 2019
FTR Headcount forecast for 2020 remains unchanged from Q1 forecast
FTE is a cumulative figure that reflects part-time and seasonal employees
For comparison, the FTE utilization at close of 2019 was 44% over budget
The Overtime Year End Projection is 4% ($274k) over budget. Overtime is both event-dependent and used to

partially cover insufficient FTR

For comparison, at Year End 2019 Overtime was 44% or $2.3M over budget

SLIDE 5

Grant PUD | BUDGET TO ACTUALS Q2 2020

8/5/2020 5

2020 YEAR-END DIRECT LABOR BY FUNCTIONAL AREA

At end of Q2 2020, Direct Labor has spent 49% of its annual budget target
Year End Projection for 2020 Direct Labor spending is currently expected to be $0.9M under budget
For comparison, at the end of Q2 2019, Direct Labor spending was at 50% of the budget target
The Chief Customer Officer group: up primarily due to not capturing the full request for Organizational Development

in the 2020 budget

The Chief Operations Officer group: Reorganizations and employee transfers and not hiring for some FTE positions

due to Covid-19 restrictions currently leave this group currently projecting lower headcount

The Chief Financial Officer group: Actual vacancy rate is below budgeted amount
AS of end of Q2, $6.8M of Labor has been charged to the Covid-19 initiative

Direct Labor by Group

Department Functional Area 2020 Labor Budget 2020 Labor YTD YTD % of Annual Budget 2020 Labor YEP YEP Variance $ YEP Variance % Under Budget / Over Budget

AA0000

Board of Commission 167,680 $ 91,950 $ 55% 209,680 $ 42,000 $ 25% Over Budget

BA0000

General Manager 637,820 $ 326,763 $ 51% 590,108 $ (47,712) $

7%

Under Budget

CA0000

Attorney 389,263 $ 193,674 $ 50% 366,137 $ (23,126) $

6%

Under Budget

DA0000

Chief Customer Officer 7,121,027 $ 3,355,885 $ 47% 7,257,212 $ 136,185 $ 2% Over Budget

EA0000

Chief Operating Officer 55,363,881 $ 26,744,298 $ 48% 53,801,634 $ (1,562,246) $

3%

Under Budget

FA0000

Chief Financial Officer 13,260,821 $ 6,815,463 $ 51% 13,776,245 $ 515,424 $ 4% Over Budget

GA0000

Merchant Wholesale Telecom 160,466 $ 82,433 $ 51% 168,116 $ 7,650 $ 5% Over Budget 77,100,957 $ 37,610,466 $ 49% 76,169,132 $ (931,825) $

1%

Under Budget 2020 Direct Labor

SLIDE 6

Grant PUD | BUDGET TO ACTUALS Q2 2020

8/5/2020 6

2020 YEAR-END DIRECT CAPITAL – PROJECT PORTFOLIO

Theory – The Project Confidence Factor (PCF)

Estimate types & % obejctives

(1) - ROM objective: -50% to +75% (2) - Preliminary estimate objective: -15% to +50% (3) - Budget estimate objective: -10% to +25% (4) - Definitive estimate objective: -5% to +10%

Collecting Selecting Initiate/Planning Executing Closing ROM Preliminary Budget Definitive Final

Project Phase

20% 60% 85% 95% 100% 0% 20% 40% 60% 80% 100% Collecting Selecting Initiate/Planning Executing Closing

Project Budget Dollar Confidence at Project Phase (%)

Using the estimate types as a guide, the PCF

Curve is applied to individual project budgets.

The PCF adjusted dollars define the

estimated capital spend

Since the 2020 Budget was adopted,

information accuracy has increased.

The new information has increased

confidence in our estimate capital spending for the whole portfolio.

2020 Budget PCF adj = 43%
Q2 2020 PCF adj = 22%
Q1 = 33%
Project status composition

Project Portfolio Group ($M) 2020 Project Budget 2020 Capital Portfolio Budget Project Confidence Adj IS/Facilities 40.5 $ 9.4 $ 77% Power Delivery 37.5 $ 16.7 $ 55% Power Production 70.4 $ 56.8 $ 19% Technology 13.8 $ 3.4 $ 76% Fiber/Other 20.9 $ 18.9 $ 9% TOTAL 183.1 $ 105.2 $ 43% Project Portfolio Group ($M) Q2 2020 Project Budget Q2 2020 Capital Portfolio YEP Project Confidence Adj IS/Facilities 30.9 $ 13.1 $ 58% Power Delivery 28.6 $ 26.3 $ 8% Power Production 43.8 $ 39.8 $ 9% Technology 10.1 $ 4.9 $ 51% Fiber/Other 27.0 $ 25.9 $ 4% TOTAL 140.5 $ 109.9 $ 22%

30% 2% 32% 36%

2020 Budget Project Status Composition

Collect Select Initiate/Planning Executing/Closing 3% 4% 22% 71%

Q2 2020 Project Status Composition

Collect Select Initiate/Planning Executing/Closing

SLIDE 7

Grant PUD | BUDGET TO ACTUALS Q2 2020

8/5/2020 7

2020 YEAR-END DIRECT CAPITAL – PROJECT PORTFOLIO

Current Capital Portfolio is $4.7M over the 2020 Budget.

Variances driven by an

increase in Fitness/Purchases and to a lesser degree Transformative work.

All sub-portfolios show

increased expected capital spend through 2020, with the exception

f Power Production.
Schedule driven

variances continue to be a drag on project

delivery. This is offset

with the expansion of capital work scope across the whole portfolio.

Price related variances

remain small.

SLIDE 8

Grant PUD | BUDGET TO ACTUALS Q2 2020

8/5/2020 8

2020 YEAR-END PROJECTION LOADED O&M & CAPITAL

Loaded YEP are over budget
2020 Budget labor split

75% O&M / 25% Capital

Year-End labor split projection

85% O&M / 15% Capital or

SLIDE 9

Grant PUD | BUDGET TO ACTUALS Q2 2020

8/5/2020 9

Questions?

SLIDE 10

COMMISSION BUDGET REVIEW 2021 PRELIMINARY BUDGET

8/5/2020 1

SLIDE 11

Grant PUD | 2021 PRELIMINARY BUDGET

8/5/2020 2

2021 BUDGET TIMELINE

AUGUST 8/11/20 Commission reviews preliminary budget presentation and preliminary budget filing 8/25/20 RCW budget filing resolution approval SEPTEMBER 9/22/20 Commission review of public materials for hearing 9/22/20 Advertising of public hearings, 2 weeks prior to first hearing OCTOBER 10/7/20 Public hearing materials available to the public (1 week prior to first hearing) 10/13/20 Commission opens RCW budget process. Public budget hearings to be held during the month of October 2020. 10/27/20 Commission review final budget and forecast 11/10/20 Anticipated Commission adoption of budget and forecast

SLIDE 12

Grant PUD | 2021 PRELIMINARY BUDGET

8/5/2020 3

ANTICIPATED CHANGES BETWEEN PRELIMINARY AND FINAL BUDGETS

Preliminary Budget is the 2021 figures from the 2020 Q1 Forecast
Future Rate Increases
Assumed to be de-minimis at 0.1% annually (effectively = 0)
Final management review in late August
Major Changes
Debt issuance for Electric System
Retail forecast update
Capital Plan update
Wholesale Market Price curve update
Retail Revenue adjustments updated to meet Strategic Plan metrics

SLIDE 13

Grant PUD | 2021 PRELIMINARY BUDGET

8/5/2020 4

PRELIM. BUDGET SUMMARY – TOTAL EXPENDITURES (EXHIBIT A)

*figures shown in thousands ($000)

Exhibit A - Summary of Budget Items Actuals Forecast Forecast Probable Impacted 2019 2020 2021 Change By Electric O&M 53,400 58,202 59,653

h

Power Delivery PRP O&M 74,162 75,594 77,612

h

Power Production & PMO TOTAL O&M 127,562 133,796 137,265

h

TAXES 17,886 17,266 18,530

g

ELECTRIC CAPITAL 57,158 68,890 59,561

g

PRP CAPITAL 66,512 58,611 79,607

g

DEBT SERVICE (net of rebates) 87,756 72,585 75,162

i

TOTAL EXPENDITURES 356,874 351,147 370,124 Expenditure offsets for deduction Contributions in Aid of Construction (8,511) (2,300) (4,501)

h

Update for new Cust. Requests Sales to Power Purchasers at Cost (29,443) (26,990) (18,889)

h

Expect Lower Retail Load Net Power (+ Expense, - Revenue) (69,381) (84,143) (81,529)

g

Conservation Loans (13) (125) (125)

g

TOTAL EXPENDITURE OFFSETS (107,348) (113,557) (105,044)

h

TOTAL BUDGETED EXPENDITURES 249,526 237,590 265,080

SLIDE 14

Grant PUD | 2021 PRELIMINARY BUDGET

8/5/2020 5

PRELIM. BUDGET SUMMARY – OPERATIONAL PERFORMANCE

(EXHIBIT B)

*figures shown in thousands ($000)

Exhibit B Actuals Forecast Forecast Probable Impacted CONSOLIDATED OPERATIONAL PERFORMANCE 2019 2020 2021 Change By Sales to Power Purchasers at Cost 29,443 26,990 18,889

h

Expect Lower Retail Load Retail Energy Sales 209,896 206,323 225,162

i

Expect Lower Retail Load Net Power (Net Wholesale+Other Power Revenue) 69,381 84,143 81,529

g

Fiber Optic Network Sales 9,431 9,762 10,668

g

Other Revenues 2,532 1,314 1,725

g

Operating Expenses (127,562) (133,796) (137,265)

h

Increased O&M Taxes (17,886) (17,266) (18,530)

g

Net Operating Income(Loss) Before Depreciation 175,235 177,470 182,178

i

Depreciation and amortization (76,588) (75,718) (75,896)

g

Net Operating Income (Loss) 98,647 101,752 106,282

i

Other Revenues (Expenses) Interest, debt and other income (23,279) (36,126) (40,530)

g

CIAC 8,511 2,300 4,501

h

Update for new Cust. Requests Change in Net Position 83,880 67,926 70,253

i

SLIDE 15

Grant PUD | 2021 PRELIMINARY BUDGET

8/5/2020 6

PRELIM. BUDGET SUMMARY – METRICS (EXHIBIT B)

*figures shown in thousands ($000)

Lower Retail Sales and higher O&M have negative impact
Retail Sales for existing customers are forecast to be lower than previously

expected

O&M expenses are expected to be higher than previously forecast to support

projects moving forward toward accomplishing the Strategic Plan Key Objectives

Actuals Forecast Forecast Probable Impacted Target 2019 2020 2021 Change By NET INCOME 83,880 67,926 70,253

i

Lower Retail Sales, Higher O&M LIQUIDITY (measured at year end) Elect System Liquidity (Rev + R&C) $105 MM 134,841 108,575 110,048

g

Excess Liquidity 67,562 54,815 55,006

i

Lower Income, so less cash Days Cash On Hand > 250 624 456 450

i

LEVERAGE Consolidated DSC >1.8x 2.13 2.20 2.42

i

Consolidated Debt/Plant Ratio ≤ 60% 57.4% 51.8% 50.0%

i

Less cash for JLB PROFITABILITY

Cons. Return on Net Assets (chg. in net assets / net plant)

>4% 3.8% 3.0% 3.0%

i

Lower Net Income Retail Op Ratio (assumes baseline capital) ≤ 100% 106% 108% 106%

i

Lower Net Income

SLIDE 16

Grant PUD | 2021 PRELIMINARY BUDGET

8/5/2020 7

Questions?

SLIDE 17

Construction and Maintenance Update August 2020

SLIDE 18

Working Safely through the Virus

Mr. Will Coe, Maintenance Engineering
The Construction & Maintenance (C&M) Department continues to work safely addressing needs of the

transmission and distribution system. Current work protocols include:

All crafts are performing necessary meetings either electronically or without congregating in large

groups

All work is being performed in accordance with District guidelines utilizing appropriate PPE
Electronic and Fiber Technicians continue to address necessary tasks
Line Crews and Electric Shop personnel have been split into two groups to prevent wide-spread
contamination. These groups alternate for on-site work reporting
Most non-union supervisory staff are working remotely, and all staff been added to the call out system,

ARCOS, to respond to needs and emergencies

Integration of maintenance work is ongoing with the MinMax software as it continues to be used.
New Senior Manager as of July 20th, Ron Alexander

WCOE 04/2020 2

SLIDE 19

Working Safely through the Virus

Equipment/Material/Contracts:

Administration of contracts continues as contractors continue to work – tree trimmers, Potelco dock

crews,…

Purchasing electronic equipment to support fiber upgrading/testing
Purchasing material for line crews and electric shops
Purchasing a rock bucket for the excavator to make rock removal more efficient and cost effective
A contract to procure replacement radiators for the Sieler Substation transformers is out for bid
A contract is in the works to convert the corner grounded delta services to wye connections throughout

the county. This effort is a product of the CT Site Audit completed last year.

WCOE 04/2020 3

SLIDE 20

Working Safely through the Virus

Mr. Nick Sickels, Electric Shop Supervisor

Electric Shop:

Replaced leaking bushing on the Ruff Substation transformer
Addressed issues at numerous substations (Mountain View, Quincy Plains,…)
Continue to perform necessary repairs
Rebuilding a 3 phase voltage regulator to implement repairs to Seep Lake
Assisted with transformer testing/quality assurance work necessary at VTC in Pocatello

WCOE 04/2020 4

SLIDE 21

Working Safely through the Virus

Mr. Jake Johnson, Electronic & Fiber Shop Supervisor

Meter/Relay Shop:

Continue to perform necessary repairs and testing
Continue to work on migration issues of meter data to the billing system
Supporting design review and planning for Design Build 2
Substation Soil Resistivity and Ground Grid testing project
2 Personnel traveled to VTC in Pocatello to take part in transformer testing/quality assurance
Continued work strengthening the AMI mesh and eliminating “dead zones”

WCOE 04/2020 5

SLIDE 22

Working Safely through the Virus

Electronic/Fiber Technicians:

Communication and Fiber upgrades are continuing
The trouble ticket repository, Remedy, is being reviewed and modified by C&M engineer to streamline

task tracking and provide an efficient means to address call outs. This effort includes cross-divisional training to utilize after-hours personnel such as the security staff to initiate crew responses

Continue to perform necessary repairs
Phone system is being updated to provide phone location when a 911 call is made
Ether channel upgrades are being performed on older wholesale fiber components, significantly

increasing their band with and prolonging replacement.

Continued support of the fiber build out, coupled with the highest pace of new customer connections we

have ever experienced.

WCOE 04/2020 6

SLIDE 23

Working Safely through the Virus

Mr. Chris Heimbigner, Line Supervisor

Line Update:

Wood pole program for test/treat is on track and will resume in August.
Crews are working at half capacity by alternating week on week off
All TR’s are being manned day and night
Numerous Customer Service Work Orders completed
Numerous Customer Service Work Orders to complete
Multiple Fiber ready projects completed
Wahluke Substation getaways reconductored
Transmission structure changed out for the new Moses Lake School
Hired 2 new Lineman
3 apprentice openings to be filled in the next month
1 Apprentice will become a journeyman in August

WCOE 08/2020 7

SLIDE 24

Working Safely through the Virus

Pole Fire Mitigation:

The effort to reduce pole fires continues as line crews have replaced approximately 963 susceptible fuse brackets to date
Pole fire tracking
Analysis of data has revealed that the manner of which outages are classified may need to be revamped. Specifically, the
utage cause of “Pole Fire” is not a listed category in the current outage tracking software. Efforts are underway to modify
utage reporting processes so that more accurate and detailed data can be recorded.

WCOE 04/2020 8

SLIDE 25

SLIDE 26

SLIDE 27

WCOE 02/2020

11

The C & M staff would like to thank the Commissioners and Executive Staff for their continued support.

SLIDE 28

Powering our way of life.

Enterprise Technology Business Review

Commission Update – August 2020

SLIDE 29

Agenda 1 Overview 2 Financial Review 3 Technology Roadmap Update 4 Organizational Health and Staffing

SLIDE 30

Overview Key Accomplishments & Special Recognition

SLIDE 31

Vision & Mission – Enterprise Technology

Vision: To be invisible and indispensable in the delivery of GCPUD’s services to the people of Grant County. Mission: To enable cost-efficient, error-free operation and timely decision making through technology that anticipates needs, silently solves everyday issues, and presents highly consumable, relevant information to stakeholders and users, regardless of where they are, when they need it, or how they wish to access it. .

SLIDE 32

Special Recognition COVID-19

Office 365 Project Team

Bobb Hansen - Product Owner,

Jesse Brazill - Agile Project Manager

Sandy Hansen, Antonio Segovia, Dorinda

Reyes, Julianne Hanley, Joshika Suresh, Change Agent Team (CATs) Service Desk Team

Sam Lamb, IT Manager
Joshua VanHeusden, Kyle Swanson,

Amanda Hall, Brock McCrady, Ceidwen Martin

A large number of folks within the Enterprise Technology Team stepped up to rapidly transition Grant PUD to work from home. Ops, Cyber Security, Software Engineering and Enterprise Apps teams all played a roll. These groups made a particularly

utsized impact.

SLIDE 33

Significant Accomplishments since last update (February 2020)

COVID-19 Response – Successfully enabled the organization to work from home leveraging

groundwork previously completed for remote access and operations, including customer service call-center capabilities. (Microsoft Teams, OneDrive, Citrix Upgrade, VPN, MFA)

Rolled out cloud-based Enterprise Analytics Architecture (Snowflake) and reporting

capabilities (PowerBI) encompassing meter data, timesheet info, billing information and financials. Next steps – Build-out standard operations dashboard templates and data sources.

SLIDE 34

Significant Accomplishments since last update (February 2020)

Migrated on-premise SharePoint (in-progress) and user files (complete) to cloud for

improved resiliency, global sharing and access, improved and ongoing capability improvements. Next steps – Complete SharePoint migration for all group sites with upgraded workflow and automation.

Initiated Maximo core asset management system upgrade (September 2020 completion).

Next Steps – Strategic implementation of available capabilities of Maximo.

Deployed Contracts 365 moving from legacy on-premise solution to cloud-based

Next steps – Improve and expand automated data interfaces eliminating manual data entry of work orders from customer service.

SLIDE 35

KPI Dashboard: 2020 Q2 Review

Notes

Financial – We under ran our capital budget
significantly. Effort needed for better estimates.
Operational – System stability, availability and

performance remain high. PlatOps is in transition with many new technologies.

Compliance – Physical changes to server room

entrance will improve compliance against “accidental tail-gaiting”

Workforce – Labor relations is going well, though

staffing causes impacts across teams

*CIP, Annual State Audit, and Independent Audit indicators reflect last fully completed audits.

IT Performance Scorecard –2020 (through Q2)

Q1 Q2 Q3 Q4 O&M Budget to Actuals

(On Track=Green, Over but may recover=Yellow, Over will not recover=Red)

Capital Budget to Actuals

(On Track=Green, Over but may recover=Yellow, Over will not recover=Red)

Labor Budget to Actuals

(On Track=Green, Over but may recover=Yellow, Over will not recover=Red)

Customer Satisfaction

(>80% is Green, 65-79% = Yellow, <65% = Red)

Help Desk First Contact Resolution

(>65% is Green, 50-64% = Yellow, <50% = Red)

CIP Compliance

(No self-reports or audit findings = green, self-reports but no audit findings = Yellow, audit findings = Red)

Annual State Audit

(No findings = Green, audit findings = Red)

Annual Independent Audit*

(No findings = Green, audit findings = Red)

W-1 Labor Relations

(No grievances = Green, Grievance Filed = Yellow, Grievance Lost = Red)

W-3 Safety Culture

(No issues = Green, Close Calls = Yellow, Injury = Red)

*Moss Adams 2019 Final Report C-3 C-2

Key Result Area Quarterly Scores Financial

F-1 F-2

KPI Measure KPI

F-3

Workforce Operational

O-1 O-3

*Compliance

C-1

SLIDE 36

Financial Review O&M and Capital

SLIDE 37

Key Points:

Benefits calculation driving overage, not controllable in BU
High allocation of time to Capital projects indicates is desired
Technology capital projects are under running estimates
We still rely heavily on contractors until we identify steady state

SLIDE 38

SLIDE 39

Capital IT Project Variance (1of 2)

CAPID Project Delivery Date Status Trend Var Status Trend Var Status Trend Var Current Forecast 12/31/20

$
$
$
$

50,313 $ 313 $ 50,313 $ Previous 12/31/22

$
$
$
$

50,313 $ 313 $ 50,313 $ 2020 Budget 12/31/20

$
$
$
$

50,313 $ 313 $ 50,313 $ Original Forecast 12/31/20

50,313

$

50,313

$ Current Forecast CY2020

$
$
$
$

50,000 $

$

50,000 $ Previous CY2020

$
$
$
$

50,000 $

$

50,000 $ 2020 Budget CY2020

$
$
$
$

50,000 $

50,000

$ Original Forecast CY2020

Current Forecast

12/31/21

$
$

211,127 $ (211,127) $ 1,163,746 $ 1,212,873 $ 1,374,873 $ Previous 6/30/20

$
$

51,987 $ (51,987) $ 1,163,746 $ 1,143,733 $ 1,215,733 $ 2020 Budget 6/30/20

$
$
$
$

1,163,746 $ 1,063,746 $ 1,163,746 $ Original Forecast

2,753,132

$

2,753,132

$ Current Forecast CY2020

$
$

139,127 $ (139,127) $ 100,000 $ $149,127 239,127 $ Previous CY2020

$
$

20,013 $ 20,013 $ 100,000 $ 79,987 $ 79,987 $ 2020 Budget CY2020

$
$
$
$

100,000 $

100,000

$ Original Forecast CY2020

Current Forecast

6/30/21

$
$
$
$

1,745,128 $ 238,013 $ 1,745,128 $ Previous 6/30/21

$
$
$
$

1,353,111 $ 104,700 $ 1,353,111 $ 2020 Budget 6/30/21

$
$
$
$

1,353,111 $ 70,400 $ 1,353,111 $ Original Forecast

1,353,111

$

1,353,111

$ Current Forecast CY2020

$
$
$
$

742,653 $ $167,613 742,653 $ Previous CY2020

$
$
$
$

742,653 $ 34,300 $ 742,653 $ 2020 Budget CY2020

$
$
$
$

1,350,632 $

1,350,632

$ Original Forecast CY2020

Variance Explanations

CS-13-2011 DC Power Conversion Scope Schedule Total Budget Actuals-to-Date Projection Total Variance Budget/Cost

Cost Variance

Forecast/ Baseline Project-to- Date Current Year

Qtr 2 2020 Budget vs Actuals

Project Cost

CS-15-2011 10.13 Firewall Replacements Project-to- Date Current Year SS-26-2019 10.1 Data Management and Modeling Project-to- Date Current Year Fortinet ending support for new equip purchase. Exchange for newer devices extended end date. Project remains signigicantly under or

riginal budget.

Capital Project Variance Dashboard

SLIDE 40

Capital IT Project Variance (2 of 2)

CAPID Project Delivery Date Status Trend Var Status Trend Var Status Trend Var Current Forecast 4/30/22

$
$
$
$

3,000,000 $ 3,000,000 $ Previous 4/30/22

$
$
$
$

3,000,000 $ 3,000,000 $ 2020 Budget 4/30/22

$
$
$
$

3,000,000 $ 3,000,000 $ Original Forecast

3,000,000

$

3,000,000

$ Current Forecast CY2020

$

50,000 $

$

50,000 $ $900,000

$

$850,000 Previous CY2020

$

2,150,000 $

$

2,150,000 $ $3,000,000

$

850,000 $ 2020 Budget CY2020

Original Forecast

CY2020

Current Forecast

12/31/20

$
$
$

14,204 $ 435,000 $ 337,400 $ 420,796 $ Previous 12/31/20

$
$
$

72,131 $ 435,000 $ 165,958 $ 362,869 $ 2020 Budget 12/31/20

$
$
$
$

435,000 $ 96,813 $ 435,000 $ Original Forecast

435,000

$

435,000

$ Current Forecast CY2020

$

58,396 $

$

(58,396) $ 265,587 $ 240,587 $ 323,983 $ Previous CY2020

$

469 $

$

(469) $ 265,587 $ 69,145 $ 266,056 $ 2020 Budget CY2020

$

266,056 $

$

(266,056) $

$
266,056

$ Original Forecast CY2020

Current Forecast

12/31/20

$
$
$

48,600 $ 400,000 $ 69,672 $ $351,400 Previous 12/31/20

$
$
$

48,600 $ 400,000 $ 35,348 $ $351,400 2020 Budget 12/31/20

$
$
$
$

400,000 $ 14,212 $ 400,000 $ Original Forecast

400,000

$

400,000

$ Current Forecast CY2020

$
$
$

62,812 $ 400,000 $ 55,460 $ $337,188 Previous CY2020

$
$
$

(184,947) $ 400,000 $ 21,136 $ 584,947 $ 2020 Budget CY2020

$
$
$
$

400,000 $

400,000

$ Original Forecast CY2020

400,000

$

400,000

$ Variance Explanations Scope Schedule Total Budget Actuals-to-Date Projection Total Variance Budget/Cost

Cost Variance

Forecast/ Baseline

Qtr 2 2020 Budget vs Actuals

Project Cost

SS-27-2019 10.14 Network Core Replacements Project-to- Date Current Year SS-28-2019 10.10 Office 365 Migration Project-to- Date Current Year SS-29-2019 10.12 SharePoint O365 Migration Project-to- Date Current Year New project. Awaiting

RFPs. Schedule change

causing slip from 2020 to 2021 Original plan had more work completed in 2019. The unspent $s in 2019 were not reallocated for 2020. Total Project cost is on- track. Under budget due to inacurrate coding of Direct Labor to O&M. Expenditure Transfer is pending.

Capital Project Variance Dashboard

SLIDE 41

Technology Roadmap Update Key Projects in Flight

SLIDE 42

Key Projects for 2020

(On Track) Office 365, Teams, One Drive, SharePoint Migration. This has been a model project for delivering complex technology in an agile fashion. Factors: Relentless/Rockstar Team, Agile Delivery Model, Rapid product Advancement (On Track) Enterprise Data Lake and Enterprise Analytics/Reporting are now in production. Model project for piloting with business units to flesh out use cases and adopt new way of working. Factors: Business ownership to leverage new tools, partnership with IT to identify needs (Deployed) Cloud hosted Contracts 365 replaced legacy CMapp on-premise solution. This solution is directly integrated with out SharePoint 365 solution. Factors: Partnership with IT and Business to overcome vendor delivery issues.

We have made tremendous progress delivering projects and capabilities laid out in out Technology

Roadmap. Huge wins with Office 365 are tempered by challenges in other projects that struggle to keep

pace with schedule targets.

SLIDE 43

Key Projects for 2020

(Delayed to October - 2 months) Complete migration from on-premise Oracle Customer Care & Billing (CC&B) system to Oracle Customer Cloud Services (CCS) adding new Meter Data Management (MDM) capabilities. Factors: Vendor platform and product readiness, Data integrity, Test readiness, Summer vacations (On Hold Pending Business Unit Readiness) Ultipro HCMS has product issues. Team is fighting to wrap Time and Benefits Management (Ø1), holding Recruitment and Compensation (Ø2), Performance Management (Ø3) and Learning Management (Ø4) Factors: Product issues, GCPUD Staffing in HR, Project Manager replacement (Late Kickoff – 2 year project) High risk project to replace legacy electric and fiber design tools and GIS with ESRI based integrated tools from Schneider Electric and ESRI. Factors: Contracting/Negotiation delayed Project formally kicked off to 5/4/2020

We pushed aggressive schedules to drive large strategic business line projects. The teams are working hard to hold the line but giving ground as issues are presented.

SLIDE 44

Organizational Health and Staffing Resourcing to meet demand

SLIDE 45

Organizational Health

Key Challenges:

Platform Operations is in transition with key “retirements” and turn-over as

we work to support the transition to a hybrid cloud delivery model.

Lots of new technology means significant changes in the way we work and

the skill sets needed to perform the work.

While we seek to provide pathways for career growth, our windows are tight

requiring we hire personnel experienced in the new technology.

SLIDE 46

Personnel Changes / Staffing

We are still learning where the pressure points are for steady state operations of the various technology functions. Service Desk 2 new staff members, 1 on LA to PlatOps Telecom Telecom Engineer (position open) Platform Ops Adding Supervisor, Augmenting heavily with contractors Senior Systems Analyst (Backfill in progress) Software Engineering & Architecture Senior SW Engineer (position open) IT Manager (position open) Evaluating need to full time testers

SLIDE 47

Powering our way of life.

SLIDE 48

2020 Federal & State Legislative Update

Andrew Munro, Senior Manager Cliff Sears, Senior Policy Analyst External Affairs & Communications Governmental/Regulatory Affairs

August 11, 2020 Commission Report

SLIDE 49

This update will cover

Introduction

CETA Rulemaking Update
State Government Operations and

next legislative session

State / Federal fiber funding update
Tax and Hydro Related Legislation
Covid-19 Funding: State and Federal
TMDL for Temperature

SLIDE 50

Clean Energy Transformation Act (CETA) - Overview

CETA Overview (SB 5116):

▪ 2025: No coal-fired resource costs can be allocated in rates – Short term (30 days or less) market purchases are exempt from this requirement. ▪ 2030 – 2033 (and each 4-year period thereafter): 100% carbon neutral standard for service to retail electric load ✓ 80% delivered carbon-free power (includes hydro & non-carbon emitting generation). ✓ 20% alternative compliance through either:

✓ Unbundled Renewable Energy Credits (RECs)

▪ $60/MWh fee (for CCNG unit) ▪ Investment in energy transformation activities

✓ Hydropower creates RECs; nuclear does not. ✓ Cost Cap: Incremental cost of compliance, including I-937 costs, ≥ 2% over a 4-year compliance period of a utility’s retail electric revenue requirement. ▪ 2045: 100% absolute zero carbon standard, but no penalty.

SLIDE 51

CETA Rulemaking

CETA Implementation Priorities:

1. Support Commerce’s approach to “use of renewable

and nonemitting generation” v. UTC delivery standard.

Bundled - means energy and REC acquired together

at time of purchase or generation.

Use is demonstrated through retirement of RECs:

RECS are matched with load every 4 years beginning 1/1/2030- 80% requirement.

No delivery to load requirement but PGP is working on

a delivery to an interconnection point option

No double counting of RECs if energy is sold as

unspecified

Attestations used to verify personal accountability
Price tag of delivery standard (astronomical) vs.

Commerce approach

Keeping price tag lower, reduces energy burden on

vulnerable populations, avoids business loss

Physical delivery is inconsistent with centralized

market rules and rules in other states (CA and OR).

SLIDE 52

CETA Rulemaking (Continued)

CETA Implementation Priorities:

2. Overly expansive interpretations go beyond

statutory intent (not gap filling). Examples that conflict with statute:

Requiring substantive compliance prior to 2030

(retiring RECs, binding interim targets, compliance reports)

Increasing renewable target in CEIP
Reporting on equitable benefits in CEIP
Public engagement requirements associated with

IRP and CEIP

3. Prohibition on new gas and nonemitting electric

generation, unless necessary to comply with CETA.

4. Demonstrating compliance with no-coal standard for

market purchases greater than 30 days 1/1/2026-27

Want to defer to Markets Workgroup (2021).
5. Deeper dive into the 2% incremental cost cap.

Next draft of rules Mid-August. More workshops, meetings and comment letters.

SLIDE 53

State Government Operations

State Government Operations and 2021 Session

1. Covid proclamations dominate government operations
Ability to operate under emergency powers is waning
Lack of collaboration with legislators except two

ranking democrats (Speaker and Senate majority leader)

Interim budget pieced together with retained CARES

Act, federal healthcare dollars, minor cost cuts

2. Special session unlikely due to Nov. 2020 election

2021 Session

3. 2021 Session will likely include:
New taxes to fill budget deficit / no new tax breaks
Anticipated energy bills from last session to resurface:
Cap and Trade Bill – Rep. Fitzgibbons, Chair

House Energy and Environment Committee

Low Carbon Fuel standard
Clean Air Rule Fix
4. WPUDA process and Hot Topic meeting preparation

SLIDE 54

State and Federal Fiber Funding

State Activities:

PWB rural broadband grant - $2M est. (Royal City

area)

State Broadband Office sponsored drive-in Wi Fi (13

spots in Grant County)

Budget request for the PWB grant program (2021)
Expand State Broadband Office authority to administer

grants / loans (2021)

Pursue a planning grant for Precision Ag (2021)
Retail authority - Remain neutral provided the following

risks are avoided:

UTC oversight, not pursue Universal Service Fund,

no duty to serve high cost to serve areas, no pole attachment threats; No franchise and ROW threats for pubic access

Mid-C Coordination:

Letter to Congressional Delegation Re: Barriers for PUDs’
pen access networks to participate in federal funding

programs (ETC, reverse auctions, etc.)

Op-Ed – PUDs support removal of barriers for participation in

federal funding programs

Congressional staff briefings

2020 WA Legislative Session

SLIDE 55

Federal Broadband Activities

1. Federal Broadband Funding Goals
Remove barriers to PUD eligibility (ETC – retail service).
Avoid reverse auctions to achieve long term solutions
Remove encumbrance liens for public entities
Require higher minimum speeds e.g. 1 gigabit per second rather

than 25 x 3 mbps

Appropriation for state block grant for rural broadband
2. Implementation options:
Appropriations – state block grants
Covid-19 Relief Package
Moving Forward Act (H.R. 2) $80B. Increase state allocation from

25% to 50% (No ETC).

Expanding Opportunities for Broadband Development Act (H.R.

7160) (No ETC).

Amend Senator Murray’s digital equity bill
Renew funding for AARA – state block grant program
3. FCC RDOF rural broadband ETC workarounds, reverse auction
Local Tel, NOAA Net application
4. FCC Pole Attachment Rates – APPA legal challenge
5. FCC Utility Spectrum Use Order – APPA legal challenge

SLIDE 56

Tax and Hydro Related Legislative Concepts:

1. Tax Exempt Financing -
Repeal of 2017 Tax Act prohibition of Advance

Refunding bonds (H.R. 2, S. 4129)

Return of Build America Bonds (H.R.2) (with limits on

sequestration; (S. 4303 American Infrastructure Bond Act.)

2. Hydro Investment Tax Credit or Production Tax Credit
Local government election 30% ITC / PTC based on

cost or value of incremental hydro efficiency or capacity improvements (The Green Act §90404)

3. Hydro Infrastructure Act – applies to a broader set of

infrastructure investments than energy efficiency and capacity improvements (Under Development).

4. Hydro Licensing Reform
Hydropower Clean Energy Future Act (Cathy McMorris

Rodgers)

Reform for projects previously licensed under the

Electric Consumers Protection Act (ECPRA – NWPA)

SLIDE 57

COVID-19 Funding & CARES ACT

State:

7/6/2020 letter to Governor Inslee requesting $70M

statewide for utility ratepayer assistance

Transition Governor’s moratorium on disconnects and late

payment charges to a customer support policy approach.

HB 2965 - $200M funding package for Covid-19 including $25M

for unemployment claims and $175M for response costs incurred by state and local governments and federally recognized tribes.

Nothing specific for utilities.

Federal:

Covid-3 – (CARES Act): FEMA, LiHEAP for low income and

utility payment protection in the paycheck protection program (PPP) program.

50% reduction in cost of unemployment when public employer

pays 100% of UE costs

Covid-3.1: More PPP - $310B
Covid-4: TBD – R’s -$1 trillion v. D’s 3 trillion; (Local government

relief and supplemental unemployment may be key issues)

Nothing Specific for Utilities Yet

SLIDE 58

EPA Total Maximum Daily Load (TMDL) for Surface Water Temperatures in the Columbia and Snake rivers

1. EPA TMDL Study found:
Water temperatures exceed numeric criteria.
Water quality standards for “natural conditions” were not measured.
Climate change is responsible for most of the temperature increase.
The 0.3°C allowance was arbitrarily allocated between the tributaries,

point and non-point sources.

2. Grant PUD License for P-2114:
No Net Impact biological objective is primary metric in license

agreement

401 WQC §6.5(4) contains a reopener for temperature TMDL: WDOE

may issue an implementation plan that contains a time frame and reasonable and feasible measures: to comply with or reduce excursions from the allocation, implement selected improvement measures and/or, if justified, modify the applicable standard through a use attainability analysis

r other process.
Implementation plan also needed for NPDES permit for hydros
Joint Mid-C and individual comments are being filed.
3. Uncertain how federal agencies will respond to the TMDL

SLIDE 59

Powering our way of life.