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Grant PUD GM details benefits of dam rehabilitation project

When a long-term rehabilitation project for its two dams is completed, Washington State-based Grant County PUD will have an energy source “that is very well positioned for the evolving future,” with the generation resources offering short-term storage and fast ramping capability, said Kevin Nordt, the PUD’s general manager, in an interview with the American Public Power Association.

(This is the second of two articles based on an Association interview with Nordt. In the first article, Nordt discussed several topics including how the PUD successfully completed a major substation project in two years and has successfully managed a dramatic increase in load growth in recent years).

Rehabilitating turbines and generators at dams

The PUD has been investing millions of dollars to rehabilitate the turbines and generators at its Wanapum and Priest Rapids dams.

“This is a major rehabilitation project,” Nordt noted in the interview. From start to finish, it will probably be in excess of twenty years.

The Wanapum and Priest Rapids dams are the two major generating resources that the PUD owns and operates, with each having roughly 1,000 MW of capacity. Priest Rapids came into service in the late 1950s, with Wanapum coming into service a few years later.

Wanapum was the first of the two dams to be rehabilitated. “All the turbines are upgraded out at Wanapum,” resulting in an uprate of their power output, as well as an increase in efficiency, Nordt noted. “Nominally, we think we get about a three percent average gain in efficiency on all the turbines. We had a decent uprate of their capacity as well.”

Moreover, the biological performance on the turbines has been solid, he noted, so the effort has been “a win for power and fish there, as well.”

The rehabilitation work on Priest Rapids got underway in 2017. “We’ve done our first unit there at Priest Rapids, successfully got that back in service. We’re into the second one now,” Nordt said. The Priest Rapids project is expected to wrap up in the 2027 timeframe.

The rehabilitation effort at the dams “really positions us well for our base power supply for decades to come,” he said.

Not just in terms of providing an energy source, but also an energy source that is very well positioned for the evolving future.

“No one can see exactly what the future looks like, but it does seem like flexibility, low-carbon output or no carbon output and the capability of having some short-term storage are all going to be features that are going to be more valuable into the future than they have been in the past,” the PUD’s general manager said.

And that is what the Priest Rapids and Wanapum dams offer the PUD. Together, the projects offer significant short-term storage. “They provide very fast ramping capability, blackstart capability – a whole host of ancillary services, as well as highly dependable capacity and low-cost energy.”

“So whether for our own use or for marketing off some of those services for higher value and offsetting retail rate costs, the power projects will be well positioned well into the next number of years,” Nordt said.

Grant County PUD responds to cryptocurrency mining

Grant County PUD and several other PUDs in Washington State are grappling with cryptocurrency mining.

Bitcoin miners have been drawn to the Pacific Northwest states of Oregon and Washington, which feature some of the lowest electricity rates in the country, thanks to available hydropower.

In May 2018, Commissioners for Grant County PUD unanimously agreed to move forward with the creation of a new customer rate class for cryptocurrency miners that would protect the interests of the utility’s existing customers.

By adopting this policy, the board also affirmed its position that core customer groups will continue to be first in line for access to the benefits of low-cost energy generated at Grant PUD’s hydro facilities.

The policy also creates a priority status for traditional commercial and industrial customers who are waiting for power service. The new “Evolving Industry” rate class provides more certainty of costs and waiting periods to the large number of cryptocurrency firms interested in service, Grant PUD said.

The Evolving Industry rate would apply to businesses:

  • Whose primary revenue stream is evolving and unproven.
  • Whose ability to pay power rates long term is uncertain or at risk, compared to traditional customer classes.
  • Who are vulnerable to extreme value fluctuations of their primary output.
  • Who are at risk for detrimental changes in regulation.
  • Who could become part of a large concentration of power demand in Grant County PUD’s service area.

Early on, cryptocurrency firms likely will be the only members of the Evolving Industry customer class, but the class will apply to all businesses that meet the same proposed risk criteria.

Cryptocurrency was on the PUD’s radar screen early

Cryptocurrency mining showed up on the PUD’s radar screen several years ago.

From 2011 to 2014, Bitcoin saw a run up in terms of pricing. Against this backdrop, Grant County PUD started to do some thinking in its strategic planning group and working with its power delivery engineering group, but then there was a subsequent Bitcoin price crash.

“It just sort of went off the radar screen,” Nordt said. “It wasn’t anything we ever really forgot about, but it just wasn’t the first priority by any stretch because the requests dried up for a number of years.”

But then as Bitcoin saw a spike in prices across 2017, particularly the back half of 2017, the PUD saw the number of requests “skyrocket to just an unbelievable amount – well north of a thousand megawatts.”

Goals

Nordt has served in the role of general manager at Grant County PUD since June 2016.

In the interview, he was asked to detail what his key goals were for the PUD when he took over as general manager and provide any update on how efforts are progressing to meet those goals.

When he became general manager at Grant County PUD, the objectives he had were outlined in a program called “Vision 2021,” a five-year plan to achieve the PUD board’s “desired vision of the excellence in service and leadership and really took it back to the board’s strategic plan,” Nordt said.

Nordt says his job as general manager “is to execute to achieve the strategic objectives that the board had laid out, so while we had been making good, positive progress towards those goals, we were definitely still seeing some gaps against the success measures in the strategic plan.”

The strategic plan “dashboard” highlighted several areas that the PUD needed to focus on and that is where he set his efforts. “I think we’re making some pretty good progress. We haven’t fully closed the gaps,” he said. Nordt pointed to solid progress in the PUD’s safety culture and performance.

In addition, “we continue to work to find ways to prioritize our work, balance our resources, so as to make sure we’re not jeopardizing customer service, reliability or the long run viability of any of our assets, but doing it in a way” that improves upon the rate trajectory. “We’re making some good progress there,” Nordt said.

Overall, the PUD is “on the track that we set out. Certain things are a little bit ahead, certain things are a little bit behind, but on average I think we’re about where we thought we would be and we’re making positive progress towards getting our dashboard green,” he said.

Nordt joined PUD in 2004

Nordt joined Grant County PUD in 2004. He began his career at the PUD as the Mid-Columbia Coordinator. In December 2006, he became the Director of Power Management with nearly 20 years of experience in the Northwest energy market.

Nordt began serving as the PUD’s chief financial officer in 2011. While serving as CFO, he oversaw the power management, finance and reliability and compliance divisions.

He has spent his career working in the Northwest in a variety of engineering, marketing, trading and operations positions. Past regional employment includes positions with Portland General Electric and Energy Northwest.

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