PUD adds $3.2 million to Leavenworth substation project

LEAVENWORTH — Seven months after a winter storm exposed a critical weakness in the Upper Valley's electrical system, Chelan County PUD commissioners approved a $3.2 million budget increase on July 20 to keep construction moving on a new substation designed to make the Leavenworth area more resilient.

Commissioners unanimously increased the Bavarian Substation project's budget from $10.531 million to $13.731 million, allowing construction to begin in August while maintaining a Jan. 15, 2027 substantial completion date.

The new substation, planned for the corner of Chumstick Highway and North Road in Leavenworth, is intended to relieve demand on the existing Leavenworth Substation, improve operational flexibility and reduce the likelihood that a single event could interrupt power to the entire area.

"It also includes some transmission work that will help reduce the potential of a single event to take out both transmission lines, as we just saw back in December up there with a big outage with the storm we had," Senior Project Manager Tyler Sellers told commissioners.

The December 2025 windstorm caused some of the most extensive damage to Chelan PUD's electrical system near Leavenworth, leaving much of the Upper Valley without electricity for more than a day while crews repaired damaged infrastructure.

Sellers said the project is also a necessary first step before Chelan PUD can rebuild the aging Leavenworth Substation, a project scheduled to begin next year.

"[It] can't be done without Bavarian being energized in place," he said.

Once the Bavarian Substation is operating, Chelan PUD will be able to shift electrical load away from portions of the existing system while crews rebuild the Leavenworth facility. Later in the meeting, Sellers explained the work will create additional switching capability and a looped transmission configuration, allowing operators greater flexibility to restore service during outages.

The revised budget reflects the negotiated construction contract with Potelco Inc., additional project contingency and increased district staffing costs associated with an extended construction schedule.

Commissioner Kelly Allen asked why the negotiated contract exceeded the original engineer's estimate.

David Lodge, project delivery manager, explained the board never awarded the original bids. Instead, commissioners authorized staff in May to reject those bids and negotiate after determining they did not meet the district's requirements.

"We don't award the bid at all," Lodge said. "We then have to go out and negotiate those contracts."

Construction had originally been expected to begin in May but will now start in August. Sellers said Potelco remains committed to meeting the original project milestones despite the delayed start.

Asked about remaining schedule risks, Sellers said the greatest uncertainty continues to be the possibility of additional cultural-resource discoveries during excavation.

"We've done quite a bit of mitigation to investigate that," he said. "But that's probably one of the biggest things that could slow things down."

If construction stays on schedule, the Bavarian Substation will be energized in early 2027, allowing Chelan PUD to begin rebuilding the existing Leavenworth Substation as part of a broader effort to improve electrical reliability in the Upper Valley.

Andrew Simpson: 509-433-7626 or andrew@ward.media