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Mason PUD News

Commission Report for April 27, 2010

Meeting Highlights

Agreement to purchase wind power from White Creek wind farm in Klickitat County
Commissioners authorize process to seek Leadership in Energy and Environmental Design certification for proposed Johns Prairie operations center
PUD 3 may receive $124,000 refund from Washington Dept of Revenue
Commissioners agree to continue with development phase of Radar Ridge wind power project
PUD conservation programs save hundreds of thousands of dollars for local school districts

Consent Agenda

Mason County PUD No. 3 Commissioners approved vouchers in the amount of $628,759.

Commissioners authorized an extension of the Mountain View substation rebuild completion date to May 17. This will allow for testing and commissioning of the new construction.

Commissioners authorized a change in the specifications for a galvanized steel pole to accommodate future transmission conductors on the structure. The bid opening has also been changed to May 12.

Comments from the Public

Shelton area resident Louis Cofoni urged commissioners to move ahead with their plans for the proposed operations center at Johns Prairie.

Action Items

PUD 3 Commissioners approved Resolution 1507 to enter into a power purchase agreement with LL & P Wind Energy (a subsidiary of Lakeview Light and Power) to purchase 3.22 megawatts of capacity from the White Creek wind farm in Klickitat County. The term of the agreement is for 18 years at a bus-bar price of just over $84 per megawatt hour. The purchase will help the PUD meets its mandated renewable energy purchases under the Washington State Energy Independence Act.

Commissioners also approved Resolution 1508, which authorizes an energy marketing agreement with Lakeview L&P. This will allow for the sale of the PUD 3 share of the wind farm output until such time that it is needed for local consumption under the requirements of the state renewable energy law.

Commissioners authorized staff (on a 2-1 vote) to pursue LEED (Leadership in Energy and Environmental Design) certification for the proposed Johns Prairie operations center. The cost to amass the data and apply for the LEED recognition is estimated at $48,000.

Commissioner Bruce Jorgenson expressed his reservations in paying for the certification since, as designed, the facility would qualify as a gold-level LEED building.

Commissioner Tom Farmer said he favored obtaining the certification for the proposed Johns Prairie operations center. Farmer said that he believed that the PUD could easily recoup the cost of the qualification through energy savings and water conservation measures. He said he felt this was a commitment to ratepayers, the community and the environment to show leadership in conservation and sustainable design.

Jay Himlie said that regardless of LEED certification, some measure of accountability in energy efficient construction will be necessary to obtain financial assistance from the Bonneville Power Administration as part of the federal agency’s regional conservation program.

LEED qualifications are based on accepted criteria from the US Green Building Council for environmentally responsible buildings. Building owners may receive credits from seven general areas that result in one of four levels of certification: certified, silver, gold, or platinum.

The seven areas of evaluation include sustainable building sites and development; water efficiency; energy efficiency and atmosphere; materials and resources used in building; indoor environmental quality; innovation in design; and regional priorities.

A list of frequently asked questions about the Johns Prairie Operations Center may be found here: http://www.masonpud3.org/newsdisplay.aspx?newsid=682

Information regarding construction of a water line to the Johns Prairie operations center site is available here: http://www.masonpud3.org/newsdisplay.aspx?newsid=716

Staff Reports

Annette Creekpaum, finance manager, reported that in the recent legislative session the Washington State Legislature clarified the manner in which public utility privilege taxes are calculated. The state Department of Revenue had been using a method which placed a levy on a PUD based on a customer’s total bill. The new law (SB 6143) clarified that the privilege tax should be based on kilowatt hours sold, excluding daily charges and other fees. Creekpaum said that this should result in a refund of $124,000 to Mason County PUD No. 3 for 2009. At the commissioners’ direction, she will be working with the PUD attorney to determine if overcharges from prior years may also be recouped.

Discussion Items

Commissioners gave direction to staff to continue PUD 3 participation in the effort by four western Washington PUDs to construct a wind power project near Naselle in Pacific County. The Radar Ridge project has seen an increase in development costs due to required studies on perceived impacts to the marbled murrelet; peer reviews requested by natural resource agencies; investigation of enhanced radar studies and bird diversion strategies; and uncertainty over the level of environmental assessments prior to permitting.

PUD 3’s share of the increased costs is estimated at $350,000.

Commissioner Jorgenson said that if the project remains on schedule, it would become operational just before a second increase in qualified renewable energy is mandated to be included in the local power mix. He noted that with increased scrutiny being given all renewable energy projects, there isn’t a large amount of these resources available.

Commissioner Farmer added that every renewable energy project has an environmental consequence, regardless of its character. He realizes that there are costs involved, and that the PUD is bound to meet the requirements of the Washington State Energy Independence Act. He pointed out that at an estimated cost of $71 per megawatt, the expected price of energy from the Radar Ridge project is well below other sources.

The initial development budget for the project was estimated to be $2.3 million. With delays, additional studies or wildlife protection measures, and necessary Bonneville Power Administration upgrades it is possible the development budget could increase to over $5 million.

Mason County PUD No. 3, Clallam County PUD, Grays Harbor County PUD, and Pacific County PUD are participants in the project. PUD 3 has committed to a 15% share of the project.

The federal government has allocated nearly $110 million in Clean Renewable Energy Bonds to go towards the funding of the Radar Ridge wind project. The project could generate up to 82 megawatts of electricity; enough energy to power approximately 18,000 homes. It is expected to consist of up to 32 wind turbines.

Renee Porter, energy services coordinator, reported on conservation programs that have been offered to Mason County schools for the installation of energy efficient measures. Porter said that over the last ten years, over 1.3 million kilowatt hours per year in energy savings have been reported to the Bonneville Power Administration, and over $300,000 in incentives have been issued to local schools.

Porter said that this year the PUD will be focusing on providing additional funding to the North Mason and Shelton School Districts as they complete projects being funded by Washington State energy grants. The estimated savings from lighting and equipment upgrades from this work is well over 800,000 kilowatt hours per year, with incentive amounts of $180,000.

Porter said that PUD 3 recently provided assistance to the Mary M. Knight and Grapeview School Districts for lighting retrofits. She stated that savings of over 175,000 kilowatt hours per year have been reported on these two projects.

Commissioners were presented with a draft business continuity plan. The proposal outlines individual department emergency plans in the event of natural disasters or pandemics, and how the PUD will maintain service to its customers.

A proposal for off-site data storage, the archiving of important computer files containing customer and operations information, was presented for commission consideration.

The draft business continuity plan and proposal for off-site data storage will be considered at a future meeting.

Next Meeting

The next PUD 3 commission meeting takes place May 4, 2010 at 10:00 AM in the PUD auditorium at 307 West Cota Street in Shelton.