Benefits Resolution Update FEBRUARY 2019 Purpose and Goals of - - PowerPoint PPT Presentation

Benefits Resolution Update

FEBRUARY 2019

Purpose and Goals of Proposed Resolution

Purpose: Non-statutory benefits (those not required by a law) provided to employees must be approved by the Commission Streamline Policies

• Ensure correct application
• Compliance
• Establish appropriate authority

Ensure Polices and Practices Align Improve on Processes for Efficiency

3 Main Changes

• Integrate Benefit Information Held in Prior Part-Time policy into

Benefit Policies

• Integrate Professional Certification Pay into Standard Compensation

Management

• Integrate HRA policy into the Medical Benefits policy

Part-Time Benefits

Grant PUD offers Part-Time employment in very limited situations Current Part-Time policy has not been updated since 2004

• Affordable Care Act
• Washington State Sick Leave
• Paid Family & Medical Leave

Integration of Part-Time Benefits

PRIOR PART-TIME POLICY Policy outlines benefits for regular, part

• time

employees, including:

• Holiday and Floating Holidays
• Personal Leave
• Medical, Dental and Vision
• Short-term Disability
• Deferred Compensation

UPDATED BENEFITS POLICIES Separate Policies exist for administering Grant PUD Discretionary Benefits, including:

• Paid Holiday and Floating Holidays
• Personal Leave Plan
• Medical Plans, Dental and Vision Insurance
• Short-Term Disability and Supplemental Leave

Bank

• Deferred Compensation

This policy will be eliminated.

These policies are being updated to include Part-Time status

Professional Certification Pay

Past Practice:

• Recognize employees with additional pay for passing

certifications that required intensive study to pass an examination and ongoing education to maintain

• CPA, Professional Engineer, Etc.
• The HR department was tasked with regular maintenance
• f this program
• Gathering certification renewals

Cert Pay - Proposed Change

Supervisor will make adjustments to pay for certifications:

• That meet already established standards for certification

requirements

• Relate to the work that the individual is currently doing
• Through already established practices for pay increases
• No additional tracking by HR
• No longer a separate line item on pay stub, just regular

pay rate

HRA Policy Integration

• Health Reimbursement Accounts are considered “qualified

medical plans” under the Affordable Care Act

• Because of this classification, this benefit is better defined

under Grant PUD’s policy for Medical, Dental and Vision

• Additionally, outdated language for administering the HRA

has been removed to align with current practices.

Smaller Changes

Personal Leave Policy

• Grants authority to CXOs to approve extension of use of

PL in a given year

• Extends use of PL not used in prior year to be used within

first 90 days of the new year (up from 30)

Power Production Premium

• Update the Hydro Premium Pay Policy title Power

Production

Smaller Changes (cont).

Retiree Subsidy

• Changes reimbursement process to a monthly processing

time Other Misc. Changes to Policies

• Grammar
• Authority Levels
• Nomenclature

Recommendation

Approve Resolution to: Streamline Policies

• Ensure correct application
• Compliance
• Establish appropriate authority

Ensure Polices and Practices Align Improve on Processes for Efficiency

Q4 2018 BUDGET TO ACTUALS February 12, 2019

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Grant PUD | BUDGET TO ACTUALS Q4 2018

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At Year End O&M and Labor both slightly exceeded the budget target. At the end of 2018 Q3 O&M was running at 64% of total 2018 budget and Labor was at 72% of total 2018

• budget. During Q4, the spending, as well as year end accrual adjustments, moved Direct

O&M and Labor to 100% and 101%, respectively. Capital was at 61% of total 2018 budget spending as of 2018 Q3. By year end, that figure increased to 91%. Net direct charges (O&M, Labor, Capital) came in less than the 2018 budget by $9M, which was due entirely to lower than planned Capital spending.

2018 YEAR-END DIRECTS OVERVIEW

2018 Budget 2018 YTD % of Annual Budget 2018 Year-End Projection YEP Variance $ YEP Variance % Favorable / Unfavorable Direct O&M 45,428,210 $ 45,653,586 $ 100% 45,653,586 $ 225,376 $ 0% Unfavorable Direct Labor 68,628,539 $ 69,317,162 $ 101% 69,317,162 $ 688,623 $ 1% Unfavorable Direct Capital 109,482,965 $ 99,573,736 $ 91% 99,573,736 $ (9,909,229) $

• 9%

Favorable 2018 Directs Total 223,539,714 $ 214,544,483 $ 96% 214,544,483 $ (8,995,231) $

• 4%

Favorable

Grant PUD | BUDGET TO ACTUALS Q4 2018

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2018 YEAR-END DIRECT O&M BY FUNCTIONAL AREA

At Year End total Direct O&M spending for 2018 is 0.5% over the total 2018 budget of $45.4M. In the Q3 report, total Direct O&M spending was at 64% of the total 2018 budget. The two areas that exceeded their Direct O&M budget were the Attorney with the highest percentage variance and the Chief Operating Officer with the largest dollar variance.

Direct O&M by Group

Department Functional Area 2018 Budget 2018 YTD YTD % of Annual Budget 2018 Year End Projection YEP Variance $ YEP Variance % Favorable / Unfavorable

AA0000

Board of Commission 60,000 $ 46,092 $ 77% 46,092 $ (13,908) $

• 23%

Favorable

BA0000

General Manager 722,046 $ 708,575 $ 98% 708,575 $ (13,471) $

• 2%

Favorable

CA0000

Attorney 536,790 $ 884,133 $ 165% 884,133 $ 347,343 $ 65% Unfavorable

DA0000

Chief Customer Officer 5,122,701 $ 4,370,521 $ 85% 4,370,521 $ (752,180) $

• 15%

Favorable

EA0000

Chief Operating Officer 27,192,148 $ 28,356,815 $ 104% 28,356,815 $ 1,164,667 $ 4% Unfavorable

FA0000

Chief Financial Officer 11,794,525 $ 11,237,203 $ 95% 11,237,203 $ (557,322) $

• 5%

Favorable

GA0000

Merchant Wholesale Telecom

• $

50,247 $ UNB 50,247 $ 50,247 $ N/A Unfavorable 45,428,210 $ 45,653,586 $ 100% 45,653,586 $ 225,376 $ 0% Unfavorable 2018 Direct O&M

Grant PUD | BUDGET TO ACTUALS Q4 2018

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2018 YEAR-END LABOR BY FUNCTIONAL AREA

Year End, as of latest available on Nov. 13, 2018, count of 592 FTR is below the budgeted figure of 619. At the Q3 review, the expectation was for a total FTR count of 610 by year

• end. From the Q3 data to Q4 data, the FTR count had dropped by 5.

FTE is a cumulative figure and reflects seasonal recreation and other maintenance. At Year End the FTE utilization was 19% over the 2018 budget and is likely due to partially cover insufficient FTR. Overtime finished 2018 at 31% or $1.35M over budget. Overtime is both event- dependent and used to partially cover insufficient FTR.

Functional Area 2018 FTR Budget 2018 FTR YTD YTD Variance 2018 FTE Budget 2018 FTE YEP YTD % of Annual 2018 OT Budget 2018 OT YEP YTD % of Annual Board of Commission

• N/A
• $
• $

N/A General Manager 4 4

• 1.55

UNB

• $
• $

N/A Attorney 2 2

• N/A
• $
• $

N/A Chief Customer Officer 58 56 (2) 7.41 8.95 121% 91,476 $ 202,874 $ 222% Chief Operating Officer 437 422 (15) 40.00 47.36 118% 3,978,319 $ 5,143,284 $ 129% Chief Financial Officer 118 108 (10) 7.60 7.49 99% 312,523 $ 390,474 $ 125% Merchant Wholesale Telecom

• N/A
• $
• $

N/A 619 592 (27) 55.01 65.35 119% 4,382,318 $ 5,736,632 $ 131%

Note: FTR and FTE figures as of 11/13/2018

2018 Full Time Regular 2018 Full Time Equivalent 2018 Overtime

Grant PUD | BUDGET TO ACTUALS Q4 2018

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2018 YEAR–END DIRECT LABOR BY FUNCTIONAL AREA

At Year End total Direct Labor spending for 2018 is 1% over the total 2018 budget of $68.6M. In the Q3 report, total Direct Labor spending was at 72% of the total 2018 budget. The two areas that exceeded their Direct Labor budget were the General Manager with the highest percentage variance and the Chief Operating Officer with the largest dollar variance.

Direct Labor by Group

Department Functional Area 2018 Labor Budget 2018 Labor YTD Q4 YTD % of Annual Budget 2018 Labor YEP YEP Variance $ YEP Variance % Favorable / Unfavorable

AA0000

Board of Commission 194,787 $ 192,174 $ 99% 192,174 $ (2,613) $

• 1%

Favorable

BA0000

General Manager 660,087 $ 737,872 $ 112% 737,872 $ 77,785 $ 12% Unfavorable

CA0000

Attorney 335,304 $ 372,677 $ 111% 372,677 $ 37,373 $ 11% Unfavorable

DA0000

Chief Customer Officer 6,656,050 $ 5,729,050 $ 86% 5,729,050 $ (927,000) $

• 14%

Favorable

EA0000

Chief Operating Officer 49,153,583 $ 51,117,369 $ 104% 51,117,369 $ 1,963,786 $ 4% Unfavorable

FA0000

Chief Financial Officer 11,628,728 $ 10,917,700 $ 94% 10,917,700 $ (711,029) $

• 6%

Favorable

GA0000

Merchant Wholesale Telecom

• $

250,321 $ N/A 250,321 $ 250,321 $ N/A Unfavorable 68,628,539 $ 69,317,162 $ 101% 69,317,162 $ 688,623 $ 1% Unfavorable 2018 Direct Labor

Grant PUD | BUDGET TO ACTUALS Q4 2018

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2018 YEAR-END DIRECT CAPITAL BY PROJECT

The table shows projects with a $2M or larger budget. The total of all Capital Directs is under budget by $9.9M for a wide variety of reasons driven by project

• specifics. Fiber underspending in 2018 will be budgeted into 2019 along with
• ther funds directed by the Commission.

Project Title 2018 Budget 2018 YTD YTD % of Annual Budget 2018 YEP YEP Variance Favorable / Unfavorable PR Turbine Upgrade 19,491,244 $ 24,432,886 $ 125% 24,432,886 $ 4,941,642 $ Unfavorable PR Generator Rewind 16,868,825 $ 14,880,729 $ 88% 14,880,729 $ (1,988,096) $ Favorable Crescent Bar Island Recreation Area 7,226,923 $ 8,372,831 $ 116% 8,372,831 $ 1,145,908 $ Unfavorable Fiber Expansion 7,000,000 $ 4,554,037 $ 65% 4,554,037 $ (2,445,963) $ Favorable PR Embankment Improvements 6,000,000 $ 1,627,354 $ 27% 1,627,354 $ (4,372,646) $ Favorable WAN Generator Upgrade 4,931,165 $ 4,754,232 $ 96% 4,754,232 $ (176,933) $ Favorable AMP 4,820,132 $ 6,971,903 $ 145% 6,971,903 $ 2,151,771 $ Unfavorable Distribution System Class 4000 Capital 4,630,000 $ 3,968,250 $ 86% 3,968,250 $ (661,750) $ Favorable WAN Spillgate Rehab 4,346,800 $ 4,622,349 $ 106% 4,622,349 $ 275,549 $ Unfavorable PR Dam Unit Controls 4,235,000 $ 3,519,412 $ 83% 3,519,412 $ (715,588) $ Favorable Mountain View Lineups 10 & 20 3,919,068 $ 2,269,270 $ 58% 2,269,270 $ (1,649,798) $ Favorable Broadband Customer Connectivity 3,100,000 $ 3,237,124 $ 104% 3,237,124 $ 137,124 $ Unfavorable Wheeler Road Tap-Warden Switchyard 115kV Line Rebuild 2,111,000 $ 361,786 $ 17% 361,786 $ (1,749,214) $ Favorable Mt View Substations-Switchyard (Cancelled) 2,000,000 $

• $

0%

• $

(2,000,000) $ Favorable 109,482,965 $ 99,573,736 $ 91% 99,573,736 $ (9,909,229) $ Favorable 2018 Direct Capital by Project

Grant PUD | BUDGET TO ACTUALS Q4 2018

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2018 YEAR-END PROJECTION LOADED O&M & CAPITAL

O&M Capital Labor* Benefits* Capitalized G&A Inventory Loaded YEP† O&M Elec 13,333,577 $

• $

22,170,401 $ 9,055,190 $ (3,236,665) $ (448,055) $ 40,874,448 $ O&M PRP 32,320,008 $

• $

33,535,570 $ 13,697,134 $ (2,933,338) $ (684,191) $ 75,935,184 $ O&M 45,653,586 $

• $

55,705,971 $ 22,752,324 $ (6,170,003) $ (1,132,246) $ 116,809,632 $ Cap Elec

• $

27,047,799 $ 7,372,809 $ 3,011,321 $ 3,236,665 $

• $

40,668,593 $ Cap PRP

• $

72,525,937 $ 6,238,383 $ 2,547,980 $ 2,933,338 $

• $

84,245,637 $ Capital

• $

99,573,736 $ 13,611,191 $ 5,559,301 $ 6,170,003 $

• $

124,914,230 $ Total Expenditures 45,653,586 $ 99,573,736 $ 69,317,162 $ 28,311,625 $

• $

(1,132,246) $ 241,723,862 $ Loaded Budget Loaded YEP† Loaded Variance Favorable / Unfavorable O&M 110,809,447 $ 116,809,632 $ 6,000,185 $ Unfavorable Capital 139,566,881 $ 124,914,230 $ (14,652,650) $ Favorable Total Expenditures 250,376,328 $ 241,723,862 $ (8,652,465) $ Favorable Year End Projection Components * based on YTD Labor to Capital scaled to Year End Projections for Labor and Capital †other factors will influence the O&M loaded YEPs in Financial Forecast such as other revenues & expenses

• Total O&M, Capital, and

Labor figures are solid, but the Elec / PRP splits and Benefits figures are preliminary

• Year-End labor splits 80%

O&M / 20% Capital

• 2018 Budget labor splits

76% O&M / 24% Capital

Grant PUD | BUDGET TO ACTUALS Q4 2018

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Questions?

Powering our way of life.

Commission Update – February 2019

Information Technology

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. .

Significant Accomplishments 2019 YTD

• Deployed secure business wireless enabling full mobility within GCPUD facilities. Workers

can now access data stored on the business network, execute workflows, and coordinate seamlessly using GCPUD mobile devices. Next step is to change business processes to leverage the new access.

• Rolled out Min/Max, enabling field crews to manage substation and distribution asset

maintenance records, plans and results. Next step is to expand the number of assets in the system and change process.

• Finalized skill sourcing and partner agreements with multiple vendors to enable rapid access

to individuals needed to execute roadmap projects. Next step is to develop improved demand and capacity management capability.

KPI Dashboard: 2018 Year End Review

Notes

• Financial – Ended Year 4% below budget.
• Capital Budget recovered as projects were slowed

during roadmap development.

• Labor ended slightly above with slight increases

converting leads to supervisors under new org structure in IT.

• Customer Satisfaction is a measure of Help Desk

performance only at this time.

• IT continues to perform well in compliance and

development of a strong safety culture. At this time, no compliance violations have been recorded.

*CIP, Annual State Audit, and Independent Audit indicators reflect last fully completed audits. **Safety Culture indicator based upon no recordable safety incidents or days away from work for safety reasons.

IT Performance Scorecard –2018 Year End

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 (Moss Adams)

(No findings = Green, audit findings = Red)

Workforce

W-3 Safety Culture**

Key Result Area Quarterly Scores Financial

F-1 F-2

Operational

O-1 O-3

Compliance

C-1 C-2

KPI Measure KPI

C-3 F-3

Financial Performance, FY 2018 (Final)

Budget

O&M Directs $2,937,706 Labor $2,582,674 Capital $580,000

Actuals (as of 7/31/2018)

O&M Directs $1,152,684 Labor $2,876,536 Capital $224,526

Year End Projection @2018Q3

O&M Directs $2,796,361 (+$141,345) Labor $2,399,114 (+$183,560) Capital $644,000 (-$64,000) $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 O&M Direct Labor Capital 2018 Budget 2018 Actuals 2018 YEP (Q3)

Final $5,832,720 (+4%)

Key Projects by Function

Customer

• Human Capital

Management Solution

• Implement a Time-

Tracking Solution

• Upgrade CC&B

Operations

• Substation SCADA

build-out

• Integrated Generation

Control

• Energy Management

System Replacement

• Trouble Reporting

System Modernization

• ARCOS Crew

Management

• ESRI ArcGIS for

Power Delivery

• Mobile Workforce

Management Finance

• Assetworks Fleet

Management

• Vehicle Telematics
• Physical Access

Control

• Warehouse

Barcoding and Inventory Control

• Core Financial

System Replacement

• Standard Financial

Reporting Technology

• Ubiquitous Business

Wireless Access

• Firewall Modernization
• Network Modernization
• Office 365 Migration

including Exchange Email and SharePoint

• Establish an Enterprise

Architecture Practice

• Enterprise Asset

Management Strategy

• Enterprise Data

Governance Strategy

Personnel Changes

Telecom – Robert Bergman moved to iFiber, filling Telecom Supervisor, Engineering Tech and Telecom Engineer positions. Platform Ops – Mark Dean moving out of region, backfilling and potentially expanding the team to cover ongoing workload. Service Desk – Filled two vacant entry level service desk technician roles Enterprise Apps – Supervisor returned to individual contributor role. Backfilling. SW Engineering/Architecture – Adding Senior talent with additional staff.

Significant Challenges

Acquisition and retention of Technology resources with the capabilities needed to execute the technology roadmap

• Turn-over is a “bar raising” activity, but can affect moral

Sheer volume of projects underway while we are maturing virtually every function and delivering results at a historic pace

• Success breeds more success, but change stresses staff

Organizational inertia resists improvements

• OCM and process re-engineering are integral to new tech

2019 Key Goals

Safety

• 1. Complete CI Team 4’s Supervisor training improvements and

train supervisors by end of Q3.

• 2. Enhance and implement the JHA program across all functions.

Complete Implementation by end of Q2.

2019 Key Goals

Maintain Strong Fin. Position & Provide Long-Term Low Rates Deliver new capabilities per the technology roadmap within budget, schedule and providing the target capabilities.

• 1. Run Projects - Implement upgrades to CC&B, Firewalls, Office 360
• 2. Grow projects - Mature technology infrastructure and architecture -

Enterprise architecture, tech retirement strategy, enterprise data governance (ODS, Integration layer)

• 3. Transform Projects - Implement technology roadmap across the District over

2019 - ARCOS, Fleetfocus, Data Optimization Phase 2, Compliance Software, MinMax, Human Capital Mgt System, Electronic Time Tracking, etc.

2019 Key Goals

Provide Outstanding Service to out Customers

• 1. Improve Grant PUD's Cyber Security Maturity and Readiness

delivering work plan in Q1 and agreed deliverables during 2019.

• 2. Evaluate GCPUD's Disaster Recovery and Business Continuity

capabilities, develop target state, develop maturity plan to achieve the target state, and implement necessary technology to achieve target state by by end of 2019.

2019 Key Goals

Operate Responsibly- Environmental, Cultural, Regulatory

• 1. No CIP/WECC Violations- prep for 2020 audit Q3
• 2. Ensure all technology information required by auditors is

available and accurate in support of the audit timing.

2019 Key Goals

Sustainable Wholesale Fiber Optic Network

• 1. Develop fiber network roadmap to support planned growth,

expansion and maintenance by end of Q1, with delivery of agreed capabilities in 2019.

• 2. Expand partner access to view environment health and

performance status

• 3. Achieve availability target 99.98% for fiber

Powering our way of life.

2019 Federal and State Legislative Update

February 12, 2019 Commission Presentation

Federal Priority Issues 116th Congress

2019 Federal Priority Issues:

Pro-Hydro / Sustainability

• U.S. hydropower capacity can grow from 100 to 150 GW by 2050 (U.S. Dept. of Energy).
• There are 80,000 U.S. dams, but only 3% are hydropower.
• Water Infrastructure Act signed into law on 10/23/18 –
• Sec. 3001 – Extends preliminary permits and start of construction deadlines for hydropower approvals.
• Sec. 3002 – Increases the capacity for exempt small conduit hydro up to 40 MW.
• Sec. 3004 – Establishes a 2 year permitting deadline for non-powered dams and closed loop pumped storage.
• Sec. 3005 – Consideration of Early Actions in Relicensing Term up to 50 years (previously 40 years).
• President’s Memo to expedite FCRPS EIS to 2020 before his term expires.

Modernize the Columbia River Treaty

The U.S. Dept. of State is leading the effort to negotiate a modernized Treaty with Canada, which began in 1964. Our key objectives:

• Rebalance the power benefits.
• Funding for flood control should not be paid by electric rate payers, but by federal dollars.
• An ecosystem function added if a modern Treaty includes a net improvement to rebalancing the power benefits.
• Timely conclusion of Treaty negotiations (1-2 years).

Finance & Telecom

• Support S. 5003 (restore Advanced Refunding Bonds) – Opposed by Chairman Brady (R- TX).
• Support S. 1068 (expand Clean Renewable Energy Bonds) – Introduced by Senate Finance Committee Democrats.
• S. 2155 passed – Allows municipal bonds to qualify as high-quality liquid assets for federal bank liquidity standards.
• FCC – Support APPA ‘s efforts to challenge FCC Order (Sept. 26, 2018) removing exemption for small cell

deployments on public power poles.

• Monitor H.R. 6442 (by Rep. Kilmer, D-WA) – Tax credit to reimburse consumers for broadband infrastructure costs

in rural areas.

State Priority Issues 2019 Legislative Session

2019 State Priority Issues:

Carbon / Energy

• Governor’s 100% Clean Energy Bill (SB 5116 / HB 1211) ~ Revised Version: Added / Removed ~

 2025: All coal eliminated from rates.

• Clarification that unspecified purchases are exempt from this requirement

 2030: 100% carbon neutral service to retail electric load

• 80% renewables, including hydro and non-carbon emitting generation, delivered to retail load
• 20% alternative compliance through $60/MWh (was $100/MWh) payment, investment in energy

transformation activities, carbon offsets, and/or RECs.  2040: 100% carbon neutral with 90% delivered to retail load  2045: Absolute zero carbon

• All thermal MWh subject to estimated $200/MWh penalty

Rural Broadband

• Governor’s Broadband Bill (SB 5511 / HB 1498) ~ Grant PUD Bill ~

 Goal: Expand broadband in unserved and underserved areas.  Competitive grant/loan program; administered by Public Works Trust Fund

• Up to $2M per project
• Utilizes $7.5M existing dollars + $17.5M in new dollars

 Supported by WPUDA, WA Farm Bureau, and Ports Association

Other Priority Bills

• Bid Limits (HB 1222 / SB 5191) – Update cost thresholds set in 2008 for work PUDs must bid.
• Wildfires (HB 1344 / SB 5305) – Mitigate wildfire liability (e.g. authority to trim or remove hazard trees).
• Electric Vehicles (EV) (SB 5336) – $1,000 tax credit; clarifies authority to invest in EV infrastructure.
• Net Metering (HB 1129 / SB 5223) – Increases system limits from 100 to 199 kW & 0.5 to 4% of peak capacity.
• Utility Worker Safety (HB 1380) – Increases penalty for assault of a utility worker.

Carbon & Electric Reliability E3 Study 1-Pager

E3 Reliability Study

E3 Reliability Study

Powering our way of life.

Q3 2018 FINANCIAL FORECAST REVENUE REQUIREMENT SCENARIOS February 12, 2019

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Grant PUD | FINANCIAL FORECAST Q3 2018 – Revenue Requirement Scenarios

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• Scenario Tables
• Q3 2018 BASE – 2%, 1%, 0.1%...
• WITH ADDITIONAL FIBER BUILD THROUGH 2023
• Q3 2018 BASE – 2%, 1%, 0.1%...
• Q3 2018 – 1%, 1%, 1%, 0%...
• Q3 2018 – No Rate Increases
• Charts for Scenario Comparison
• Debt Service Coverage (DSC)
• Excess Liquidity

SCENARIOS AND CHARTS

Grant PUD | FINANCIAL FORECAST Q3 2018 – Revenue Requirement Scenarios

2/12/2019 3

Q3 2018 Base

Target 2018 2019 2020 2021 2022 2023 2024 2025 2026* 2027* NET INCOME 68,213 74,630 58,880 66,120 66,045 65,911 66,788 58,327 42,162 36,979 LIQUIDITY (measured at year end) Elect System Liquidity (Rev + R&C) $155 MM 158,624 110,994 112,857 114,609 116,254 117,879 120,786 123,767 126,826 129,963 Excess Liquidity 67,772 83,733 92,276 99,882 107,909 117,114 126,028 133,298 129,707 118,957 Days Cash On Hand > 250 758 623 617 417 456 452 448 443 406 382 LEVERAGE Consolidated DSC >1.8x 1.96 2.07 1.93 2.01 1.94 1.97 2.07 1.97 1.80 1.76 Consolidated Debt/Plant Ratio ≤ 60% 61.83% 59.71% 59.29% 58.26% 57.44% 56.32% 55.58% 55.23% 55.00% 55.00% PROFITABILITY Rate of Return (chg. in net assets / net plant) >4% 3.25% 3.44% 2.61% 2.90% 2.84% 2.79% 2.79% 2.39% 1.70% 1.46% Retail Op Ratio (assumes baseline capital) ≤ 100% 109.28% 107.40% 105.86% 105.88% 102.86% 98.96% 100.25% 102.13% 102.69% 104.69% *Does not include non-preference revenues to offset market purchases

Q3 2018 Scenario: +$12.6M Fiber Next 4 Years

Target 2018 2019 2020 2021 2022 2023 2024 2025 2026* 2027* NET INCOME 68,213 74,630 58,437 65,158 64,627 63,947 64,480 56,130 40,020 35,024 LIQUIDITY (measured at year end) Elect System Liquidity (Rev + R&C) $155 MM 158,624 110,994 112,857 114,609 116,254 117,879 120,786 123,767 126,826 129,963 Excess Liquidity 67,772 83,733 86,644 87,804 88,848 90,362 97,037 102,576 97,459 85,474 Days Cash On Hand > 250 758 623 603 397 423 408 402 396 362 338 LEVERAGE Consolidated DSC >1.8x 1.96 2.07 1.93 2.00 1.93 1.95 2.05 1.94 1.77 1.74 Consolidated Debt/Plant Ratio ≤ 60% 61.83% 59.71% 59.29% 58.26% 57.44% 56.32% 55.58% 55.23% 55.00% 55.00% PROFITABILITY Rate of Return (chg. in net assets / net plant) >4% 3.25% 3.44% 2.58% 2.82% 2.74% 2.66% 2.64% 2.26% 1.59% 1.36% Retail Op Ratio (assumes baseline capital) ≤ 100% 109.28% 107.40% 105.90% 106.05% 103.13% 99.30% 100.56% 102.31% 102.75% 104.66% *Does not include non-preference revenues to offset market purchases

Grant PUD | FINANCIAL FORECAST Q3 2018 – Revenue Requirement Scenarios

2/12/2019 4

Q3 2018 Scenario: +$12.6M Fiber Next 4 Years, 1%, 1%, 1%, 0%..

Q3 2018 Scenario: +$12.6M Fiber Next 4 Years, No Rate Increase

Target 2018 2019 2020 2021 2022 2023 2024 2025 2026* 2027* NET INCOME 68,213 71,581 53,065 59,006 57,868 56,617 56,242 47,328 30,473 24,843 LIQUIDITY (measured at year end) Elect System Liquidity (Rev + R&C) $155 MM 158,624 110,994 111,624 114,609 116,254 117,879 120,786 123,767 126,826 129,963 Excess Liquidity 67,772 80,684 79,457 73,232 67,517 61,701 60,139 56,876 42,212 20,046 Days Cash On Hand > 250 758 617 584 374 388 363 347 331 290 255 LEVERAGE Consolidated DSC >1.8x 1.96 2.04 1.87 1.94 1.86 1.88 1.96 1.85 1.68 1.64 Consolidated Debt/Plant Ratio ≤ 60% 61.83% 59.71% 59.29% 58.26% 57.44% 56.32% 55.58% 55.23% 55.00% 55.00% PROFITABILITY Rate of Return (chg. in net assets / net plant) >4% 3.25% 3.30% 2.34% 2.56% 2.45% 2.35% 2.30% 1.91% 1.21% 0.97% Retail Op Ratio (assumes baseline capital) ≤ 100% 109.28% 108.83% 108.24% 108.50% 105.62% 101.77% 103.17% 105.06% 105.61% 107.66% *Does no include non-preference revenues to offset market purchases

Grant PUD | FINANCIAL FORECAST Q3 2018 – Revenue Requirement Scenarios

2/12/2019 5

SCENARIOS – DEBT SERVICE COVERAGE

1.60 1.65 1.70 1.75 1.80 1.85 1.90 1.95 2.00 2.05 2.10 2018 2019 2020 2021 2022 2023

Debt Service Coverage by Year and Scenario (Q3 2018)

Target Q3 2018 Base Q3 2018 Scenario: +$12.6M Fiber Next 4 Years Q3 2018 Scenario: +$12.6M Fiber Next 4 Years, 1%, 1%, 1%, 0%.. Q3 2018 Scenario: +$12.6M Fiber Next 4 Years, No Rate Increase

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Target 1.80 1.80 1.80 1.80 1.80 1.80 1.80 1.80 1.80 1.80 Q3 2018 Base 1.96 2.07 1.93 2.01 1.94 1.97 2.07 1.97 1.80 1.76 Q3 2018 Scenario: +$12.6M Fiber Next 4 Years 1.96 2.07 1.93 2.00 1.93 1.95 2.05 1.94 1.77 1.74 Q3 2018 Scenario: +$12.6M Fiber Next 4 Years, 1%, 1%, 1%, 0%.. 1.96 2.06 1.91 2.01 1.93 1.95 2.04 1.93 1.76 1.73 Q3 2018 Scenario: +$12.6M Fiber Next 4 Years, No Rate Increase 1.96 2.04 1.87 1.94 1.86 1.88 1.96 1.85 1.68 1.64

Grant PUD | FINANCIAL FORECAST Q3 2018 – Revenue Requirement Scenarios

2/12/2019 6

SCENARIOS – EXCESS LIQUIDITY

$- $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 2018 2019 2020 2021 2022 2023

Millions

Excess Liquidity by Year and Scenario (Q3 2018)

MINIMUM Q3 2018 Base Q3 2018 Scenario: +$12.6M Fiber Next 4 Years Q3 2018 Scenario: +$12.6M Fiber Next 4 Years, 1%, 1%, 1%, 0%.. Q3 2018 Scenario: +$12.6M Fiber Next 4 Years, No Rate Increase

figures in millions of USD 2018 2019 2020 2021 2022 2023 MINIMUM

• $
• $
• $
• $
• $
• $

Q3 2018 Base 67.8 $ 83.7 $ 92.3 $ 99.9 $ 107.9 $ 117.1 $ Q3 2018 Scenario: +$12.6M Fiber Next 4 Years 67.8 $ 83.7 $ 86.6 $ 87.8 $ 88.8 $ 90.4 $ Q3 2018 Scenario: +$12.6M Fiber Next 4 Years, 1%, 1%, 1%, 0%.. 67.8 $ 82.2 $ 83.5 $ 84.9 $ 85.9 $ 87.2 $ Q3 2018 Scenario: +$12.6M Fiber Next 4 Years, No Rate Increase 67.8 $ 80.7 $ 79.5 $ 73.2 $ 67.5 $ 61.7 $

Grant PUD | FINANCIAL FORECAST Q3 2018 – Revenue Requirement Scenarios

2/12/2019 DRAFT 7

• Debt Service Coverage (DSC) impact is minimal between revenue

requirement trajectory scenarios of 2%, 1%, 0.1% and 1%, 1%, 1%, then 0%.

• DSC change for moving from either of the above two scenarios to No Rate

Increase is far more impactful negatively.

• Similarly, the Excess Liquidity impact is minimal between revenue

requirement trajectory scenarios of 2%, 1%, 0.1% and 1%, 1%, 1%, then 0%.

• Excess Liquidity change for moving from either of the above two scenarios

to No Rate Increase is far more impactful negatively.

IMPLICATIONS AND CONCLUSIONS

Grant PUD | FINANCIAL FORECAST Q3 2018 – Revenue Requirement Scenarios

2/12/2019 8

Questions?

Powering our way of life.

February 12, 2019 Presentation on Potential Rate Impacts

Class Rate Impact

Proposed 2% Rate Increase

Schedule April 1, 2018 2018 % Change April 1, 2019 2019 % Change 4/1/2019 - 3/31/2020 Base Rev 4/1/2019 - 3/31/2020 Rev Post Rate Change Rev Increase from Rate Change Rate Schedule 1 - Residential (Total % Increase) & all in rate 0.05636 $ 1.5% 0.05712 $ 1.5% $46,480,105 Total $47,176,239 Total $696,133 Total Rate Schedule 2 - General Service (Total % Increase) & all in rate 0.04892 $ 2.1% 0.04867 $ 2.1% $25,390,300 Total $25,920,337 Total $530,038 Total Rate Schedule 3 - Irrigation (Total % Increase) & all in rate 0.04491 $ 3.4% 0.04568 $ 3.4% $25,225,141 Total $26,090,100 Total $864,958 Total , , Rate Schedule 6 - Street Lighting Service (Total % Increase) & all in rate 0.20737 $ 0.5% 0.20841 $ 0.5% $943,735 Total $948,453 Total $4,719 Total $ $ Rate Schedule 7 - Large General Service (Total % Increase) & all in rate 0.03200 $ 1.0% 0.03428 $ 1.0% $7,306,189 Total $7,380,456 Total $74,267 Total Rate Schedule 14 - Industrial (Total % Increase) & all in rate 0.02913 $ 5.0% 0.03125 $ 5.0% $17,209,871 Total $18,073,392 Total $863,521 Total Rate Schedule 15 - Large Industrial (Total % Increase) & all in rate 0.03678 $ 0.7% 0.03749 $ 0.7% $69,988,615 Total $70,484,127 Total $495,512 Total Rate Schedule 16 - Ag Food Processing (Total % Increase) & all in rate 0.02985 $ 5.0% 0.03131 $ 5.0% $10,766,125 Total $11,301,517 Total $535,392 Total Rate Schedule 17 - A Evolving Industry, less than 200 kW Demand N/A N/A $0 Total $0 Total $0 Total Rate Schedule 17 - B Evolving Industry, 200 kW Demand and greater 0.02731 $ 0.03638 $ 33.2% $4,787,808 Total $6,377,330 Total $1,589,522 Total Rate Schedule 85 - Ag Food Processing Boiler (Total % Increase) & all in rate N/ N/A 5.0% N/A 5.0% $14,586 Total $15,315 Total $729 Total Rate Schedule 94 - New Large Load Service 0.03356 $ 0.0% 0.03725 $ 0.0% $3,617,006 Total $3,617,006 Total $0 Total Rate Change & all in Rates - Excluding Rate Sch. 17 A, B 0.04068 $ 2.0% 0.04247 $ 2.0% $206,941,674 Total $211,006,942 Total $4,065,269 Total Total Rate Change & all in Rates 0.04068 $ 2.0% 0.04148 $ 2.7% $211,729,482 Total $217,384,273 Total $5,654,791 Total

2% Postage Stamp Increase

Schedule 2 April 1, 2018 2018 % Change April 1, 2019 2019 % Change 4/1/2019 - 3/31/2020 Base Rev 4/1/2019 - 3/31/2020 Rev Post Rate Change Rev Increase from Rate Change Rate Schedule 1 - Residential (Total % Increase) & all in rate 0.05636 $ 1.5% 0.05741 $ 2.0% $46,480,105 Total $47,409,707 Total $929,602 Total Rate Schedule 2 - General Service (Total % Increase) & all in rate 0.04892 $ 2.1% 0.04863 $ 2.0% $25,390,300 Total $25,898,106 Total $507,806 Total Rate Schedule 3 - Irrigation (Total % Increase) & all in rate 0.04491 $ 3.4% 0.04505 $ 2.0% $25,225,141 Total $25,729,644 Total $504,503 Total Rate Schedule 6 - Street Lighting Service (Total % Increase) & all in rate 0.20737 $ 0.5% 0.21152 $ 2.0% $943,735 Total $962,609 Total $18,875 Total Rate Schedule 7 - Large General Service (Total % Increase) & all in rate 0.03200 $ 1.0% 0.03461 $ 2.0% $7,306,189 Total $7,452,313 Total $146,124 Total Rate Schedule 14 - Industrial (Total % Increase) & all in rate 0.02913 $ 5.0% 0.03035 $ 2.0% $17,209,871 Total $17,554,068 Total $344,197 Total Rate Schedule 15 - Large Industrial (Total % Increase) & all in rate 0.03678 $ 0.7% 0.03797 $ 2.0% $69,988,615 Total $71,388,388 Total $1,399,772 Total Rate Schedule 16 - Ag Food Processing (Total % Increase) & all in rate 0.02985 $ 5.0% 0.03042 $ 2.0% $10,766,125 Total $10,981,448 Total $215,323 Total $6 4.00 0.0% $6 4.00 $ , $ , $ , Rate Schedule 17 - A Evolving Industry, less than 200 kW Demand N/A N/A $0 Total $0 Total $0 Total Rate Schedule 17 - B Evolving Industry, 200 kW Demand and greater 0.02731 $ 0.03638 $ 33.2% $4,787,808 Total $6,377,330 Total $1,589,522 Total Rate Schedule 85 - Ag Food Processing Boiler (Total % Increase) & all in rate N/A 5.0% N/A 2.0% $14,586 Total $14,878 Total $292 Total Rate Schedule 94 - New Large Load Service 0.03356 $ 0.0% 0.03725 $ 0.0% $3,617,006 Total $3,617,006 Total $0 Total Rate Change & all in Rate - Excluding Rate Sch. 17 A, B 0.04068 $ 2.0% 0.04247 $ 2.0% $206,941,674 Total $211,008,167 Total $4,066,493 Total Total Rate Change & all in Rate 0.04068 $ 2.0% 0.04148 $ 2.7% $211,729,482 Total $217,385,497 Total $5,656,015 Total

1% Increase No Rate Design Change

Schedule January 1, 2016 April 1, 2017 2017 % Change April 1, 2018 2018 % Change April 1, 2019 2019 % Change 4/1/2019 - 3/31/2020 Base Rev 4/1/2019 - 3/31/2020 Rev Post Rate Change Rev Increase from Rate Change Rate Schedule 1 - Residential (Total % Increase) & all in rate 0.05474 $ 0.05553 $ 1.5% 0.05636 $ 1.5% 0.05670 $ 0.7% $46,480,105 Total $46,828,172 Total $348,066.71 Rate Schedule 2 - General Service (Total % Increase) & all in rate 0.04711 $ 0.04794 $ 2.1% 0.04892 $ 2.1% 0.04818 $ 1.0% $25,390,300 Total $25,655,319 Total $265,019 Total Rate Schedule 3 - Irrigation (Total % Increase) & all in rate 0.04029 $ 0.04181 $ 3.4% 0.04491 $ 3.4% 0.04492 $ 1.7% $25,225,141 Total $25,657,620 Total $432,479.15 Rate Schedule 6 - Street Lighting Service (Total % Increase) & all in rate 0.20634 $ 0.20737 $ 0.5% 0.20737 $ 0.5% 0.20789 $ 0.2% $943,735 Total $946,094 Total $2,359 Total Rate Schedule 7 - Large General Service (Total % Increase) & all in rate 0.03141 $ 0.03177 $ 1.0% 0.03200 $ 1.0% 0.03411 $ 0.5% $7,306,189 Total $7,343,322 Total $37,134 Total Rate Schedule 14 - Industrial (Total % Increase) & all in rate 0.02637 $ 0.02763 $ 5.0% 0.02913 $ 5.0% 0.03051 $ 2.5% $17,209,871 Total $17,641,631 Total $431,761 Total Rate Schedule 15 - Large Industrial (Total % Increase) & all in rate 0.03595 $ 0.03677 $ 0.7% 0.03678 $ 0.7% 0.03735 $ 0.4% $69,988,615 Total $70,236,371 Total $247,756 Total Rate Schedule 16 - Ag Food Processing (Total % Increase) & all in rate 0.02713 $ 0.02842 $ 5.0% 0.02985 $ 5.0% 0.03057 $ 2.5% $10,766,125 Total $11,033,821 Total $267,696 Total Rate Schedule 17 - A Evolving Industry, less than 200 kW Demand N/A N/A $0 Total $0 Total $0 Total Rate Schedule 17 - B Evolving Industry, 200 kW Demand and greater 0.02731 $ 0.03638 $ 33.2% $4,787,808 Total $6,377,330 Total $1,589,522 Total Rate Schedule 85 - Ag Food Processing Boiler (Total % Increase) & all in rate N/A N/A 5.0% N/A 5.0% N/A 2.5% $14,586 Total $14,951 Total $365 Total Rate Schedule 94 - New Large Load Service N/A 0.03369 $ 0.0% 0.03356 $ 0.0% 0.03725 $ 0.0% $3,617,006 Total $3,617,006 Total $0 Total Rate Change & all in Rate - Excluding Rate Sch. 17 A, B 0.03933 $ 0.03991 $ 2.0% 0.04068 $ 2.0% 0.04206 $ 1.0% $206,941,674 Total $208,974,308 Total $2,032,634 Total Total Rate Change & all in Rate 0.03933 $ 0.03991 $ 2.0% 0.04068 $ 2.0% 0.04109 $ 1.7% $211,729,482 Total $215,351,638 Total $3,622,157 Total

1% Postage Stamp Increase

Schedule 2018 % Change April 1, 2019 2019 % Change 4/1/2019 - 3/31/2020 Base Rev 4/1/2019 - 3/31/2020 Rev Post Rate Change Rev Increase from Rate Change Rate Schedule 1 - Residential (Total % Increase) & all in rate 1.5% 0.05684 $ 1.0% $46,480,105 Total $46,944,906 Total $464,801 Total Rate Schedule 2 - General Service (Total % Increase) & all in rate 2.1% 0.04816 $ 1.0% $25,390,300 Total $25,644,203 Total $253,903 Total $ $ , , $ , , $ , Rate Schedule 3 - Irrigation (Total % Increase) & all in rate 3.4% 0.04461 $ 1.0% $25,225,141 Total $25,477,393 Total $252,251 Total Rate Schedule 6 - Street Lighting Service (Total % Increase) & all in rate 0.5% 0.20944 $ 1.0% $943,735 Total $953,172 Total $9,437 Total Rate Schedule 7 - Large General Service (Total % Increase) & all in rate 1.0% 0.03427 $ 1.0% $7,306,189 Total $7,379,251 Total $73,062 Total $ $ , $ , $ , Rate Schedule 14 - Industrial (Total % Increase) & all in rate 5.0% 0.03006 $ 1.0% $17,209,871 Total $17,381,969 Total $172,099 Total $ , , Rate Schedule 15 - Large Industrial (Total % Increase) & all in rate 0.7% 0.03759 $ 1.0% $69,988,615 Total $70,688,502 Total $699,886 Total Rate Schedule 16 - Ag Food Processing (Total % Increase) & all in rate 5.0% 0.03012 $ 1.0% $10,766,125 Total $10,873,786 Total $107,661 Total 0.0% $6 4.00 0.0% $84, 40 asic $84, 40 asic $0 asic Rate Schedule 17 - A Evolving Industry, less than 200 kW Demand N/A N/A $0 Total $0 Total $0 Total Rate Schedule 17 - B Evolving Industry, 200 kW Demand and greater 0.03638 $ 33.2% $4,787,808 Total $6,377,330 Total $1,589,522 Total Rate Schedule 85 - Ag Food Processing Boiler (Total % Increase) & all in rate 5.0% N/A 1.0% $14,586 Total $14,732 Total $146 Total Rate Schedule 94 - New Large Load Service 0.0% 0.03762 $ 1.0% $3,617,006 Total $3,653,176 Total $36,170 Total $ $ , , gy $ , , gy $ gy Rate Change & all in Rate - Excluding Rate Sch. 17 A, B 2.0% 0.04206 $ 1.0% $206,941,674 Total $209,011,090 Total $2,069,417 Total Total Rate Change & all in Rates 2.0% 0.04109 $ 1.7% $211,729,482 Total $215,388,421 Total $3,658,939 Total

Powering our way of life.