P.O. Box 500
1492 Wind River Hwy
Carson, Washington 98610
Manager’s Message June/July 2016
BPA Overpayment Case Settled
The Skamania PUD has been overestimating the size of our system to Bonneville Power Administration for several years. As a result, we were given a small added discount to what we paid BPA for power. We passed that discount along to you, our customers, in the form of slightly lower electric bills. Now we are being required to fix that mistake.
We expect this error to have little or no impact on our ongoing rates to our customers.
We work hard here at the utility to keep rates low and provide the best service we can. That includes getting the best possible pricing we can on the goods and services that ultimately go into the bill our customers pay. We want to find every dime of discount we are entitled to, but not a penny that we don’t deserve.
Since at least 2008, we provided BPA with data every year that entitled us to a 6% discount on what BPA was charging for electricity. Our data was based on what we thought was the size of our power line distribution network, which sometimes is referred to as our pole miles. However, a mapping project that we completed last year showed that we were a smaller system than previously thought. As a result, we only qualified for a 4.5% discount. That was 1.5% less than we actually received.
The cost of the electricity sold to us by BPA amounts to about half of our total costs, so the savings we passed along to our customers was less than 1% of their bills. If your electric bill was $100, it should have been $101. The discount was also a small part of our total BPA bill. We pay BPA nearly $5 million a year for electricity. The extra 1.5% discount we received amounted to about $60,000 a year.
In 2014, we started a mapping project that would accurately tell us for the first time how large our network was. Shortly after that project began, the Justice Department notified us by letter that it had opened a formal inquiry to see if we were making false claims to BPA about our system size. We now know that we were. While this is not a criminal matter, doing so, even if it were not intended, violated the law.
The Justice Department could have been harder on us, but chose not to be. We accepted their settlement offer. We have to pay back the $362,500 overpayment going back to 2008. We also must pay damages equal to the overpayment, plus some attorneys’ fees. The total comes to about $862,200. We also will pay BPA directly about $180,000 for the last three years that the DOJ chose to exclude from the settlement, freeing us from having to pay damages for those years.
While this was a serious matter, it should have little or no effect on the rates we charge our customers or our ongoing operations. We will pay what we owe from contingency funds that will be built back up over time. With our system now fully mapped, we are confident that the data we provide BPA in the future will be correct, so this kind of mistake is not likely to happen again. We will continue to look for each and every dollar of saving we can find, but will hold fast to our values and only take that which we deserve.
Brent Bischoff, General Manager
Manager’s Message – April/May 2016
Underwood substation construction is now complete! The work began in July 2015 and finished in March 2016. In 2008 the PUD purchased our five substations from the Bonneville Power Administration. At the time of purchase the PUD recognized there were both immediate and long term infrastructure upgrade and replacement needs in all five substations. Within a few years after the purchase, the PUD made some minor upgrades and began planning the first major project to rebuild Underwood substation.
- The substation is running on a new transformer (the backbone of the substation).
- The old transformer has been repurposed to be a ready-in-place spare.
- Voltage regulators were installed to provide consistent service voltage to our customers.
- Catch basins were built to contain an oil spill in the event of an unexpected leak in one of the oil-filled power transformers.
- Flexibility was built into the distribution circuits to minimize the need for outages for maintenance or repairs.
The completion of this project marks a significant upgrade in quality and reliability of service for the Underwood, Mill A and Willard areas.
Brent Bischoff General Manager
Manager’s Message February/March
Remodeling? Building a new home or purchasing a manufactured home? Replacing appliances or lighting? If your answer is yes to any of these questions, are you aware that there are likely energy efficiency rebates available to you through the PUD?
The Source: The Bonneville Power Administration (BPA) funds an energy efficiency (EE) program where they establish a bi-annual budget for each of their customers to accomplish approved energy efficiency projects. BPA’s EE program is funded by the rates they collect from their wholesale electric customers. The PUD Board of Commissioners has elected to pass all of the PUD’s EE Incentive budget on to you, our customers. Since the PUD is predominantly a residential service provider, the Board has allocated 85% of the budget for residential EE projects and 15% for commercial and industrial EE projects. The PUD utilizes the expertise of Efficiency Services Group (ESG) to administer the local EE program.
What qualifies for EE rebates?
|· Insulation – attic, floor and wall||· LED lamps and fixtures|
|· Exterior window and door replacement||· Clothes washer|
|· Ducted and ductless heat pumps||· Heat pump water heaters|
|· Duct sealing||· New manufactured homes|
How do I take advantage of the program? Before you start your project or make your purchase, it is important to be sure your project qualifies for an EE rebate. For some items, that is a simple as comparing the product specifications to the PUD rebate schedule to verify the minimum EE requirements are met for that product. Following your purchase, complete and submit the appropriate rebate form. Other projects like insulation replacement or upgrade will require a project pre-audit to determine the available rebate. When the work is complete, a post-inspection is done to verify the project scope was accomplished. ESG completes these project audits and inspections at no cost to you.
Want more information? You can find more information on the Conservation tab of the PUD website, at https://www.skamaniapud.com/conservation/ . There you will find answers to frequently asked questions (FAQ), the rebate schedule specifying all available rebates, and contact information so you can get your specific questions answered.
Please take advantage of the PUD’s Energy Efficiency program. You can reduce the cost of your project, reduce your PUD power bill, and conserve the natural resources used to generate the electricity you use.
Brent Bischoff General Manager
Manager’s Message – December 2015/January 2016
Winter wind, ice, snow – the Gorgeous weather is coming and power outages go hand in hand with the winter storms. November 17 marked our first this season. Reliability is a major factor in the value of your electric service. Yet as electric system reliability improves, awareness of our dependence on electricity declines. Being unaware of and unprepared for the possibilities when the lights go out can lead to difficult and even dangerous situations.
What to expect when the power goes out: First, a night-time power outage means instant darkness. Your electric appliances obviously will not function. In most cases that is no problem for a few hours. But if you have a central air heating system (or other HVAC system requiring electricity) you will be without heat. Even if your furnace burns natural gas or propane it requires electricity to operate the control circuitry and fans. If your water source depends on a pump to pressurize the system, you will be without running water. Your electric powered medical appliance will not function unless it has a battery backup. Though your laptop computer will run on battery power for a while, your internet modem will be down. Fortunately during most power outages cellular data is available as long as your mobile device battery lasts. When you jump in the car to escape to your friend’s house where the power is on, your garage door opener is not going to work. This is only a partial list. We encourage you to take your own inventory of how you’ll be affected when the power is out.
So what should you do? Like any good Boy Scout “Be Prepared.” The longest power outages usually happen in the worst weather. Prudent outage preparation would keep you warm and safe for up to 72 hours. Most outages will be just a few hours but in unusual circumstances they can last for days. First, keep a flashlight with fresh batteries in a handy place. Have an alternative (non-electric) source of heat available with fuel to heat at least one room in your house. If you depend on a medical appliance, have a backup plan. Store drinking water and non-perishable food to last a few days; have a backup means to heat food and water. Know how to disconnect your automatic garage door and driveway gate opener so you can leave in your car if you need to. Keep your vehicle gas tank more than half full. Again this list is not complete. More information is available from many government and private agencies. For example www.redcross.org has a very helpful Power Outage Safety page.
Important first step: When the power first goes out, take a moment and call the PUD. Keep our phone number handy. Unless you call us, we won’t know your power is out. Our staff will ask for your address and some simple questions to help us characterize the nature of the outage. After normal business hours, your call will be forwarded to our call center. If you have internet access, the PUD website www.skamaniapud.com will be updated with general outage information for outages affecting many customers.
What about a backup generator? Both portable and permanently installed generators can be safe and reliable sources of backup electrical power. To ensure PUD crew safety and to prevent damage to your generator, your building electric system must be isolated from the PUD distribution system when a backup generator is running. This is done by either opening your “MAIN” circuit breaker or by an automatic transfer switch (ATS) on a permanently installed generator. Consult with an electrical professional to ensure your generator is the correct size to meet your needs and correctly connected to your electric system to ensure personnel and equipment safety.
Manager’s Message – October/November 2015
August and September included significant financial milestones for Skamania County PUD. For 18 months the PUD has been working toward a bond issue to finance electric and water system infrastructure upgrades and to refinance the remainder of the 2005 bond issue.
On August 5 Moody’s issued Skamania PUD’s inaugural credit rating of A1 – a very positive rating for a public utility of our size. Moody’s noted, “The PUD’s financial position is strong.” It has “healthy cash reserves and projected annual net revenue coverage of debt service on new bonds.” Then on August 18 investors responded favorably as the PUD went to the market for bond pricing. Timing of bond pricing was favorable as August 24 marked the start of significant volatility in the markets. Bond proceeds totaled $9,952,032 on a 20 year amortization schedule with an all-in true interest cost of 3.00%. Of the total proceeds, $3,669,101 was designated to refund the remainder of the 2005 PUD bond issue. By refinancing the 2005 bonds, the PUD achieved a total present value savings of $287,515 representing an 8.00% savings. As a rule of thumb a 3-5% savings is considered strong justification for refunding existing bonds. The PUD received the net bond sale proceeds on September 16, marking a major step towards implementing the Board’s strategic vision for the PUD.
Congratulations and thank you to the Board of Commissioners, PUD financial team and our consultants at Piper Jaffray (financial advisors and bond underwriters) and Foster Pepper (bond counsel)!
We are already putting the bond proceeds to work as construction to rebuild the Underwood substation is well under way. The project will install all new equipment in the substation replacing the nearly 50 year old existing equipment. To provide a second layer of redundancy and reliability, the existing power transformer will be reconfigured as a backup to the new transformer. This new substation configuration will provide insurance from an extended outage caused by a power transformer failure. The total project cost is approximately $2,000,000. There will be two outages lasting approximately 12 hours each as the work is accomplished in two phases. The first outage will happen near the middle of November. Once the outage date is firm, the PUD will get the word out to the Underwood and Mill A communities. Interesting to note, because the substation is in the Columbia Gorge National Scenic Area the color scheme is required to be brown and weathered steel compared to the common substation color scheme of gray and galvanized steel.