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Candidates on questions


Dan Gunkel

The Sentinel asked the three candidates for KPUD commissioner to respond to three key questions. Following are their responses.

1. What are the top issues facing the KPUD at this time, and why?

Sherry Carver: Our revenue vs operating expenses are the biggest problem. We will spend ½ million more than revenue this year alone, and this is without a BPA raise. Our debt will also need restructuring in several years, so hopefully interest rates don't raise beyond 4 percent.

Dan Gunkel: There are a couple of important issues that are on the Klickitat County PUD (KPUD) Commission agenda on a regular basis. One of those items is the financial health of KPUD and how it relates to stable and sustainable electric rates. After the last economic downturn, the usage of electricity dropped significantly on the West Coast. At approximately the same time, the installation of approximately 7,000 megawatts of renewable wind power was integrated into the grid. The combination of these two forces caused the wholesale electric Market to become very soft. The exposure of KPUD to the soft wholesale electricity Market was the main contributor to the district's weak financial performance in 2011 and 2012.

Since the economic downturn in 2010, the KPUD board and management implemented sweeping restructuring, budget cuts and staffing reductions, along with new risk management and revised financial policies. These actions resulted in measurable improvements to KPUD's financial performance. Fitch Ratings removed their negative outlook in 2013 and KPUD retains its A rating today. This improvement significantly reduces the interest rates KPUD pays for its borrowing. Further risk management and financial policy revisions are being developed to improve KPUD's fiscal health; this action will support rate stability over time.

KPUD has put wholesale forward hedging in place to provide greater revenue certainty around its wholesale power sales. The goal is to reduce the exposure to wild wholesale price fluctuations, mainly in the short term.

KPUD's power supply is all renewable and carbon free and includes McNary hydropower, White Creek wind, and H.W. Hill landfill gas. McNary and H.W. Hill are base load generation and will contribute to added value to the ratepayers over the long term.

The transmission business line has long- term transmission service agreements that are producing very stable and predictable positive cash flow. These business lines have inherent risks associated with them and have been incorporated into KPUD's risk management review process. Power supply diversification and transmission business line revenues support rate stability over the long term. McNary hydro is $10 per megawatt hour cheaper than BPA power, saving KPUD ratepayers hundreds of thousands of dollars per year. This clean renewable electric generation is contributing to rate stability today and for the long term.

Jonathan Lewis: The top issues facing the KPUD at this time are the same issues facing Klickitat County-increasing costs, aging infrastructure, antiquated government regulation, artificially restricted Market access, and dwindling opportunity. If KPUD and the NW energy grid continue to pretend that the modus operandi of 1947 will work in a modern global Market place, we will be relegated to an ever smaller and more costly piece of the pie-or maybe just the crumbs.

2. Do you feel the public has a clear understanding of how the KPUD operates?

Dan Gunkel: The public does have a good understanding of how Klickitat County PUD (KPUD) operates. Every year, top management and one of the KPUD commissioners attend community meetings around the entire county and make presentations on the electric system and the water and sewer systems the PUD operates within that community. The presentations are designed to keep ratepayers up to speed on rates, operations, maintenance, and major capital projects.

Whenever a new major project is proposed, there is a public process that starts at the community level. The KPUD board requires strong community support before moving forward on a new project. The Bickleton Water System project is a good example of community involvement.

The amount of collaboration and coordination between KPUD and the Klickitat County Board of Commissioners is extremely important to the success of many of the water and wastewater systems that exist in the small communities of Klickitat County. KPUD also works closely with other agencies to obtain the necessary resources to make these small systems affordable and financially viable. . If re-elected I will continue to work hard to strengthen the excellent working relationship with the Klickitat County Board of Commissioners.

Sherry Carver: No, absolutely not. When I decided to run for PUD Commissioner, I found it very difficult to assemble information to begin the process of learning about our PUD. I believe that the public has a right to information and that it should be disseminated better. The public should know what we own and what we are paying for.

Jonathan Lewis: Back in the '60s, my dad went to work at Boeing. They were working on the 747 project. His supervisor let him in on a little secret: "No one person knows how to build a 747." This is equally true of our modern electric grid. Each component is so complex and those that make and manage these systems are so specialized that no one person knows everything about running KPUD. Fortunately there are thousands of dedicated people who work together in a careful symphony-a dance of electrons-that faithfully brings power to our homes and businesses every day.

As KPUD commissioner, I would want to help our customers understand the relationships between all of the cogs and pistons that make our local and regional utility markets work and work to make sure those relationships are all focused on bringing the best value to Klickitat County. Many of the policies and organizations that we deal with today are based on the energy needs of 1935. The rest are band-aids put on top of old policies to make them work in a modern world. It's time to start ripping off some band-aids and forge relationships and policies that are future ready.

3. Why are you the best candidate to help deal with these issues?

Jonathan Lewis: District 3 has a real challenge on its hands-it has three excellent candidates to vote for on August 5. Dan Gunkel has done a commendable job over the last 23 and a half years diversifying KPUD's portfolio, and Sherry Carver would bring her amazing team-building gifts to the job. I'm running because I can't not run. I got bit about 23 years ago with a passion for rural development and privately owned energy systems-with a vision of what could happen to our country if we shifted from our consumer mindset to a land of independent/cooperative producers once again. I've realized in the past few years that the utilities really hold the key to making energy independence happen. That the utilities are not the enemy to be disconnected from, but the catalyst for making it a reality. And if we work together to carve out a future ready KPUD, we can put Klickitat County on the map, attract energy intensive industry, stabilize rates and bring much needed jobs and opportunity for our children. Passion and creativity are the renewable energy resources that our county so desperately needs and that I will bring to this job if elected.

Dan Gunkel: There are many complex issues KPUD will face in the future. A few of those, in addition to those already discussed, include: focus on BPA's ability to control power costs; renewable power integration into the grid and the associated electric energy Market implications; BPA-KPUD power supply contract; the Columbia River Treaty with Canada, and others. To be effective as a KPUD board member and deal with the current complex utility world requires experience, knowledge, and the willingness to commit to continued learning.

My experience and qualifications are as follows. I have served as a KPUD commissioner for 23.5 years. I also served on the Energy Northwest Executive Board for 20 years, during which time I served as chairman of the Nuclear Oversight and Safety committee for 8 years. (Energy Northwest is a Public Power Joint Action Agency, the agency currently supplies enough base load electrical generation to the Bonneville Power Administration to power a city the size of Seattle, WA.) I completed a course from Emory University on the roles and responsibilities of a Board member. I also completed a course on Excellence in Governance. I have 30 years of experience in the management and operations of Gunkel Orchards Inc., a grower-packer-shipper of fresh fruit. I am the only board member involved on a daily basis in the irrigated agriculture business; as a result I understand irrigators' needs and sensitivity to power rates. I truly have a vested interest to keep electric rates stable over the long term.

Sherry Carver

My extensive electric utility experience, comprehensive board member education, and proven leadership skills will help the KPUD board and the management team when facing these complex utility issues. My continued service as a KPUD commissioner will also benefit the utility customers whom I have served over the past many years.

Sherry Carver: I have accumulated a vast amount of business knowledge over my 40 years of living in Goldendale. I am fiscally responsible, a respected community leader, accessible and effective at the jobs I've accomplished. I am an independent thinker, hard worker and dedicated on all levels. I believe I represent the people of my community and will always listen.


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