Commission Meeting News

PUD Board Cites Customer Value in Decision to Modernize Original Units at Rock Island Dam

by Kimberlee Craig | Jun 21, 2016

Chelan County PUD commissioners Monday, decided to invest about $60 million to modernize the four original generating units at Rock Island Dam. The decision came after the board reviewed the results of intensive staff analysis and concluded the project meets the strategic objective of investing in long-term assets that provide value to customer-owners.

The benefits would include reliable operation of the units for another 50 years; an expected 12-percent rate of return; and more flexibility in hydro operations, said Brett Bickford, Engineering and Project Management director. The project also has environmental and fish protection benefits and aligns with PUD values of safety, stewardship, trustworthiness and operational excellence, Bickford said.  

PUD staff studied the impacts of retiring the units, moving them to inactive status and rehabilitating them. Analysis shows returning the units to service provides clear benefits for customers. The other alternatives create costs and removed all possible future revenue from power generation.

Dan Garrison, Hydro Operations director, said staff’s recommendation includes schedule changes for ongoing modernizing of four other units in Powerhouse 1. It also calls for hiring at least 10 people for the workload at Rock Island and Rocky Reach over the next several years.  Six of these positions will provide succession planning for projected retirements in the future.

Analysis presented indicates the District’s strong financial position makes it unlikely the work would require any change in electric rates under currently forecasted conditions.   

Turbine blade cracks were found in 2015 on one unit originally placed in service in 1931.  Numerous attempts to repair all the cracks were unsuccessful. The extensive look into alternatives for the future began in early 2016 after cracks also were discovered on the three other original units. All four units are out of service until they can be rehabilitated.

The turbine and generator work underway at Rocky Reach Dam also was taken into consideration in setting the schedule for the new project, said Garrison. Modernizing units B1-B4 is expected to start in fall 2018 and finish in spring 2020. Similar work on the larger B5 and B8 units will be rescheduled for 2020-2022.

The board’s action set up the $60 million capital project with $350,000 in work to be done this year, put the hiring for the 10 positions in motion and approved the schedule changes.

Next steps for the board are action in September to advertise for bids and a request to award the contract in January 2017.

In other business Monday, commissioners: 

  • Selected and approved funding for projects to enhance the quality of life in Chelan County. Projects include continuing broadband fiber network expansion and extending through 2017 the day use parking pass pilot under the Public Power Benefit program. New projects include a technical feasibility study on installing a “splash pad” water feature in a PUD park and collaborating on a study to pursue local hydropower and electrification research. Approval allocates $1.36 million to projects for 2016 and makes available up to $4 million for 2017.
  • Agreed on a spilt vote to move forward with a camping pass pilot study in 2017 as a Public Power Benefit. Features are still under discussion, but could include up to three nights free camping at the PUD’s Beebe Bridge Park for Chelan PUD residential electric customers. The study cost is estimated at $40,000. Commissioners Ann Congdon and Randy Smith voted “no” on the pilot study.
  • Continued the public hearing on a proposed new rate for high density load customers to 1 p.m. on July 5.
  • Affirmed a philosophy and strategies for managing debt that is designed to create financial flexibility to support low and stable electric rates – even if financial results are lower than expected.  It will be used in business planning starting this summer as part of annual budgeting and long-term planning.
  • Adopted the 2016 Integrated Resource Plan that outlines the sources of power needed to supply PUD customers through 2026. It describes the mix of resources from generation, conservation and efficiency and new renewable energy that will meet current and projected needs at the lowest reasonable cost and risk to the utility and its customer-owners.
  • Directed Ron Gibbs, Insurance and Claims manager, to spend no more than $2.245 million for insurance premium renewals for July 1, 2016, through July 1, 2017 policies. Gibbs said ongoing negotiations show a 4.5 percent decrease from last year so far.
  • Set a special meeting for 6 p.m. on Tuesday, June 28, at Leavenworth City Hall, 700 U.S. Hwy. 2, to attend the community substation update.

 Upcoming events:

  • June 20-24 – STEM Academy, first hydro career-focused program for high school and college students offered by the Foundation for Water and Energy Education at Rocky Reach Dam
  • June 28 – 6 p.m., community update on Bavarian Substation, Leavenworth City Hall
  • July 4 – Holiday, PUD offices closed
  • July 4 – 3-10 p.m., Independence Day Celebration, PUD’s Walla Walla Point Park
  • July 5 – 10 a.m., commission meeting (moved to Tuesday due to the holiday)
  • July 5 – 1 p.m., continued hearing on proposed high density load rate
  • July 18 – 10 a.m., commission meeting