Board discusses rebuilding, finances

Submitted by sheilac on Wed, 09/30/2020 - 15:12


Okanogan County PUD board and staff work to balance the need to rebuild the system with the financial impacts to ratepayers. Major projects lay ahead, and the best way to finance them is yet to be determined.

Earlier in September, the board authorized staff to look into bonding up to $40 million to cover capital projects now that interest rates are low, but the amount borrowed could be less. However much is borrowed, the district has to make a plan to pay it back. Both rate increases and use of the rate stabilization fund to ease those increases were discussed.

As the PUD system is aging, more projects are becoming more critical. With damage from the Cold Springs Fire, some projects have been accelerated.

General Manager Steve Taylor said at a Sept. 28 board meeting that the Okanogan to Brewster transmission line was due for replacement over the next few years, but since the fire destroyed around 40 percent of it, that project will need to move quicker. The rebuild will be to a higher standard to better serve customer needs, including steel structures and larger wire, estimated between $9.5 and $10 million, in addition to what FEMA might be estimated to cover at $4 million.

Another multi-million dollar project is required safety measures, including a dewatering inspection, of Enloe Dam in 2021. The project was delayed due to COVID-19 restrictions in 2020.

The district has also prioritized rebuilding the Tonasket substation, which requires about $4.5 million to finish, and replacing several power transformers at other substations, which average about half a million dollars each. These projects all lead to better reliability and preventing major outages.

The goal of past equity management plans was to cover regular replacements of poles and equipment through the rates, and reduce how much was needed to bond in the future, Taylor said. To do that and be able to pay back what is bonded, the plan called for several small rate increases over the next few years.

Commissioners and staff emphasized the need to inform the public about possible increases in 2021. Although FEMA might come through for some of the cost of the transmission lines damaged in the Cold Springs Fire, it would not be enough to cover all the needs.

Chief Engineer Dan Simpson said the district is back to having all four outside transmission lines feeding the county, but the internal transmission lines still have damage. About 18-20 structures need replacing before winter, not counting those on the Okanogan-Brewster line.

Resolution 1728 regarding the draft bond will be discussed again Oct. 5 in a special meeting, and anticipated for voting on Oct. 12. Commissioner meetings are still via teleconference, with information posted on the commissioners' meetings webpage.

In other business, the board:

  • Approved Resolution 1729 to surplus telecom items, some of which will be sold at auction while others are disposed of.
  • Heard an update from staff member Matt Stevie, who has spent the last year representing public utilities on the state’s Disaster Resiliency Workgroup. Although his time on the group has ceased, a recommendation was made to the governor’s office to continue the workgroup; no word yet on its status.