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PUD 3 Signs Contract for Construction of Johns Prairie Operations Center

Kim Nakamura (L), president of Rushforth Construction, and Wyla Wood, PUD 3 manager, sign the contract for construction of Johns Prairie operations center

No Net Rate Impact – Will Provide for Increased Efficiency

Mason County PUD No. 3 today (July 29) entered into a contract with Rushforth Construction of Tacoma for construction of the new Johns Prairie operations center. Wyla Wood, PUD 3 manager, joined Kim Nakamura, Rushforth’s president, in signing the contract to build the new Shelton area complex.

The PUD commission awarded a bid of nearly $24.2 million to Rushforth to build the facility. It will be the site for the PUD 3 warehouse; field operations such as Shelton line workers; vehicle maintenance, repair and fueling; engineering, telecommunications, the meter shop, transformer and substation maintenance; and various administrative functions.

The total cost of construction and design for the operations center at Johns Prairie is estimated at $34.5 million. The bid for overall construction was 17 percent lower than estimates. The bid for site preparation ($243,000 plus tax, went to Zephyr’s, Inc of Allyn) came in at approximately 45 percent of the estimated cost.

Of the total project cost, up to 80 percent will pay for relocation of the warehouse, including offices for operations personnel who currently work at the warehouse on Olympic Highway North. The remainder will pay for relocation of administrative offices and the development of public spaces.

The PUD will retain a customer service office in downtown Shelton, along with a payment drop. Customers will also be able to make payments, set up accounts and conduct general business at the Johns Prairie facility. Operations at PUD 3’s Belfair office will not be affected by the proposed changes.

PUD 3 has been working on relocation plans for over 15 years, finalizing the acquisition of the Johns Prairie Road property in early 2002.

Because of the timing of the issue and the maturing of current bonds issued by the PUD, it isn’t expected that the sale of bonds for the operations center will change debt service in the long term, and therefore will not have a net impact on utility rates.

PUD 3 Commission Report for July 27, 2010

Meeting Highlights

Vehicles declared surplus, replacements authorized
Contract awarded for reconstruction of underground electrical system at Hartstene Pointe South
Contract awarded for substation testing to ensure federal high-voltage reliability standards
Radar Ridge wind farm update from PUD 3 manager, Energy Northwest to make future presentation on project status

Consent Agenda

Mason County PUD No. 3 Commissioners approved vouchers in the amount of $738,936.

Commissioners authorized the write-off of closed, delinquent accounts in the total amount of $70,283. The accounts will be forwarded to a collection agency for further efforts to obtain payment.

Action Items

Commissioners accepted a recommendation to purchase eight vehicles from the Washington State contract for meter readers, engineering and fleet pool. The total purchase cost is $165,840 plus taxes.

Commissioners adopted resolution 1514 declaring eight vehicles as surplus, to be replaced by the new purchases approved during the meeting. The surplused items will be offered for sale under surplus sale S2-2010.

Commissioners awarded bid L3-2010 to Potelco, Inc. for the underground electricity distribution system rebuild and fiber conduit installation at Hartstene Pointe South. Potelco’s bid was $327,620 plus taxes. The project will consist of placing about two and a quarter miles of underground cable, along with vaults, pedestals, conduit and other related equipment.

Commissioners authorized a professional services contract (PS-2010-10) for substation equipment testing and equipment testing with Specialty Engineering of Vancouver, WA. The company will test high voltage equipment at PUD substations to ensure compliance with federal transmission reliability standards overseen by the Western Electricity Coordinating Council. The contract amount is $43,338.

On a 2-1 vote Commissioners approved the issuance of Addendum 2, bid L4-2010, for the Johns Prairie watermain extension. The addendum does not include cost-related changes, but revises the burial depth of a small portion of the watermain, modifies some surface restoration requirements, alters the payment and performance bond forms and bid proposal form.

Staff Reports

Wyla Wood, PUD 3 manager, noted that Energy Northwest has asked if the commission wishes to have a presentation regarding the status of the development phase of the Radar Ridge wind farm in Pacific County. Wood said that the major participant in the project, Grays Harbor PUD, has halted all interest in the facility. She reported that Grays Harbor PUD had recently signed an agreement with a wood-burning power plant in Aberdeen, which will meet that utility’s renewable energy requirements under state law. Wood also said that Clallam County PUD will withdraw from further Radar Ridge development efforts.

Commissioners asked that staff report August 3 on the status of PUD 3’s renewable energy acquisition efforts and the strategy to meet state green power requirements. An Energy Northwest presentation was tentatively set for August 9

Next Meeting

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

Contractor for PUD 3 Operations Center Recognized For Safety

The July 27 online issue of the South Sound Business Examiner reports that Rushforth Construction, the contractor for the Mason County PUD No. 3 operations center on Johns Prairie, has received a 2010 STEP Platinum award for safety from the western Washington chapter of the Associated Builders and Contractors Inc.

“The Safety Training and Evaluation Process program was designed to give contractors a method to develop and measure safety programs. To earn a platinum-level award companies must have a recordable incident rate of 3.3 or lower, which represents the number of injuries and illnesses per 200,000 hours worked.”

“Rushforth's RIR was 1.75 during 2009, and is currently zero for 2010.”

“Rushforth Construction, headquartered in Tacoma, is a wholly owned subsidiary of Adolfson & Peterson Construction, which provides construction management, design/build and general contracting services to public and private clients.”

South Sound Business Examiner

Mason PUD 3 Sells Bonds for Capital Projects and Refinancing of Debt

Will be used for new operations center and projects for electrical reliability

Mason County PUD No. 3 today sold bonds to pay for construction of its Johns Prairie operations center, a number of important electrical system improvements and refinancing of a portion of existing debt at lower interest rates.

Proceeds from the par value of the $59.8 million bond sale will fund the following PUD 3 projects:

$34.5 million for the Johns Prairie operations center, including construction, design, equipment, permits and fees
$8.4 million for capital projects, including Mason substation rebuild; construction of a watermain to serve the Johns Prairie operations center; potential relocation of PUD facilities related to the 1.5 mile Belfair SR 3 improvement project; and matching funds, if successful, for a federal stimulus grant for broadband expansion
$9.5 million for refunding higher interest bonds and debt payoff
$7.3 million for reserve accounts, capitalized interest costs and bond issuance fees

PUD 3 had initially expected to sell nearly $70 million on bonds for this investment, but financial staff was able to prioritize investments in capital projects and financing costs to reduce the overall borrowing needs.

Because of the timing of the issue and the maturing of current bonds issued by the PUD, it isn’t expected that the bond sale for the operations center will change debt service in the long term, and therefore will not have an impact on utility rates. The debt service may also be lower than anticipated due to the ability of the PUD to access “Build America Bonds” through federal stimulus programs. The federal assistance will provide annual rebates to the PUD reduce finance charges.

The commission also awarded a bid of nearly $24.2 million to Rushforth Construction of Tacoma for the construction of the new Johns Prairie operations center. The facility will be the site for the PUD 3 warehouse; field operations such as Shelton line workers; vehicle maintenance, repair and fueling; engineering, telecommunications, the meter shop, transformer and substation maintenance; and various administrative functions.

PUD 3 has been working on relocation plans for over 15 years, finalizing the acquisition of the Johns Prairie Road property in early 2002.

The total cost of construction and design for the operations center at Johns Prairie is estimated at $34.5 million. The bid for overall construction ($24.2 million from Rushforth Construction of Tacoma) was 17 percent lower than estimates. The bid for site preparation ($243,000 plus tax, went to Zephyr’s, Inc of Allyn) came in at approximately 45 percent of the estimated cost.

Of the total project cost, up to 80 percent is for relocation of the warehouse, including offices for operations personnel who currently work on Olympic Highway North. The remainder will pay for relocation of administrative offices and the development of public spaces.

Commission Report for July 13, 2010

Meeting Highlights

Commissioners approve bid documents and contracts for certain aspects of Johns Prairie operations center
Staff presents update on the status of the budget and treasurer’s report
PUD 3 receives bond upgrade from Standard & Poor’s
Site preparation for Johns Prairie operations center nearly complete
July 20 commission meeting rescheduled to afternoon of July 21

Consent Agenda

Mason County PUD No. 3 Commissioners approved vouchers in the amount of $585,556.

Comments from the Public

Residents of the Rustlewood area near Grapeview expressed concern about a project to install overhead distribution lines along Krabbenhoft Road to their neighborhood. PUD 3 staff assured those in attendance that the overhead lines would not extend into Rustlewood, but that the overhead system was being constructed to provide reliability and safety. Future replacement of the community’s underground distribution system with the similar underground design is being planned.

John Komen, a resident of Mason Lake, stated his opposition to construction of the PUD’s Johns Prairie operations center; extension of municipal water to the project site, which he contended would enable construction of a wood-fired power plant in the area; and a pending PUD bond sale.

Action Items

Commissioners approved a recommendation to declare a sole-sourced procurement, and authorized the purchase of four regulators in the amount of $43,724 (plus tax) from HD Supply Utilities Corporation.

On a 2-1 vote, Commissioners approved three addenda on the call for bids (Bid L2-2010, addenda 1, 2, 3) for the Johns Prairie operations center. Most of the changes dealt with instructions to bidders, forms, and procedural matters.

Commissioners approved a recommendation to prequalify Potelco, Inc, of Sumner, WA and Robinson Brothers Construction, Inc. of Vancouver, WA for the public works roster.

On a 2-1 vote, commissioners approved a contract with OAC Services for project management of the Johns Prairie operations center, including site preparation and construction. The contract has a not-to-exceed amount of $623,500.

On a 2-1 vote, commissioners approved a contract with Engineering Economics, Inc. for commissioning agent services at the Johns Prairie operations center. The commissioning agent will ensure that the building and its systems perform properly. The firm will also include documentation to achieve Leadership in Engineering and Environmental Design (LEED) certification. The contract has a not-to-exceed amount of $135,700.

Staff Reports

PUD 3 Finance Manager Annette Creekpaum reported on the status of the budget, ending June 30, 2010. June expenditures were $3.7 million. Expenditures for the first six months of the year were $27.9 million, or 50 percent of the 2010 budget. Revenue for June was $4.3 million. Revenue for the first six months of the year was $29.8 million, which is 53 percent of the 2010 budget.

Sherry Speaks, treasurer, said that the PUD ended the month of June 2010 with a reserve balance of $25.9 million. Total investments were $28.1 million.

Wyla Wood, PUD manager, reported that Standard & Poor’s this week announced a two-level upgrade from A- to A+ in the bond rating of the PUD. The upgraded credit rating, along with a previous improvement in bond ratings from Moody’s Investor Service, is expected to save PUD 3 nearly $1 million in finance costs over the 30-year term of a bond sale this summer. In April, Moody’s announced an upgrade in PUD 3’s rating from A2 to AA3.

Wood stated that site preparation for the Johns Prairie operations center is nearly complete. The project was awarded to Zephyrs’, Inc. of Allyn. The original bid amount was $243,000 plus taxes, or approximately 45 percent of the engineer’s estimate for the job.

Wood said that bid opening for construction of the Johns Prairie operations center is scheduled for Wednesday, July 14 at 3:00 PM in the PUD 3 auditorium.

Commissioners approved a recommendation to reschedule the July 20 commission meeting to 1:00 PM on Wednesday July 21 in the PUD 3 auditorium. The change will coincide with an anticipated sale of bonds to fund several capital projects, including the Johns Prairie operations center; Mason substation rebuild; refinancing of previous bond sales at lower interest rates; potential relocation of PUD facilities related to the 1.5 mile Belfair SR 3 improvement project; and related finance charges. The sale is expected to be less than $70 million for a 30-year term.

Next Meeting

The next PUD 3 commission meeting takes place July 21, 2010 at 1:00 PM in the PUD auditorium at 307 West Cota Street in Shelton.

Standard and Poor’s Upgrades Mason PUD 3 Bond Rating by Two Classification Levels

Standard & Poor’s (S&P) this week announced a two-level upgrade from A- to A+ in the bond rating of Mason County PUD No. 3. The upgraded credit rating, along with a previous improvement in bond ratings from Moody’s Investor Service, is expected to save PUD 3 nearly $1 million in finance costs over the 30-year term of a bond sale this summer. In April, Moody’s announced an upgrade in PUD 3’s rating from A2 to AA3.

The PUD was notified of the most recent upgrade by A. Dashen & Associates, the PUD’s financial advisory firm, which has worked with the local utility to improve its bond rating.

“We’re excited by another affirmation of the excellent financial health of Mason County PUD No. 3, and the management of its finances,” said Annette Creekpaum, PUD 3 finance manager. “These high bond ratings will allow the PUD to finance projects more easily, attract a broader range of investors to our bond sales, and make the bonds less costly to finance,” she said.

The A+ Standard and Poor’s bond rating shows that PUD 3 bonds are strong investments. The upgrade summary from S&P stated, “The improved ratings reflect the district’s consistently strong financial performance and maintenance of very low debt.” Coupled with the Moody’s Investment rating, these are generally considered high-grade bonds.

PUD 3 is considering the sale of bonds in July for several capital projects, including the Johns Prairie operations center; Mason substation rebuild; refinancing of previous bond sales at lower interest rates; potential relocation of PUD facilities related to the 1.5 mile Belfair SR 3 improvement project; and related finance charges. The sale is expected to be less than $70 million for a 30-year term.

Standard & Poor’s is well known as a leader in credit ratings, indices, investment research and risk evaluations and solutions.

Mason County PUD No. 3 is a locally controlled public utility that provides electricity to nearly 33,000 customers in most of Mason County and small portions of Kitsap and Grays Harbor Counties. PUD 3 also provides wholesale telecommunications services through a fiber optic network. PUD 3 has won five straight Government Finance Officers Association awards of excellence for its annual reports and has experienced over 30 years of excellent audits from the Washington State Auditor’s Office.

PUD 3 Commission cancels July 20 meeting, rescheduled for July 21

The Mason County PUD No. 3 Board of Commissioners has canceled its July 20 regular business meeting. The board has scheduled a special meeting for July 21 at 1:00 p.m., at which it will conduct its normal business. The meeting will be held in the PUD 3 auditorium at 307 West Cota Street in Shelton.

The Mason County PUD No. 3 Board of Commissioners will resume its regular meeting schedule on Tuesday, July 27.

4,200 South Mason PUD 3 Customers Have Electrical Service Restored After Thursday Outage - Update With Suspected Cause

Bonneville Power Administration personnel work to repair damaged insulators on high voltage transmission lines near Kamilche

A power outage that affected 4,200 customers in south Mason County Thursday appears to have been caused by damaged insulators on a high voltage Bonneville Power Administration (BPA) line that feeds a PUD 3 substation.

The loss of electricity occurred at approximately 5:30 PM when a BPA line relay to the Skookum substation at Kamilche went out. Bonneville crews were dispatched to restore service to the substation and service was brought back on line at 6:54 PM.

General areas affected by the outage included:

Arcadia Road
Arcadia Shores
Bloomfield Road
Cole Road
Hurley Waldrip Road
Hwy 101 North
Hwy 108 from Kamilche to Grays Harbor County line
Kamilche Point
Lynch Road
Mill Creek Road
Old Olympic Hwy
Portion of Hillcrest (City of Shelton)
Taylortowne
Totten Shores

Bonneville Power Administration personnel discovered the damaged insulators while inspecting the high voltage power line in an attempt to determine the cause of the outage.

7/8/2010 - 4,200 South Mason Customers Have Electricity Restored

Electricity was restored at 6:54 this evening to nearly 4,200 Mason County PUD No. 3 customers affected by an outage in south Mason County. The outage occurred due to a problem with a high voltage Bonneville Power Administration (BPA) line that feeds a PUD 3 substation.

A BPA line relay to the Skookum substation at Kamilche went out at about 5:45 PM and Bonneville crews were dispatched to restore service to the substation.

General areas affected by the outage included:

Arcadia Road
Arcadia Shores
Bloomfield Road
Cole Road
Hurley Waldrip Road
Hwy 101 North
Hwy 108 from Kamilche to Grays Harbor County line
Kamilche Point
Lynch Road
Mill Creek Road
Old Olympic Hwy
Portion of Hillcrest (City of Shelton)
Taylortowne
Totten Shores

Bonneville Power Administration personnel will be inspecting the high voltage power line in an attempt to determine the cause of the outage.

Mason County Under Heat Advisory from National Weather Service

The National Weather Service in Seattle has issued a heat advisory for the Southwest Interior and the Hood Canal area...which is in effect until 9 pm Friday.

Daytime temperatures: highs will be in the lower to mid 90s for much of the area today...and in the upper 80s and lower 90s on Friday.
Night-time temperatures: minimum temperatures will cool off to the mid to upper 50s tonight providing some relief from the heat...but this will not occur until several hours after midnight. Noticeable cooling will not occur until after sunset which is still around 9 pm tonight...and even then it can take a few hours for significant cooling to occur. Locations on hill sides and hill tops will not cool off as much and minimum temperatures may only reach the lower 60s.
Impacts: the elderly...small children...and people who work outside are especially vulnerable to the effects of heat. Heat exhaustion or heat stroke are possible if proper precautions are not taken.

Precautionary/preparedness actions...

A heat advisory means that a period of hot temperatures is expected. The combination of hot temperatures and high humidity will combine to create a situation in which heat illnesses are Possible. Drink plenty of fluids...stay in an air-conditioned room...stay out of the sun...and check up on relatives and neighbors.