A few months back, PUD General Manager Dave Ward started hearing complaints when PUD officials planned on doing a rate hike.
There was the typical complaints about increasing rates, period. Nobody likes rate hikes, Ward admits. But sometimes it has to happen to cover increasing costs. But then there were pretty good questions being asked, such as why are rate hikes always in the winter? Why do the rate hikes come right after the holidays when bills are already stacked up? Why couldn’t the rate hikes come at a different time?
“That’s the feedback we started getting from our customers,” Ward said.
“Nobody ever thought about it before, but it makes sense,” agreed Chief Financial Officer Doug Streeter.
“So, we’re transitioning into summer rate increases,” Ward said.
And that’s the core difference with Ward at the top of the Grays Harbor PUD, says PUD Commissioner Dave Timmons.
“Just because it’s happened before doesn’t mean it always has to be that way,” Timmons said.
A CHOICE OF STYLES
Ward was hired in June of last year. He celebrated his six-month anniversary in the middle of storm season.
For those on the Harbor, Ward was a complete unknown. Although he was an Aberdeen High School graduate, he had only spent two years with the Grays Harbor PUD in the early 1990s. He escaped the Harbor to work for Tacoma Power and built a family and a career in Pierce County.
Although he had a lot of friends and former classmates on the Harbor, he was coming in as an outsider to the power agency without any connections to the top brass of the PUD administration or former general manager Rick Lovely, who retired in 2012.
Really, the PUD commissioners had two paths they could have taken in hiring for the PUD general manager position. They could have hired a guy like Doug Smith, who spent his career with the Grays Harbor PUD and actively sought the promotion or could have gone with the guy without much connection to the PUD to get an outsider’s perspective.
Timmons says he’s happy they went with Ward. He had wanted some kind of changes at the PUD ever since he was elected to the post in 2010. It was just always hard to pin down the specifics that needed changes. So, when the opportunity came to bring in a perspective that had been brought up in a different atmosphere outside of the current administration, Timmons jumped at the chance.
“We hit a home run,” Timmons said. “He’s made some real positive changes at the PUD. What he’s been doing has been really well received by the entire staff. I haven’t gone to a meeting or an event where he isn’t smiling. He doesn’t look at challenges as challenges but an opportunity to make something better.”
BUILDING A TEAM
Smith, meantime, resigned his position in the fall, opting to become a consultant for the power industry. Smith had been the deputy general manager under Lovely. And, when the administration was reorganized last spring, he became the chief administrative officer.
Ward decided to eliminate the position completely. Timmons stresses that Smith was never pushed out and would have had a home at the PUD if he had wanted to stay.
“We re-distributed the work load so customer service is under Doug Streeter now,” Ward said. “It’s a really good fit. As the CFO, he sees it all on the accounting end and is able to help streamline billing and customer service better. It’s just more efficient.”
Ward has also been looking to flesh out his administrative team in the wake of other vacancies. He says Steve Easton is his new line superintendent. He’s been interviewing for the top communications and government relations positions that Liz Anderson occupied before she quit a year ago.
And he’s been actively recruiting for the chief operating officer position after Wes Gray resigned in December to take a different job out of the area. The deputy engineering manager is also vacant, but Ward wants to wait to fill it until Gray’s old position is hired.
“That’s a job I’m doing so there is some desire to find someone as soon as I can,” Ward said. “I feel good where we’re heading. I feel very engaged in this organization. The organization is responding well. People have a lot of cool things going on. I’m very much a believer in creating a sound foundation out front.”
On a personal level, Ward said he and his wife have purchased a home in Hoquiam. Streeter, a Montesano native, tried to convince him to live in Montesano — but the right house wasn’t available.
PUD Commissioner Russ Skolrood brags that Hoquiam won out in the end because the selection was just better.
“It’s a nice, old home built in 1903,” Ward said, adding that his kids are all in college. “We like to do remodeling.”
Ward says they still own a home in Gig Harbor and is still working on transitions between that home and the new one.
“We’ll get it all sorted out,” he said. “My focus is on the PUD.”
In the coming weeks, Ward says the big focus will be on a strategic plan for the Grays Harbor PUD.
“It’s imperative we get that in place because that’s really going to be the plan for the next five to six-year horizon,” Ward said. “It’s what we want to do with the board and the senior leadership team to put that high level structure together and then we roll that down to the organization and let the employees work on putting the meat to the bones. We need to involve everybody in the organization and it can’t be done just at the senior leadership team. Everyone wants to know how can they contribute to the big picture and what is the big picture and what’s the direction? That’s why it’s so important to get that in place right away.”
One of the big questions to come into play is to figure out the real role of the PUD in the community. For instance, should the Grays Harbor PUD be an economic development engine?
Ward says the PUD should always be at the table to help new businesses coming to town who have questions on how the utility works or needs to develop connections to the utility. But should the PUD be there to bail out companies, to innovate business where none exist or to give breaks to companies that don’t pay their bills?
With the failures of Grays Harbor Paper and Harbor Paper right after that, Ward says he’s heard the concerns. The PUD could be on the hook for a big cleanup bill at Harbor Paper because state legislators used the PUD as a middleman to help out private business. The question is if the PUD would ever put themselves in such a position again because of the bad experience.
“Selling power is our core business,” Ward said. “We need to provide safe, reliable cost effective power. One of my first messages when I got here was to tell folks that we need to be really good at our core business.”
In September, when Harbor Paper hadn’t paid their bills in months, Ward made the call to turn off the mill’s power.
But he took it one step further and decided to issue a press release to tell the public what the PUD was doing. It would have been just as easy to turn the power off and not notify the public of what was happening.
But Ward says that thought never crossed his mind.
“It’s about transparency,” Ward said. “You’re going to know about it anyway. We talked about it and thought you might as well hear it directly from us. It’s been very newsworthy for quite some time. You would have been surprised because at some point you would have found out that there’s no lights on over there. If someone drives by at night sometime, it’s pretty obvious what went on.”
“I think that says just who Dave Ward is,” Timmons said. “He just wants to put the facts out there for people to have them.”
Ward says with looming retirements at the PUD, he feels one of his main jobs is for succession planning and ensure his staff is properly trained to go from one position to another. He believes strongly in staff retention.
Staff numbers are down from about 185 employees to about 151.
“We’ve had to do more with less,” Streeter said.
One item that he wanted to make sure to devote more funds to was replacing power poles and replacing infrastructure.
“We have 30,000 poles and you have to stay on top of replacements because, at some point, there’s the point of no return,” Ward said.
Vegetation management and handling problem infrastructure areas where the power keeps shutting down in storms remain top priorities.
The PUD is in its third year of a three-year contract with its unions so he has yet to participate in the hard questions of salaries and raises. Most employees received a 2 percent increase this year, per the contract.
But questions of high-paying PUD staff continue to be raised. Although the raises are based on union contracts and bargaining, PUD administration have never held firm with its unions to push them not to take raises. Management have gone for years without raises, but the unions have received raises every year — even in tougher economic climates than this year.
Union employees from the county and the cities have noticed — even as their unions have agreed to furloughs, wage freezes and, at the county, temporary layoffs where employees actually gave money back to the county just to save jobs.
“It’s a tough balancing act because our industry is very competitive with these trained electricians and with the power engineers,” Ward said. ” You want to be able to attract good people to an organization when you have those vacancies. And so you have to be careful when you’re at the market. You don’t want to be that low ball that gets the reputation where you don’t value your employees, not that money necessarily equals value, but it’s one of the indicators that you send out there.”
So, as employees get raises, the PUD goes back to the people and asks for higher rates.
“I think the big difference between the PUD and the county, though, is our budget is 14 percent personnel, while the county’s is 70 percent,” Streeter said.
“I totally understand, Ward said. “Everybody had a hard time right now. So, we don’t take it lightly. We’ve had a lot of discussions about this. That’s why we think, if we’re going to do rate increases, maybe it’s better to do it in the summer when it’ll hurt less.”
“We actually talk about it,” Streeter said. “We know we’re asking people to pay more and they’re not getting the raises, especially if they’re on a fixed income.”
A 3.75 percent rate hike went into effect on Jan. 1. Ward said that a smaller rate hike might be needed this summer, but he’s keeping a close eye on the Bonneville Power Administration. PUD officials had said previously that a 1.75 percent rate hike might be needed, but they won’t know for sure for a few more months.
“As we get toward spring, I’m hoping for a good water year in wholesale market prices and that could have a huge impact on our budget,” Ward said. “But I really do think the summer rate increases are the way to go. It’ll be up to us to work on those projections earlier on to make sure we educate and be proactive with our customers to make sure they know what’s coming so we’ll work on that, too. We’re also talking about looking at smaller rate increases over time, rather than go a couple zeros and then have a big spike and not give much heads up on it.”