1151 Valley Mall Parkway, East Wenatchee, WA 98802

509-884-7191 / 1-800-503-7990

Meaghan Vibbert
Public Information Officer
(509) 881-2221
News Release - 7/1/2002

Douglas PUD Commission Meeting Report

Douglas County PUD Commissioners Lynn Heminger, Mike Doneen and Jim Davis executed the following actions during the July 1, 2002 Commission meeting held at the East Wenatchee Headquarters building:

Approved a resolution opposing proposed changes to the northwest electricity system. The Federal Energy Regulatory Commission (FERC) is calling for changes in the Northwest electricity system, including creation of a regional transmission organization (RTO) and imposition of standard market design. RTO West would diminish public control over the Northwest electricity system by shifting authority from Northwest regional forums and elected public officials to an appointed RTO West board. Standard market design would replace current structures for providing electricity to the public on an at-cost basis with a system seeking to rely on market rates, and would force utilities into the short-term, price-volatile market and away from the predictable and low-cost long-term contracts that have been standard in the Northwest. There are more effective, less expensive ways to strengthen the Northwest power system than forming RTO West and imposing standard market design such as physical improvements to the transmission system infrastructure.

Authorized an interlocal cooperative agreement with Grant and Chelan PUDs for grant research and application services. Douglas PUD, Chelan County PUD and Grant County PUD are in the process of developing broadband, fiber optic, communication facilities to monitor, manage and control their respective electric systems. The PUDs are cooperatively investigating the availability of grant funding to support the ever-growing communication needs of their customers.

Approved a call for bids to provide Douglas PUD with a traveling water screen for the Wells Hydroelectric Project. The traveling water screen is used to filter debris from the water prior to its entry into the hatchery facilities at Wells Dam. The current screen’s main drive mechanical system is worn beyond repair.

Authorized an amendment to agreement for professional services with Parametrix, Inc. As a result of the Habitat Conservation Plan being completed, the final environmental impact statement will need to be updated to reflect the changes made during final negotiations. This amendment will increase the not to exceed budget by $55,330.

Approved an agreement for professional services with Biomark, Inc. a sole source, in connection with an evaluation of the prototype Adult PIT-tag Interrogation System for the Wells Hydroelectric Project. Diagnostic tests have indicated a high rate of tag detection and component reliability with the prototype. The District may be able to utilize the prototype PIT-tag detection system as the final production grade system for the fishways at Wells Dam. To determine this, Douglas PUD will conduct a biological evaluation of the prototype system utilizing up to 500 adult fish PIT-tagged at Wells Dam. Biomark will apply the PIT-tags to the test fish and manage the database of information collected by the prototype interrogation system. The contract is not to exceed $12,500.

Authorized acoustic scintillation flow meter measurement services for the Wells Hydroelectric Project by ASL AQFlow, Inc., a sole source. Douglas PUD is investigating the use of an acoustic scintillation flow meter time of travel system for measuring water flow through the Wells Hydroelectric Project turbines. This system will perform tests with better accuracy than the current Winter-Kennedy system. The cost is not to exceed $66,000.

Approved land use permit for Wells Tract 340. This resolution will give Mr. Russell Mahan permit approval for an existing boat ramp and existing residential landscaping placed and planted on District property.

Manager Dobbins reported Standard Poors upgraded the rating of Wells Project Revenue Bonds to double-A from double-A-minus. This upgrade is particularly notable because it comes at a time when utilities have been placed on credit watch or have been downgraded. The rating reflects the following credit strengths:

· Historical production costs that are among the lowest in the country at about seven mills per kilowatt-hour with expectations that they will remain very low even under critical water conditions;

· Long term power supply contracts that extend through 2018 including take or pay provisions and a 25% step-up provision;

· A unique project design that allows the district to meet environmental regulations with negligible capital expenditures;

· Conservative management practices, including the use of critical water levels for financial planning purposes; and

· Adequate debt service coverage for a wholesale system of 1.13x even under the exceptionally poor water conditions experienced in 2001, a conservative balance sheet with equity at 23% of assets, and stellar liquidity of $37.6 million, or nearly three years of Wells Project operating expenses.