Immediately following the SMUD Board meeting scheduled at 6:00 p.m.

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1 Sacramento Cogeneration Authority Special Meeting (Procter & Gamble Cogeneration Project) Date: December 21, 2017 Time: Immediately following the SMUD Board meeting scheduled at 6:00 p.m. Location: SMUD Customer Service Center, Rubicon Room 6301 S Street, Sacramento, CA Powering forward. Together. * SMUDm

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3 Members of the public wishing to address the Commission are requested to complete a signup slip at the lobby information center, Statements shall not exceed three minutes unless the President grants special permission. SACRAMENTO COGENERATION AUTHORITY (Procter & Gamble Cogeneration Project) 6301 S Street, Sacramento, CA NOTICE OF SPECIAL MEETING AND AGENDA To: Commissioners Brandon D. Rose, Nancy Bui-Thompson, Gregg Fishman, Genevieve Shiroma, Rob Kerth, and Dave Tamayo Pursuant to Section of the California Government Code, a SPECIAL MEETING of the Commissioners of the Sacramento Cogeneration Authority (SCA) is called to be held on Thursday, December 21, 2017, at 6:00 p.m., or immediately following adjournment of the regular meeting of the Board of Directors of the Sacramento Municipal Utility District (SMUD), in the Rubicon Room of the SMUD Customer Service Center at 6301 S Street, Sacramento, California, to review, discuss and act upon, as appropriate, the following items - 1. Approve agenda. 2. Approve minutes of April 6, 2017, annual meeting. Item 3 was reviewed by the Finance and Audit Committee on November 7 and 8, Comments from the public are welcome when this agenda item is called. CONSENT CALENDAR: 3. Approve the proposed 2018 SCA Budget. Finance and Audit Committee 11/7 and 11/8. (Frankie McDermott)

4 Public Comment: 4. Statements from the public (non-agenda items) Dated - December 15, 2017 _PP_. Cl~l Tiv - Bill S16ton-,'Presiderit Sacramento Cogeneration Authority The Rubicon Room is located on the first floor of SMUD Customer Service Center, 6301 S Street, Sacramento, CA. Members of the public shall have three (3) minutes to provide public comment on items on the agenda or items not on the agenda, but within the jurisdiction of SCA. The total time allottedto any individual speaker shall not exceed nine (9) minutes. Members of the public wishing to inspect public documents related to agenda items may call to arrange for inspection of the documents at the SMUD Customer Service Center, 6301 S Street, Sacramento, Califomia. NOTE: Accommodations are available for the disabled public. If you need a hearing assistance device or other aid, please call in advance of this Commission Meeting.

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6 DRAFT Sacramento, California April 6, 2017 The annual meetings of the Commissioners of the Central Valley Financing Authority (CVFA), the Northern California Gas Authority Number 1 (NCGAl), the Sacramento Cogeneration Authority (SCA), the Sacramento Municipal Utility District Financing Authority (SMF), and the Sacramento Power Authority (SPA) were held in the Rubicon Room of the Sacramento Municipal Utility District (SMUD) Customer Service Center, 6301 S Street, Sacramento, California, at 9:46 a.m. Roll Call: Presiding: Present: Absent: President Slaton Commissioners Rose, Bui-Thompson, Fishman, and Kerth Commissioners Shiroma, Tamayo, and Somavarapu Present also were Arlen Orchard, Chief Executive Officer and General Manager; Laura Lewis, Chief Legal Officer and General Counsel; members of SMUD's executive management; and SMUD employees and visitors. At the request of President Slaton, Laura Lewis briefly reviewed the purpose, organization and responsibilities of the CVFA, which currently owns and operates the Carson Ice-Gen Project; the NCGA1, which is authorized to acquire, construct, and operate natural gas related facilities and engage in the purchase and sale of natural gas; SCA, which currently owns and operates the Procter & Gamble Cogeneration Project; the SFA, which currently owns and operates the Cosumnes

7 Power Plant; and SPA, which currently owns and operates the cogeneration plant at the Capital Commerce facility in Sacramento. As required by state law, the Chief Legal Officer and General Counsel notified the public that the Commissioners of CVFA, NCGA1, SCA, SFA and SPA were not receiving additional compensation as a result of the Commission meetings. President Slaton called for approval of the agendas of all five agencies. Commissioner Bui-Thompson moved for approval, Commissioner Fishman seconded, and the JPA agendas were approved by a vote of 5-0, with Commissioners Shiroma and Tamayo absent. President Slaton then called for approval of the minutes of the December 1, 2016, special meetings for the following agencies: CVFA, NCGA1, SCA, SFA, and SPA. Commissioner Kerth moved for approval, Commissioner Fishman seconded, and the minutes were approved by a vote of 4-0, with Commissioner Rose abstaining and Commissioners Shiroma and Tamayo absent. Eric Poff, Manager of Thermal Generation, presented highlights of this past year's operations for CVFA, SCA, SPA, and SFA. Copies of the slides used in his presentation are aftached to these minutes. Sandra Moorman, Controller, presented the financial reports for the year ending December 31, 2016 for CVFA, NCGA1, SFA, SCA, and SPA. Copies of the slides used in her presentation are aftached to these minutes. Commissioner Fishman asked about the obtaining a new steam host at the Campbell Soup facility.

8 Mr. Orchard responded that work is being done with the Greater Sacramento Economic Council and the City of Sacramento to attract new businesses to that area, and while conversations have occurred with a number of potential parties, nothing has come to fruition at this point. No further business appearing, the meetings were adjourned at 10:06 a.m. Approved: President Secretary

9 2016 Annual Joint Powers Authority (JPA) Report Central Valley Financing Authority (CVFA) Sacramento Cogeneration Authority (SCA) Sacramento Power Authority (SPA) SMUD Financing Authority (SFA) JPA Commission Meetings April 6, 2017, directly following the SMUD Board Meeting Powering forward. Together.

10 2016 SMUD Load by Resource (GWh) Thermal 5,974,731 5,975 a Thermal UARP 1,902,800 1,903 Additional Renewable 168, Contracts & Market Purchases 3,200,590 3,201 e UARP Total Load 11,246,530 11,247 Additional Renewable racts & Market Purchases 16f 5, SMUD Load GWh

11 2016 JPA Total Net Generation (GWh) CVFA SCA SPA & McClellan SFA Total Generation MWh 380, , , ,609 5,819,115 GWh ,862 5, CVFA SCA SPA & McClellan SFA m-*1 a W.- rotal Net Generat'ion 5,819 GWh *SMUD

12 SCA Cogen 11 (Procter & Gamble Cogen) * SMUD

13 SCA Cogen 11 (Procter & Gamble Cogen) MW Total Capacity (164.3MW original NDC).- 134MW Cogeneration 50MW Simple Cycle Peaking Unit * GE Aero Derivative Gas Turbines (LM6000) 0 Operated by EthosEnergy Power Plant Services 0 Steam Host: o Procter & Gamble Oleo-chemicals o Factory converts palm kernel and coconut oils into alcohol esters W'SMUD

14 A 0 dh (Procter & Gamble Cogen) Operational Performance Data: Equivalent Forced Outage Factor (EFOF) IEEE Equivalent Availability (on line or ready to run) Overall Capacity Factor (based on MW) Combined Cycle Capacity Factor (based on MW) Peaker Capacity Factor (based on 44 MW) Generation Compared to Budget N/A 6.50% 94.78% 90.51% 55.00% 50.70% 72.90% 68.00% 13.30% 9.00% 78.10% 102,20% LJ There were no lost time or OSHA recordable injuries at the SCA Cogeneration Project during LJ The SCA peaker starting reliability was 98.0% in 2016 (130 successful starts out of 133 attempts). LJ All permit & regulatory requirements were satisfactorily met during LJ Significant Forced Outage event in December 2016 due to a Steam Turbine Bus failure and consequential Transformer failure that impacted both Combustion Turbine 1 A & Steam Turbine availability. Oft a ---,zomud v

15 Sacramento Cogeneration ALithority P.O.Box 15830, Sacramento, CA sc,a ( ogene.ration Projeci Statements of Revenues, Expenses and Changes in Net Position Year Ended December 31, 2016 (in millions) Operating Revenues: Actual Budget Power Sales to Member Steam Sales Total $ 52.9 $ Operating Expenses: Fuel Operations Maintenance Administrative & General Depreciation Total Operating Income Other Income Net Interest Expense Chan_qe in Net Assets before MemberActivity 1.6) 2.6 Net Member Distributions Change in Net Assets

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17 SSS No, SCA SCA COMMISSION AGENDA ITEM Sacramento Cogeneration Authority STAFFING SUMMARY SHEET Committee Meeting & Date Finance November 7, 201 Board Meeting ~ate December 21, 2017 Please use a separate sheet if you have any comments. TO TO 1 Eric Poff 7. Jennifer Davidson 2. Ross Gould 8. Stephen Clemons 3. Sandra Moorman 9. Gary King 4. Ron Jelicich Noreen Roche-Carter 11, Legal 6. Frankie McDe mott 12. CEO & General Manager Consent Calendar Yes No If no, schedule a dry run presentation. I Budgeted 1-7 y.s No (If no, explain in CostIBudgeted section.) FROM (IPR) DEPARTMENT MAIL STO I EXT. DATE SENT Andrea McGagin Power Generation/Thermal Generation EA405 ~'P /10/17 NARRATIVE: Requested Approve the proposed 2018 Sacramento Cogeneration Authority (SCA) Budget Resolution. Action'. Summary: The 2018 SCA Budget covers costs to be incurred by SCA in operating and maintaining the SCA Cogeneration Plant and providing for debt service on SCA Bonds. The budget amount is per the attached Resolution and is based on the operations expected during the normal water year for SMUD. Board Policy: SD 2 Competitive Rates, SD 3 Access to Credit Markets, SD 4, Reliability (Number & Title) Benefits: Approval of the SCA Budget Resolution will authorize spending within the limits prescribed to maintain operations of the SCA Cogeneration Plant and provide for the payment of the SCA Debt Service. Cost/Budgeted: Approval of the Budget Resolution will authorize spending within the limits prescribed. Expenditures authorized under this action should offset expenditures under purchased power. Alternatives: Approval of a budget is required or SCA will not have the authority to make purchases or pay bills. Affected Budget Office, Accounting, Treasury, Power Generation, and Legal Parties: Presenter: Frankie McDermott Additional Links: SUBJECT: 2018 SCA BUDGET ITEMS SUBMITTED AFTER DEADLINE WILL BE POSTPONED UNTIL NEXT MEETING ITEM NO. (FOR LEGAL USE ONLY)

18 SACRAMENTO COGENERATION AUTHORITY 2018 BUDGET SUMMARY NET CHANGE BUDGET BUDGET PERCENT GENERATION (MWh) 645, ,351 31% FUEL Combined Cycle Gas Expenses $23,276,981 $24,759,598 6% Peaker Plant Gas Expenses $1,751,283 $2,557,723 46% Natural Gas Commodity ($ /MMBtu) $3.99 $3.08 Auxiliary Boiler Fuel Costs $2,283,651 $971,113-57% TOTAL FUEL EXPENSES $27,311,915 $28,288,435 4% PLANT OPERATION & MAINTENANCE Station Service Energy Costs $339,276 $349,454 3% Operator Fixed Fees $2,396,447 $2,456,361 3% Operator Reimbursable Expenses $3,001,576 $2,773,890-8% Operator Availability Bonus $710,838 $728,606 2% Lease Engine Program $189,780 $170,672-10% JPA Administrative and Other Expenses $410,376 $422,351 3% Engine Overhaul Expense $7,520,000 $5,410,000-28% TOTAL PLANT OPERATION & MAINTENANCE $14,568,293 $12,311,334-15% ITOTAL O&M COSTS $41,880,208 $40,599,76q -3% ADMINISTRATIVE & GENERAL SMUD Labor $406,074 $416,354 3% SMUD Administrative & General $75,670 $63,670-16% Insurance $846,648 $930,728 10% ITOTAL ADMINISTRATIVE & GENERAL $1,328,392 $1,410,752 6% INTEREST EXPENSE Interest on SCA Bonds $1,402,213 $1,123,838-20% DEBT SERVICE PRINCIPAL REPAYMENT SCA Bond Principal Repayment $5,567,500 $5,880,000 6% PLANNED CAPITAL EXPENSES $175,000 $250,000 43% TOTAL PRINCIPAL, INTEREST & CAPITAL EXPENDITURES $7,144,713 $7,253,838 2%

19 DRAFT RESOLUTION NO. BE IT RESOLVED BY THE COMMISSIONERS OF THE SACRAMENTO COGENERATION AUTHORITY: Section 1. This resolution may be referred to as the 2018 SCA budget resolution. Section 2. There is hereby appropriated from the Revenue Fund, Operating Fund, Debt Service Fund, and other funds as appropriate, sufficient monies for the payment of demands against the Authority which relate to obligations incurred for the purposes and within the amount specified for such purposes in the follow'ing projection of the Authority's programs for the period January 1, 2018 through December 31, Operation and Maintenance $40,599,769 Administrative & General $ 1,410,752 Principal, Interest & Capital Expenditures $ 7,253,838 There shall be deemed added to the O&M line item a +20% increase with no limit to a decrease in the Operations and Maintenance Expense line item, plus an additional $1 million applicable to the overall budget. Section 3. Demands against the Authority may be paid without the prior specific approval of this Commission, if they relate to obligations incurred for the purpose and within the amounts specified in Section 2, provided such demands are approved by the General Manager of the Authority, or his designee. It is the purpose and intent of this paragraph to delegate to the General Manager, or his designee,

20 authority to make purchases, to negotiate and execute contracts, and expend funds in any manner necessary or appropriate to the administration of the business affairs of the Authority, within the amounts and for the purposes set forth above, subject to duly adopted delegations of authority.