power production - grant pud...2019/01/08 · june july august september october november december...

Quarterly Commission Update 1/8/19

Powering our way of life.

Power Production

Department Purpose and Goal

Purpose: Provide safe, secure, economical, reliable and compliant power generation under the Priest Rapid Project Federal Energy Regulatory Commission (FERC) License Project No. 2114 while supporting the Wanapum relationship.Goal: Execute the aforementioned tasks while championing a culture of safety and operational excellence with continuous focus on the guiding values of safety, innovation, service, teamwork, respect, integrity, and heritage.

Acronym List

• PP – Power Production• HPI – Human Performance Improvement• FOP – Forced Outage Percentage (unavailability as

classified as non operational due to an unexpected breakdown)

• RPIW – Rapid Process Improvement Workshop• PM – Preventative Maintenance• ODSP – Owners Dam Safety Program• PRRE – Priest Rapids Right Embankment

2018 Q4 Review

• Safety Update• PP Performance• Budget Review• Lean• Maximo Update• Q1 Forecast• HPI Update

Safety Update

65%

70%

75%

80%

85%

90%

95%

100%

105%

January February March April May June July August September October November

2018 PP Safety Meeting Attendance

Safety Update

PP Performance

60.00%

65.00%

70.00%

75.00%

80.00%

85.00%

90.00%

January February March April May June July August September October November December

2018 Availability By Month

Priest Wanapum Project Target

PP Performance

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

January February March April May June July August September October November December

2018 PP Forced Outage Percentage

Priest Wanapum Project Target

2018 Budget and ActualsCapital O&M

Budget $66,816,703 Directs $20,950,354

Actual $54,164,532 $16,768,157

Remain $12,652,171 $4,182,197

Budget $8,383,939 Labor $16,736,478

Actual $5,733,247 $19,811,972

Remain $2,650,692 -$3,075,494

Budget $75,200,642 Total $37,686,832

Actual $59,897,779 $36,580,129

Remain $15,302,863 $1,106,703

LEAN Update• Completed mapping and data gathering on current state of 2 processes

(switching and clearances and preventative maintenance

• Created vision of future state of both

• Identified and prioritized 6 areas of improvement for both (process standardization, clearance building, roles standardized, production boards, multi-week schedules)

• Will complete improvement events (RPIW)

• Strategic Plan Key Objective 1

• Lean puts customer needs first

• Lean empowers the people doing the work

Key Lean PrinciplesContinuous ImprovementThe relentless pursuit of reducing waste and increasing customer value

Respect for PeopleManagement system that is respects customers and employees

Relying on the expertise of the people who do the work to shape how the work is done

Creating problem solvers at ALL levels of the organization

PR Value Stream Current State Maps

Electronic Timekeeping

- Benchmarking evidence

- 1/25 pilot kick off at Priest Rapids

- Labor management discussions

- Understanding Payroll Needs and Financial Software Inputs

(time codes, etc)

Q1 Forecast

- Succession Planning (multiple retirements)

- ODSP Peer Review

- PRRE work

- Continuing to work on emergency procedures (testing, hatcheries, etc)

- Wanapum 07 outage warranty work on rotor, Priest 02 outage update,

Wanapum 08 returned to service

HPI Update

- Training ongoing with leadership

- Rollout to others

- Incorporating and complimenting

Grant PUD Commission Meeting – January 8, 2019

Grant PUD Lands & Recreation 2019 Q1 Business Report


Departmental Purpose and Goal• Purpose: Fulfill certain regulatory obligations under the District’s

FERC license, provide real estate support services for the District, and manage the District’s geographic information system (GIS) program.

• Goal: Execute the aforementioned tasks and services in light of the District’s Strategic Plan objectives related to maintaining a strong financial position, providing long-term low rates, providing excellent customer service, and attaining environmental compliance.

2018 Business Review• Safety

• Non-recordable incidents = 6• Recordable incidents = 0• Safety meeting attendance = 100%

• Regulatory Review• FERC filings by Grant PUD = 3• Submitted on time = 3• FERC approvals/orders = 6• Summary/listing of major filings:

• FERC approval of Riverstone Marina (non-project use of project lands)• FERC approval of EOTs to file PR Water Trail As-Builts and construct Wanapum Lower

Boat Launch (pending RRMP approval and liquefaction studies)• Grant PUD files Crescent Bar As-Builts

2018 Business Review• Projects & Work Activities

• Recreation site operations and maintenance• Watershed weekend success• Installed 17 picnic shade shelters• Completion of Crescent Bar’s Riverbend Boat

Launch• Start-up of Crescent Bar water/wastewater

systems• Recreation monitoring surveys• Continued encroachment removals• PR Right Embankment project support• 2019 Shoreline Management Plan update • Supported revamp of Grant PUD website• Began working with Columbia Cliffs

community for shoreline compliance

YTD budget-to-actuals (through November 30)

2018 BudgetActuals as of

11/30/18Budget

Remaining

% of Budget Spent Q4 YEP

% Budget to YEP

CAP $7,540,673 $525,092 $7,015,581 6.96% $8,745,498 115.98%

O&M $1,172,290 $1,039,497 $132,793 88.67% $1,633,818 139.37%

Labor $1,067,854 $1,058,184 $9,670 99.09% $1,067,854 100.00%

TOTAL $9,780,817 $2,622,773 $7,158,044 26.82% $11,447,170 117.04%

2019 Q1 Forecast• Planned Projects & Work Activities

• Central Washington Management Group contract• SMP update consultation / Board review and request for approval• Crescent Bar Well 1B drilling• Crescent Bar swales, Teal Rd. crosswalk, rock placement• Contracting for PRRA maintenance dredging• Columbia Cliffs Public Recreation Development Plan• Encroachment removal/prep for spring restoration activities• Continue real estate, vegetation management, and GIS support • Evaluate long-term facility maintenance programs• Recruitment for open Lands Specialist position

2019 Q1 Forecast• Safety Goals

• Non-recordable incidents = 0• Recordable incidents = 0• Safety meeting attendance =

100%• Regulatory Outlook

• Anticipated FERC filings = 2• Anticipated FERC approvals = 1

(RRMP)• Any regulatory threats or risks =

none known/anticipated

2019 Q1 Forecast• Potential Management Challenges

• District use of Sunland Estates Lot 51 • Agricultural leasing of project lands

• Potential Efficiency Opportunities• Succession planning• Crew support for rec site O&M, vegetation management,

encroachment removals

Q1 Spotlight – Crescent Bar

Crescent Bar history…• 1962 – Leased to the Port of Quincy

• 1973 – Residential development begins

• 2010 – Commission votes to expire lease with Port of Quincy

• 2011 – Island residents sue Grant PUD for right to stay

• 2015 – Commission votes to approve settlement agreement, litigation ends, 80% of island returned to public use

• 2016 – Fair market rent payments and recreation construction begins

• 2018 – Renovation of Crescent Bar Recreation Area completed

Before – Oct. 20, 2016

Before – August 2016

After – June 1, 2018

After –Chinook Park

After –RiverbendPark

Water/wastewater system upgrades

Financials – capital expenses (2009-2018)

• Capital spending to date (through 11/28/18) $35,996,994• Estimated remaining capital expenditures ~$350,000• Total estimated capital costs $36,346,994*

*Does not include the cost of financing or long-term capital upgrades. *Does not consider water/wastewater cost share reimbursement from leaseholders.

2018 Crescent Bar O&M Expenses and RevenuesCWMG Expenses Grant PUD Expenses Total Expenses Grant PUD Revenues

Campground and day-use areas $ 223,877 $ 223,877 $ 113,243 Marina & fuel $ 36,647 $ 75,259 $ 112,407 $ 110,311 Golf course $ 251,795 $ 251,795 $ 112,407 Admin, overhead, etc.* $ 345,829 $ 345,829 Other O&M (public works repairs, security) $ 243,905 $ 243,905 Grant PUD labor (L&R/LRMs) $ 55,697 $ 55,697 Leases $ - $ 1,460,442 WS/WWTP payments $ - $ -Special events $ - $ 17,145 Total 2018 $ 858,148 $ 374,861 $ 1,233,510 $ 1,813,548 *excludes taxes

CWMG Expenses Grant PUD Expenses Total Expenses Grant PUD RevenuesCampground and day-use areas 409,131$ 409,131$ 125,000$ Marina & fuel 73,198$ 80,000$ 153,198$ 110,000$ Golf course 507,047$ 507,047$ 115,000$ CWMG admin, overhead, etc.* 294,492$ 294,492$ Non-CWMG O&M (public works repairs, security, office trailer rental) 281,000$ 281,000$ Grant PUD staff labor (L&R, LRMs) 55,120$ 55,120$ Leases -$ 1,532,712$ WS/WWTP payments -$ 581,884$ Special events -$ 20,000$ Total 2019 1,283,868$ 416,120$ 1,699,988$ 2,484,596$ *excludes taxes

2019 Crescent Bar Estimated Expenses and Revenues

2018

2018 Crescent Bar O&M Expenses and Revenues

CWMG ExpensesGrant PUD ExpensesTotal ExpensesGrant PUD Revenues

Campground and day-use areas$ 223,877$ 223,877$ 113,243

Marina & fuel$ 36,647$ 75,259$ 112,407$ 110,311

Golf course$ 251,795$ 251,795$ 112,407

Admin, overhead, etc.*$ 345,829$ 345,829

Other O&M (public works repairs, security)$ 243,905$ 243,905

Grant PUD labor (L&R/LRMs)$ 55,697$ 55,697

Leases$ - 0$ 1,460,442

WS/WWTP payments$ - 0$ - 0

Special events$ - 0$ 17,145

Total 2018$ 858,148$ 374,861$ 1,233,510$ 1,813,548

*excludes taxes

2019

2019 Crescent Bar Estimated Expenses and Revenues

CWMG ExpensesGrant PUD ExpensesTotal ExpensesGrant PUD Revenues

Campground and day-use areas$ 409,131$ 409,131$ 125,000

Marina & fuel$ 73,198$ 80,000$ 153,198$ 110,000

Golf course$ 507,047$ 507,047$ 115,000

CWMG admin, overhead, etc.*$ 294,492$ 294,492

Non-CWMG O&M (public works repairs, security, office trailer rental)$ 281,000$ 281,000

Grant PUD staff labor (L&R, LRMs)$ 55,120$ 55,120

Leases$ - 0$ 1,532,712

WS/WWTP payments$ - 0$ 581,884

Special events$ - 0$ 20,000

Total 2019$ 1,283,868$ 416,120$ 1,699,988$ 2,484,596

*excludes taxes

Central Washington Management Group• Selected through a Request for Proposals process conducted in spring 2018• Demonstrated expertise (Crescent Bar O&M since 2016)• Positive relationship with Grant PUD staff, recreating public, and Crescent

Bar residents• Allows time for continued evaluation of long-term O&M strategy• Contract price ~$450K annual increase

• Added maintenance work - Chinook Park, well houses, and wastewater plant• Added bonding and insurance costs

Questions?

GCPUD Enterprise RiskQ1 2019 Update

Agenda• Current Business• Strategic Market Risks• Capital Planning Support• Risk Appetite• Work plan – Schedule

Adjustments

GCPUD ERM: Current Business

• Insurance brokerage RFP

• Insurance process improvement

KEY DETAILSThe Risk Department budget is dominated by insurance premiums.

GCPUD ERM: Current Business

• 2019 Budget

KEY DETAILSThe Risk Department budget is dominated by insurance premiums.

Strategic Market Risk

Premium Power Prices: Gas Power

KEY DETAILSNatural gas prices have informed premium power prices across America for decades.

Premium Power Prices: Gas Power

KEY DETAILSFour-year-average storage numbers suggest there is a practical top informing production behavior.

Strategic Market Risk: Gas Supply

KEY DETAILSThe last 15 years’ storage data seems to clarify the pre-and post-fracking paradigms.


KEY DETAILSHenry Hub gas prices seem responsive to the gas top.


KEY DETAILSMid-Columbia power prices seem responsive to the gas prices.


KEY DETAILSRising production costs and apparently capped wholesale power prices have put a squeeze on the traditional value of hydro generating assets.


KEY DETAILSThe 2018 rate forecast suggests GCPUD’s retail service rates offer revenue potentially as good as wholesale markets were in their heyday.


KEY DETAILSThe recent typical wholesale gross margin is represented in the turquoise arrow, and current gas market fundamentals offer little to suggest this will change in the District’s current planning horizon.


KEY DETAILSWith continual improvements in operation and business execution, growth in the volume of retail rates paid may offer ratepayers greater stability.

Capital Planning Support

GCPUD ERM: Capital Planning Support

• Enterprise Risk Data will collect and refresh data used to inform risk-based decision-making

• Continued practice should result in gradually higher quality data

KEY DETAILSUse of the data encourages its review and cements its value to those submitting it; refreshing the data with audit findings better supports future decision-making.

GCPUD ERM: Capital Planning Support

• Enterprise Risk Data supports Capital planning ands allocation


GCPUD ERM: Internal Audit Feedback

• Enterprise Risk Data supports Audit planning

• Successful capital projects should alter the organizational risk profile, in total


Capital Integration – 2017 Risks

ALIGNMENT ANALYSISAlignment between the risks present to the team and capital allocation is sure to produce benefits.

Capital Integration – 2018 Capital


Capital Integration – 2018 Risks


Capital Integration – 2019 Capital


Risk Appetite

GCPUD ERM: Risk Capacity

• Analyze financial forecast and operational capital for top-down approach

• Include free cash flow, prioritization of eligible projects for delay

KEY DETAILSHigh-level targets and day-to-day practices should conform to one another. Checking our risk capacity and appetite is one of those ways we can assure fit.

GCPUD ERM: Imputed Risk Appetite• Hydro event - $2.5mm• ES event - $6.3mm• Environmental - $2.5mm• Facilities - $2.5mm• Fleet - $2.0mm• Tech - $5mm• Wholesale - $10mm• Retail - $9mm

$16mm

KEY DETAILSThat the imputed risk appetite is less than the capacity speaks to a conservative management philosophy.

Work Plans

Work Plan

PROGRESSDemonstrate measurable accomplishment of goals with demonstrable value to the District.

• By end of 2019:Q1• 2018 Major risk analysis

• By end of 2019:Q2• Financial function risk framework

• By end of 2019:Q3• Task-based ERM Platform

• By end of 2019• Integration report – Audit, Capital activity

Thank you.Devon WilliamsRisk Manager

[email protected] grantpud.org


2018 Q4 NERC Compliance Update

NERC Compliance

Compliance Overview

NERC BackgroundGrant ProgramPast Performance The Path Forward

Authorities

Federal Energy Policy Act of 2005• Tasked FERC to develop an Electric Reliability Organization • NERC executed delegation agreements with Regional Entities • Regional Entities carry out Electric Reliability Compliance activities• Registered Entities required to meet Reliability Compliance Standards

FERC NERC WECC Grant

NERC Compliance Scope

Bulk Electric System (BES)• Transmission elements at 100kV or higher• Real Power and Reactive Power connected at 100kV or higher

Operations and Planning• System operations• System planning• Maintenance• Continuity and Recovery

Critical Infrastructure Protection• Cyber Security• Physical Security• Continuity and Recovery

Grant PUD Compliance Organization

CIP Senior Manager: Kevin

Marshall

CFO: Jeff Bishop

RC Manager: TBD

(Interim)

Compliance Specialist:

Karla Weaver

RC Internal Auditor:

Alex Ybarra

Grant PUD Compliance Program

$369,488

$47,400

$302,088

$20,000

$205,674

$7,645

$178,230

$19,799

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

Total O&M Labor Travel and Training

2018 Budget

Budget Actual

Grant PUD Violation History

0

2

4

6

8

10

12

2013 2014 2015 2016 2017* 2018

Self Report Audit Finding

* Pending adjudication from WECC Enforcement

$176,000$49,500

$45,000 $15,000TBD

$0

Compliance Violation Impacts

Penalties and Sanctions• Up to $1M/violation/day• $275,500 in penalties to date

Mitigations• Violations must be mitigated• Failure to mitigate will incur further penalties and sanctions

Cumulative Impacts• Violation history influences penalties and sanctions• Risk-based enforcement

Self-Report: CIP-010-2 R3.1• GCPD did not conduct Vulnerability Assessments by the due date• Self-Report and mitigation plan submitted

2018 Accomplishments

Participated in WAPA Rocky Mountain Region mock audit• Increased technical and audit knowledge• Information sharing• Network building

Aligned Standard Owners to org chart where practicalParticipated in the Reliability and Security Workshop Initiated Requirement-based internal controls program

2018 Goals

Update Internal Compliance Program RACI modelAlign responsibilities to positions

Begin Internal Controls ProgramIdentify and mitigate potential failure pointsMeasure against controls rather than StandardsCompliance becomes a byproduct

Meet external reporting requirementsQuarterly to NERCQuarterly and Annual to WECC

2018 Work Plan

Q1 Align Responsibilities• Formalize RC Staff Position changes• Standard ownership at appropriate level

Q2 Complete Standard Teams• All Standard Owners “onboarded”• Subject Matter Experts assigned to teams

Q3 Internal Controls Development• Driven by Standard Owners• Supported by RC Staff and Archer Security Group• Developed at Requirement level

Q4 Internal Controls Review• Conducted by RC Staff and external parties as appropriate

Internal Controls Plan

Work with Standard Owners and SMEs to develop internal controls for each NERC requirement

• No single points of failure• Documented in Controls Matrix

RC Staff will review internal controls • Ideally with assistance from WECC

Internal audit focused on controlsRoot Cause Analysis and After Action Review will be conducted and

documented on all controls violationsControls scheme will identify areas of compliance risk prior to violation

2019 First Quarter – Self Certification

Annually WECC requires GCPD to Self-Cert whether we were compliant in 2018 of some Standard Requirements

• All RSAWs and evidence of compliance will be reviewed by SOs• R&C Staff will conduct final review

GCPD’s internal compliance program requires all Standard Requirements be self-certified

2018 Accomplishments/Challenges

Personnel• 1 FTR on RC Staff• 1 FTR position filled (Q4)• 1 FTR in approval process• CIP Standard Owners and SMEs changes• Mitigation: Reliability and Compliance consultant• Mitigation: Evaluating technology efficiencies

FERC Commissioners• Anticipate complete turnover of FERC Commission from 2016-2018• Unknown agenda and viewpoints• Mitigation: Remain active in industry groups• Mitigation: Ensure internal controls exceed minimum standards

WECC Support• Provides assistance and guidance on internal controls programs• WECC CEO resigned to accept NERC CEO position• WECC hired a new Director of Compliance• Mitigation: Reliability and Compliance consultant• Mitigation: Peer support with other utilities• Mitigation: Active participation in Western Interconnection Compliance Forum (WICF)


2019-01-08 Power Production Performance ReportSlide Number 1Department Purpose and GoalAcronym List2018 Q4 ReviewSafety UpdateSafety UpdateSafety UpdatePP PerformancePP Performance2018 Budget and ActualsLEAN UpdateKey Lean PrinciplesSlide Number 13Electronic TimekeepingQ1 ForecastHPI UpdateSlide Number 17

2019-01-08 Lands and Recreation Program ReportSlide Number 1Departmental Purpose and Goal2018 Business Review2018 Business ReviewYTD budget-to-actuals (through November 30)2019 Q1 Forecast2019 Q1 Forecast2019 Q1 ForecastSlide Number 9Slide Number 10Before – Oct. 20, 2016Before – August 2016After – June 1, 2018After –�Chinook Park �After – �Riverbend�ParkWater/wastewater system upgradesFinancials – capital expenses (2009-2018)Slide Number 18Slide Number 19Slide Number 20Slide Number 21

2019-01-08 Enterprise Risk Program ReportGCPUD Enterprise RiskAgendaGCPUD ERM: Current BusinessGCPUD ERM: Current BusinessStrategic Market RiskPremium Power Prices: Gas PowerPremium Power Prices: Gas PowerStrategic Market Risk: Gas SupplyStrategic Market Risk: Gas SupplyStrategic Market Risk: Gas SupplyStrategic Market Risk: Gas SupplyStrategic Market Risk: Gas SupplyStrategic Market Risk: Gas SupplyStrategic Market Risk: Gas SupplyCapital Planning SupportGCPUD ERM: Capital Planning SupportGCPUD ERM: Capital Planning SupportGCPUD ERM: Internal Audit FeedbackCapital Integration – 2017 RisksCapital Integration – 2018 CapitalCapital Integration – 2018 RisksCapital Integration – 2019 CapitalRisk AppetiteGCPUD ERM: Risk CapacityGCPUD ERM: Imputed Risk AppetiteWork PlansWork PlanThank you.

2019-01-08 NERC-WECC R&C Program ReportNERC ComplianceCompliance OverviewAuthoritiesNERC Compliance ScopeGrant PUD Compliance OrganizationGrant PUD Compliance ProgramGrant PUD Violation HistoryCompliance Violation Impacts2018 Accomplishments2018 Goals2018 Work PlanInternal Controls Plan2019 First Quarter – Self Certification2018 Accomplishments/ChallengesSlide Number 15

power production - grant pud...2019/01/08 · june july august september october november december...

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