Wahkiakum PUD wrestles with 20-year Bonneville contract
March 9, 2023
At the Wahkiakum County PUD Board of Commissioners meeting on Tuesday General Manager Dan Kay talked about the ongoing conversation between utilities and Bonneville Power Administration as they negotiate their twenty year, post 2028 contracts.
Kay and Commissioner Gene Healy have been closely involved in the process and Kay said the Public Power Council, an organization that represents the interests of utilities in the Pacific Northwest, was thankful for the small utility’s active engagement, as one of their goals was to make sure that no one was left behind.
“It’s important that we are there and asking questions and being actively engaged,” Kay said.
A first draft of the post 2028 contract with BPA is expected to be completed by July 30, and all parties involved are still hashing out a multitude of matters.
BPA’s rate structure is divided into two levels, Tier 1 and Tier 2. “In simplest terms,” to quote Healy from a March 2022 meeting, “if you go over the amount they’ve got allotted to you, theoretically, you’re supposed to pay a penalty.”
The amount allotted is Tier 1, the penalty is the Tier 2 rate.
Kay said they are trying to keep Tier 1 costs as low as possible with the coming contract. As for allocation in Tier 1, Wahkiakum is at the high water mark, and doesn’t have much headroom. While new growth that comes with electrification or industrial growth could move the utility into Tier 2, Kay says that powering all the new homes in the county won’t move us out of Tier 1.
Tier 2 costs have led to other questions with Bonneville. Utilities always elected Bonneville, a federal resource, to provide the power in the past, Kay said, but now utilities with non-federal resources, who are able to generate their own power, or would like to be in the position to do so, want to be able to consider that option if it’s cheaper for Tier 2.
“Give us more flexibility to integrate non-federal resources, that’s what we are talking about there,” Kay said.
Bonneville has some curve balls of their own and have started talking about something called peak net requirements, Kay said.
“What problem are they trying to solve with this new term coming out?” He wondered. “It’s not clear. It could affect us probably the most visible way, in the demand charge on our bill.”
"Every meeting there seems to be some new variable,” Kay said.
As for the July 30 draft or the coming BP 2024 rate case, which is also being negotiated and defines Bonneville rate structures for the next two years, Kay quoted an unnamed but well-respected colleague.
“It’s important that everyone is paying attention so they can have an informed signature,” he said.
Kay shifted to the manager’s report. Several new hookups and installations were added on the electrical side, he said, and the PUD provided some assistance to the Town of Cathlamet which is adding an AMI system and Wahkiakum County Port 1 with their project to install more RV hookups.
There were some weather related outages in recent weeks, and it appeared someone bumped into a pole in the Elochoman Valley this week and knocked out power in that area.
The water crew has made significant improvements to the Skamokawa Water System, Kay said, and water loss is at about 16 percent. Their goal is get below 10 percent.
Kay talked about struggles to purchase transformers, as supply chain issues continue to cause problems, and said that the PUD was preparing grant applications after they learned about some recent opportunities.
After some discussion, commissioners approved a tree trimming bid from Davey Tree Services, at $3,127.04 per day for a three person tree trim crew and equipment. Davey included a bid for traffic control, at a rate of $2,253.80 for two flaggers per day but hoping to save money, commissioners agreed that the PUD should look into possible alternatives for traffic control. The PUD has budgeted $250,000 for tree trimming this year.