2A
| NOVEMBER 27, 2013
FROM PAGE ON E
The Newport Miner
Cyber attack affects the area
Serving Pend Oreille County, WA
BY DESIREÉ HOOD
Fred J. Willenbrock
OF THE MINER
Publisher
Michelle Nedved Managing Editor
J. Lindsay Guscott Advertising Consultant
Cindy Boober
Advertising Consultant
Beth Gokey
MINER PHOTO|DESIREÉ HOOD
Advertising Consultant
Don Gronning Reporter
Desireé Hood Reporter
Pandi Gruver Production
THE NEWPORT MINER
Students spell Thanksgiving before break The first period fifth grade social studies class at Sadie Halstead Middle School performed “A Pilgrim’s Story, A Time of Thanksgiving” Tuesday, Nov. 26, ending the show in a Thanksgiving Spell Down. Morgan Jackson, left, Brooke Marsengill, Brenna Ells, Kaily Braden, Violett Green, Saxon Comer and Keelen Mitchem discussed the significance of their letter in terms of Thanksgiving.
PRIEST RIVER – URM Stores were advised that they were the target of a cyber attack against their payment processing system. Because of this, actions are being taken and stores in the area are changing their credit card policies. The stores in the area affected are Family Foods in Oldtown and Mitchell’s Harvest Foods in Priest River. URM states they are continuing to investigate the cyber attack. Some stores in the system will be able to process cards through a dial up connection, but that takes longer to complete transactions.
They are working around the clock to fix the problem but recommend that customers pay with cash or checks. URM advises anyone who thinks their debit or credit card has been compromised should contact the bank that issued the card. They state that major credit card companies have a “zero liability” policy that guarantees cardholders will not be responsible for fraudulent charges. URM Stores opened a call center to answer questions about the data breach or to learn what protections to take in a cyber attack, Monday-Friday from 9 a.m. to 7 p.m. and Saturday from 10 a.m. to 2 p.m. at 877-237-7408.
Charisse Neufeldt Production
Susan Willenbrock Operations Manager
Jeanne Guscott Office Manager
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CO N N EC T W I T H U S The Miner Online
PUD | Fiber-to-the-premise project about $4.3 million over budget FROM PAGE 1
expenses. The CNS fiber-to-the-premise project is about $4.3 million over budget, about 12 percent over the anticipated costs for the fiber project. The original cost estimate was $34.1 million for the fiber to the home build-out in south Pend Oreille County and was largely funded by a $27 million federal stimulus grant, which ended Sept. 30. Plus the PUD matched $4.65 million and an additional $2.1 million was counted towards the match for parts of the system the PUD already built. So the PUD investment was about $6.75 million. It now must add another $4.3 million for the over run to its total costs. The grant required the PUD to bring fiber to at least 960 premises, however the PUD completed fiber to about 4,000 whether they requested service or not. Currently there are more than 964 requests for service with more than 505 customers connected to the Internet on PUD fiber lines. CNS Supervisor Robert Fritz said that the fiber backbone has been completed and they are focusing on connecting the remaining 400 requests and any future requests they receive. Owen said the PUD would continue to complete installations for the customers that request service. Owen said bringing the fiber to about 4,000 premises is part of the reason for the over run. “Several things changed as we were going through the grant process,” Owen said. PUD General Manager John Jordan said to the board in July that the cost overrun was caused by a lack of detailed record keeping. He said the PUD should have seen the overrun coming. “It’s a tracking thing,” Jordan said to the board in July. “No one in the district is trying to spend anything or hide anything. Until the middle of April, the district absolutely did not realize that an overrun was coming.” Knapp said the commissioners are cautious with rate increases on the fiber system. The PUD gets $35 from the three retail service providers per customer per month through the end of 2014. At that point, the PUD can increase this rate. “I am very cautious how we do the increases over the next five years,” Knapp said. He said a gradual increase would be better than an immediate jump to $50, which was the original plan. The $35 was just an introductory offer. “It is our challenge and responsibility to control broadband costs and live within our broadband revenues,” Jordan said. “Our computer models indicate we can do so, however, models are not always correct.” Owen said the PUD will be put-
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ting together a “look back at the project” and show how the overrun happened before the end of the year when the final grant paperwork must be turned in to the federal government to finalize the grant. Owen said that CNS shows in the PUD budget as debt payments in 2014, estimated at more than $200,000. “First off, CNS doesn’t affect rates,” Owen said. She said they are still working the CNS budget but she hopes the project will take in more than it spends next year. CNS is expected to have more than $815,000 in expenses, more than $350,000 in capital projects and more than $200,000 in debt payments. With a revenue source of more than $1.48 million, the project should start to pay for itself during 2014. CNS will borrow $5.25 million from the Box Canyon Renewal and License fund before the end of 2013. About $2 million will be used to refinance a short-term loan into a 20-year loan. The remaining $3.25 million will cover some of the $4.3 million overrun from the fiber-to-the-premise project. Repaying this loan is the debt shown in the CNS budget.
Electric system loses a few customers The electric system budget is more than $53.98 million for 2014, an increase of more than $806,430 from 2013. There are more than 7,842 residential customers on the system, a small decrease from 7,896 in 2012. More than 840 commercial customers have remained steady for a couple years, Owen said. Pend Oreille County residents receive most of their power from 48 megawatts produced at Boundary Hydroelectric Project, operated by Seattle City Light (SCL). This power is sold to the PUD at cost because of an agreement made many years ago when the Federal Energy Regulatory Commission (FERC) licensed Boundary to SCL. FERC said that as licensed, Boundary’s cost of power will be $51.3 million per year, or $14.20 per MWh, an increase of 143.5 percent compared to $5.84 per MWh the PUD was paying under the previous 50-year license. Boundary produces more than 1,040 MW at peak times. In comparison, Box Canyon Dam is operated by the PUD and operates at a much smaller scale producing more than 52 MW of power. According to Owen, the 2013 rate of power from Box Canyon Dam was about $42 per MWh. In 2014, Owen said the cost is $41.17 per MWh, a small decrease because of changing water runoff levels. Jordan said the Box Canyon project is 10 times smaller than Boundary Dam so they will have higher costs per MWh. “It depends on how much we
generate and what kind of water flows we get,” Owen said. For the average utility in the U.S., the U.S. Energy Information Administration states that the levelized cost of energy of small hydropower production is $140 per MWh in 2011. “Boundary power is probably the cheapest power you can get in the nation,” Owen said. Box Canyon power is sold to the Ponderay Newsprint Company, as well as power purchased from the Bonneville Power Administration and any remaining power from Boundary at cost. Owen said the newsprint uses about 75 percent of the power in the county. These rates have been going up because of the turbine and relicensing projects. Tree trimming is being moved away from contractors and brought in-house to the PUD, budgeted for more than $205,000. The PUD is hiring a foreman and two tree trimmers as well as buying miscellaneous equipment for this operation. “We used to contract that out but we are moving it in-house,” Owen said. “That’s probably the biggest change.” Other expenses in the electric system include more than $2 million for engineering costs, including more than $400,000 for installing and replacing more than 5.3 miles of upgraded lines near Sunvale Acres. “There’s a lot in that, sometimes we have to replace poles, sometimes we have to just replace the line, it depends,” Owen said. There is also more than $500,000 budgeted to replace aging poles on the system. The PUD has more than 20,000 poles and there has not been a replacement on some of the poles in more than eight years. Owen said that the fiber project crossed with some of the south county poles but they did not look at all of the poles in the north county. “The fiber system didn’t cross all 20,000 poles,” Owen said. “Most of the work is in the north end of the county.” More than $313,000 is budgeted as part of a five-year truck rotation program. The 1989 digger truck in Ione is scheduled for replacement and the 2006 Foreman bucket truck as well for an additional $140,000. Almost $300,000 is planned for stock items including transformers, regulators and other needed supplies.
Box Canyon Dam spending the most The production system includes Box Canyon Dam expenses and is budgeted for more than $49.15 million for 2014. This is an increase of more than $708,250 from 2013. Box Canyon Dam is currently
under the projects portion of the relicensing agreement with FERC. More than $28.8 million will be spent on capital projects for the production system, mainly on projects at the dam. Three of the four turbines have been upgraded and the fourth is close to completion. This is budgeted at more than $19.2 million to complete miscellaneous items on the four units, with more than $13.5 million of that to complete construction costs on the fourth unit alone. Protection Mitigation and Enhancement (PM&E) is about $3 million. These are the projects that are required by FERC under their relicensing. Owen said most of this amount is from erosion payments the PUD did not pay in 2013. Supplying fish passage upstream for Westslope cutthroat trout, Bull trout and Mountain whitefish from four to 24 inches in size, is required as part of relicensing. The design for the ladder should be complete in early 2014 and then the PUD can get the necessary permits. There is $6.1 million budgeted for fish passage next year for engineering and construction management, however, the total cost will be between $15 and $20 million for completion of the fish ladder. A cold water pipe is being designed for Sullivan Lake as part of the relicensing requirements. This pipe will bring cold water to the surface area and tributaries to help with the fish habitat for fish mitigation. This project is estimated at more than $4.4 million, however, Seattle City Light will reimburse half of the cost to the PUD because of its relicensing agreement on Boundary Dam. “Sullivan is budgeted there but it is also reimbursed. Seattle City Light pays for half of that and we also got money from the Columbia River initiative to pay for that so it is kind of a net zero,” Owen said. Columbia River gives the PUD money for water rights on Sullivan Lake. The total dissolved gas project is going out for a contractor bid and manufacturing by the end of 2013. It is budgeted for $2.7 million in 2014, with a total cost for the regulatory requirement costing an expected $6.5 million for completion.
Owen said that the PUD has built up enough of a reserve that they are not budgeting for more this year. They currently have more than $9 million in reserve. “We actually have quite a bit of money in reserves so we are not looking to grow that at this point,” Owen said. “That’s looked upon favorably to get a better rating on our bonds.”
Water systems
Dues and memberships
The water systems are the lowest budgeted item. The PUD operates nine water systems and a small one for their Box Canyon project, showing a budget of more than $417,700. This is a decrease from 2013 of almost $886,000 because the Metaline Falls water system had pipes replaced in 2013 for about $860,000. Owen said that reducing labor costs in the water systems also helped reduce the budget.
costly to PUD
Reserve money not budgeted
T H I S W E E K’S FO R EC A ST
Partly sunny
Partly sunny
41/23
41/25
Friday
Saturday
Partly sunny
Chance snow, mostly cloudy
39/28
39/30
Sunday
Cloudy, chance rain
41/26
coming to the PUD There are 111 employees at the PUD, which includes three commissioners. There are seven parttime or on call employees and 101 full time employees. The PUD had 98 full time and six on call employees in 2013. “For the 2014 budget, we project adding three union positions for tree trimming and vegetation management. Concurrently, we are eliminating $300,000 per year in outside contractor tree trimming services,” Jordan said. “We expect to shrink again to 99 full time employees by early 2015 due to scheduled retirements.” There is also a non-union and union wage increase, assumed to be at 2 percent, which equals more than $166,000. Owen said this increase is for all employees at the PUD. A contract is being negotiated currently with the union for next year and non-union wage increases will not be decided until late spring. The two watermen employed by the PUD will take over milfoil responsibilities in 2014. This reduces some of the cost of operations and labor at the Metaline Falls water system. Training and travel expenses are estimated at more than $214,000. The three PUD commissioners receive more than $40,000 for travel expenses. Owen said the commissioners do a lot of legislative work so they travel frequently. The commissioners’ salaries are set by the state and they receive $2,100 per month plus benefits. This increases every five years for cost of living and this was an increase year, raising the salary from $1,800 per month. “It’s out of our hands,” Knapp said of their wages.
Dues and memberships are not changing a lot from 2013, totaling more than $275,950. The North American Electric Reliability Corporation (NERC) expenses are listed at more than $38,000. These are required expenses and are used for training, software and consultants. Western Electric Coordinating Council (WECC) is showing more than $60,000. The PUD is required to be a member of the organization.
L A ST W E E K
Thanksgiving Day
Wednesday Thursday
More employees
Monday Cloudy, snow
32/20
Tuesday Cloudy
30/7
Source: National Weather Service and Accuweather.com, Newport, WA
Nov. 19 20 21 22 23 24 25
High 46 52 37 39 39 41 38
Low Precip. 39 .5” 31 .01” 15 - 14 - 14 - 18 - 19 - Source: Albeni Falls Dam
L A ST Y E A R This week last year was still warm and rainy. It was more like fall weather than winter. Highs in the 40s. Lows remained in the upper 20s and the region received nearly inch of rain.