Safety Report August 2020 Incidents Reported DATE INJURY - - PowerPoint PPT Presentation

Safety Report August 2020

Incidents Reported

DATE INJURY DESCRIPTION CAUSES PREVENTION

7/08/2020 Shoulder, arm & elbow While drilling holes to mount handrail, drill bit caught causing drill motor to twist right arm and shoulder. Overexertion An additional handle on the drill motor may have helped. 7/11/2020 Burn While unhooking hose from pressure washer the forearm bumped muffler. Contact w/hot surface Situational awareness 7/13/2020 Knee pain & cramping Employee was up and down on his knees the week before installing hardware on

• decking. His knees hurt, and from the

previous week and had cramping in his calf. Overexertion, body position Hydrate, take appropriate breaks for the task. Especially in the heat of the day.

Incidents Reported

DATE INJURY DESCRIPTION CAUSES PREVENTION

7/21/2020 Hip Performing normal work and began feeling discomfort in my left hip area. Undetermined Stretching may ease the Hip pain. 7/28/2020 Heat Stress While working an employee began showing signs of heat stress. Appropriate measures were taken by the employee and coworkers, such as; placing the worker in an air- conditioned vehicle, providing water (Squincher) to hydrate. Employee was transported for medical evaluation and released. Hot working conditions Ensure appropriate breaks are taken and hydrate frequently.

Monthly and Year to Date

2020 Month YTD

Total Incidents Reported 5 18 Recordable Case(s) 4 Restricted Duty Case(s) 1 Lost Workday Case(s) 2

Vehicle Incidents

Date Vehicle Driver’s Account: Prevention 7/21/2020 392 Employee was driving down a gravel road when a coyote crossed the road. Employee braked and swerved leading him and vehicle into soft shoulder. Tow truck was called, and vehicle was pulled back into the roadway. Be on the lookout for Wile E. Coyote

Close Calls

Date Location Description

7/04/2020 Moses Lake ​While driving service truck 504(New ) at night, the employee was looking for wire down. He turned on a toggle switch in the roof console for the spotlights. Not able see the label

• n the switch he accidentally turned on PTO switch, in turn killed the engine and lights.

The employee was able to stop the truck without incident, and then able to start truck after PTO switch was turned off. 7/23/2020 ESC ​As an employee pulled up to the gate while exiting service center the gate opened and swung into front of truck hooking onto the front hooks of the bumper, stopping gate from

• pening. The employee slowly reversed; the gate came loose from the front of the
• bumper. No damage was found.

Contractor Close Calls & Incidents

Date Location Description

Nothing to report for the month.

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 2

Employee Safety

2020 incidents Year to Date Summary

2020

7

Recordable Cases TTL.

2019

67 7 11 8 5 7

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

46 6 4 4 1 2

Leading & Lagging Indicators

82 78 82 72 79 71 68 39 34 40 41 28

Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20

Jobsite Reviews Conducted

95% 96% 96% 96% 95% 96% 95% 95% 87% 91% 97% 97% 94%

Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20

Safety Meeting Attendance

2.4 2.9 3.0 2.7 3.2 2.9 2.9 3.2 3.1 2.7 2.7 2.6

Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20

Recordable Injury Rate

COVID-19 Q&A

PPE Testing Quarantine/Isolation

Safety Action Item Critical Success Factors

Incident Reporting (Date of Entry into System vs Data of Distribution Systemwide)

• Number of Close Calls in July = 4
• Number of Close Calls sent Next day after being entered into the system = 0

Number of Open Action Items over 60 days old As of June 2020 As of July 2020 Year 2017 = 9 Year 2017 = 9 Year 2018 = 12 Year 2018 = 11 Year 2019 = 32 Year 2019 = 30 Year 2020 = 8 Year 2020 = 8 Month Total = 61 Month Total = 58 Net - July 2020: -3

Incident Reporting (Date of Incident vs. Date of Entry into System) for July 2020

Injuries

• Total Number of Injuries = 4
• Total Number of Injuries Which Date of Incident and Date Entered into System Match = 1

Mobile

• Total Number of Mobile Incidents = 1
• Total Number of Mobile Incidents that Date of Incident and Date Entered into system match = 1

Powering our way of life.

Thank You!

1

M E M O R A N D U M August 25, 2020 TO: Jeffrey Bishop, Chief Financial Officer FROM: John Mertlich, Sr. Mgr Financial Planning & Analysis Jeremy Nolan, Lead Financial Analyst SUBJECT: 2nd Quarter 2020 Financial Forecast Update Purpose: Provide Highlights of the Q2 Financial Forecast Metrics:  The District has in place interim and long-term annual target milestones for five financial metrics through 2025 (Exhibit C).  Over the 5-year forecast (thru 2025) the current metrics indicate (Exhibits A & B):

• The following long-term targets are met through 2025 for:
• Liquid Cash >$105 Million,
• Debt to Net Plant < 60%, and
• Debt Service Coverage > 1.80x
• Return on Net Assets does not meet the interim or long-term targets thru 2025.
• Retail Operating Ratio (ROR) meets the interim target in 2020 and 2021, but does not

meet the long-term target through 2025.  Comparisons between the 2020 Budget and Q2 2020 Forecast can be found in Exhibit D.  Debt to Net Plant Illustrative Example – Historic Cost vs Fair Market Value comparison found in Exhibit E.  The current COVID crisis restrictions by the state of Washington have relaxed such that economic activity has bounced back to a large extent from the “shelter in place” rules from earlier this year. Significant uncertainty remains concerning the intermediate and long-term macroeconomic impacts as a result of the COVID 19 Pandemic. Notes of Interest:  Key forecast updates:

• Interest rates updated for current market impact on Interest Income.
• Labor, O&M, and Capital updated for Q2 actual data and balance of year projection.
• Cash Optimization was executed in Jan. 2020 and additional debt refunding in March

2020.  Load Forecast and Retail Revenue have been updated for Q2 actual data. Forecast for the balance of 2020 and future years is the same as Q1.

• Retail Revenue rate adjustment assumption is: 0.1% annually beginning 2021.
• EUDL CRAC Revenue moved to begin in 2026 instead of 2021. The table below shows

the revenue that was in the 2020 Budget and 2020 Q1 forecast that has been removed.

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 Net Wholesale was calculated using prior Net Wholesale forecasts from 2018 – 2020 Q1. These calculations include an adjustment to 2020 and 2021 for overstatement in previous Net Wholesale calculations. Reductions of $17M were made to 2020 and reductions of $26M were made to 2021. The table below shows the change in Net Power (Net Wholesale and Other Power Revenue) from 2020 Q1 to 2020 Q2. Scenarios:  No scenarios were run at this time. Once the Net Wholesale / Net Power Cost structure is completed, then we will resume running scenarios. Conclusions and Path Forward:  The reduction in Net Power along with moving the EUDL CRAC revenue to start in 2026 negatively impacts Net Income and the Financial Metrics.  The movement in this forecast combined with the Retail Sales reduction in the 2020 Q1 forecast have, effectively, flatlined the Financial Metrics where previous forecasts had shown continued improvement over time. Recommendation:  For your information.

3

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

4

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

5

EXHIBIT C - District Annual Financial Metric Targets

6

EXHIBIT D - Comparison between 2020 Budget and Q2 2020 Financial Forecast

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EXHIBIT D - Comparison between 2020 Budget and Q2 2020 Financial Forecast (con’t)

8

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

1

Randalynn Hovland

From: John Mertlich Sent: Wednesday, August 19, 2020 1:06 PM To: Randalynn Hovland; Tina Wentworth Cc: Jeffrey Bishop; Jeremy Nolan Subject: Emailing: 20200819_Commission_Memo_Q2_2020_v03.pdf Attachments: 20200819_Commission_Memo_Q2_2020_v03.pdf

Randi & Tina ‐ Attached is the Q2 Financial Forecast memo. Tina, please upload to the memo to the 8/25 Commission packet. Thanks, ‐John John Mertlich FP&A

• EXT. 2184

EMAIL jmertlich@gcpud.org

Powering our way of life.

August 2020

Trea easu sury Q Quart uarterl rly R Rep eport rt

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P O R T F O L I O

Cash & Investments

Key Cash Flow Dates:

• Ending cash/investment

portfolio 6/30 $448.9M (market based)

• Q1 Debt financings- release of

$79.6M of liquidity plus $14M of reserves for debt reduction

• Jan 2nd 2020 bi-annual debt

service payment: $59.2M

• July 1st 2020 bi-annual debt

service payment: $20.7M (interest only payments)

• Upcoming Jan 2nd bi-annual

debt service payment: $51.6M

Public Utility District No. 2 of Grant County

Quarterly Treasurer's Report

Historical Cash and Investments Summary | Liquidity and Restricted

Market Value per Financial Statements in thousands $000

Ca Cash & & In Inves estmen ents 6/ 6/30/ 30/2018 2018 9/ 9/30/ 30/2018 2018 12/ 12/31/ 31/2018 2018 3/ 3/31/ 31/2019 2019 6/ 6/30/ 30/2019 2019 9/ 9/30/ 30/2019 2019 12/ 12/31/ 31/2019 2019 3/ 3/31/ 31/2020 2020 6/ 6/30/ 30/2020 2020 Liquidity-ES R&C Fund (1) 122,023.7 $ 122,318.8 $ 124,201.3 $ 126,043.9 $ 127,956.0 $ 129,622.4 $ 129,841.3 $ 106,096.3 $ 104,927.5 $ Liquidity-ES Revenue Fund (2) (4) 104,154.7 126,127.2 133,651.3 152,637.6 46,539.4 58,689.4 72,734.1 40,693.8 47,061.4 Other DCOH Funds (3) 44,041.2 33,671.9 35,469.5 45,822.5 57,943.7 54,459.9 46,881.0 49,735.0 51,260.6 Liquidity and Other DCOH Funds 270,219.7 $ 282,117.9 $ 293,322.1 $ 324,503.9 $ 232,439.1 $ 242,771.7 $ 249,456.4 $ 196,525.1 $ 203,249.5 $ Restricted-Construction Funds (4) 72,069.8 51,896.7 27,422.9 11,607.7 107,080.3 90,957.5 74,368.7 54,421.5 42,973.0 Restricted-DS Reserve Funds 54,749.2 54,827.9 55,636.0 56,618.9 57,565.4 58,210.0 58,320.7 43,759.7 44,717.4 Restricted-DS P&I Funds 53,834.1 54,303.7 87,998.4 30,475.4 54,665.1 57,650.1 89,073.4 30,962.7 53,602.5 Restricted-DS CREBs Sinking Funds (5) 66,922.4 63,360.1 61,450.4 69,991.5 78,769.0 76,466.2 79,138.8 84,536.3 86,469.6 Restricted-Habitat Funds 16,920.8 16,563.1 16,224.4 18,242.2 17,588.3 17,056.5 15,888.5 18,063.4 17,906.7 All Restricted Funds 264,496.4 $ 240,951.5 $ 248,732.1 $ 186,935.7 $ 315,667.9 $ 300,340.3 $ 316,790.1 $ 231,743.7 $ 245,669.0 $ Total al 534,716.0 $ 523,069.4 $ 542,054.2 $ 511,439.6 $ 548,107.1 $ 543,112.0 $ 566,246.5 $ 428,268.8 $ 448,918.5 $

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D I V E R S I F I C A T I O N

Portfolio as of 06/30/2020

• The District is within policy limits for portfolio

holdings

• The target range reflects strategy diversification

levels, the current market environment has impacted the ability to transact in all sectors consistently

• The state LGIP remains an efficient liquidity

management investment program

Security Type Book Value ($ in Millions) Yield Portfolio Allocation Policy Max Target Range In Compliance Municipal Bonds $ 174.1 3.850 39.2% 50% 25-40% YES WA State LGIP $ 109.7 0.360 24.7% 100% Varies YES Agency $ 55.0 1.620 12.4% 50% 5-15% YES Corporate Bond $ 42.3 1.600 9.5% 25% 5-10% YES US Treasury $ 37.7 0.650 8.5% 100% 20-40% YES Supranational $ 13.9 1.620 3.1% 50% 5-15% YES Commerical Paper $ 7.0 1.410 1.6% 25% 5-10% YES Bank Holdings (Cash) $ 4.6 0.050 1.0% n/a < $3M avg YES

*Totals $ 444.3 2.670 100%

Cash & Investments

4

M A R K E T

Cash & Investments

• Interest earnings are driven by UST rates both directly

as an investment and as a driver to underlying transactable yields

• The Fed Funds target currently is at 0.00-0.25%
• The District’s policy follows state requirements and

strategy is based upon the tenants of 1) legality, 2) safety, 3) liquidity, and 4) return

• LGIP rates have declined but has remained a strong

liquidity management program

Short term liquidity management State LGIP 6/30/20 Yield 0.34% 3 month T-bill 6/30/20 Yield 0.13% Overnight repo rate quoted 6/30/20 0.07% Use of LGIP vs 28 Day T-Bill for liquid funds has netted ~ $230K YTD as of 6/30/20

5

Aggregate Portfolio Q2 Book Yield 6/30/20 2.7% Aggregate Portfolio Q2 Modified Duration 2.18 Years 2020 Budget= $8.8M Interest Income @ 2% assumed earnings rate

P E R F O R M A N C E

Cash & Investments

• Decline in aggregate portfolio size in 2020 due to planned/executed defeasance

in January impacts earnings dollars (Elec R&C, Elec Rev, Bond Reserves)

• Investment in muni’s return @ 3.85% yield, propping up overall aggregate yield

amidst falling rates

• 24% of portfolio matures > year 2022 (a large portion was executed when rates

were higher)

• The Federal Reserve June meeting indicates a low rate environment thru at least

2022

*source Federal Reserve June Economic Projections

Actual Projected 2019 2020 YTD Investment Proceeds * (Thru 6/30) 6.7 $ 4.1 $ Annual Investment Proceeds * 16.5 $ 5.2 $ Change in Fair Value (GASB market entry) 5.2 $ 5.6 $ Total Interest Income (FS) 21.7 $ 10.8 $ Annualized Book Return (interest Proceeds/Book Value) 2.9% 1.9% *Interest Proceed s includes accrued interest and realized gain/loss 2020 Projected Cash Inflows from investing activity 10.1 $

Investment Income Forecast (shown in millions)

6

Debt Portfolio Total Consolidated Outstanding Debt

$1,205,355,000

• Principal and interest

payments Jan 2 annually

• 2nd half interest payments

July 1 annually

• Subordinate debt / variable

rate interest payments monthly

• 1/12th of fixed rate annual

debt requirements “set aside” in P&I funds

• Defeasance in 2020 reduced
• utstanding debt liability
• Internal PRP financing of

capital (JLB bonds) has resulted in reduction of bond financed capital

• Weighted average coupon rate of

fixed debt: 4.4%

• Effective cost of debt for entire

portfolio (net of interest rebates and sinking funds): 3.4%

• Weighted average life of portfolio

12.2 years

2020 Budget 2020 2021 2022 2023 2024 Principal Due and Accrued 43.7 $ 29.3 $ 29.8 $ 31.9 $ 29.0 $ 29.8 $ Interest Due and Accrued 43.3 $ 44.8 $ 44.8 $ 44.1 $ 43.3 $ 42.6 $ CREB Sinking Fund Deposits 8.7 $ 9.3 $ 10.0 $ 10.0 $ 10.0 $ 10.0 $ Federal Interest Rebates (10.5) $ (10.5) $ (10.5) $ (10.4) $ (10.4) $ (10.3) $ Projected New Debt Service

• $

0.6 $ 2.6 $ 3.0 $ 5.2 $ *Subtotal Cash Impact 85.2 $ 72.8 $ 74.8 $ 78.1 $ 74.9 $ 77.3 $ Amortization of Discount/Premium/Issuance Cost (2.2) $ 7.5 $ 4.1 $ 2.8 $ 2.9 $ 3.2 $ **Net Debt Activity 83.0 $ 80.4 $ 78.9 $ 80.9 $ 77.8 $ 80.5 $ Variance to 2020 Budget (2.6) $ Shown in $ millions

7

• The Strategic Plan target for debt to net plant is ≤ 60% and is a factor in determining

future financing

• As of 6/30/20 ratio = 56%
• Includes $9.3M of unamortized bond premiums

Debt Portfolio

• Par balance of Iinternal PRP Junior Lien Bonds (JLB) to the Electric

System = $400.7 million as of 6/30/2020

• The finance plan includes a combination of debt and cash funding for capital
• Fund 7250 (PRP construction) balance as of 8/1 = $35M
• Scheduled PRP JLB Q1 2021 ~ $30M (subject to change time/amount

based on need/availability)

• New money bond funding July of 2021 ~ $50M estimated (subject to

change)

• August 2020 remarketing of two series of short-term debt
• July 2021 required tender of variable rate bonds and associated refunding

transaction

• Currently no refunding opportunities on portfolio for savings meeting internal

policy of >3% PV savings and >50% escrow efficiency

• .

Series Outstanding Par Amount Coupon Range Final Maturity 2014JLB 40,170,000 $ 2.38% - 4.25% 1/1/2044 2015JLB 27,040,000 $ 5.034% 1/1/2045 2015JLB B 7,625,000 $ 5.213% 1/1/2045 2016JLB 29,380,000 $ 2.85% - 4.92% 1/1/2046 2017A JLB 24,810,000 $ 2.87% - 5.00% 1/1/2047 2017B JLB 83,560,000 $ 2.90% - 4.93% 1/1/2048 2019JLB 108,480,000 $ 1.83% - 3.352% 1/1/2049 2020JLB 79,585,000 $ 1.694% - 3.41% 1/1/2050 Total Junior Lien Debt 400,650,000 $

Internal Financing-Junior Lien Bonds

Priest Rapids Project (PRP)

F I N A N C E P L A N

8

Debt Portfolio

The Elec short-term debt program makes up $150 million of the total portfolio (12%), hedged in three “traunches” 1. ES 2017-M: Senior Lien- Fixed – 9/20 maturity, 2% fixed coupon

• to be replaced with series R, closing 9/1

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

• to re replaced with series S, closing 9/1

3. ES 2019-P: Subordinate Lien- Variable/Libor – 7/21 maturity, 37+ Libor The program goal of short term debt is to hedge net interest rate volatility (earnings and expense). The District has scheduled each traunch to come due annually to dollar cost average the market (future maturities are 2021, 2023, 2024, and 2025 (note the 2021 maturity represents a new 2024 redemption after remarketing).

• Annual debt service represents fixed and variable debt requirements
• Represents amounts paid to bond holders and CREB sinking fund

amounts

• CREBs sinking funds recalibrated for future straight-lined debt service

bi-annually

• Updated CREB’s sinking fund requirements
• Net increase of $1.5M annually from prior update
• PRP – JLB payments to the Elec system for intersystem debt not

included in graph and are paid thru the annual power cost proforma

• Levelized annual repayment is $23 million
• Repayment of each JLB is 30 years @ time of transfer
• Federal rebates on subsidy bonds ~ $10M annually thru 2026, currently

sequestered @ 5.9%, declines thereafter corresponding to CREB maturities

• Upcoming remarketing of Electric short term bond series to price Aug 17-
• 19. Anticipated net interest cost 0.75-1.25%.

.

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Debt Management- Credit Ratings

• During December 2019 and March 2020

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 for one rating

• Rating engagement under way for

September refunding bonds

10

Appendix

• Treasury Personnel
• Banking Institutions
• Petty Cash Accounts

11 Last Updated On: 2/20/2020

12 *notes:

• US Bank is the safekeeping agent for the state
• f 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)

• The broker list was updated per the routine

review to update active and qualified counterparties

13

M E M O R A N D U M August 10, 2020 TO: Kevin Nordt, General Manager/CEO VIA: Jeff Bishop, Chief Financial Officer FROM: Michael Facey, Senior Manager Accounting SUBJECT: Unaudited Financial Statements Second Quarter 2020 Financial Highlights: All comparisons unless otherwise stated are year to date (January through June) of 2020 versus 2019.  Statement of Revenues, Expenses and changes in net position:

• Total operating revenues of $167.1M were $2.5M (1.5%) higher than the same period in

the prior year driven by a $7M (16.5%) increase in Wholesale revenues and a $1.2M (18.0%) increase in Irrigation; partially offset by a $2.1M (14.8%) decrease in Sales to power purchasers at cost, a $2M (7.7%) decrease in retail revenues. Residential and small commercial load decreased due to a combination of warmer weather and COVID- 19 closures. This led to the decrease in retail revenues, but also drove the increase in wholesale revenues because the District receives market prices when actual retail load is lower than forecasted through the SENA agreement.

• Total operating expenses of $111.1M were $7.7M (7.5%) higher than the same period in

the prior year. The increase in operating expenses is largely due to Distribution expense ($8.9M or 127.8% increase), Administrative and general expense ($1.5M or 7.8% increase), Depreciation expense ($1.7M or 4.5% increase), Generation expense ($2.2M

• r 13.5% increase); partially offset by License compliance expense ($4.1M or 54.5%

decrease). The 2020 budget expected an increase in operating expenses of approximately 3%. The additional increase is driven by the broad use of administrative leave in response to COVID-19 and other delays experienced by capital projects.

• Total change in net position of $51.4 is $7.1M (12.2%) lower than the same period in the

prior year. This decrease is largely due to the changes in operating revenues and expenses described above, $3.1M of insurance proceeds related to the Central Ephrata Substation claim, a $6.6M (60%) decrease in Contributions in aid of construction and the impacts of the bond transactions that occurred in January and March of 2020. The bond transactions have driven a $8.3M (28.1%) decrease in year to date interest expense, but also had debt issuance costs of $1.4M to execute the transactions and $3.5M in losses associated with the defeasance of $81.8M of outstanding bonds.  Statement of net position:

• Total cash and investments of $448.9M were $99.2M (18.1%) less than the same period

in the prior year due to the planned use of funds for the defeasance of bonds and to adjust to the new Electric System liquidity target of $105M. There was a corresponding decrease in outstanding debt of $89.3M (6.8%).

• Utility plant, net increased $71.9 or 3.4%.

Recommendation: For your information only.

PUBLIC UTILITY DISTRICT NO. 2 OF GRANT COUNTY UNAUDITED STATEMENT OF NET POSITION June 30, 2020 AND 2019 2020 2019 Difference CURRENT ASSETS Cash 112,091 7,434,469 (7,322,378) Investments 73,089,575 80,545,237 (7,455,661) Restricted funds Cash 6,042,189 14,218,535 (8,176,346) Investments 73,408,190 113,152,954 (39,744,764) Customer accounts receivable, net 31,526,926 24,895,439 6,631,487 Materials and supplies 19,008,383 18,226,079 782,304 Other current assets 725,391 644,579 80,812 Total current assets 203,912,745 259,117,291 (55,204,546) NONCURRENT ASSETS Investments 11,726,203 3,078,831 8,647,372 Restricted funds Cash 641,731 2,026,026 (1,384,295) Investments 283,898,569 327,651,004 (43,752,435) Conservation loans 384,045 353,171 30,874 Demand-side management 110,510 312,269 (201,758) Preliminary expenses 3,979,265 4,596,738 (617,472) Total other noncurrent assets 300,740,323 338,018,038 (37,277,715) Utility plant, net 2,180,477,224 2,108,607,744 71,869,480 Total noncurrent assets 2,481,217,548 2,446,625,782 34,591,766 DEFERRED OUTFLOWS Net pension, change in proportion 6,409,454 5,753,562 655,892 Other Post Employment Benefits 2,290,950 2,290,950 Unamortized refunding loss 35,745,388 3,936,813 31,808,575 Total deferred outflows 44,445,792 9,690,375 34,755,417 TOTAL ASSETS AND DEFERRED OUTLFOWS OF RESOURCES 2,729,576,085 2,673,016,703 56,559,382

PUBLIC UTILITY DISTRICT NO. 2 OF GRANT COUNTY UNAUDITED STATEMENT OF NET POSITION June 30, 2020 AND 2019 2020 2019 Difference CURRENT LIABILITIES Accounts payable Trade 13,288,847 12,180,598 1,108,249 Wages payable 14,160,825 11,961,470 2,199,355 Due to Power Purchasers 1,669,869 1,452,857 217,012 Accrued taxes 4,309,453 4,052,178 257,275 Customer deposits 6,472,410 13,938,414 (7,466,004) Accrued bond interest 20,723,704 28,772,243 (8,048,539) Unearned revenue 9,397,519 313,064 9,084,455 Habitat liability 17,900,674 17,457,519 443,155 Other current liabilities 39,768 39,768

• Current portion of licensing obligations

2,343,889 2,283,494 60,395 Current portion of long-term debt 29,295,000 30,580,000 (1,285,000) Total current liabilities 119,601,957 123,031,605 (3,429,648) NONCURRENT LIABILITIES Revenue bonds, less current portion 1,176,060,000 1,238,815,000 (62,755,000) Unamortized (discount) premium, net 9,249,618 34,463,639 (25,214,021) Licensing obligations, less current portion 70,704,367 45,686,925 25,017,442 Pension obligations 24,837,391 32,686,126 (7,848,735) Accrued other postemployment benefits 9,705,904 6,977,140 2,728,764 Long-term unearned revenue 8,533,991 2,103,690 6,430,301 Total noncurrent liabilities 1,299,091,271 1,360,732,520 (61,641,249) DEFERRED INFLOWS Net pension, deferred inflow 14,701,254 13,692,570 1,008,685 Total deferred inflows 14,701,254 13,692,570 1,008,685 Total liabilities and deferred inflows of resources 1,433,394,482 1,497,456,695 (64,062,212) NET POSITION Invested in capital assets, net of related debt 984,863,578 871,914,041 112,949,536 Restricted 270,331,040 300,489,285 (30,158,245) Unrestricted 40,986,985 45,573,427 (4,586,442) Total net position 1,296,181,603 1,217,976,754 78,204,849 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION 2,729,576,085 2,715,433,449 14,142,637

PUBLIC UTILITY DISTRICT NO. 2 OF GRANT COUNTY UNAUDITED STATEMENT OF REVENUES AND EXPENSES AND CHANGES IN NET POSITION

For the Six Months Ending June 30, 2020 and 2019

2020 2019 Difference OPERATING REVENUES Sales to power purchasers at cost 12,228,649 14,358,805 (2,130,156) Retail energy sales Residential 23,991,364 26,004,506 (2,013,143) Irrigation 8,413,583 7,130,377 1,283,206 Commercial and industrial 66,596,536 68,030,724 (1,434,188) Governmental and others 687,585 1,247,243 (559,658) Wholesale revenues, net 49,351,449 42,346,130 7,005,319 Fiber optic network sales 5,030,054 4,549,679 480,376 Other 755,977 854,715 (98,739) Total operating revenues 167,055,196 164,522,179 2,533,017 OPERATING EXPENSES Generation 18,802,938 16,559,838 2,243,100 Transmission 1,434,308 3,677,384 (2,243,076) Distribution 15,952,928 7,004,248 8,948,680 Customer and information services 1,902,930 2,113,332 (210,402) Fiber optic network operations 1,319,605 1,181,188 138,417 Administrative and general 20,707,492 19,211,441 1,496,051 License compliance and related agreements 3,456,019 7,599,735 (4,143,716) Depreciation and amortization 38,982,456 37,311,398 1,671,058 Taxes 8,557,025 8,741,954 (184,929) Total operating expenses 111,115,701 103,400,519 7,715,182 NET OPERATING INCOME 55,939,495 61,121,660 (5,182,165) OTHER REVENUES (EXPENSES) Interest and other income 14,192,858 13,722,796 470,063 Interest on revenue bonds and other, net of capitalized interest (21,376,475) (29,711,132) 8,334,657 Federal rebates on revenue bonds 5,268,841 5,275,764 (6,923) Amortization of debt discount/premium (3,957,207) 1,766,903 (5,724,111) Cost of debt issuance (1,384,444)

• (1,384,444)

Total other revenue (expenses) (7,256,427) (8,945,670) 1,689,242 CONTRIBUTIONS IN AID OF CONSTRUCTION 2,441,436 6,067,512 (3,626,075) CHANGE IN NET POSITION 51,124,504 58,243,502 (7,118,998) NET POSITION Beginning of year 1,245,057,099 1,159,733,252 85,323,847 End of year 1,296,181,603 1,217,976,754 78,204,849

Continuing to safely, efficiently and effectively execute projects

Quarterly Commission Update - August 25, 2020

Powering our way of life.

Project Management Office

2020 Q3 Review

Purpose and Goal Structure and Personnel Safety Update Budget Update Q2 Accomplishment Updates Q3 Forecasted Work

Acronym List

• EPMO

Enterprise Project Management Office

• ET

Enterprise Technology

• PP

Power Production

• PD

Power Delivery

Department Purpose

Execute business line projects to meet the District’s business objectives

Execute

Improve the probability of successful project delivery to create greater business value

Improve

Become the source for guidance, documentation and metrics for the practices involved in managing and implementing projects within Grant PUD.

Develop

Department Goals

Cultivate a business driven EPMO that enables consistent, reliable data and

• utcomes

Standardized business driven project management framework Employ change management principles to allow greater adoption, utilization and proficiency The success of the EPMO is derived exclusively from achieving greater business value to the utility

EPMO Structure

Senior Manager EPMO Julie Pyper Manager Power Production Projects Aaron Kuntz Administrative Assistant Project Managers Outage Coordinator Manager Project Services Dustin Bennett Project Coordinators Construction Inspectors Lead Project Manager Randy Weisheit Manager IT Projects Chris Roseburg Project Manager Project Coordinators Senior Training Coordinator Manager Power Delivery Russ Seiler Project Managers Project Coordinators Business Analyst Administrative Assistant

Personnel

• Moving to support Large Power Services
• Gradual Transition – full time by

December 2020

• Planning to backfill position

EPMO Manager – Power Delivery: Russ Seiler

• Promoted to EPMO Manager – Facilities

and Support Services

Project Support Services Supervisor: Dustin Bennett

Safety Update: Safety Meeting Attendance

100% 97% 100% 94% 100% 100% 91% 92% 93% 94% 95% 96% 97% 98% 99% 100% 101% 1

2020 Safety Meeting Attendance

January February March April May June

Safety Update: Job Site Review s

Projects managers

• Minimum 2 per active project per month
• Folks are encouraged to do more
• Folks are encouraged to do them together

Inspectors

• Minimum of 1 per month for each non-EPMO managed project
• Coordinate with Project Manager for each EPMO managed project

Enterprise Technology projects

• Required on a project by project basis

Safety Update: Job Site Review s

Total projects that required JSRs

• Q1 = 8
• Q2 = 4

Did not meet targets in April, May and June

• Employees responsible for JSRs had limited access to most job sites due to COVID-19

requirements.

Jan Feb Mar Apr May June

TOTAL Required 10

9 6 5 5 6

TOTAL Completed 14

12 8 2 4 4

Safety Update

Q2 2020 Recordable incidents: 0 Q2 2020 Vehicle incidents: 0 Continued emphasis on job site reviews and contractor safety

Budget Update

Purchased Services

• Contracted project manager to support

project management framework formalization

Overall EPMO 2020 Initiatives

• Formalize standard project management

framework Project Management Moving Forward  Step 1

• Roadmap development and implementation
• Project support
• Program support

Organizational Change Management

• Quality surveys continue for ET projects

Project Management Quality Management Operations budget and financial analysis Implement business line projects

Enterprise Technology

• myHR
• Office 365 Migration
• Oracle CCS
• ESRI GIS and Work Order Design

Continued implementation

Pow er Delivery

• Wholesale Fiber Project
• Supporting our customer demand

through this challenging time

• Started construction inspection – EPMO

Support Services

• Design Build 2
• Change Order coming – as planned – in

an upcoming meeting

Continued implementation

• Quincy Transmission Expansion Project
• Allows for continued industrial growth

Started planning

Pow er Production

• PR Turbine Generator Upgrade project
• Pre-COVID-19 Unit Completion Date:

07/03/2020

• Current Unit Complete Date: PR Plant

Manager – Ben Pearson to provide update

Continued implementation

• Additional projects to be managed by

EPMO at PP

Started planning

Q2: 2020 Q3 Forecasted Work

What did I tell you we were going to accomplish in Q3 when we last met in Q2?

Q2: 2020 Q3 Forecasted Work

Onboard Power Production Project Managers Allen Chatriand Mike Zabransky - Internal Onboard Enterprise Technology Project Coordinator Kristi Van Diest – Internal

Q2: 2020 Q3 Forecasted Work

Continued implementation: Project Management Moving Forward  Step 1 Change Management Approach deployment

• Capacity constraint – Senior Manager
• Contracted experienced change management professional joining

EPMO in late August Expand quality assurance to construction projects

• First establish Monthly Business Reviews

Q2: 2020 Q3 Forecasted Work

All EPMO Team meeting “EPMO Summits” Early June held #2

• Topics: Change Management; Culture/Values of EPMO; Project

Management framework progress; Break-out session – challenges implementing projects remotely Start management of Facility projects in EPMO Moses Lake Service Center

• Hired contracted project managers (for both service center

projects) Ephrata Service Center Other major projects

• Facilities Master Plan – contracted facilitator/project manager

Q3: 2020 Q4 Forecasted Work

What are we planning to accomplish in Q4?

Q3: 2020 Q4 Forecasted Work

EPMO Summit #4 – September

• Topics: Culture/Values of EPMO; Lessons Learned from

existing projects Onboard new Power Delivery EPMO Manager Continued implementation of business line projects Continued implementation Project Management Moving Forward  Step 1 Change Management Approach deployment

Powering our way of life.