In an interview with the American Public Power Association, Kevin Nordt, general manager of Grant County PUD in Washington State, detailed how the PUD’s decision to break from the old way of doing business helped the PUD successfully complete a major substation project in two years and explained how the PUD has successfully managed a dramatic increase in load growth in recent years.
Nordt also noted that given its diverse customer mix, the PUD has recognized that its approach to customer service can’t be one size fits all and while the PUD’s customer satisfaction results have been good, the PUD is not going to rest on its laurels in this area going forward.
(This is the first of a two-part article based on the Association’s interview with Nordt).
Substation project successfully completed
In the interview, Nordt discussed the PUD’s successful completion in 2017 of a two-year project to build or rebuild eight substations around the county.
The project was a good example of the way the PUD is trying to do business, Nordt said. He noted that the PUD’s board has “laid out a very clear vision of excellence in service and leadership and they really want us to strive to achieve excellence on behalf of the customer. We think that’s fundamental to the public power ethos.”
He said that one of the ways to achieve the PUD’s goals has been through maintaining excellent customer service and reliability. With the type of growth that the PUD has experienced, there is a need for significant additions to the PUD’s electric system.
As with many utilities in the U.S., the PUD has been faced with aging infrastructure. It had older substations and other infrastructure that needed to be replaced.
Avoiding the old way of doing business
Grant County PUD found itself in a situation prior to this project where the old way of doing business was going to create what looked like an untenable backlog to get the facilities that were needed for various purposes including reliability and expansion completed in a timely manner.
The PUD was looking at a backlog of somewhere on the order of five to eight years “and that just was not going to be an acceptable outcome,” Nordt said.
The old way of doing business involved a design/bid/build approach.
The PUD challenged its engineers to see if there was another way the project could be completed and ultimately decided to utilize a design/build process.
“We pursued the design/build contract and we put a team together and I think all in all it came off really well. I think we’ve got a lot of infrastructure built in a short time,” Nordt said.
The bigger picture lessons from the project? “Don’t fear trying to do something innovative. Recognize that certain things can still be a big success even though not every piece went well. So you’ve just got to recognize that,” Nordt said. “The importance of teamwork and respect and cooperation amongst parties to the type of effort was a lesson that we learned,” he added.
Overall, the biggest thing the project did was reinforce the idea that by being innovative and being willing to try something new the PUD could create real customer value. In order to make it successful, it required the PUD to lean heavily on some of its core values, namely, respect, service and teamwork, in that all parties to the project needed to work well together, Nordt said.
“The proof’s in the pudding. Eight substations in roughly twenty-four months or so is pretty impressive,” Nordt said.
Meanwhile, Nordt was asked to discuss load growth for Grant County PUD, both in terms of recent trends, as well as load growth projections for the PUD.
The PUD has experienced rapid growth for quite some time. In the 2004-2005 period, growth started to pick up and Grant County saw that as a good thing, as long as the PUD’s core customers -- residential and small commercial customers and irrigators -- were not adversely harmed by the growth.
What the PUD found is that it can have a business model that enhances outcomes for its core customers — outcomes aided by growth in the larger commercial and particularly large industrial space. “We have a situation where we have some cross-subsidization and growth in the larger industrial classes helping keep the rates lower in those core classes. That’s a good thing, if we can keep that growth going.”
In 2004, the PUD’s load averaged around 340 MW and has grown dramatically since that time.
At a July 24 Grant County PUD Commission meeting, commissioners learned that Grant PUD has the potential for more than 200 MW in traditional load. Last year Grant PUD’s average load was 590 average MW. The new expressions of interest from large general service and industrial customers could grow the system by more than a third.
The PUD has grown from 2014 through “about now by 100 megawatts or a little bit more and we’ll continue to grow this year,” Nordt said in the interview. Over that period, the PUD has averaged about four percent year-on-year growth “and we see probably somewhere on the area of about three and half to four percent going forward for the next five years,” he said. The PUD may come in a bit above that, Nordt said, noting that this doesn’t include any load tied to cryptocurrency mining.
“One thing that we do worry about is we don’t want to get too concentrated,” the Grant County PUD general manager said.
The PUD wants to make sure that it doesn’t find itself in a situation that puts the overall utility at risk.
They’ve been successful, Nordt says, in tapping load growth to help balance the ups and downs of wholesale market pricing and the need to rehabilitate major generating resources and other aging infrastructure.
“We see the capability to keep some pretty healthy growth going for the foreseeable future,” Nordt said.
Customer service and advanced metering
Meanwhile, Nordt was asked to discuss the ways in which Grant County PUD is working to improve customer service and detail how important of a role the PUD’s shift to advanced metering will play in improving the overall experience for customers.
Excellent customer service is one of the PUD’s clear strategic objectives, Nordt pointed out.
He noted that the PUD has an interesting customer mix. It has a large amount of load in retail sales concentrated in a very small number of very large customers, along with traditional customers – residential, small commercial and irrigators.
Some of the steps that the PUD has taken have been to refocus and reorganize customer service functions to better align expertise to interact with those various customer segments.
The PUD recognized that its customer service approach couldn’t be one size fits all. The PUD has a customer solutions group that is “laser focused” on making sure it can take care of the needs of customers in the residential, irrigator and small commercial customer segments.
Grant County PUD also set up a large-customer care group to make sure the needs of those customers are met.
The PUD has organized all of these efforts under a chief customer officer, a position that was created within the last two years to make sure that the PUD had a very clear focus on reaching out and taking care of customers.
“Our customer service satisfaction results and other measures show that we’re doing a good job, but we don’t want to rest on our laurels there as we go forward,” Nordt said.
The PUD wants to make sure that as customer needs and desires change, “whether in terms of power quality, the greenhouse gas attributes of their power supply, or other products and services,” that Grant PUD has what it needs to address those desires, Nordt said.
With its large customers, the PUD has developed services that are tailored to meet some of their individual needs. “We found there that sort of one-size-fits-all rate schedules may not go as far as we could to meet the individual customer desires, but, again, to meet a particular customer’s desires, we want to make sure that that’s not coming at the cost to another customer,” Nordt pointed out.
Meanwhile, the PUD is undertaking a full, holistic look at its rate design to see if there are improvements or things that it can structure in terms of pricing that will better service customers.
Advanced metering infrastructure “can and probably will play a role. We’re just getting that in place now,” Nordt said.
The PUD sees the opportunity for customer cost savings through reduced cost of meter reading and reduced maintenance costs and it anticipates having the ability to identify customer outages sooner.
Right now, the PUD’s main focus is effectively executing on its plan to get all of its meters across the PUD’s service territory changed out to the new AMI infrastructure and take advantage of some of the basic gains with the remote meter reading.
The advanced meters will help ensure the PUD’s cost-of-service analysis is as accurate as possible, he said, by helping staff understand how customers are using power, whether the PUD is sending the right price signals and what the utility could potentially do to better address customers’ usage patterns.
Nordt said that in the PUD’s upcoming examination of its rate design, it will not, yet, have sufficient data to inform that from the AMI.
“We’ll look to build on that through time to help with meeting customer desires,” Nordt said.
Additional information about the PUD’s advanced metering program is available here.