2020 Q2 BUDGET TO ACTUALS August 11, 2020 8/5/2020 1 Grant PUD | - PowerPoint PPT Presentation

2020 Q2 BUDGET TO ACTUALS August 11, 2020 8/5/2020 1

Grant PUD | BUDGET TO ACTUALS Q2 2020 2020 DIRECTS YEAR-END PROJECTION OVERVIEW % of YEP Under 2020 Year-End 2020 Budget 2020 YTD Annual YEP Variance $ Variance Budget / Projection Budget % Over Budget Direct O&M $ 54,632,583 $ 21,129,842 39% $ 53,914,910 $ (717,673) -1% Under Budget Direct Labor $ 77,100,957 $ 37,610,466 49% $ 76,169,132 $ (931,825) -1% Under Budget Direct Capital $ 105,249,571 $ 36,193,893 34% $ 109,944,363 $ 4,694,792 4% Over Budget 2020 Directs Total $ 236,983,111 $ 94,934,202 40% $ 240,028,406 $ 3,045,295 1% Over Budget • At the end Q2 2020, O&M has spent 39% of its annual budget target, while Labor has spent 49% of its target • As a comparison, at end of Q2 2019 the O&M spend was 39% of budget and Labor was 50% of budget • Capital is at 34% of total 2020 confidence budget target at year-end • Year End Projections for Capital is currently expected to be 4% over the 2020 confidence budget • As a comparison, at end of Q2 2019, Capital spent was at 28% of its budget target • Year End net direct charges (O&M, Labor, Capital) are forecast higher than the 2020 budget by $3M, which is due primarily to higher than planned Capital spending 8/5/2020 2

Grant PUD | BUDGET TO ACTUALS Q2 2020 2020 YEAR-END DIRECT O&M BY FUNCTIONAL AREA Direct O&M by Group 2020 Direct O&M YTD % of YEP 2020 Year End YEP Variance Under Budget Functional Area 2020 Budget 2020 YTD Annual Variance Projection $ / Over Budget Budget % Board of Commission $ 91,000 $ 6,117 7% $ 66,613 $ (24,388) -27% Under Budget General Manager $ 754,208 $ 402,837 53% $ 779,981 $ 25,773 3% Over Budget Attorney $ 881,960 $ 125,475 14% $ 881,960 $ 0 0% Under Budget Chief Customer Officer $ 4,505,109 $ 3,096,971 69% $ 4,685,037 $ 179,928 4% Over Budget Chief Operating Officer $ 30,978,971 $ 10,183,298 33% $ 28,505,175 $ (2,473,795) -8% Under Budget Chief Financial Officer $ 17,301,365 $ 7,287,192 42% $ 18,929,532 $ 1,628,168 9% Over Budget Merchant Wholesale Telecom $ 119,971 $ 27,953 23% $ 66,613 $ (53,359) -44% Under Budget $ 54,632,583 $ 21,129,842 39% $ 53,914,910 $ (717,673) -1% Under Budget • At end of Q2 2020, Direct O&M has spent 39% of its annual budget target. Year End Projection for 2020 Direct O&M spending is under budget by $0.7M • As a comparison, at end of Q2 2019, Direct O&M spending was at 39% of the budget target • Overall Travel and other O&M expenses are down due to Covid-19 restrictions • Chief Customer Officer group: HR up $250k for addition of management consulting to support streamlining payroll • Chief Operations Officer group: PP WD expects $400k in overages for dam safety spillway gate and foundation drain cleaning. PMO Strategy Consulting Fees up $206k. FW canceled White Sturgeon and PR Lamprey Adult Passage Study $188k. Expect FERC License fee lower by $400k • Chief Financial Officer group: Internal Services $239k over due to Covid-19 expenses. Security up $300k for Security Risk Assessment and $330k increase in GuardForce contract. Expect more Technology Roadmap expenses to move from O&M to Capital by year end 8/5/2020 3

Grant PUD | BUDGET TO ACTUALS Q2 2020 • At the end of Q2 2020, the forecast for both FTR and FTE head count is below budget target • Total head count, as of 7/27 is 641 FTR and 76 FTE • For comparison, FTR head count was 606 at the close of 2019 • FTR Headcount forecast for 2020 remains unchanged from Q1 forecast • FTE is a cumulative figure that reflects part-time and seasonal employees • For comparison, the FTE utilization at close of 2019 was 44% over budget • The Overtime Year End Projection is 4% ($274k) over budget. Overtime is both event-dependent and used to partially cover insufficient FTR • For comparison, at Year End 2019 Overtime was 44% or $2.3M over budget 8/5/2020 4

Grant PUD | BUDGET TO ACTUALS Q2 2020 2020 YEAR-END DIRECT LABOR BY FUNCTIONAL AREA Direct Labor by Group 2020 Direct Labor YTD % of YEP 2020 Labor 2020 Labor 2020 Labor YEP YEP Variance Under Budget Functional Area Annual Variance Budget YTD $ / Over Budget Department Budget % AA0000 Board of Commission $ 167,680 $ 91,950 55% $ 209,680 $ 42,000 25% Over Budget BA0000 General Manager $ 637,820 $ 326,763 51% $ 590,108 $ (47,712) -7% Under Budget CA0000 Attorney $ 389,263 $ 193,674 50% $ 366,137 $ (23,126) -6% Under Budget DA0000 Chief Customer Officer $ 7,121,027 $ 3,355,885 47% $ 7,257,212 $ 136,185 2% Over Budget EA0000 Chief Operating Officer $ 55,363,881 $ 26,744,298 48% $ 53,801,634 $ (1,562,246) -3% Under Budget FA0000 Chief Financial Officer $ 13,260,821 $ 6,815,463 51% $ 13,776,245 $ 515,424 4% Over Budget GA0000 Merchant Wholesale Telecom $ 160,466 $ 82,433 51% $ 168,116 $ 7,650 5% Over Budget $ 77,100,957 $ 37,610,466 49% $ 76,169,132 $ (931,825) -1% Under Budget • At end of Q2 2020, Direct Labor has spent 49% of its annual budget target • Year End Projection for 2020 Direct Labor spending is currently expected to be $0.9M under budget • For comparison, at the end of Q2 2019, Direct Labor spending was at 50% of the budget target • The Chief Customer Officer group: up primarily due to not capturing the full request for Organizational Development in the 2020 budget • The Chief Operations Officer group: Reorganizations and employee transfers and not hiring for some FTE positions due to Covid-19 restrictions currently leave this group currently projecting lower headcount • The Chief Financial Officer group: Actual vacancy rate is below budgeted amount • AS of end of Q2, $6.8M of Labor has been charged to the Covid-19 initiative 8/5/2020 5

Grant PUD | BUDGET TO ACTUALS Q2 2020 2020 YEAR-END DIRECT CAPITAL – PROJECT PORTFOLIO Theory – The Project Confidence Factor (PCF) Collecting Selecting Initiate/Planning Executing Closing Estimate types & % obejctives Project Phase ROM Preliminary Budget Definitive Final (1) - ROM objective: -50% to +75% Project Budget Dollar Confidence at Project Phase (%) (2) - Preliminary estimate objective: -15% to +50% 100% (3) - Budget estimate objective: -10% to +25% 100% 95% (4) - Definitive estimate objective: -5% to +10% 80% 85% • Using the estimate types as a guide, the PCF 60% 60% Curve is applied to individual project 40% budgets. • 20% The PCF adjusted dollars define the 20% estimated capital spend 0% Collecting Selecting Initiate/Planning Executing Closing • Project Portfolio Group 2020 Project 2020 Capital Project Since the 2020 Budget was adopted, 2020 Budget Project Status ($M) Budget Portfolio Budget Confidence Adj Composition information accuracy has increased. Collect • IS/Facilities $ 40.5 $ 9.4 77% The new information has increased Power Delivery $ 37.5 $ 16.7 55% 30% Select 36% confidence in our estimate capital Power Production $ 70.4 $ 56.8 19% Initiate/Planning Technology $ 13.8 $ 3.4 76% 2% spending for the whole portfolio. Fiber/Other $ 20.9 $ 18.9 9% Executing/Closing • 32% 2020 Budget PCF adj = 43% TOTAL $ 183.1 $ 105.2 43% • Q2 2020 PCF adj = 22% Project Portfolio Group Q2 2020 Project Q2 2020 Capital Project • Q2 2020 Project Status Composition Q1 = 33% ($M) Budget Portfolio YEP Confidence Adj • Project status composition Collect IS/Facilities $ 30.9 $ 13.1 58% 3% 4% Power Delivery $ 28.6 $ 26.3 8% Select 22% Power Production $ 43.8 $ 39.8 9% Initiate/Planning Technology $ 10.1 $ 4.9 51% 71% Fiber/Other $ 27.0 $ 25.9 4% Executing/Closing TOTAL $ 140.5 $ 109.9 22% 8/5/2020 6

Grant PUD | BUDGET TO ACTUALS Q2 2020 2020 YEAR-END DIRECT CAPITAL – PROJECT PORTFOLIO Current Capital Portfolio is $4.7M over the 2020 Budget. • Variances driven by an increase in Fitness/Purchases and to a lesser degree Transformative work. • All sub-portfolios show increased expected capital spend through 2020, with the exception of Power Production. • Schedule driven variances continue to be a drag on project delivery. This is offset with the expansion of capital work scope across the whole portfolio. • Price related variances remain small. 8/5/2020 7

Grant PUD | BUDGET TO ACTUALS Q2 2020 2020 YEAR-END PROJECTION LOADED O&M & CAPITAL Loaded YEP are over budget • 2020 Budget labor split • 75% O&M / 25% Capital Year-End labor split projection • 85% O&M / 15% Capital or 8/5/2020 8

Grant PUD | BUDGET TO ACTUALS Q2 2020 Questions? 8/5/2020 9

COMMISSION BUDGET REVIEW 2021 PRELIMINARY BUDGET 8/5/2020 1

Grant PUD | 2021 PRELIMINARY BUDGET 2021 BUDGET TIMELINE AUGUST 8/11/20 Commission reviews preliminary budget presentation and preliminary budget filing 8/25/20 RCW budget filing resolution approval SEPTEMBER 9/22/20 Commission review of public materials for hearing 9/22/20 Advertising of public hearings, 2 weeks prior to first hearing OCTOBER 10/7/20 Public hearing materials available to the public (1 week prior to first hearing) 10/13/20 Commission opens RCW budget process. Public budget hearings to be held during the month of October 2020. 10/27/20 Commission review final budget and forecast 11/10/20 Anticipated Commission adoption of budget and forecast 8/5/2020 2