Florida Municipal Power Agency. Executive Committee Meeting

Transcription

1 Florida Municipal Power Agency Executive Committee Meeting March 19, :00 a.m. Executive Committee Howard McKinnon, Havana - Chairman Lynne Tejeda, Key West Vice Chairwoman Bruce Hickle, Bushnell Danny Williams, Clewiston Fred Hilliard, Fort Meade Bill Thiess, Fort Pierce Vacant, Green Cove Springs Alan Putman, Jacksonville Beach Larry Mattern, Kissimmee Patrick Foster, Leesburg Bill Conrad, Newberry Mike Poucher, Ocala Tom Ernharth, Starke Meeting Held 10:30 a.m. Thursday, February 19, 2015 Florida Municipal Power Agency 8553 Commodity Circle Orlando, FL Page 1 of 153

2 TO: FROM: FMPA Executive Committee Nicholas Guarriello DATE: March 11, 2015 RE: Executive Committee Meeting Thursday, February 19, 2015 at 9:00 a.m. PLACE: Florida Municipal Power Agency, 8553 Commodity Circle, Orlando, FL Board Room, Orlando, Florida DIAL-IN INFORMATION: or ACCESS CODE 91583# (If you have trouble connecting via phone or internet, please call ) Chairman Howard McKinnon, Presiding AGENDA 1) Call to Order, Roll Call, Declaration of Quorum ) Set Agenda (By Vote) ) Recognition of Guests ) Public Comments (Individual Public comments to be limited to 3 minutes) ) Comments from the Chairman (Howard McKinnon) ) Report from the General Manager (Nick Guarriello) ) Sunshine Law Update in a Minute (Jody Finklea) Page 2 of 153

3 FMPA Executive Committee Meeting March 11, 2015 Page 2 8) Consent Agenda a) Approval of Meeting Minutes Telephonic Meeting Held February 3, 2015; Meetings Held February 16, 2015 and February 19, 2015; ARP Telephonic Rate Workshop Minutes Workshop Held February 9, b) Approval of Treasury Reports As of January 31, c) Approval of the Agency and All-Requirements Project Financials as of January 31, d) Acceptance and Approval of the Report on the All-Requirements Series 2015A Bonds (Ed Nunez) ) Action Items a) Approval of Proposed Amendments of the ARP Net Metering Policy and Tri-Party Net Metering Power Purchase Agreement (Dan O Hagan) b) Approval of Alternative Quincy Credit Provisions (Frank Gaffney) ) Information Items a) Extension of FGT Firm Capacity (Joe McKinney) b) Revision to CROD Implementation Protocols (Frank Gaffney) c) Taylor Swaps Termination Alternatives and Permanent Financing Structure Alternatives (Mark Larson) d) Policy and Procedure Modifications to Address the Auditor General s Preliminary and Tentative Findings (Nick Guarriello) e) Hedge Portfolio Position Update January 2015 (Rich Popp) ) Other Information a) FYI Invoice Summary Report from Spiegel and McDiarmid ) Member Comments 13) Adjournment One or more participants in the above referenced public meeting may participate by telephone. At the above location there will be a speaker telephone so that any interested person can attend this public meeting and be fully informed of the discussions taking place either in person or by telephone communication. If anyone chooses to appeal any decision that may be made at this public meeting, such person will need a record of the proceedings and should accordingly ensure that a verbatim record of the proceedings is made, which includes the oral statements and evidence upon which such appeal is based. This public meeting may be continued to a date and time certain, which will be announced at the meeting. Any person requiring a special accommodation to participate in this public meeting because of a disability, should contact FMPA at (407) or 1-(888) , at least two (2) business days in advance to make appropriate arrangements. Page 3 of 153

4 AGENDA ITEM 1 CALL TO ORDER, ROLL CALL, DECLARATION OF QUORUM Executive Committee March 19, 2015 Page 4 of 153

5 AGENDA ITEM 2 SET AGENDA (By Vote) Executive Committee March 19, 2015 Page 5 of 153

6 AGENDA ITEM 3 RECOGNITION OF GUESTS Executive Committee March 19, 2015 Page 6 of 153

7 AGENDA ITEM 4 PUBLIC COMMENTS (INDIVIDUAL COMMENTS TO BE LIMITED TO 3 MINUTES) Executive Committee Meeting March 19, 2015 Page 7 of 153

8 VERBAL REPORT VERBAL REPORT AGENDA ITEM 5 COMMENTS FROM THE CHAIRMAN Executive Committee March 19, 2015 Page 8 of 153

9 VERBAL REPORT VERBAL REPORT AGENDA ITEM 6 REPORT FROM THE GENERAL MANAGER Executive Committee March 19, 2015 Page 9 of 153

10 VERBAL REPORT VERBAL REPORT AGENDA ITEM 7 SUNSHINE LAW UPDATE IN A MINUTE Executive Committee March 19, 2015 Page 10 of 153

11 AGENDA ITEM 8 CONSENT AGENDA a) Approval of Meeting Minutes Telephonic Meeting Held February 3, 2015; Meetings Held February 16, 2015 and February 19, 2015; ARP Telephonic Rate Workshop Minutes Workshop Held February 9, 2015 Executive Committee March 19, 2015 Page 11 of 153

12 CLERKS DULY NOTIFIED....January 30, 2015 AGENDA PACKAGES/CDS FEDEXED TO MEMBERS.... January 30, 2015 MINUTES TELEPHONIC EXECUTIVE COMMITTEE MEETING TUESDAY, FEBRUARY 3, 2015 FLORIDA MUNICIPAL POWER AGENCY 8553 COMMODITY CIRCLE ORLANDO, FL PARTICIPANTS PRESENT Bushnell - Bruce Hickle (via telephone) Clewiston - Danny Williams (via telephone) Fort Meade - Fred Hilliard (via telephone) Fort Pierce - Bill Thiess (via telephone) Havana - Howard McKinnon (via telephone) Jacksonville Beach - George Forbes (via telephone) Key West - Lynne Tejeda (via telephone) Kissimmee - Larry Mattern Leesburg - Patrick Foster (via telephone) Newberry - Bill Conrad (via telephone) Ocala - Mike Poucher (via telephone) Starke - Ricky Thompson (via telephone) PARTICIPANTS ABSENT Green Cove Springs - Vacant OTHERS PRESENT STAFF PRESENT Jim Hilty, Ocala (via telephone) Paul Jakubcziak, Fort Pierce (via telephone) Barry Rothschild, Nixon Peabody (via telephone) Elizabeth Columbo, Nixon Peabody (via telephone) Allen Putman, Jacksonville Beach (via telephone) Trish Roberts, Jacksonville Beach (via telephone) Craig Dunlap, Dunlap & Associates, Inc. (via telephone) Nick Guarriello, General Manager and CEO Fred Bryant, General Counsel (via telephone) Jody Finklea, Assistant General Counsel and Manager of Legal Affairs (via telephone) Mark McCain, Assistant General Manager, Public Relations & Human Resources Mark Larson, Assistant General Manager, Finance and Information Technology and CFO Page 12 of 153

13 Telephonic Executive Committee Meeting Minutes February 3, 2015 Page 2 of 3 Michelle Pisarri, Administrative Coordinator Sue Utley, Executive Assistant to the CEO/Asst. Secry to the BOD Dan O Hagan, Associate General Counsel Janet Davis, Treasury Manager (via telephone) Sharon Smeenk, Member Services Manager ITEM 1 - CALL TO ORDER, ROLL CALL, AND DECLARATION OF QUORUM: Chairman Howard McKinnon, Havana, called the FMPA Telephonic Executive Committee meeting to order at 10:00 a.m. on Tuesday, February 3, 2015 via telephone. A speaker telephone for public attendance and participation was located in the Library at Florida Municipal Power Agency, 8553 Commodity Circle, Orlando, Florida. The roll was taken and a quorum was declared with 11 members present out of a possible 13. Newberry arrived late bringing the quorum to 12. ITEM 2 SET AGENDA (BY VOTE): MOTION: Mr. Mattern, Kissimmee, moved approval to set the agenda as presented. Mr. Hickle, Bushnell, seconded the motion. Motion carried ITEM 3 PUBLIC COMMENTS: None. ITEM 4 ACTION ITEMS: Item 4a Approval of Resolution 2015-EC1 Approval of Credit Agreement with Wells Fargo and Bank of America MOTION: Mr. Mattern, Kissimmee, moved approval of Resolution 2015-EC1. Mr. Thiess, Fort Pierce, seconded the motion. The Resolution was read by title. RESOLUTION OF THE EXECUTIVE COMMITTEE OF FLORIDA MUNICIPAL POWER AGENCY (I) RECITING STATEMENT OF AUTHORITY; (II) APPROVING AND ADOPTING THE SERIES 2015A SUPPLEMENTAL ALL-REQUIREMENTS POWER SUPPLY PROJECT REVENUE BOND RESOLUTION WHICH AUTHORIZES THE ISSUANCE OF FLORIDA MUNICIPAL POWER AGENCY ALL-REQUIREMENTS POWER SUPPLY PROJECT REVENUE BONDS, SERIES 2015A IN A PRINCIPAL AMOUNT SUFFICIENT TO PRODUCE NOT TO EXCEED TWO HUNDRED MILLION ($200,000,000) IN NET NEW MONEY PROCEEDS TO BE SOLD ON OR BEFORE OCTOBER 1, Page 13 of 153

14 Telephonic Executive Committee Meeting Minutes February 3, 2015 Page 3 of AND DELEGATES TO AUTHORIZED SIGNATORIES CERTAIN MATTERS RELATING TO THE ISSUANCE OF SUCH SERIES 2015A BONDS INCLUDING (1) WHETHER AND WHEN TO ISSUE SUCH SERIES 2015A BONDS, (2) DETERMINATION OF THE PRINCIPAL AMOUNT OF THE SERIES 2015A BONDS, AND (3) APPROVAL OF THE SALE AND THE PURCHASE PRICE FOR THE SERIES 2015A BONDS PURSUANT TO A CREDIT AGREEMENT WITH WELLS FARGO MUNICIPAL CAPITAL STRATEGIES, LLC AND BANK OF AMERICA NATIONAL ASSOCIATION AS LENDERS AND WELLS FARGO BANK, N.A., AS ADMINISTRATIVE AGENT; (III) MAKING CERTAIN FINDINGS AS TO THE REASONS REQUIRING THE NEGOTIATED SALE OF THE BONDS AUTHORIZED BY SUCH SERIES 2015A SUPPLEMENTAL ALL-REQUIREMENTS POWER SUPPLY PROJECT REVENUE BOND RESOLUTION ON A NEGOTIATED BASIS; (IV) DESIGNATING AUTHORIZED OFFICERS; (V) APPROVING AND TAKING CERTAIN OTHER ACTIONS; AND (VI) PROVIDING AN EFFECTIVE DATE. Roll call vote was taken. Motion carried Fort Meade voted nay. ITEM 5 MEMBER COMMENTS: None. There being no further business, the meeting was adjourned at 10:33 a.m. Howard McKinnon Chairperson, Executive Committee Sue Utley Assistant Secretary Approved: Seal Page 14 of 153

15 CLERKS DULY NOTIFIED.....February AGENDA PACKAGES/CDS FEDEXED TO MEMBERS.... February 13, 2015 LEGAL AD PUBLISHED..February 13, 2015 MINUTES FMPA CONCURRENT EXECUTIVE COMMITTEE AND BOARD OF DIRECTORS MEETING MONDAY, FEBRUARY 16, 2015 FLORIDA MUNICIPAL POWER AGENCY 8553 COMMODITY CIRCLE ORLANDO, FL PARTICIPANTS PRESENT Bushnell - Bruce Hickle Clewiston - Danny Williams (via telephone) Fort Meade - Fred Hilliard Fort Pierce - Bill Thiess Havana - Howard McKinnon Jacksonville Beach - Harry Royal Key West - Lynne Tejeda Kissimmee - Larry Mattern Leesburg - Patrick Foster Newberry - Bill Conrad Ocala - Mike Poucher Starke - Ricky Thompson PARTICIPANTS ABSENT Green Cove Springs - Vacant OTHERS PRESENT Brad Hiers, Bartow Elmon Lee Garner, Chattahoochee (via telephone) David Beaulieu, Gainesville Howard McKinnon, Havana Barbara Quinones, Homestead George Forbes, Jacksonville Beach (via telephone) Clay Lindstrom, Lake Worth Alan Shaffer, Lakeland (via telephone) Charles Revell, Mount Dora (via telephone) Sandra Wilson, Ocala Donna Cooley, St. Cloud Randy Old, Vero Beach Jerry Warren, Winter Park Paul Jakubczak, Fort Pierce Jim Swan, Kissimmee Page 15 of 153

16 Executive Committee Meeting Minutes February 16, 2015 Page 2 of 4 Jim Welsh, Kissimmee Grant Lacerte, Kissimmee Al Minner, Leesburg Michael Poucher, Ocala David Anderson, Ocala Mark Mucher, Vero Beach Deborah Zorc Seeley, Vero Beach Arlyne Zorc, Vero Beach Craig Dunlap, Dunlap and Associates Tim Zorc, Indian River County Dylan Reingold, Indian River County Glenn Heran, Indian River County Lisa Zahner, Vero Beach Media Christopher Heath, WFTV Colleen Wixon, Press Journal/TC Palm.com, Vero Beach STAFF PRESENT Nick Guarriello, General Manager and CEO Fred Bryant, General Counsel Jody Finklea, Assistant General Counsel and Manager of Legal Affairs Dan O Hagan, Associate General Counsel (via telephone) Mark McCain, Assistant General Manager, Public Relations & Human Resources Mark Larson, Assistant General Manager, Finance and Information Technology and CFO (via telephone) Frank Gaffney, Assistant General Manager, Power Resources Rich Popp, Contract Compliance Audit and Risk Manager Michelle Pisarri, Administrative Coordinator Sue Utley, Executive Assistant to the CEO/Asst. Secry to the BOD ITEM 1 - CALL TO ORDER, ROLL CALL, AND DECLARATION OF QUORUM: Chairman Howard McKinnon, Havana, called the FMPA Executive Committee meeting to order at 10:02 a.m. on Monday, February 16, 2015 in the Boardroom, Florida Municipal Power Agency, 8553 Commodity Circle, Orlando, Florida. The roll was taken for the Executive Committee and a quorum was declared with 12 members present out of a possible 13. The meeting was held for the Executive Committee concurrent with a meeting of the Board of Directors so that both bodies could cover the action item. ITEM 2 Recognition of Guests Chairman McKinnon, acknowledged the guests that were previously introduced by FMPA Board Chairman Conrad, including the Mayor of Kissimmee, Jim Swan. Page 16 of 153

17 Executive Committee Meeting Minutes February 16, 2015 Page 3 of 4 Guests visiting introduced themselves as follows: Mark Mucher, Vero Beach Deborah Zorc Seeley, Vero Beach Arlyne Zorc, Vero Beach Craig Dunlap, Dunlap and Associates Tim Zorc, Indian River County Dylan Reingold, Indian River County Glenn Heran, Indian River County Lisa Zahner, Vero Beach Media Christopher Heath, WFTV Colleen Wixon, Press Journal/TC Palm.com, Vero Beach ITEM 3 PUBLIC COMMENTS (Individual Public Comments Limited to 3 Minutes): Jody Finklea, Assistant General Counsel and Manager of Legal Affairs, explained FMPA s adopted policy on Public Comments. Speakers included: 1) Dylan Reingold, County Attorney for Indian River County; 2) Glenn Heran, Indian River County; and 3) Jim Swan, Mayor of the City of Kissimmee ITEM 4 SET AGENDA: MOTION: Mrs. Tejeda, Key West, moved to set the agenda as presented. Mr. Mattern, Kissimmee, seconded the motion. Motion carried ITEM 5 REPORT FROM GENERAL MANAGER: Nicholas Guarriello reported that FMPA s lobbyist, Bill Peebles, recommends hiring additional help to work with him in Tallahassee, and that staff will recommend to the Executive Committee at its next meeting to hire a management consulting firm to look at the five areas recommended by the Auditor General s report. Page 17 of 153

18 Executive Committee Meeting Minutes February 16, 2015 Page 4 of 4 ITEM 6 ACTION ITEMS: Item 6a Approval of FMPA s Response to the Preliminary and Tentative Findings of the Auditor General MOTION: Mr. Thompson, Starke, moved approval of staff s proposal response to the Auditor General s preliminary and tentative findings, including the responses to numbered findings 1, 2, 3, 13, and 14, and to include a short form of FMPA s response to each numbered finding as an executive summary at the beginning of FMPA s response, similar to the short form of findings included at the front of the Auditor General s preliminary and tentative findings. Mr. Foster, Leesburg, seconded the motion. Motion carried Fort Meade voted nay. ITEM 7 INFORMATION ITEMS: None. ITEM 8 MEMBER COMMENTS: Mr. Welsh, Kissimmee, commended his colleagues for the candor and transparency and a good meeting. There being no further business, the meeting was adjourned at 11:53 a.m. Howard McKinnon Chairperson, Executive Committee Sue Utley Assistant Secretary Approved: Seal Page 18 of 153

19 CLERKS DULY NOTIFIED....February 17, 2015 AGENDA PACKAGES/CDS FEDEXED TO MEMBERS.... February 18, 2015 MINUTES EXECUTIVE COMMITTEE THURSDAY, FEBRUARY 19, 2015 FLORIDA MUNICIPAL POWER AGENCY 8553 COMMODITY CIRCLE ORLANDO, FL PARTICIPANTS PRESENT Bushnell - Bruce Hickle (via telephone) Clewiston - Danny Williams (via telephone) Fort Meade - Fred Hilliard (via telephone) Fort Pierce - Bill Thiess Havana - Howard McKinnon Jacksonville Beach - Harry Royal Key West - Lynne Tejeda (via telephone) Kissimmee - Larry Mattern Leesburg - Patrick Foster Newberry - Bill Conrad (via telephone)* Ocala - Mike Poucher Starke - Ricky Thompson (via telephone) *arrived late PARTICIPANTS ABSENT Green Cove Springs - Vacant OTHERS PRESENT Mike Wade, Quincy (via telephone) Matt Williams, Bank of America Merrill Lynch David Thornton, Wells Fargo Grant Lacerte, Kissimmee Greg Woessner, Kissimmee Allen Putnam, Jacksonville Beach Tim Zorc, Indian River County Lisa Zahner, Vero Beach Media Sandra Wilson, Ocala David Anderson, Ocala Diane Reichard, Ocala (via telephone) Mike Perri, Fort Pierce Paul Jakubcziak, Fort Pierce George Forbes, Jacksonville Beach (via telephone) Randy Old, Vero Beach Donna Painter, nfront Consulting LLC Page 19 of 153

20 Executive Committee Meeting Minutes February 19, 2015 Page 2 of 5 Craig Dunlap, Dunlap & Associates, Inc. STAFF PRESENT Nick Guarriello, General Manager and CEO Fred Bryant, General Counsel Jody Finklea, Assistant General Counsel and Manager of Legal Affairs Dan O Hagan, Associate General Counsel Mark McCain, Assistant General Manager, Public Relations & Human Resources Mark Larson, Assistant General Manager, Finance and Information Technology and CFO Frank Gaffney, Assistant General Manager, Power Resources Michelle Pisarri, Administrative Coordinator Sue Utley, Executive Assistant to the CEO/Asst. Secry to the BOD Bud Boudreaux, Executive Consultant Janet Davis, Treasury Manager Michele Jackson, System Planning Manager ITEM 1 - CALL TO ORDER, ROLL CALL, AND DECLARATION OF QUORUM: Chairman Howard McKinnon, Havana, called the FMPA Executive Committee meeting to order at 11:17 a.m. on Thursday, February 19, 2015 in the Boardroom, Florida Municipal Power Agency, 8553 Commodity Circle, Orlando, Florida. The roll was taken and a quorum was declared with 11 members present out of a possible 13. Newberry arrived late bringing the quorum to 12. ITEM 2 SET AGENDA (BY VOTE): MOTION: Mr. Thiess, Fort Pierce, moved to set the agenda as presented. Mr. Royal, Jacksonville Beach, seconded the motion. Motion carried Page 20 of 153

21 Executive Committee Meeting Minutes February 19, 2015 Page 3 of 5 ITEM 3 RECOGNITION OF GUESTS: Chairman McKinnon, recognized Allen Putman, Utilities Director of Beaches Energy and Clay Lindstrom, current Electric Utilities Director for Lake Worth and incoming Director of Utilities at Fort Pierce Utilities Authority. ITEM 4 PUBLIC COMMENTS: None. ITEM 5 COMMENTS FROM THE CHAIRMAN: Chairman McKinnon commented on the February 16 telephonic meeting that was held and stated that it was frank and open meeting. He also expressed his appreciation and thanks to the staff. He also stated that Harry Royal of Jacksonville Beach and Bill Thiess of Fort Pierce Utilities Authority will be retiring, it was a pleasure working with them and that they will be missed. ITEM 6 REPORT FROM GENERAL MANAGER: Nick Guarriello, General Manager and CEO, reported on the following items: Quincy and presented Bill Thiess and Harry Royal with letters of appreciation and plaques from the Agency. ITEM 7 SUNSHINE LAW UPDATE IN A MINUTE: Daniel O Hagan, Associate General Counsel, provided a verbal report on recent Public Records Law news. ITEM 8 CONSENT AGENDA: Item 8a Approval of Meeting Minutes Meeting Held January 22, 2015; ARP Telephonic Rate Workshop Minutes Workshop Held January 9, 2015 Item 8b - Approval of Treasury Reports - As of November 30, 2014 and December 31, 2014 Item 8c Approval of Agency and All-Requirements Project Financials as of December 31, 2014 MOTION: Mr. Mattern, Kissimmee, moved approval of the consent agenda as presented. Mr. Foster, Leesburg, seconded the motion. Motion carried Page 21 of 153

22 Executive Committee Meeting Minutes February 19, 2015 Page 4 of 5 ITEM 9 ACTION ITEMS: Item 9a Approval of an Increase in Lobbying Expenditures MOTION: Mr. Mattern, Kissimmee, moved approval to increase expenditures with William J. Peebles, P.A. by $100,000 to fund additional assistance with legislative and media relations, and to fund the additional expense from the fiscal year 2015 budget, within FMPA s current authorized budget authority. Mr. Thiess, Fort Pierce, seconded the motion. Motion carried 9-3. Clewiston, Fort Meade, and Leesburg voted nay. Item 9b Approval of Initial Steps to Consider Retaining a Management Consulting Firm MOTION: Mrs. Tejeda, Key West, moved approval of staff s recommendation to consider retaining a management consulting firm to assist the Executive Committee in addressing the Auditor General s findings 1, 2, 3, 13 and 14, and to prepare a Request for Qualifications (RFQ) document and a recommended RFQ distribution list for Executive Committee approval prior to issuance; all with the understanding that each member of the Executive Committee will have the opportunity to review and comment on the RFQ document before it is brought to the Executive Committee for approval. Mr. Mattern, Kissimmee, seconded the motion. Roll call vote was taken. Motion carried Item 9c Approval of Cane Island 4 Steam Turbine Dispute Mediation Budget MOTION: Mr. Poucher, Ocala, moved approval of an initial budget of $60,000 for outside legal counsel for mediation and other pre-litigation efforts concerning the AEGIS lawsuit against FMPA and GE. Mr. Thiess, Fort Pierce, seconded the motion. Motion carried Page 22 of 153

23 Executive Committee Meeting Minutes February 19, 2015 Page 5 of 5 ITEM 10 INFORMATION ITEMS: a. Syncora Buys Majority Stake in Swap Financial b. Annual Debt Report c. Proposed Rider for the Tri-Party Net Metering Power Purchase Agreement d. IRP Process Update e. Hedge Portfolio Position Update December 2014 Staff reported on each of the above items ITEM 12 MEMBER COMMENTS: None. There being no further business, the meeting was adjourned at 12:52 p.m. Howard McKinnon Chairperson, Executive Committee Sue Utley Assistant Secretary Approved: Seal Page 23 of 153

24 AGENDA PACKAGES SENT TO MEMBERS... February 6, 2015 PUBLIC NOTICE SENT TO CLERKS... February 6, 2015 MINUTES EXECUTIVE COMMITTEE ALL-REQUIREMENTS POWER SUPPLY PROJECT TELEPHONIC RATE WORKSHOP MONDAY, FEBRUARY 9, 2015 FLORIDA MUNICIPAL POWER AGENCY 8553 COMMODITY CIRCLE ORLANDO, FLORIDA COMMITTEE MEMBERS PRESENT Bushnell - Susan Noell (via telephone) Clewiston - Danny Williams (via telephone) Fort Pierce - Bill Thiess (via telephone) Havana - Howard McKinnon (via telephone) Jacksonville Beach - Harry Royal (via telephone) Leesburg - Patrick Foster (via telephone) COMMITTEE MEMBERS ABSENT OTHERS PRESENT Fort Meade - Fred Hilliard Green Cove Springs- Vacant Key West - Lynne Tejeda Kissimmee - Larry Mattern Newberry - Bill Conrad Ocala - Sandra Wilson Starke - Ricky Thompson Mark Schultz, Green Cove Springs (via telephone) Paul Jakubczak, Fort Pierce (via telephone) Trish Roberts, Jacksonville Beach (via telephone) Don Cuevas, Jacksonville Beach (via telephone) Alan Putnam, Jacksonville Beach (via telephone) David Anderson, Ocala (via telephone) Joe Hostetler, Kissimmee (via telephone) STAFF PRESENT Mark McCain, Assistant General Manager, Member Services, Human Resources, and Public Relations Mark Larson, Assistant General Manager, Finance and Information Technology and CFO Page 24 of 153

25 EC ARP Rate Telephonic Workshop Minutes February 9, 2015 Page 2 of 2 Jody Finklea, Assistant General Counsel & Manager of Legal Affairs (via telephone) Michelle Pisarri, Administrative Coordinator Sue Utley, Executive Assistant to the CEO/Asst. Secy. to the Board Rich Popp, Contract Compliance Audit and Risk Manager Jim Arntz, Senior Financial Analyst Item 1 Call to Order Executive Committee Chairman Howard McKinnon, Havana, called the Executive Committee All-Requirements Telephonic Rate Workshop to order at 2:00 p.m. on Monday, February 9, 2015, via telephone. A speaker telephone for public attendance and participation was located in the 1 st floor conference room at Florida Municipal Power Agency, 8553 Commodity Circle, Orlando, Florida. Item 2 Information Items Mr. Popp gave a verbal update on the natural gas markets. Mr. Larson gave a verbal update on ARP liquidity. Mr. Arntz provided a verbal report on Florida Municipal Power Pool Operations for January. Mr. Arntz reviewed the loads, costs and ARP rate calculations for the month of January and estimated rate ranges for February 2015 and March Item 3 Member Comments None There being no further business, the meeting was adjourned at 2:17 p.m. Approved ML/JA/su Page 25 of 153

26 AGENDA ITEM 8 CONSENT AGENDA b) Approval of Treasury Reports - As of January 31, 2015 Executive Committee March 19, 2015 Page 26 of 153

27 AGENDA PACKAGE MEMORANDUM TO: FMPA Executive Committee FROM: Janet Davis DATE: March 10, 2015 ITEM: EC 8b Approval of Treasury Reports as of January 31, 2015 Strategic Relevance FMPA s Relevant Strategic Goals 1. Be the lowest cost wholesale electricity provider in Florida Identify, understand and manage risk responsibility Maintain sound financial policies and practices 2. Foster a positive communication culture Improve board-staff communication Policy Decisions/Implications To report operation and effectiveness of asset management To report on the current opportunities and risk environment affecting FMPA Introduction This report is a quick update on the Treasury Department s functions. The Treasury Department reports for January are posted in the member portal section of FMPA s website. Debt Discussion The Project has fixed, variable, and synthetically fixed debt. The variable rate portion is 1.76%. The fixed and synthetic fixed rate percentages of total debt are 69.26% and 28.98%, respectively. The estimated bonded debt interest funding for fiscal year 2015 as of January 31, 2015 was $49.01 million. The total amount of debt outstanding is $1,009,845,000. Hedging Discussion The Project has 25 interest rate swap contracts, 9 of which are forward starting. The Project is currently posting collateral to Bank of New York ($7,650,000) and Credit Agricole ($8,240,000) for the interest rate swaps. Page 27 of 153

28 EC 8b Approval of Treasury Reports as of January 31, 2015 March 10, 2015 Page 2 As of January 31, 2015, the cumulative termination value of the interest rate swaps in the All-Requirements Project was ($272,254,996.). The forward starting interest rate swaps make up ($161,116,429) of the total ($272.25) million valuation. The Swap Valuation Report is a snap shot of the mark-to-market values at the end of the day on January 31, The report for January is posted in the Member Portal section of FMPA s website. Investment Discussion The investments in the Project are comprised of debt from the governmentsponsored enterprises such as the Federal Farm Credit Bank, Federal Home Loan Bank, Federal Home Loan Mortgage Corporation (Freddie Mac), and Federal National Mortgage Association (Fannie Mae), as well as investments in U.S. Treasuries, Municipal Bonds, Commercial Paper and Money Market Mutual Funds. As of January 31, 2015, the All-Requirements investment portfolio earned a weighted average rate of return of 0.67%. The benchmarks (SBA s Florida Prime Fund and the 10 year US Treasury Note) and the Project s yields are graphed below: 5.00% All-Requirement's Weighted Average Yield 5-Year History 4.00% 3.00% 2.00% 1.00% 0.00% Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 FL Prime 10 Yr. Treasury All Requirements Project Page 28 of 153

29 EC 8b Approval of Treasury Reports as of January 31, 2015 March 10, 2015 Page 3 Below is a graph of U.S. Treasury yields for the past 5 years US Government Treasury Securities Interest Rates 5-Year History /1/2010 6/1/ /1/2010 2/1/2011 6/1/ /1/2011 2/1/2012 6/1/ /1/2012 2/1/2013 6/1/ /1/2013 2/1/2014 6/1/ /1/ Yr Treasury Yield 5-Yr Treasury Yield 10-Yr Treasury Yield The Investment Report for January is posted in the Member Portal section of FMPA s website. Recommended Motion Move approval of the Treasury Reports for January 31, 2015 Page 29 of 153

30 AGENDA ITEM 8 CONSENT AGENDA c) Approval of the Agency and All-Requirements Project Financials as of January 31, 2015 Executive Committee March 19, 2015 Page 30 of 153

31 AGENDA PACKAGE MEMORANDUM TO: FMPA Executive Committee FROM: Rick Minch DATE: March 10, 2015 ITEM: EC 8c Approval of the Agency and All-Requirements Project Financials for the period ended January 31, Discussion: The summary financial statements and detailed financial statements of the Agency and All-Requirements Project for the period ended January 31, 2015 will be posted on the members only FMPA website. Recommended Motion: Move to approve and accept the Agency and All-Requirements Project Financial reports for the month of January RM/DF Page 31 of 153

32 AGENDA ITEM 8 CONSENT AGENDA d) Acceptance and Approval of the Report on the All-Requirements Series 2015A Bonds Executive Committee March 19, 2015 Page 32 of 153

33 TO: FROM: AGENDA PACKAGE MEMORANDUM FMPA Executive Committee Edwin Nunez DATE: March 10, 2015 ITEM: EC 8d Acceptance and Approval of the Report on the All-Requirements Series 2015A Bonds Introduction: Pursuant to Section 7.2 of the Debt Risk Management Policy and Section 2.07 of the Series 2015A Supplemental All-Requirements Power Supply Project Revenue Bond Resolution adopted February 3, 2015, the Debt Financing Team is responsible for completion of a post-closing debt report. Bond report: On February 24, 2015, the Agency (acting solely on behalf of the All-Requirements Power Supply Project) closed on a Credit Agreement with Wells Fargo Municipal Capital Strategies, LLC and Bank of America, N.A., as Lenders and with Wells Fargo Bank, N.A., as Administrative Agent, relating to the issuance of the All- Requirements Power Supply Project Revenue Bonds, Series 2015A in an amount not to exceed $200 million. On February 3, 2015, the Executive Committee approved the entering into of the Credit Agreement and the negotiation of the terms of the Credit Agreement with the Lenders and the Administrative Agent, including the terms of the All-Requirements Power Supply Project Revenue Bonds, Series 2015A. At the meeting, Resolution 2015-EC1 was adopted authorizing the issuance of the Series 2015A Revenue Bonds. The items listed below are, in part, required to be reported by the Debt Risk Management Policy and the Series 2015A Supplemental All-Requirements Power Supply Project Revenue Bond Resolution: The total amount of new bonds that can be issued is an amount not to exceed $200,000,000. A credit facility in an amount not to exceed $200 million was put in place to pay all or a portion of the amounts needed to fund the termination of certain interest rate swaps associated with the terminated Taylor County coal facility, as directed by the Executive Committee Page 33 of 153

34 EC 8d Acceptance and Approval of the Report on the All-Requirements Series 2015A Bonds March 10, 2015 Page 2 Estimated Costs of issuance: $141,100 (additional costs will be incurred as swaps are terminated and as draws are made under the Credit Agreement) The new credit facility closed on February 24, Variable rate bonds will be issued when funds are drawn on this credit facility, and the bonds will be issued in equal amounts to Wells Fargo Municipal Capital Strategies, LLC and Bank of America, N.A. Each draw on the Credit Agreement by the Agency under the Credit Agreement will be in an amount not less than $500,000. The rate to be paid by the All-Requirements Project for any amounts drawn on the Credit Agreement will be set monthly based on the 70% of 1 Month LIBOR Index % (tax-exempt bond). For example this formula would produce an interest rate of % based on a February 2, 2015 LIBOR rate. This assumes no change to the Project s ratings from Moody s and Fitch. The rate to be paid by the Agency for undrawn amounts will be 20 basis points times the undrawn amount for the number of days elapsed, assuming no change to the Project s ratings from Moody s and Fitch. The undrawn amount will equal the Available Commitment, which is an amount equal to the amount of the Commitment on the Effective Date of $200,000,000 less the principal amount of the loans made under the Credit Agreement. The amount of the Commitment can be reduced by the Agency to an amount not less than the principal amount of the loans made under the Credit Agreement and in no event to an amount less than $80,000,000 until the end of the Commitment Period, which will end by October 1, 2015, at which time the amount of the Commitment will be reduced to $0. The method of sale was negotiated. At this time there is no increase in the debt outstanding of All-Requirements Power Supply Project, but the amount of debt can be increased to an amount not to exceed $200 million in variable rate debt. All draws under the Credit Agreement must be made by October 1, 2015 and draws will be made to pay all or a portion of the amounts needed to fund the termination of certain interest rate swaps associated with the terminated Taylor County coal facility, such termination (to the extent above previously approved amounts) to be at the direction of the Executive Committee. Recommended Motion: Attachments Move acceptance and approval of the report on the All-Requirements Power Supply Project Revenue Bonds, Series 2015A. Attachment #1 (Exhibit A-1) Bond Series Certificate Supplemental Resolution Resolution Page 34 of 153

35 Exhibit A-1 Project Series Outstanding Bonds Underwriter Total All-Requirements Revenue Bonds, Series 2006A 32,255, Merrill Lynch Revenue Bonds, Series 2008A 500,980, Merrill Lynch Revenue Bonds, Series 2008B 36,305, Merrill Lynch Revenue Bonds, Series 2008C 153,025, Merrill Lynch Revenue Bonds, Series 2009A 142,620, Merrill Lynch Revenue Bonds, Series 2009B 15,235, Merrill Lynch Revenue Bonds, Series 2011A-1 29,394, PNC / Private Placement Revenue Bonds, Series 2011A-2 42,220, PNC / Private Placement Revenue Bonds, Series 2011B 44,091, SunTrust / Private Placement Revenue Bonds, Series 2013A 13,720, SunTrust / Private Placement Page 35 of 153

36 BOND SERIES CERTIFICATE RELATING TO ALL-REQUIREMENTS POWER SUPPLY PROJECT REVENUE BONDS, SERIES 2015A OF FLORIDA MUNICIPAL POWER AGENCY Pursuant to the All-Requirements Power Supply Project Revenue Bond Resolution adopted by Florida Municipal Power Agency (the Agency or FMPA ) on March 22, 1985, as amended and restated in its entirety on May 23, 2003 (as previously supplemented and amended, the Bond Resolution ) and as supplemented by the Series 2015A Supplemental All- Requirements Power Supply Project Revenue Bond Resolution adopted by the Agency on February 3, 2015 (the Supplemental Resolution ), authorizing the All-Requirements Power Supply Project Revenue Bonds, Series 2015A (the Series 2015A Bonds ), WE, Howard McKinnon, Chairman of the Executive Committee of the Agency, and Mark J. Larson, Assistant General Manager, Finance and Information Technology and CFO of the Agency, in accordance with Section 2.07 of the Supplemental Resolution, DO HEREBY DETERMINE as follows: 1. The aggregate principal amount of Series 2015A Bonds to be issued, calculated in the manner provided in Section 2.01 of the Supplemental Resolution, is $200,000,000. Such principal amount does not exceed the principal amount authorized in the Supplemental Resolution for the purpose of funding all or a portion of the cost of the termination of certain interest rate swaps entered into by FMPA, and associated with FMPA s All-Requirements Power Supply Project for the terminated Taylor County Coal Facility and to pay the Costs of Issuance of the Series 2015A Bonds, which constitutes the Cost of Acquisition and Construction of the System as described in Section 2.03 of the Bond Resolution. 2. The amount of the proceeds of the Series 2015A Bonds to be applied to the payment of all or a portion of the cost of the termination of certain interest rate swaps entered into by FMPA, and associated with FMPA s All-Requirements Power Supply Project for the terminated Taylor County Coal Facility and constituting the Net New Money Proceeds will be determined at the time of each Borrowing under the Credit Agreement pursuant to a certificate executed and delivered by the Agency. The portion of the proceeds of the Series 2015A Bonds to be applied to the payment of Cost of Issuance of the Series 2015A Bonds will be determined at the time of each Borrowing under the Credit Agreement pursuant to a certificate executed and delivered by the Agency. All proceeds of the Series 2015A Bonds shall be deposited into the Construction Fund established under the Bond Resolution and disbursed in accordance with Section 503 of the Bond Resolution, as supplemented by the Supplemental Resolution and this Bond Series Certificate, and the Trustee shall pay from the Construction Fund to FMPA upon its requisitions therefor signed by an Authorized Officer of FMPA, at one time or from time to time, a sum or sums aggregating not more than $200,000, The amount of the proceeds of the Series 2015A Bonds to be deposited in the Debt Service Reserve Account in the Debt Service Fund in accordance with the provisions of subparagraph (4) of Section 2.01 of the Supplemental Resolution is $0. 4. The Series 2015A Bonds shall be dated their date of delivery and shall bear interest from such date and interest thereon shall be payable monthly on the first Business Day of Page 36 of 153

37 each calendar month commencing March 2, 2015, on the final maturity date and on any optional redemption date. 5. The amount of the proceeds to be used to fund capitalized interest on the Series 2015A Bonds in accordance with the provisions of subparagraph (f) of Section 2.07 of the Supplemental Resolution is $0. 6. The Series 2015A Bonds shall be issued in the form of fully registered Bonds. Unless the Agency shall otherwise direct, the Series 2015A Bonds shall be numbered and lettered 015AR, followed by the number of the Bond. The Series 2015A Bonds shall be numbered consecutively from one upward in order of issue. 7. The Series 2015A Bonds shall be sold to Wells Fargo Municipal Capital Strategies, LLC and Bank of America, N.A., each in an amount not to exceed $100,000,000. The purchase price for the Series 2015A Bonds to be paid to the Agency by each of the Lenders shall be the aggregate amount of Borrowings from such Lenders under the Credit Agreement. The Agency shall provide prompt written notice to the Trustee of each Borrowing. 8. (a) The Series 2015 Bonds shall mature on February 24, 2021 and, shall bear interest at a variable rate of interest per annum payable on the first Business Day of each calendar month commencing on March 2, 2015 and established on each Computation Date (as defined in the Credit Agreement) equal to the LIBOR Index Rate as described in the Credit Agreement, subject to change upon a Determination of Taxability and the occurrence and continuance of an Event of Default under the Credit Agreement as described in the Credit Agreement. From and after the occurrence and during the continuance of a Determination of Taxability under the Credit Agreement, the interest rate on the Series 2015A Bonds shall be equal to the Taxable Rate (as specified in the Credit Agreement). Notwithstanding the foregoing, from and after the occurrence and during the continuance of an Event of Default under the Credit Agreement, the interest rate on the Series 2015A Bonds shall be equal to the Default Rate (as specified in the Credit Agreement). Notwithstanding the foregoing and subject to the terms of the Credit Agreement, the interest rate per annum cannot exceed the maximum rate permitted by applicable laws. Interest on the Series 2015A Bonds shall be calculated on the basis of a 360 day year and the actual days elapsed. (b) If, during the Commitment Period and within the notice period specified in the Credit Agreement, the Administrative Agent determines that a Change in Law shall have occurred pursuant to the terms of Section 3.9 of the Credit Agreement and notifies the Agency that an amount is due from the Agency in accordance with the terms of Section 3.9 of the Credit Agreement, then the Agency may have an additional payment to make to the Administrative Agent in accordance with the terms of Section 3.9 of the Credit Agreement. (c) The Agency may be obligated to pay additional fees or taxes under the terms of the Credit Agreement in accordance with Article 3 of the Credit Agreement Page 37 of 153

38 9. (a) The Series 2015A Bonds may be subject to redemption prior to maturity, at the option of the Agency, upon notice and otherwise as provided in Section 2.3 of the Credit Agreement at any time as a whole or in part at a Redemption Price equal to the principal amount thereof plus accrued interest up to but not including the redemption date. In addition, in the event of a prepayment on a date which is not an Interest Payment Date, Breakage Expenses (as defined in Section 3.7 of the Credit Agreement) may be payable by FMPA and further under certain conditions specified in the Credit Agreement, FMPA shall owe an additional prepayment fee in connection with a prepayment. The Agency will also provide written notice of such redemption to the Trustee. The Administrative Agent shall calculate the Redemption Price due on the redemption date and provide written or electronic notice thereof to the Agency and the Trustee no later than two (2) Business Days prior to the redemption date. The determination of any Redemption Price of the Series 2015A Bonds shall be conclusive and binding, absent manifest error or identified error. (b) Notwithstanding the notice provisions in Section 405 of the Bond Resolution, notice of redemption shall comply with the notice requirements in the Credit Agreement and as specified in the Supplemental Resolution and herein. (c) The Administrative Agent shall calculate the rate and amount of interest accruing on the Series 2015A Bonds, including any adjustments thereto, and provide written or electronic notice thereof to the Agency and the Trustee not later than two (2) Business Days prior to each Interest Payment Date. The determination of any interest rate of the Series 2015A Bonds shall be conclusive and binding, absent manifest error or identified error. If for any reason the Administrative Agent shall fail to establish any interest rate on the Series 2015A Bonds, the Series 2015A Bonds shall bear interest at the interest rate last in effect. Notwithstanding any provision hereof to the contrary, and subject to the provisions in the Credit Agreement, in no event shall the Interest Rate on the Series 2015A Bonds exceed the maximum rate permitted by applicable laws. 10. The Series 2015A Bonds are not subject to mandatory sinking fund redemption prior to maturity. 11. Upon the occurrence of a partial redemption (i) no presentation of the Series 2015A Bond shall be required for payment and (ii) the registered owner, or the Administrative Agent on behalf of the registered owner, shall notate receipt of such principal payment on the bond certificate and upon any subsequent transfer of such Series 2015A Bonds, the Series 2015A Bonds shall be issued to the Registered Owner in authorized denominations in an aggregate unpaid principal amount equal to the unredeemed portion of the Series 2015A Bonds. 12. The form of the Series 2015A Bonds and of the Trustee s Certificate of Authentication shall be substantially in the form annexed hereto as Exhibit A. The Series 2015A Bonds shall have such terms as are set forth in the Series 2015A Bonds, the Bond Resolution, the Supplemental Resolution and this Bond Series Certificate. Unless otherwise directed by the Agency, the Series 2015A Bonds shall be registered in the name of Wells Fargo Municipal Capital Strategies, LLC and Bank of America, N.A., as applicable Page 38 of 153

39 13. The following definitions shall apply to the Series 2015A Bonds and shall have the meanings provided in the Credit Agreement (the Credit Agreement ), dated as of February 24, 2015, among the Agency, acting solely on behalf of the All-Requirements Power Supply Project, Wells Fargo Municipal Capital Strategies, LLC (including its successors and assigns) and Bank of America, N.A. (including its successors and assigns), and Wells Fargo Bank, N.A., as Administrative Agent (including its successors and assigns, the "Administrative Agent").: Borrowing, Breakage Expenses, Business Day, Change in Law, Commitment Period, Computation Date, Default Rate, Interest Payment Date, Lenders, LIBOR Index, and LIBOR Index Rate. 14. All amounts payable under the Credit Agreement, other than principal, interest or redemption price on the Series 2015A Bonds, shall be payable by the Agency from the General Reserve Fund. 15. The issuance of the Series 2015A Bonds is advantageous to the Agency. 16. The appointment of TD Bank, National Association, Cherry Hill, New Jersey, as Trustee under the Bond Resolution is hereby confirmed. The Trustee shall act as the Paying Agent as well as the Trustee with respect to the Series 2015A Bonds. 17. Pursuant to Section 2.09 of the Supplemental Resolution, TD Bank, National Association, Cherry Hill, New Jersey, is hereby appointed Paying Agent and Bond Registrar for the Series 2015A Bonds. 18. The Series 2015A Bonds are issuable in the form of fully registered bonds in the denomination of $100,000 or any integral multiple of $1,000 in excess thereof. 19. The covenants in Article VI of the Credit Agreement shall apply to the Series 2015A Bonds. 20. This certificate constitutes a Bond Series Certificate within the meaning of the Supplemental Resolution, and is executed pursuant to and in accordance with the delegation of authority authorized by and contained in Section 2.07 of the Supplemental Resolution. 21. Each of the Lenders, the Administrative Agent and the Agency hereby irrevocably waives its right to trial by jury in any action or proceeding relating to this Bond Series Certificate and Series 2015A Bonds. Venue shall lie in any state court sitting in the State of Florida or any United States federal court sitting in the State of Florida. 22. The Series 2015A Bonds shall be transferable as provided in the Series 2015A Bonds, the Bond Resolution and the Credit Agreement. 23. All terms used in this Bond Series Certificate and not otherwise defined herein shall have the meanings given to them in the Bond Resolution, the Supplemental Resolution or the Credit Agreement Page 39 of 153

40 Page 40 of 153

41 Page 41 of 153

42 Exhibit A SPECIMEN FORM OF BOND Page 42 of 153

43 NO OFFERING CIRCULAR OR MEMORANDUM, OFFICIAL STATEMENT OR OTHER DISCLOSURE DOCUMENT HAS BEEN PREPARED OR PROVIDED BY FLORIDA MUNICIPAL POWER AGENCY ( FMPA ) IN CONNECTION WITH THE OFFERING AND SALE OF THE SERIES 2015A BONDS (AS DEFINED HEREIN). UNLESS AND UNTIL SUCH A DISCLOSURE DOCUMENT HAS BEEN PREPARED AND PROVIDED BY FMPA IN CONNECTION WITH A TRANSFER, REOFFERING OR REMARKETING OF THE SERIES 2015A BONDS, THE SERIES 2015A BONDS MAY NOT BE TRANSFERRED OTHER THAN TO ACCREDITED INVESTORS AND INSTITUTIONAL INVESTORS EACH OF WHICH IS A QUALIFIED INSTITUTIONAL BUYER, AS DEFINED IN RULE 144A OF THE SECURITIES ACT OF ANY TRANSFEREE TO WHOM A TRANSFER HAS BEEN MADE PRIOR TO THE PREPARATION AND PROVISION OF SUCH A DISCLOSURE DOCUMENT SHALL BE DEEMED TO HAVE REPRESENTED TO FMPA THAT (A) IT IS SUCH A QUALIFIED INSTITUTIONAL BUYER, (B) IT HAS PURCHASED SERIES 2015A BONDS FOR INVESTMENT PURPOSES AND NOT AS AN UNDERWRITER AND DOES NOT PRESENTLY INTEND TO TRANSFER, OTHERWISE DISTRIBUTE OR SELL THE SERIES 2015A BONDS, AND (C) IT IS FAMILIAR WITH THE CONDITION, FINANCIAL AND OTHERWISE, OF FMPA, HAS OBTAINED ALL INFORMATION THAT IT REGARDS AS NECESSARY FOR AND MATERIAL TO ITS DECISION TO PURCHASE THE SERIES 2015A BONDS, AND HAS MADE ITS OWN CREDIT EVALUATION OF FMPA AND HAS NOT RELIED ON FMPA IN MAKING ITS CREDIT EVALUATION. No. 015AR 1 Not to exceed $100,000,000 FLORIDA MUNICIPAL POWER AGENCY ALL-REQUIREMENTS POWER SUPPLY PROJECT REVENUE BOND, SERIES 2015A Interest Rate: Maturity Date: Dated Date: Variable Rate February 24, 2021 February 24, 2015 Registered Owner: Principal Sum: WELLS FARGO MUNICIPAL CAPITAL STRATEGIES, LLC Not to exceed ONE HUNDRED MILLION DOLLARS FLORIDA MUNICIPAL POWER AGENCY, a legal entity created and existing under the laws of the State of Florida ( FMPA ), for value received, hereby promises to pay to the Registered Owner (named above) or registered assigns, on the Maturity Date (stated above), but solely from the funds pledged therefor, upon presentation and surrender of this bond at the designated corporate trust office of TD Bank, National Association, Cherry Hill, New Jersey (such bank and any successor thereto being called the Paying Agent ), the aggregate outstanding principal balance of the Borrowings (as defined in the hereinafter described Credit Agreement) made from the Registered Owner to FMPA under the Credit Agreement (the Credit Agreement ), dated as of February 24, 2015, among FMPA, acting solely on behalf of the All-Requirements Power Supply Project, the Registered Owner (including its successors and assigns, a Lender ), Bank of America, N.A. (including its successors and assigns, a Lender and collectively with the other Lender, the Lenders ), and Wells Fargo Bank, N.A., as Administrative Agent (including its successors and assigns, the Administrative Agent ) SPECIMEN Page 43 of 153

44 (the Outstanding Amount ) in an amount not to exceed the Principal Sum (stated above) in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay interest, if any, on the first Business Day of each calendar month (an Interest Payment Date ) commencing on March 2, 2015 on the Outstanding Amount, at the Interest Rate as determined below from time to time, accruing from the date of each Borrowing to the next Interest Payment Date and then accruing from an Interest Payment Date to the next Interest Payment Date until payment of said Outstanding Amount has been made or duly provided for. Interest on the Series 2015A Bonds shall be computed on the basis of a 360-day year and the actual days elapsed. The interest so payable on the first Business Day of each calendar month shall be paid to the person in whose name this bond (or any one or more bonds for which this bond shall have been issued in exchange or on transfer) is registered at the close of business on the record date which shall be the fifteenth day of each calendar month (whether or not a Business Day) next preceding the applicable Interest Payment Date. This bond is one of a duly authorized series of bonds of FMPA designated All-Requirements Power Supply Project Revenue Bonds, Series 2015A (herein called the Series 2015A Bonds ), in the aggregate principal amount not to exceed $200,000,000 issued under and in full compliance with the Constitution and Statutes of the State of Florida, and particularly Chapter 166, Part II, Florida Statutes, as amended and supplemented (herein called the Act ), and under and pursuant to a Resolution of FMPA, adopted by the Board of Directors of FMPA on March 22, 1985 as amended and restated in its entirety on May 23, 2003, entitled All-Requirements Power Supply Project Revenue Bond Resolution, as amended and supplemented, including as supplemented by the Series 2015A Supplemental All-Requirements Power Supply Project Revenue Bond Resolution adopted by FMPA on February 3, 2015 (the Supplemental Resolution ), authorizing the Series 2015A Bonds (such All-Requirements Power Supply Project Revenue Bond Resolution as so supplemented and amended being herein called the Resolution ), and the Bond Series Certificate Relating to All-Requirements Power Supply Project Revenue Bonds, Series 2015A dated February 24, 2015 (the Bond Series Certificate ). The Series 2015A Bonds and all other bonds now or hereafter issued under the Resolution on a parity with the Series 2015A Bonds (herein collectively called the bonds ) shall be payable solely from and secured as to payment of the principal and redemption price thereof, and interest thereon, in accordance with their terms and the provisions of the Resolution solely by (i) the proceeds of the sale of bonds (ii) all right, title and interest of FMPA in, to and under the All-Requirements Power Supply Project Contracts, (iii) the Revenues (as defined in the Resolution), and (iv) all Funds, established by the Resolution (other than the Decommissioning Fund, if established) including the investment income, if any, thereon, subject only to the provisions of the Resolution permitting the application thereof for the purposes and on the terms and conditions set forth in the Resolution. Capitalized terms used herein and not defined shall have the meanings given such terms in the Resolution or the Bond Series Certificate or the Credit Agreement. The Series 2015A Bonds are being issued for the purpose of financing all or a portion of the cost of funding the termination of certain interest rate swaps entered into by FMPA with several swap counterparties and the costs of issuing the Series 2015A Bonds in accordance with the terms of the Resolution. SPECIMEN The interest rate for the Series 2015A Bonds is a per annum rate established on each Computation Date equal to the LIBOR Index Rate as described in the Credit Agreement, subject Page 44 of 153

45 to change upon a Determination of Taxability and the occurrence and continuance of an Event of Default under the Credit Agreement. From and after the occurrence and during the continuance of a Determination of Taxability under the Credit Agreement, the interest rate on the Series 2015A Bonds shall be equal to the Taxable Rate (as specified in the Credit Agreement). Notwithstanding the foregoing, from and after the occurrence and during the continuance of an Event of Default, the interest rate on the Series 2015A Bonds shall be equal to the Default Rate (as specified in the Credit Agreement) (the Default Rate ). The Administrative Agent shall calculate the rate and amount of interest accruing on the Series 2015A Bonds, including any adjustments thereto, and provide written or electronic notice thereof to FMPA and the Trustee not later than two (2) Business Days prior to each Interest Payment Date. The Trustee shall provide to the Administrative Agent, on the date of each principal and interest payment on the Series 2015A Bonds, a statement indicating the amount of, identifying the recipient of, and setting forth the federal reference number for each such payment. The determination of any interest rate of and the interest amount on the Series 2015A Bonds shall be conclusive and binding, absent manifest error or identified error. The determination of any interest rate of the Series 2015A Bonds shall be conclusive and binding, absent manifest error or identified error, upon FMPA, the Trustee, and the Holders of the Series 2015A Bonds. If for any reason the Administrative Agent shall fail to establish any interest rate on the Series 2015A Bonds, the Series 2015A Bonds shall bear interest at the interest rate last in effect. Notwithstanding any provision hereof to the contrary, and subject to the provisions in the Credit Agreement, in no event shall the interest rate on the Series 2015A Bonds exceed the maximum rate permitted by applicable laws. The Series 2015A Bonds are subject to optional redemption prior to maturity, at the option of FMPA, upon notice and as provided in Section 2.3 of the Credit Agreement with respect to the repayment of each Loan, as a whole or in part at any time at a redemption price of 100% of the principal amount of the Series 2015A Bonds or portions thereof to be redeemed, together with accrued interest to but not including the redemption date (the Redemption Price ). In addition, in the event of a prepayment on a date which is not an Interest Payment Date, Breakage Expenses (as defined in Section 3.7 of the Credit Agreement) and further under certain conditions specified in the Credit Agreement, FMPA shall owe an additional prepayment fee in connection with a prepayment. Additionally, no more than one prepayment in a thirty (30) day period may be elected by FMPA and the amount prepaid must be a minimum of $100,000. FMPA will also provide written notice of such redemption to the Trustee. The Administrative Agent shall calculate the Redemption Price due on the redemption date and provide written or electronic notice thereof to FMPA and the Trustee no later than two (2) Business Days prior to the redemption date. The determination of any Redemption Price of the Series 2015A Bonds shall be conclusive and binding, absent manifest error or identified error. Monies received in connection with the redemption of the Series 2015A Bonds pursuant to the Bond Series Certificate shall be applied against the Outstanding Amount due on the Maturity Date. SPECIMEN Page 45 of 153

46 In the event of redemption of all or less than all of the outstanding Series 2015A Bonds, such redemption shall comply with the Credit Agreement with respect to the manner of such redemption and the notice requirements in connection therewith. Upon the occurrence of a partial redemption (i) no presentation of the Series 2015A Bonds shall be required for payment and (ii) the registered owner, or the Administrative Agent on behalf of the registered owner, shall notate receipt of such principal payment on the bond certificate and upon any subsequent transfer of such Series 2015A Bonds, the Series 2015A Bonds shall be issued to the Registered Owner in authorized denominations in an aggregate unpaid principal amount equal to the unredeemed portion of the Series 2015A Bonds. The Series 2015A Bonds are issuable in the form of fully registered bonds in the denomination of $100,000 or any integral multiple of $1,000 in excess thereof. The Series 2015A Bonds are being issued by means of physical distribution of bond certificates, with no book-entry-only system. The registered owner of any Series 2015A Bond of one or more denominations shall have the right to exchange such Series 2015A Bond for a new Series 2015A Bond of any denomination then authorized for such Series 2015A Bond of the same aggregate principal amount and Series and maturity of the surrendered Series 2015A Bond. Such Series 2015A Bond shall be exchanged by FMPA for a new Series 2015A Bond upon the request of the registered owner thereof in person or by his attorney duly authorized in writing, upon surrender of such Series 2015A Bond together with a written instrument requesting such exchange satisfactory to the Bond Registrar duly executed by the registered owner or his duly authorized attorney. FMPA and each Fiduciary may deem and treat the person in whose name any Series 2015A Bond shall be registered upon the books of FMPA as the absolute owner of such Series 2015A Bond, whether such Series 2015A Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal and Redemption Price, if any, of and interest on such Series 2015A Bond and for all other purposes, and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Series 2015A Bond to the extent of the sum or sums so paid, and neither FMPA nor any Fiduciary shall be affected by any notice to the contrary. FMPA agrees to indemnify and save each Fiduciary harmless from and against any and all loss, cost, charge, expense, judgment or liability incurred by it, acting in good faith and without negligence under the Resolution, in so treating such registered owner. In all cases in which the privilege of exchanging or transferring Series 2015A Bonds is exercised, FMPA shall execute and the Trustee shall authenticate and deliver Series 2015A Bonds in accordance with the provisions of the Resolution. All Series 2015A Bonds surrendered in any such exchanges or transfers shall forthwith be delivered to the Trustee and cancelled or retained by the Trustee. For every such exchange or transfer of Series 2015A Bonds, whether temporary or definitive, FMPA or the Bond Registrar may make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer. Neither FMPA nor the Bond Registrar shall be required to exchange or transfer Series 2015A Bonds for a period of 15 days next preceding an interest payment date on the SPECIMEN Page 46 of 153

47 Series 2015A Bonds or next preceding any selection of Series 2015A Bonds to be redeemed or thereafter until after the mailing of any notice of redemption. To the extent that there is a conflict between the terms hereof and the terms described in the Bond Series Certificate for the Series 2015A Bonds, the terms of the Bond Series Certificate shall control. Copies of the Resolution are on file at the office of FMPA and at the designated corporate trust office of the Trustee, and reference is made to the Resolution and any and all supplements thereto and modifications and amendments thereof and to the Act for a description of the security interest, pledge and assignment and covenants securing the bonds, the nature, extent and manner of enforcement of such pledge, the rights and remedies of the holders of the bonds with respect thereto, the terms and conditions upon which the bonds are issued and may be issued thereunder, the terms and provisions upon which this bond shall cease to be entitled to any lien, benefit or security under the Resolution and all covenants, agreements and obligations of FMPA under the Resolution may be discharged and satisfied at or prior to the maturity of this bond if monies or certain specified securities shall have been deposited with the Trustee, and for the other terms and provisions thereof. As provided in the Resolution, bonds may be issued from time to time pursuant to supplemental resolutions in one or more series, in various principal amounts, may mature at different times, may bear interest at different rates and may otherwise vary as provided in the Resolution. The aggregate principal amount of bonds which may be issued under the Resolution is not limited except as provided in the Resolution, and all bonds issued and to be issued under the Resolution are and will be equally secured by the pledge and covenants made therein, except as otherwise expressly provided or permitted in the Resolution. To the extent and in the manner permitted by the terms of the Resolution, the provisions of the Resolution, or any resolution amendatory thereof or supplemental thereto, may be modified or amended by FMPA, with the written consent of the holders of at least a majority in principal amount of the bonds then outstanding under the Resolution, and, in case less than all of the series of bonds then outstanding would be affected thereby, with such consent of at least a majority in principal amount of the bonds of each series so affected then outstanding under the Resolution; provided, however, that, if such modification or amendment will, by its terms, not take effect so long as any bonds of any specified like series and maturity remain outstanding under the Resolution, the consent of the holders of such bonds shall not be required and such bonds shall not be deemed to be outstanding for the purpose of the calculation of outstanding bonds. No such modification or amendment shall permit a change in the terms of redemption (including sinking fund installments) or maturity of the principal of any outstanding bond or of any installment of interest thereon or a reduction in the principal amount or redemption price thereof or in the rate of interest thereon without the consent of the holder of such bond, or shall reduce the percentages or otherwise affect the classes of bonds the consent of the holders of which is required to effect any such modification or amendment, or shall change or modify any of the rights or obligations of the Trustee or of any Paying Agent without its written assent thereto. Notwithstanding the foregoing, the Resolution provides that in the event that payment of principal of and interest on all or any portion of any series of bonds are insured by any nationally recognized company engaged in the business of insuring municipal bonds and such insurance company is not in default in respect of any of its obligations in respect of such insurance policy, SPECIMEN Page 47 of 153

48 then the insurance company (and not the registered holder thereof) shall be deemed to be the holder of such bonds for the purposes of granting any such consent. Any provision of the Series 2015A Bonds may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by FMPA, the Lenders and the Administrative Agent. Such amendments and waivers to the Series 2015A Bonds will require approval of Lenders holding more than 66-2/3 percent in outstanding principal amount of the Loans but in any case no less than two Lenders (the Required Lenders ), except that the consent of all Lenders or affected Lenders shall be required to (i) extend or increase the Commitment (as defined in the Credit Agreement), or (ii) extend the date scheduled for payment of any principal (excluding any mandatory prepayment), interest or fees, or (iii) reduce the principal amount of any Loan (as defined in the Credit Agreement), the rate of interest thereunder or fees payable in respect thereof; or (iv) reduce the percentage required for Required Lenders. This bond is transferable, as provided herein and in the Resolution and the Credit Agreement, only upon the books kept for that purpose at the designated corporate trust office of the Bond Registrar, by the Registered Owner hereof in person, or by his duly authorized attorney, upon surrender of this bond together with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the registered owner or his duly authorized attorney and thereupon a new fully registered bond or bonds, without coupons, and in the same aggregate principal amounts, shall be issued to the transferee in exchange therefor as provided in the Resolution, and upon payment of the charges therein prescribed. FMPA, the Trustee and any Paying Agent may deem and treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal and interest due hereon and for all other purposes. The Resolution provides that neither the members of FMPA nor any person executing the Series 2015A Bonds shall be liable personally on the Series 2015A Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. The principal of, premium, if any, and interest on the Series 2015A Bonds are payable solely from the amounts pledged therefor under the Resolution, and neither the State of Florida nor any political subdivision thereof, nor any city or other entity which is a member of FMPA, other than FMPA, is obligated to pay the principal of, premium, if any, or interest on the Series 2015A Bonds or the issue of which it is one. It is hereby certified and recited that all conditions, acts and things required by law and the Resolution to exist, to have happened and to have been performed precedent to and in the issuance of this bond, exist, have happened and have been performed and that the series of bonds of which this is one complies in all respects with the applicable laws of the State of Florida, including, particularly, the Act. This bond shall not be entitled to any benefit under the Resolution or be valid or become obligatory for any purpose until this bond shall have been authenticated by the execution by the Trustee of the Trustee s Certificate of Authentication hereon. SPECIMEN Page 48 of 153

49 IN WITNESS WHEREOF, FLORIDA MUNICIPAL POWER AGENCY has caused this bond to be executed in its name and on its behalf by the manual or facsimile signature of its Chairman, and its seal to be impressed, imprinted, engraved or otherwise reproduced hereon, and attested by the manual or facsimile signature of its Assistant Secretary. Attest: [SEAL] Assistant Secretary FLORIDA MUNICIPAL POWER AGENCY (ALL-REQUIREMENTS PROJECT) By: Chairman, Executive Committee of Florida Municipal Power Agency SPECIMEN Page 49 of 153

50 TRUSTEE S CERTIFICATE OF AUTHENTICATION This bond is one of the bonds delivered pursuant to the within-mentioned Resolution. Date of this bond: February 24, 2015 TD BANK, NATIONAL ASSOCIATION, as Trustee By: Authorized Officer SPECIMEN Page 50 of 153

51 DATE OF BORROWING AMOUNT OF BORROWING APPENDIX A to the Bond SCHEDULE OF BORROWINGS AND PAYMENTS REQUISITION NO. ACCOUNT NUMBER DATE OF REPAYMENT SPECIMEN Page 51 of 153 AMOUNT OF REPAYMENT

52 ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please print or typewrite name of undersigned transferor) PLEASE INSERT SOCIAL SECURITY OR OTHER TAX IDENTIFYING NUMBER OF TRANSFEREE (Please print or typewrite name and address, including zip code, of transferee) the within mentioned bond and hereby irrevocably constitutes and appoints, attorney-in-fact, to transfer the within bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: NOTICE: The signature must be guaranteed by an officer of a commercial bank, trust company, or a member of the New York Stock Exchange or other national securities exchange. Notarized or witnessed signatures not acceptable. Signature Guaranteed: NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within bond in every particular, without alteration or enlargement, or any change whatsoever. SPECIMEN Page 52 of 153

53 NO OFFERING CIRCULAR OR MEMORANDUM, OFFICIAL STATEMENT OR OTHER DISCLOSURE DOCUMENT HAS BEEN PREPARED OR PROVIDED BY FLORIDA MUNICIPAL POWER AGENCY ( FMPA ) IN CONNECTION WITH THE OFFERING AND SALE OF THE SERIES 2015A BONDS (AS DEFINED HEREIN). UNLESS AND UNTIL SUCH A DISCLOSURE DOCUMENT HAS BEEN PREPARED AND PROVIDED BY FMPA IN CONNECTION WITH A TRANSFER, REOFFERING OR REMARKETING OF THE SERIES 2015A BONDS, THE SERIES 2015A BONDS MAY NOT BE TRANSFERRED OTHER THAN TO ACCREDITED INVESTORS AND INSTITUTIONAL INVESTORS EACH OF WHICH IS A QUALIFIED INSTITUTIONAL BUYER, AS DEFINED IN RULE 144A OF THE SECURITIES ACT OF ANY TRANSFEREE TO WHOM A TRANSFER HAS BEEN MADE PRIOR TO THE PREPARATION AND PROVISION OF SUCH A DISCLOSURE DOCUMENT SHALL BE DEEMED TO HAVE REPRESENTED TO FMPA THAT (A) IT IS SUCH A QUALIFIED INSTITUTIONAL BUYER, (B) IT HAS PURCHASED SERIES 2015A BONDS FOR INVESTMENT PURPOSES AND NOT AS AN UNDERWRITER AND DOES NOT PRESENTLY INTEND TO TRANSFER, OTHERWISE DISTRIBUTE OR SELL THE SERIES 2015A BONDS, AND (C) IT IS FAMILIAR WITH THE CONDITION, FINANCIAL AND OTHERWISE, OF FMPA, HAS OBTAINED ALL INFORMATION THAT IT REGARDS AS NECESSARY FOR AND MATERIAL TO ITS DECISION TO PURCHASE THE SERIES 2015A BONDS, AND HAS MADE ITS OWN CREDIT EVALUATION OF FMPA AND HAS NOT RELIED ON FMPA IN MAKING ITS CREDIT EVALUATION. No. 015AR 2 Not to exceed $100,000,000 FLORIDA MUNICIPAL POWER AGENCY ALL-REQUIREMENTS POWER SUPPLY PROJECT REVENUE BOND, SERIES 2015A Interest Rate: Maturity Date: Dated Date: Variable Rate February 24, 2021 February 24, 2015 Registered Owner: Principal Sum: BANK OF AMERICA, N.A. Not to exceed ONE HUNDRED MILLION DOLLARS FLORIDA MUNICIPAL POWER AGENCY, a legal entity created and existing under the laws of the State of Florida ( FMPA ), for value received, hereby promises to pay to the Registered Owner (named above) or registered assigns, on the Maturity Date (stated above), but solely from the funds pledged therefor, upon presentation and surrender of this bond at the designated corporate trust office of TD Bank, National Association, Cherry Hill, New Jersey (such bank and any successor thereto being called the Paying Agent ), the aggregate outstanding principal balance of the Borrowings (as defined in the hereinafter described Credit Agreement) made from the Registered Owner to FMPA under the Credit Agreement (the Credit Agreement ), dated as of February 24, 2015, among FMPA, acting solely on behalf of the All-Requirements Power Supply Project, the Registered Owner (including its successors and assigns, a Lender ), Wells Fargo Municipal Capital Strategies, LLC (including its successors and assigns, a Lender and collectively with the other Lender, the Lenders ), and Wells Fargo Bank, N.A., as Administrative Agent (including its successors and assigns, the "Administrative SPECIMEN Page 53 of 153

54 Agent") (the Outstanding Amount ) in an amount not to exceed the Principal Sum (stated above) in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay interest, if any, on the first Business Day of each calendar month (an Interest Payment Date ) commencing on March 2, 2015 on the Outstanding Amount, at the Interest Rate as determined below from time to time, accruing from the date of each Borrowing to the next Interest Payment Date and then accruing from an Interest Payment Date to the next Interest Payment Date until payment of said Outstanding Amount has been made or duly provided for. Interest on the Series 2015A Bonds shall be computed on the basis of a 360-day year and the actual days elapsed. The interest so payable on the first Business Day of each calendar month shall be paid to the person in whose name this bond (or any one or more bonds for which this bond shall have been issued in exchange or on transfer) is registered at the close of business on the record date which shall be the fifteenth day of each calendar month (whether or not a Business Day) next preceding the applicable Interest Payment Date. This bond is one of a duly authorized series of bonds of FMPA designated All-Requirements Power Supply Project Revenue Bonds, Series 2015A (herein called the Series 2015A Bonds ), in the aggregate principal amount not to exceed $200,000,000 issued under and in full compliance with the Constitution and Statutes of the State of Florida, and particularly Chapter 166, Part II, Florida Statutes, as amended and supplemented (herein called the Act ), and under and pursuant to a Resolution of FMPA, adopted by the Board of Directors of FMPA on March 22, 1985 as amended and restated in its entirety on May 23, 2003, entitled All-Requirements Power Supply Project Revenue Bond Resolution, as amended and supplemented, including as supplemented by the Series 2015A Supplemental All-Requirements Power Supply Project Revenue Bond Resolution adopted by FMPA on February 3, 2015 (the Supplemental Resolution ), authorizing the Series 2015A Bonds (such All-Requirements Power Supply Project Revenue Bond Resolution as so supplemented and amended being herein called the Resolution ), and the Bond Series Certificate Relating to All-Requirements Power Supply Project Revenue Bonds, Series 2015A dated February 24, 2015 (the Bond Series Certificate ). The Series 2015A Bonds and all other bonds now or hereafter issued under the Resolution on a parity with the Series 2015A Bonds (herein collectively called the bonds ) shall be payable solely from and secured as to payment of the principal and redemption price thereof, and interest thereon, in accordance with their terms and the provisions of the Resolution solely by (i) the proceeds of the sale of bonds (ii) all right, title and interest of FMPA in, to and under the All-Requirements Power Supply Project Contracts, (iii) the Revenues (as defined in the Resolution), and (iv) all Funds, established by the Resolution (other than the Decommissioning Fund, if established) including the investment income, if any, thereon, subject only to the provisions of the Resolution permitting the application thereof for the purposes and on the terms and conditions set forth in the Resolution. Capitalized terms used herein and not defined shall have the meanings given such terms in the Resolution or the Bond Series Certificate or the Credit Agreement. The Series 2015A Bonds are being issued for the purpose of financing all or a portion of the cost of funding the termination of certain interest rate swaps entered into by FMPA with several swap counterparties and the costs of issuing the Series 2015A Bonds in accordance with the terms of the Resolution. SPECIMEN Page 54 of 153

55 The interest rate for the Series 2015A Bonds is a per annum rate established on each Computation Date equal to the LIBOR Index Rate as described in the Credit Agreement, subject to change upon a Determination of Taxability and the occurrence and continuance of an Event of Default under the Credit Agreement. From and after the occurrence and during the continuance of a Determination of Taxability under the Credit Agreement, the interest rate on the Series 2015A Bonds shall be equal to the Taxable Rate (as specified in the Credit Agreement). Notwithstanding the foregoing, from and after the occurrence and during the continuance of an Event of Default, the interest rate on the Series 2015A Bonds shall be equal to the Default Rate (as specified in the Credit Agreement) (the Default Rate ). The Administrative Agent shall calculate the rate and amount of interest accruing on the Series 2015A Bonds, including any adjustments thereto, and provide written or electronic notice thereof to FMPA and the Trustee not later than two (2) Business Days prior to each Interest Payment Date. The Trustee shall provide to the Administrative Agent, on the date of each principal and interest payment on the Series 2015A Bonds, a statement indicating the amount of, identifying the recipient of, and setting forth the federal reference number for each such payment. The determination of any interest rate of and the interest amount on the Series 2015A Bonds shall be conclusive and binding, absent manifest error or identified error. The determination of any interest rate of the Series 2015A Bonds shall be conclusive and binding, absent manifest error or identified error, upon FMPA, the Trustee, and the Holders of the Series 2015A Bonds. If for any reason the Administrative Agent shall fail to establish any interest rate on the Series 2015A Bonds, the Series 2015A Bonds shall bear interest at the interest rate last in effect. Notwithstanding any provision hereof to the contrary, and subject to the provisions in the Credit Agreement, in no event shall the interest rate on the Series 2015A Bonds exceed the maximum rate permitted by applicable laws. The Series 2015A Bonds are subject to optional redemption prior to maturity, at the option of FMPA, upon notice and as provided in Section 2.3 of the Credit Agreement with respect to the repayment of each Loan, as a whole or in part at any time at a redemption price of 100% of the principal amount of the Series 2015A Bonds or portions thereof to be redeemed, together with accrued interest to but not including the redemption date (the Redemption Price ). In addition, in the event of a prepayment on a date which is not an Interest Payment Date, Breakage Expenses (as defined in Section 3.7 of the Credit Agreement) and further under certain conditions specified in the Credit Agreement, FMPA shall owe an additional prepayment fee in connection with a prepayment. Additionally, no more than one prepayment in a thirty (30) day period may be elected by FMPA and the amount prepaid must be a minimum of $100,000. FMPA will also provide written notice of such redemption to the Trustee. The Administrative Agent shall calculate the Redemption Price due on the redemption date and provide written or electronic notice thereof to FMPA and the Trustee no later than two (2) Business Days prior to the redemption date. The determination of any Redemption Price of the Series 2015A Bonds shall be conclusive and binding, absent manifest error or identified error. Monies received in connection with the redemption of the Series 2015A Bonds pursuant to the Bond Series Certificate shall be applied against the Outstanding Amount due on the Maturity Date.SPECIMEN Page 55 of 153

56 In the event of redemption of all or less than all of the outstanding Series 2015A Bonds, such redemption shall comply with the Credit Agreement with respect to the manner of such redemption and the notice requirements in connection therewith. Upon the occurrence of a partial redemption (i) no presentation of the Series 2015A Bonds shall be required for payment and (ii) the registered owner, or the Administrative Agent on behalf of the registered owner, shall notate receipt of such principal payment on the bond certificate and upon any subsequent transfer of such Series 2015A Bonds, the Series 2015A Bonds shall be issued to the Registered Owner in authorized denominations in an aggregate unpaid principal amount equal to the unredeemed portion of the Series 2015A Bonds. The Series 2015A Bonds are issuable in the form of fully registered bonds in the denomination of $100,000 or any integral multiple of $1,000 in excess thereof. The Series 2015A Bonds are being issued by means of physical distribution of bond certificates, with no book-entry-only system. The registered owner of any Series 2015A Bond of one or more denominations shall have the right to exchange such Series 2015A Bond for a new Series 2015A Bond of any denomination then authorized for such Series 2015A Bond of the same aggregate principal amount and Series and maturity of the surrendered Series 2015A Bond. Such Series 2015A Bond shall be exchanged by FMPA for a new Series 2015A Bond upon the request of the registered owner thereof in person or by his attorney duly authorized in writing, upon surrender of such Series 2015A Bond together with a written instrument requesting such exchange satisfactory to the Bond Registrar duly executed by the registered owner or his duly authorized attorney. FMPA and each Fiduciary may deem and treat the person in whose name any Series 2015A Bond shall be registered upon the books of FMPA as the absolute owner of such Series 2015A Bond, whether such Series 2015A Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal and Redemption Price, if any, of and interest on such Series 2015A Bond and for all other purposes, and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Series 2015A Bond to the extent of the sum or sums so paid, and neither FMPA nor any Fiduciary shall be affected by any notice to the contrary. FMPA agrees to indemnify and save each Fiduciary harmless from and against any and all loss, cost, charge, expense, judgment or liability incurred by it, acting in good faith and without negligence under the Resolution, in so treating such registered owner. In all cases in which the privilege of exchanging or transferring Series 2015A Bonds is exercised, FMPA shall execute and the Trustee shall authenticate and deliver Series 2015A Bonds in accordance with the provisions of the Resolution. All Series 2015A Bonds surrendered in any such exchanges or transfers shall forthwith be delivered to the Trustee and cancelled or retained by the Trustee. For every such exchange or transfer of Series 2015A Bonds, whether temporary or definitive, FMPA or the Bond Registrar may make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer. Neither FMPA nor the Bond Registrar shall be required to exchange or transfer Series 2015A Bonds for a period of 15 days next preceding an interest payment date on the SPECIMEN Page 56 of 153

57 Series 2015A Bonds or next preceding any selection of Series 2015A Bonds to be redeemed or thereafter until after the mailing of any notice of redemption. To the extent that there is a conflict between the terms hereof and the terms described in the Bond Series Certificate for the Series 2015A Bonds, the terms of the Bond Series Certificate shall control. Copies of the Resolution are on file at the office of FMPA and at the designated corporate trust office of the Trustee, and reference is made to the Resolution and any and all supplements thereto and modifications and amendments thereof and to the Act for a description of the security interest, pledge and assignment and covenants securing the bonds, the nature, extent and manner of enforcement of such pledge, the rights and remedies of the holders of the bonds with respect thereto, the terms and conditions upon which the bonds are issued and may be issued thereunder, the terms and provisions upon which this bond shall cease to be entitled to any lien, benefit or security under the Resolution and all covenants, agreements and obligations of FMPA under the Resolution may be discharged and satisfied at or prior to the maturity of this bond if monies or certain specified securities shall have been deposited with the Trustee, and for the other terms and provisions thereof. As provided in the Resolution, bonds may be issued from time to time pursuant to supplemental resolutions in one or more series, in various principal amounts, may mature at different times, may bear interest at different rates and may otherwise vary as provided in the Resolution. The aggregate principal amount of bonds which may be issued under the Resolution is not limited except as provided in the Resolution, and all bonds issued and to be issued under the Resolution are and will be equally secured by the pledge and covenants made therein, except as otherwise expressly provided or permitted in the Resolution. To the extent and in the manner permitted by the terms of the Resolution, the provisions of the Resolution, or any resolution amendatory thereof or supplemental thereto, may be modified or amended by FMPA, with the written consent of the holders of at least a majority in principal amount of the bonds then outstanding under the Resolution, and, in case less than all of the series of bonds then outstanding would be affected thereby, with such consent of at least a majority in principal amount of the bonds of each series so affected then outstanding under the Resolution; provided, however, that, if such modification or amendment will, by its terms, not take effect so long as any bonds of any specified like series and maturity remain outstanding under the Resolution, the consent of the holders of such bonds shall not be required and such bonds shall not be deemed to be outstanding for the purpose of the calculation of outstanding bonds. No such modification or amendment shall permit a change in the terms of redemption (including sinking fund installments) or maturity of the principal of any outstanding bond or of any installment of interest thereon or a reduction in the principal amount or redemption price thereof or in the rate of interest thereon without the consent of the holder of such bond, or shall reduce the percentages or otherwise affect the classes of bonds the consent of the holders of which is required to effect any such modification or amendment, or shall change or modify any of the rights or obligations of the Trustee or of any Paying Agent without its written assent thereto. Notwithstanding the foregoing, the Resolution provides that in the event that payment of principal of and interest on all or any portion of any series of bonds are insured by any nationally recognized company engaged in the business of insuring municipal bonds and such insurance company is not in default in respect of any of its obligations in respect of such insurance policy, SPECIMEN Page 57 of 153

58 then the insurance company (and not the registered holder thereof) shall be deemed to be the holder of such bonds for the purposes of granting any such consent. Any provision of the Series 2015A Bonds may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by FMPA, the Lenders and the Administrative Agent. Such amendments and waivers to the Series 2015A Bonds will require approval of Lenders holding more than 66-2/3 percent in outstanding principal amount of the Loans but in any case no less than two Lenders (the Required Lenders ), except that the consent of all Lenders or affected Lenders shall be required to (i) extend or increase the Commitment (as defined in the Credit Agreement), or (ii) extend the date scheduled for payment of any principal (excluding any mandatory prepayment), interest or fees, or (iii) reduce the principal amount of any Loan (as defined in the Credit Agreement), the rate of interest thereunder or fees payable in respect thereof; or (iv) reduce the percentage required for Required Lenders. This bond is transferable, as provided herein and in the Resolution and the Credit Agreement, only upon the books kept for that purpose at the designated corporate trust office of the Bond Registrar, by the Registered Owner hereof in person, or by his duly authorized attorney, upon surrender of this bond together with a written instrument of transfer satisfactory to the Bond Registrar duly executed by the registered owner or his duly authorized attorney and thereupon a new fully registered bond or bonds, without coupons, and in the same aggregate principal amounts, shall be issued to the transferee in exchange therefor as provided in the Resolution, and upon payment of the charges therein prescribed. FMPA, the Trustee and any Paying Agent may deem and treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal and interest due hereon and for all other purposes. The Resolution provides that neither the members of FMPA nor any person executing the Series 2015A Bonds shall be liable personally on the Series 2015A Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. The principal of, premium, if any, and interest on the Series 2015A Bonds are payable solely from the amounts pledged therefor under the Resolution, and neither the State of Florida nor any political subdivision thereof, nor any city or other entity which is a member of FMPA, other than FMPA, is obligated to pay the principal of, premium, if any, or interest on the Series 2015A Bonds or the issue of which it is one. It is hereby certified and recited that all conditions, acts and things required by law and the Resolution to exist, to have happened and to have been performed precedent to and in the issuance of this bond, exist, have happened and have been performed and that the series of bonds of which this is one complies in all respects with the applicable laws of the State of Florida, including, particularly, the Act. This bond shall not be entitled to any benefit under the Resolution or be valid or become obligatory for any purpose until this bond shall have been authenticated by the execution by the Trustee of the Trustee s Certificate of Authentication hereon. SPECIMEN Page 58 of 153

59 IN WITNESS WHEREOF, FLORIDA MUNICIPAL POWER AGENCY has caused this bond to be executed in its name and on its behalf by the manual or facsimile signature of its Chairman, and its seal to be impressed, imprinted, engraved or otherwise reproduced hereon, and attested by the manual or facsimile signature of its Assistant Secretary. Attest: [SEAL] Assistant Secretary FLORIDA MUNICIPAL POWER AGENCY (ALL-REQUIREMENTS PROJECT) By: Chairman, Executive Committee of Florida Municipal Power Agency SPECIMEN Page 59 of 153

60 TRUSTEE S CERTIFICATE OF AUTHENTICATION This bond is one of the bonds delivered pursuant to the within-mentioned Resolution. Date of this bond: February 24, 2015 TD BANK, NATIONAL ASSOCIATION, as Trustee By: Authorized Officer SPECIMEN Page 60 of 153

61 DATE OF BORROWING APPENDIX A to the Bond SCHEDULE OF BORROWINGS AND PAYMENTS AMOUNT OF BORROWING REQUISITION NO. ACCOUNT NUMBER DATE OF REPAYMENT SPECIMEN Page 61 of 153 AMOUNT OF REPAYMENT

62 ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please print or typewrite name of undersigned transferor) PLEASE INSERT SOCIAL SECURITY OR OTHER TAX IDENTIFYING NUMBER OF TRANSFEREE (Please print or typewrite name and address, including zip code, of transferee) the within mentioned bond and hereby irrevocably constitutes and appoints, attorney-in-fact, to transfer the within bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: NOTICE: The signature must be guaranteed by an officer of a commercial bank, trust company, or a member of the New York Stock Exchange or other national securities exchange. Notarized or witnessed signatures not acceptable. Signature Guaranteed: NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within bond in every particular, without alteration or enlargement, or any change whatsoever. SPECIMEN Page 62 of 153

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68 FLORIDA MUNICIPAL POWER AGENCY All-Requirements Power Supply Project Revenue Bonds, Series 2015A Series 2015A Supplemental All-Requirements Power Supply Project Revenue Bond Resolution Adopted February 3, Page 68 of 153

69 - i - TABLE OF CONTENTS Page ARTICLE I. DEFINITIONS AND STATUTORY AUTHORITY...1 SECTION Supplemental Resolution... 1 SECTION Definitions... 1 SECTION Authority for this Supplemental Resolution... 2 ARTICLE II. AUTHORIZATION OF SERIES 2015A BONDS;TERMS AND PROVISIONS OF SERIES 2015A BONDS...2 SECTION Principal Amount, Designation of Series, Purpose, Debt Service Reserve Requirement... 2 SECTION Date, Maturities, Principal Amounts and Interest... 3 SECTION Forms of Series 2015A Bonds and Trustee s Certificate of Authentication, Denominations, Numbers and Letters... 3 SECTION Place and Medium of Payment;Paying Agent... 4 SECTION Sinking Fund Installments... 4 SECTION Redemption Prices and Terms... 4 SECTION Delegation to Authorized Signatories... 4 SECTION Sale of Series 2015A Bonds... 5 SECTION Appointment of Paying Agent and Bond Registrar for the Series 2015A Bonds... 6 SECTION Dealings in Series 2015A Bonds with FMPA... 6 ARTICLE III. APPLICATION OF PROCEEDS OF SERIES 2015A BONDS...6 SECTION Disposition of Series 2015A Bond Proceeds... 6 ARTICLE IV. EFFECTIVE DATE...7 SECTION Effective Date Page 69 of 153

70 SERIES 2015A SUPPLEMENTAL ALL-REQUIREMENTS POWER SUPPLY PROJECT REVENUE BOND RESOLUTION BE IT RESOLVED by Florida Municipal Power Agency ( FMPA ) as follows: ARTICLE I. DEFINITIONS AND STATUTORY AUTHORITY SECTION Supplemental Resolution. This Series 2015A Supplemental All-Requirements Power Supply Project Revenue Bond Resolution (the Supplemental Resolution ) is supplemental to the All-Requirements Power Supply Project Revenue Bond Resolution adopted by FMPA on March 22, 1985, as amended and restated in its entirety on May 23, 2003, as supplemented and amended (the Bond Resolution ). The Bond Resolution as so supplemented and amended is hereinafter referred to as the Resolution. SECTION Definitions. 1. Except as provided by this Supplemental Resolution, all terms which are defined in Section 101 of the Resolution shall have the same meanings, respectively, in this Supplemental Resolution as such terms are given in said Section 101 of the Resolution. 2. In this Supplemental Resolution: Applicable Margin means the definition provided for such term in the Credit Agreement. Authorized Signatories means (i) Chairman of the Executive Committee or the Vice Chairman of the Executive Committee and (ii) the General Manager and CEO of FMPA or the Assistant General Manager, Finance and Information Technology and CFO of FMPA. Bond Counsel means Nixon Peabody LLP or any other attorney at law or a firm of attorneys, designated by FMPA, of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on bonds issued by states and their political subdivisions, duly admitted to the practice of law before the highest court of any state of the United States of America selected by FMPA. Bond Series Certificate means a certificate fixing the terms and other details of the Series 2015A Bonds, executed by the Authorized Signatories in accordance with delegation of power to do so under Section 2.07 hereof. Agreement. Business Day means the definition provided for such term in the Credit Code means the Internal Revenue Code of 1986, as amended, and the applicable regulations thereunder Page 70 of 153

71 Credit Agreement means the Credit Agreement, dated February 24, 2015, among FMPA (acting solely on behalf of the All-Requirements Power Supply Project), Wells Fargo Municipal Capital Strategies, LLC (including its successors and assigns, Wells Fargo ) and Bank of America, N.A. (including its successors and assigns, "BOA," and together with Wells Fargo, the "Lenders," and each a "Lender"), and Wells Fargo Bank, N.A., as Administrative Agent (including its successors and assigns, the "Administrative Agent"). Agreement. LIBOR Index means the definition provided for such term in the Credit Net New Money Proceeds shall have the meaning set forth in Section 2.01 of this Supplemental Resolution Opinion ofbond Counsel means a written opinion signed by Bond Counsel. Series 2015A Bonds means FMPA s All-Requirements Power Supply Project Revenue Bonds, Series 2015A, authorized by Article II of this Supplemental Resolution. Supplemental Resolution means this Supplemental Resolution, supplemental to the Bond Resolution, as from time to time amended or supplemented by other supplemental resolutions in accordance with the terms of the Resolution and the terms hereof. This Supplemental Resolution shall constitute a Supplemental Resolution within the meaning of the Resolution. SECTION Authority for this Supplemental Resolution. This Supplemental Resolution is adopted (i) pursuant to the provisions of the Act and (ii) in accordance with Article II and Article X of the Bond Resolution. ARTICLE II. AUTHORIZATION OFSERIES 2015A BONDS; TERMS AND PROVISIONS OFSERIES 2015A BONDS SECTION Principal Amount, Designation ofseries, Purpose, Debt Service Reserve Requirement. 1. Pursuant to the provisions of the Resolution and in order to provide all or any portion of the funds required to fund the cost of the termination of certain interest rate swaps entered into by FMPA, and associated with FMPA s All-Requirements Power Supply Project, with several swap counterparties and the costs of issuing the Series 2015A Bonds, any time from the date of this Supplemental Resolution to and including October 1, 2015, a Series of Bonds, which for purposes of this Supplemental Resolution shall be referred to herein as the Series 2015A Bonds, entitled to the benefit, protection and security of such provisions are hereby authorized to be issued, in an aggregate principal amount not exceeding the principal amount necessary so that, exclusive of the amount, if any, required to pay any Costs of Issuance of the Series 2015A Bonds payable from the proceeds of such Series of Bonds, shall not exceed the`amount or amounts determined in the Bond Series Certificate to be necessary to effectuate the purposes set forth in subsection 3 of Section 2.01 hereof. The net amounts authorized to finance a portion of the cost of the termination of certain interest rate swaps entered into by FMPA, and associated with FMPA s All-Requirements Power Supply Project for the terminated Page 71 of 153

72 Taylor County Coal Facility pursuant to this Section and made available pursuant to the issuance hereunder are hereinafter referred to as the Net New Money Proceeds. As of the date of original issuance of any Series 2015A Bonds, the amount of Net New Money Proceeds shall not exceed $200,000, Series 2015A Bonds shall be designated as, and shall be distinguished from the Bonds of all other Series by the title, All-Requirements Power Supply Project Revenue Bonds, Series 2015A or such other title or titles as are set forth in the Bond Series Certificate. 3. The purposes for which the Series 2015A Bonds are issued shall include the payment, along with other available funds, of all or any portion of the amounts needed to fund the cost of the termination of certain interest rate swaps entered into by FMPA, and associated with FMPA s All-Requirements Power Supply Project for the terminated Taylor County Coal Facility as evidenced by the execution of a Bond Series Certificate pursuant to Section 2.07 hereof in accordance with Sections 202 and 203 of the Resolution, and the payment of related Costs of Issuance, all to the extent and in the manner provided in this Supplemental Resolution. 4. The Debt Service Reserve Requirement for the Series 2015A Bonds shall be zero ($0) and the Series 2015A Bonds shall have no claim on any monies which may be on deposit in the Debt Service Reserve Account. SECTION Date, Maturities, Principal Amounts and Interest. The Series 2015A Bonds, except as otherwise provided in the Resolution, shall be dated the date of delivery unless otherwise determined in the Bond Series Certificate. Unless otherwise provided in the Bond Series Certificate, the Series 2015A Bonds shall mature on February 24, 2021 and shall bear interest at a variable rate of interest per annum payable on the first Business Day of each calendar month commencing on March 1, 2015 and established on each Computation Date (as defined in the Credit Agreement) equal to the LIBOR IndexRate as described in the Credit Agreement, subject to change upon the occurrence and continuance of an Event of Default under the Credit Agreement. From and after the occurrence and during the continuance of an Event of Default under the Credit Agreement, the interest rate on the Series 2015A Bonds shall be equal to the Default Rate (as specified in the Credit Agreement) (the Default Rate ). Notwithstanding the foregoing and subject to the terms of the Credit Agreement, the interest rate per annum cannot exceed the maximum rate permitted by applicable laws. The Series 2015A Bonds shall bear interest from their date or dates and be payable on such date or dates as may be determined pursuant to the Credit Agreement. Interest on the Series 2015A Bonds shall be computed on the basis of a 360-day year and the actual days elapsed. SECTION Forms ofseries 2015A Bonds and Trustee s Certificate ofauthentication, Denominations, Numbers and Letters. Unless otherwise provided in the Bond Series Certificate, the Series 2015A Bonds shall be issued in fully registered form, and will be physical certificates not subject to the provisions of a book-entry-only system, without coupons. Subject to the provisions of the Resolution, the form of registered Series 2015A Bonds, Page 72 of 153

73 and the Trustee s certificate of authentication, shall be substantially in the form and in the authorized denominations set forth in the Bond Series Certificate. The Series 2015A Bonds shall be lettered and numbered as provided in the Bond Series Certificate. SECTION Place and Medium of Payment; Paying Agent. Except as otherwise provided in the Bond Series Certificate, principal and Redemption Price of the Series 2015A Bonds shall be payable to the registered owner of each Series 2015A Bond when due in the manner and at the times provided in the Credit Agreement. SECTION Sinking Fund Installments. The Series 2015A Bonds shall not be subject to redemption from mandatory Sinking Fund Installments which are required to be made in amounts sufficient to redeem on each such date the principal amount of such Series 2015A Bonds. SECTION Redemption Prices and Terms. The Series 2015A Bonds may be subject to redemption prior to maturity, at the option of FMPA, upon notice and otherwise as provided in the Credit Agreement at any time as a whole or in part at a Redemption Price equal the principal amount thereof plus accrued interest up to but not including the redemption date. In addition, in the event of a prepayment on a date which is not an Interest Payment Date, Breakage Expenses (as defined in the Credit Agreement) may be payable by FMPA and further under certain conditions specified in the Credit Agreement, FMPA shall owe an additional prepayment fee in connection with a prepayment. SECTION Delegation to Authorized Signatories. 1. There is hereby delegated to the Authorized Signatories, subject to the limitations contained in this Supplemental Resolution, the following powers with respect to the issuance of any Series 2015A Bonds: (a) to determine whether and when to issue any Series 2015A Bonds, the amount of Net New Money Proceeds to be provided by the Series 2015A Bonds, and the amount of the proceeds of the Series 2015A Bonds estimated to be necessary to pay the Costs of Issuance of the Series 2015A Bonds; (b) to determine the principal amounts of the Series 2015A Bonds to be issued, which principal amount shall not exceed the principal amount permitted by Section 2.01 of this Supplemental Resolution, and any matters related thereto, dated; (c) to determine the date which the Series 2015A Bonds shall be (d) to make such changes in or from the form of this Supplemental Resolution as may be necessary or desirable, in the opinion of Bond Counsel, in order to cure any ambiguities, inconsistencies or other defects; (e) to make any changes in the terms and provisions of this Supplemental Resolution relating to the terms, dates, or provisions relating to the setting of interest rates for the Series 2015A Bonds, or any other changes in the terms and provisions of this Supplemental Resolution as the Authorized Signatories executing the Bond Series Certificate shall deem necessary and desirable to reflect the terms and Page 73 of 153

74 conditions of the sale of the Series 2015A Bonds to Wells Fargo Municipal Capital Strategies, LLC and Bank of America, National Association, as applicable, as provided in the Credit Agreement, provided, however, such changes shall not be inconsistent with the provisions establishing the interest rates and maturity date in the first paragraph of Section 2.02 or with the provisions in Section 2.01(1) establishing a not to exceed amount for Net New Money Proceeds;and (f) to determine such other matters specified in or permitted by (i) Sections 202 and 203 of the Resolution or (ii) any provision of this Supplemental Resolution, including preparation of any documentation therefore. 2. The Authorized Signatories shall execute one or more Bond Series Certificates evidencing the determinations made pursuant to this Supplemental Resolution and any such Bond Series Certificate shall be conclusive evidence of the determinations of the Authorized Signatories as stated therein. Determinations set forth in any Bond Series Certificate shall have the same effect as if set forth in this Supplemental Resolution. 3. In the event that the Authorized Signatories exercise any of the authority delegated to them pursuant to this Section 2.07 and execute a Bond Series Certificate evidencing such exercise, a report describing the exercise of such delegated authority shall be delivered at the next regularly scheduled meeting of the Executive Committee of FMPA. SECTION Sale of Series 2015A Bonds. 1. The Authorized Signatories are hereby authorized to sell and award all or any portion of the Series 2015A Bonds to Wells Fargo Municipal Capital Strategies, LLC and Bank of America, National Association, as applicable pursuant to the Credit Agreement, which Credit Agreement, shall be substantially in the form attached hereto as Exhibit A with such revisions as may be approved by the Authorized Signatories executing the Credit Agreement; said execution being conclusive evidence of such approval. 2. In connection with the Credit Agreement, the Authorized Signatories are hereby authorized to deliver to Wells Fargo Municipal Capital Strategies, LLC and Bank of America, National Association, as applicable, such materials and information concerning FMPA and the All-Requirements Power Supply Project as are reasonably requested by Wells Fargo Municipal Capital Strategies, LLC and Bank of America, National Association, as applicable. 3. Each Authorized Officer is hereby authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts necessary or proper for carrying out the Credit Agreement, and the issuance, sale and delivery of the Series 2015A Bonds and for implementing the terms of the Series 2015A Bonds and the transactions contemplated hereby or thereby 4. When reference is made in this Supplemental Resolution to the authorization of an Authorized Officer to do any act, such act may be accomplished by any of such officers individually Page 74 of 153

75 SECTION Appointment ofpaying Agent and Bond Registrar for the Series 2015A Bonds. Unless otherwise provided in the Bond Series Certificate, TD Bank, National Association is hereby appointed Bond Registrar and Paying Agent for the Series 2015A Bonds, such appointments to be effective immediately upon the filing of this Supplemental Resolution with the Trustee. SECTION Dealings in Series 2015A Bonds with FMPA. The Trustee, the Paying Agent or the Bond Registrar, each in its individual capacity, may in good faith buy, sell, own, hold and deal in any of the Series 2015A Bonds issued hereunder, and may join in any action which any Holder of the Series 2015A Bonds may be entitled to take with like effect as if it did not act in any capacity hereunder. The Trustee, the Paying Agent or the Bond Registrar, each in its individual capacity, either as principal or agent, may also engage in or be interested in any financial or other transaction with FMPA, and may act as depository, trustee, or agent for any committee or body of Holders of any Series 2015A Bonds secured hereby or other obligations of FMPA as freely as if it did not act in any capacity hereunder. ARTICLE III. APPLICATION OFPROCEEDS OFSERIES 2015A BONDS SECTION Disposition of Series 2015A Bond Proceeds. Unless otherwise provided in the Bond Series Certificate, any proceeds of the sale of the Series 2015A Bonds, other than accrued interest, if any, shall be deposited, simultaneously with the issuance and delivery of the Series 2015A Bonds, at one time or from time to time in one or more Series or subseries, in the Construction Fund and applied to the payment of the termination of certain interest rate swaps entered into by FMPA, and associated with FMPA s All-Requirements Power Supply Project for the terminated Taylor County Coal Facility and to the payment of the costs of issuance of the Series 2015A Bonds. ARTICLE IV. ADDITIONAL COVENANTS AND AGREEMENTS OFFMPA SECTION Tax Covenants Relating to the Internal Revenue Code of In order to maintain the exclusion from gross income for Federal income tax purposes of interest on the Series 2015A Bonds the interest on which is generally intended by FMPA to be excluded from gross revenue for federal income tax purposes, and for no other purpose, FMPA covenants to comply with each applicable requirement of the Code necessary to maintain such exclusion. In furtherance of the covenant contained in the preceding sentence, FMPA agrees to comply with the provisions of the Tax Certificate as to Arbitrage and Instructions as to Compliance with the Provisions of Section 103(a) of the Code (the Tax Certificate ), delivered on the date of initial issuance and delivery of the Series 2015A Bonds, as such TaxCertificate may be amended from time to time, as a source of guidance for achieving compliance with the Code Page 75 of 153

76 2. FMPA covenants and agrees with the Trustee and the holders of the Series 2015A Bonds that FMPA shall not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Series 2015A Bonds, would cause any of the Series 2015A Bonds to be industrial development bonds, private activity bonds or arbitrage bonds within the meaning of the applicable Sections of the Code, or any successor provisions. 3. Notwithstanding any other provisions of the Resolution to the contrary, so long as necessary in order to maintain the exclusion from gross income for Federal income taxpurposes of interest on the Series 2015A Bonds, the covenants contained in this section shall survive the payment of the Series 2015A Bonds and the interest thereon, including any payment or defeasance thereof pursuant to Section 1201 of the Bond Resolution. SECTION Additional Provisions Regarding Defeasance. In the event FMPA shall seek, prior to the maturity or redemption date thereof, to pay or cause to be paid, within the meaning and with the effect expressed in the Resolution, all or less than all Outstanding Series 2015A Bonds the interest on which is generally intended by FMPA to be excluded from gross revenue for federal income taxpurposes and the provisions of Section 4.01 of this Supplemental Resolution shall then be in effect, then, notwithstanding the provisions of Section 1201 of the Bond Resolution, the Series 2015A Bonds which FMPA then seeks to pay or cause to be paid shall not be deemed to have been paid within the meaning and with the effect expressed in paragraph 1 of said Section 1201 unless (i) FMPA has taken such action as is necessary to assure that the Holders of such Series 2015A Bonds which FMPA then seeks to pay or cause to be paid will continue, after such action, to have the benefit of a covenant of FMPA to maintain the exclusion from gross income of interest on such Series 2015A Bonds pursuant to Section 103(a) of the Code to the extent provided in Section 4.01 or (ii) there shall have been delivered to the Trustee an opinion of Bond Counsel to the effect that noncompliance thereafter with the applicable provisions of the Code will not affect the exclusion from gross income for Federal income taxpurposes of the interest on such Series 2015A Bonds. ARTICLE V. EFFECTIVE DATE SECTION Effective Date. This Series 2015A Supplemental All- Requirements Power Supply Project Revenue Bond Resolution shall take effect immediately after its adoption by the Executive Committee of FMPA and a filing of a copy thereof certified by the Secretary with the Trustee Page 76 of 153

77 Page 77 of 153

78 AGENDA ITEM 9 ACTION ITEMS a) Approval of Proposed Amendments of the ARP Net Metering Policy and Tri-Party Net Metering Power Purchase Agreement Executive Committee March 19, 2015 Page 78 of 153

79 TO: FROM: Executive Committee Dan O Hagan Amanda L. Swindle DATE: March 11, 2015 ITEM: AGENDA PACKAGE MEMORANDUM EC 9a Approval of Proposed Amendments of the ARP Net Metering Policy and Tri- Party Net Metering Power Purchase Agreement Strategic Relevance FMPA s Relevant Strategic Goals Optimize member services that are responsive to member needs. Introduction In June 2008, the ARP Participants adopted a Net Metering Policy ( Policy ) to permit interconnection of customer-owned renewable generation to its Members distribution system. This policy facilitates the purchase of excess customer-owned renewable generation and outlines the metering, billing, and crediting procedures to be followed by ARP Participants. Under the Policy, ARP Participants and eligible customers must execute the Tri-Party Net Metering Power Purchase Agreement ( Tri-Party Agreement ), which sets forth the terms and conditions of FMPA s purchase of excess energy from interconnected renewable generators in accordance with the Policy. The Tri-Party Agreement is an agreement between FMPA, the ARP Participant, and the owner of a renewable generation system ( RGS ). Typically, the owner of the RGS is also the customer of the ARP Participant, and the power generated by the RGS is used to offset that customer s electric demand. However, there are situations where the owner of the RGS leases his or her property to a tenant, the tenant is the ARP Participant s customer of record, and power generated by the RGS is used to offset the tenant s electric demand. In this case, the owner of the RGS remains the same, whereas the tenant obtaining the benefit of the RGS may change over time. FMPA staff has been asked to draft changes to the Policy and the Tri-Party Agreement to address these net metering landlord-tenant situations. Explanation The proposed amendments are intended to clarify the terms used in the Policy and Tri-Party Agreement so that a single Tri Party Agreement can be used for any Page 79 of 153

80 EC9a Approval of Proposed Amendments of the ARP Net Metering Policy and Tri-Party Net Metering Power Purchase Agreement March 11, 2015 Page 2 number of RGS owner utility customer scenarios, including the landlord-tenant scenario described above. The proposed changes to the Policy include the addition of the term Premises, which means the specific site where the customer-owned renewable generation is installed. The term customer-owned renewable generation is now defined, and expressly also includes a leased RGS and landlord-owned renewable generation, where ARP Participant s customer is the tenant occupying or using the Premises. Conforming changes are made throughout the Policy to make appropriate use of these new terms. The proposed changes to the Tri-Party Agreement align with those made to the Policy (i.e. the terms Premises and customer-owned renewable generation have been defined and used throughout). The proposed changes further provide that the energy generated by the RGS will offset the demand at the Premises, rather than the demand of the owner of the RGS. Thus, credits for excess energy delivered by the RGS to the grid are credited to the registered account at the Premises, i.e. the tenant s account. In addition a provision has been added providing that this agreement supersedes and replaces any other Tri-Party Agreement for the same customer-owned renewable generation at the Premises. With these changes, the Tri-Party Agreement provides for a continuing agreement between FMPA, the ARP Member, and the owner of the RGS, even if the tenant receiving the benefit of the RGS changes over time. Also, the same form of the Tri-Party Agreement can be used under all homeowner and landlord/tenant net metering scenarios, provided that the RGS owner (or lessee in the case of a leased RGS) is the party that executed the Tri-Party Agreement. Requested Motion Move approval of the recommended changes to the ARP Net Metering Policy and Tri-Party Net Metering Power Purchase Agreement. Page 80 of 153

81 Tri-Party Net Metering Power Purchase Agreement This Tri-Party Net Metering Power Purchase Agreement (this Agreement ) is entered into this day of, 20, by and between Florida Municipal Power Agency, a governmental joint action agency created and existing under the laws of the State of Florida, [UTILITY], [a.describe entity type] (hereinafter Utility ), and, [RGS OWNER], a retail electric customer of Utilitythe owner or lessee of a renewable generation system located within Utility s service territory (hereinafter CustomerRGS Owner ). Section 1. Recitals Utility and CustomerRGS Owner have executed Utility s Standard Interconnection Agreement for Customer-Owned Renewable Generation System pursuant to which Utility has agreed to permit interconnection of CustomerRGS Owner s renewable generation to Utility s electric system at Customer s presently-metered location [ADDRESS] (hereinafter Premises ), and CustomerRGS Owner has agreed to deliver excess electric energy generated by CustomerRGS Owner s renewable generation system to Utility s electric distribution system; Utility and FMPA have entered into the All-Requirements Power Supply Contract, dated as of <date>[date], (hereinafter the ARP Contract ) pursuant to which Utility has agreed to purchase and receive, and FMPA has agreed to sell and supply Utility with all energy and capacity necessary to operate Utility s electric system, which limits Utility s ability to directly purchase excess energy from customer-owned renewable generation In order to promote the development of small customer-owned renewable generation by permitting Utility to allow its customers to interconnect with Utility s electric system and to allow Utility customers to offset their electric consumption with customer-owned renewable generation, FMPA, in accordance with the terms and conditions of this agreement, has agreed to purchase excess customer-owned generation from Utility customers interconnected to Utility s electric system. NOW THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein, the Parties covenant and agree as follows: Section 2. Interconnection CustomerRGS Owner shall not begin or resume parallel operations with Utility s electric distribution system until CustomerRGS Owner has executed Utility s Standard Interconnection Agreement for Small Customer-Owned Renewable Generation and is in compliance with all terms and conditions therein. Utility shall befmpa shall not be responsible for ensuring the customer-owned renewable generation is installed and operated in accordance with all applicable safety codes and standards. Utility shall establish and enforce terms and conditions of operation and disconnection of all interconnected customer-owned renewable generation. Formatted: Not Highlight Page 1 of 6 Page 81 of 153

82 2.02 The term customer-owned renewable generation means an electric generating system located on a customer's premises that is primarily intended to offset part or all of the customer's electricity requirements with renewable energy. The term customer-owned renewable generation does not preclude the customer of record from contracting for the purchase, lease, operation, or maintenance of an on-site renewable generation system with a third-party under terms and conditions that do not include the retail purchase of electricity from the third party, and the term includes landlord-owned renewable generation, where ARP Participant s customer is the tenant occupying or using the Premises. Section 3. Metering 3.01 In accordance with Utility s Standard Interconnection Agreement for Customer- Owned Renewable Generation, Utility shall install metering equipment at the point of delivery at the Premises capable of recording two separate meter readings: (1) the flow of electricity from Utility to the CustomerPremises, and (2) the flow of excess electricity from the Customer Premises to Utility. Utility shall take meter reading on the same cycle as the otherwise applicable rate schedule Section 4. Purchase of Excess Customer-Owned Renewable Generation Customer-owned renewable generation shall be first used for Customer s own load and shallto offset customer s the demand for Utility s electricity at the Premises. All electric power and energy delivered by Utility to Customer the Premises shall be received and paid for by Customer to Utility pursuant to the terms, conditions, and rates of the Utility s otherwise applicable rate schedule otherwise applicable to the Premises at the time of delivery Excess customer-owned renewable generation shall be delivered to the Utility s electric distribution system. For purposes of this Agreement, the term excess customer-owned renewable generation means any kwh of electrical energy produced by the customer-owned renewable generation system that is not consumed by Customerat the Premises and is delivered to Utility s electric distribution system. FMPA agrees to purchase and receive, and CustomerRGS Owner agrees to sell and deliver, all excess customer-owned renewable generation at the energy rate established by FMPA, which shall be calculated in accordance with Schedule A. Excess customer-owned renewable generation shall be purchased in the form of a credit on Customer s the monthly energy consumption bill from Utility for the Premises In the event that a given monthly credit for excess customer-owned renewable generation exceeds the total billed amount for energy Customer s consumption at the Premises in any corresponding month, then the excess credit shall be applied to the subsequent month s bill. Excess energy credits produced pursuant to the preceding sentence shall accumulate and be used to offset Customer s energy consumption at the Premises bill for a period of not more than twelve (12) months FMPA and Utility shall not be required to purchase or receive excess customerowned renewable generation, and may require CustomerRGS Owner to interrupt or reduce production of customer-owned renewable generation, (a) when necessary in order to construct, Page 2 of 6 Page 82 of 153

83 install, maintain, repair, replace, remove, investigate, or inspect any Utility equipment or part of the Utility electric system; or (b) if either FMPA or Utility determine, in their sole judgment, that curtailment, interruption, or reduction is necessary because of emergencies, forced outages, force majeure, or compliance with any applicable electric code or standard. Section 5. Renewable Energy Credits CustomerRGS Owner shall offer FMPA a first right of refusal before selling or granting to any third party the right to the Green Attributes associated with its customer-owned renewable generation that is interconnected to ARP ParticipantUtility s electric distribution system. The term Green Attributes shall include any and all credits, certificates, benefits, environmental attributes, emissions reductions, offsets, and allowances, however entitled, attributable to the generation of electricity from the customer owned-renewable generation and its displacement of conventional energy generation Any additional meter(s) installed to measure total renewable electricity generated by the CustomerRGS Owner for the purposes of measuring Green Attributes, including and renewable energy certificates (or similarly titled credits for renewable energy generated), shall be installed at the expense of the CustomerRGS Owner, unless determined otherwise during negotiations for the sale of the CustomerRGS Owner s credits to FMPA. Section 6. Term and Termination This Agreement shall become effective upon execution by all Parties, and shall remain in effect thereafter on a month-to-month basis until terminated by any Party upon thirty (30) days written notice to all other Parties This Agreement shall terminate immediately and without notice upon: (a) termination of the electric distribution service by Utility to CustomerPremises; or (b) failure by CustomerRGS Owner to comply with any of the terms and conditions of this Agreement, the ARP Net Metering Policy, or Utility s Standard Interconnection Agreement for Customer- Owned Renewable Generation This Agreement supersedes and replaces any previous Tri-Party Net Metering Power Purchase Agreement among FMPA, Utility and RGS Owner for the net metering of customer-owned renewable generation at the Premises. Section 7. Miscellaneous Provisions Assignment. It is understood and agreed that no party may transfer, sell, mortgage, pledge, hypothecate, convey, designate, or otherwise assign this Agreement, or any interest herein or any rights or obligations hereunder, in whole or in part, either voluntarily or by operation of law, (including, without limitation, by merger, consolidation, or otherwise), without the express written consent of the other parties (and any such attempt shall be void), which consent shall not be unreasonably withheld. Subject to the foregoing, this Agreement shall inure Page 3 of 6 Page 83 of 153

84 to the benefit of and be binding upon the parties and their respective successors and permitted assigns Indemnification. To the fullest extent permitted by laws and regulations, CustomerRGS Owner shall defend, indemnify, and hold harmless FMPA and Utility, their officers, directors, agents, guests, invitees, and employees from and against all claims, damages, losses to persons or property, whether direct, indirect, or consequential (including but not limited to fees and charges of attorneys, and other professionals and court and arbitration costs) arising out of, resulting from, occasioned by, or otherwise caused by the operation or misoperation of the customer-owned renewable generation, or the acts or omissions of any other person or organization directly or indirectly employed engaged by the CustomerRGS Owner to install, furnish, repair, replace or maintain the customer-owned renewable generation system, or anyone for whose acts any of them may be liable Governing Law. The validity and interpretation of this Agreement and the rights and obligations of the parties shall be governed and construed in accordance with the laws of the State of Florida without regard for any conflicts of law provisions that might cause the law of other jurisdictions to apply. All controversies, claims, or disputes arising out of or related to this Agreement or any agreement, instrument, or document contemplated hereby, shall be brought exclusively in the County or Circuit Court for [xxxxxx] County, Florida, or the United States District Court sitting in [xxxxxxxxxx], Florida, as appropriate Enforcement of Agreement. In the event that either any party to this Agreement is required to enforce this Agreement by court proceedings or otherwise, the prevailing party shall be entitled to recover all fees and costs incurred, including reasonable attorney s fees and costs for trial, alternative dispute resolution, and/or appellate proceedings Severability. To the extent any provision of this Agreement is prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement Third Party Beneficiaries. This Agreement is solely for the benefit of FMPA, Utility, and CustomerRGS Owner and no right nor any cause of action shall accrue upon or by reason, to or for the benefit of any third party not a formal party to this Agreement. Nothing in this Agreement, expressed or implied, is intended or shall be construed to confer upon any person or corporation other FMPA, Utility, or CustomerRGS Owner, any right, remedy, or claim under or by reason of this Agreement or any of the provisions of conditions of this Agreement; and, all provisions, representations, covenants, and conditions contained in this Agreement shall inure to the sole benefit of and be binding upon FMPA, Utility, and CustomerRGS Owner and their respective representatives, successors, and assigns. IN WITNESS WHEREOF, CustomerRGS Owner and Utility have executed this Agreement the day and year first above written. [UTILITY NAME] Page 4 of 6 Page 84 of 153

85 By: Title: Date: FLORIDA MUNICIPAL POWER AGENCY By: Title: Date: CUSTOMERRGS OWNER By: (Signature) (Print Name) (CustomerRGS Owner Account Number) [if applicable] Date: Page 5 of 6 Page 85 of 153

86 Tri-Party Net Metering Power Purchase Agreement Schedule A I. All-Requirements Project Calculation of Excess Customer-Owned Renewable Generation Credit a) FMPA shall pay Utility for the excess kwh energy delivered by customer-owned renewable generation to Utility s electric system. Every month, Utility shall determine the total kwh of customer-owned renewable generation that is delivered to Utility s electric system, and shall send the information to FMPA as soon as it becomes available, but no later than the 2 nd working day of every month. FMPA will then provide a monthly payment to Utility in the form of a credit on the ARP power bill for the excess energy delivered to the distribution grid. The ARP Renewable Generation Credit will be calculated as follows: ARP Renewable Generation Credit = Quarterly Energy Rate * Monthly kwh of excess customer-owned renewable generation Quarterly Energy Rate = 3 month average of ARP energy rate. FMPA will update the Quarterly Energy Rate every April 1, July 1, October 1 and January 1. b) As part of the monthly bill adjustment, FMPA will also increase Utility s kwh billing amount by the same kwh amount as the customer-owned renewable generation purchased by FMPA. This adjustment is necessary because excess customer generation that flows onto Utility s system has been purchased by FMPA, but will remain on Utility s system and be used by Utility to meet its other customers electric needs. As a result, Utility s monthly ARP bill will be adjusted accordingly to reflect FMPA s subsequent sale of this energy to Utility. II. Payment for Unused Excess Energy Credits a) Monthly excess energy credits shall accumulate and be used to offset the CustomerRGS Owner s following month energy consumption bill for a period of not more than twelve (12) months. b) At the end of each calendar year, Utility shall pay the CustomerRGS Owner for any unused excess energy credits in accordance with the Utility s Net Metering Service Rate Schedule. Page 6 of 6 Page 86 of 153

87 Tri-Party Net Metering Power Purchase Agreement This Tri-Party Net Metering Power Purchase Agreement (this Agreement ) is entered into this day of, 20, by and between Florida Municipal Power Agency, a governmental joint action agency created and existing under the laws of the State of Florida, [UTILITY], [a.describe entity type] (hereinafter Utility ), and [RGS OWNER], the owner or lessee of a renewable generation system located within Utility s service territory (hereinafter RGS Owner ). Section 1. Recitals Utility and RGS Owner have executed Utility s Standard Interconnection Agreement for Customer-Owned Renewable Generation System pursuant to which Utility has agreed to permit interconnection of RGS Owner s renewable generation to Utility s electric system at [ADDRESS] (hereinafter Premises ), and RGS Owner has agreed to deliver excess electric energy generated by RGS Owner s renewable generation system to Utility s electric distribution system; Utility and FMPA have entered into the All-Requirements Power Supply Contract, dated as of [DATE], (hereinafter the ARP Contract ) pursuant to which Utility has agreed to purchase and receive, and FMPA has agreed to sell and supply Utility with all energy and capacity necessary to operate Utility s electric system, which limits Utility s ability to directly purchase excess energy from customer-owned renewable generation In order to promote the development of small customer-owned renewable generation by permitting Utility to allow its customers to interconnect with Utility s electric system and to allow Utility customers to offset their electric consumption with customer-owned renewable generation, FMPA, in accordance with the terms and conditions of this agreement, has agreed to purchase excess customer-owned generation interconnected to Utility s electric system. NOW THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein, the Parties covenant and agree as follows: Section 2. Interconnection RGS Owner shall not begin or resume parallel operations with Utility s electric distribution system until RGS Owner has executed Utility s Standard Interconnection Agreement for Small Customer-Owned Renewable Generation and is in compliance with all terms and conditions therein. FMPA shall not be responsible for ensuring the customer-owned renewable generation is installed and operated in accordance with all applicable safety codes and standards. Utility shall establish and enforce terms and conditions of operation and disconnection of all interconnected customer-owned renewable generation The term customer-owned renewable generation means an electric generating system located on a customer's premises that is primarily intended to offset part or all of the customer's electricity requirements with renewable energy. The term customer-owned Page 1 of 6 Page 87 of 153

88 renewable generation does not preclude the customer of record from contracting for the purchase, lease, operation, or maintenance of an on-site renewable generation system with a third-party under terms and conditions that do not include the retail purchase of electricity from the third party, and the term includes landlord-owned renewable generation, where ARP Participant s customer is the tenant occupying or using the Premises. Section 3. Metering 3.01 In accordance with Utility s Standard Interconnection Agreement for Customer- Owned Renewable Generation, Utility shall install metering equipment at the point of delivery at the Premises capable of recording two separate meter readings: (1) the flow of electricity from Utility to the Premises, and (2) the flow of excess electricity from the Premises to Utility. Utility shall take meter reading on the same cycle as the otherwise applicable rate schedule Section 4. Purchase of Excess Customer-Owned Renewable Generation Customer-owned renewable generation shall be first used to offset the demand for Utility s electricity at the Premises. All electric power and energy delivered by Utility to the Premises shall be received and paid for pursuant to the terms, conditions, and rates of the Utility s rate schedule otherwise applicable to the Premises at the time of delivery Excess customer-owned renewable generation shall be delivered to the Utility s electric distribution system. For purposes of this Agreement, the term excess customer-owned renewable generation means any kwh of electrical energy produced by the customer-owned renewable generation system that is not consumed at the Premises and is delivered to Utility s electric distribution system. FMPA agrees to purchase and receive, and RGS Owner agrees to sell and deliver, all excess customer-owned renewable generation at the energy rate established by FMPA, which shall be calculated in accordance with Schedule A. Excess customer-owned renewable generation shall be purchased in the form of a credit on the monthly energy consumption bill from Utility for the Premises In the event that a given monthly credit for excess customer-owned renewable generation exceeds the total billed amount for energy consumption at the Premises in any corresponding month, then the excess credit shall be applied to the subsequent month s bill. Excess energy credits produced pursuant to the preceding sentence shall accumulate and be used to offset energy consumption at the Premises for a period of not more than twelve (12) months FMPA and Utility shall not be required to purchase or receive excess customerowned renewable generation, and may require RGS Owner to interrupt or reduce production of customer-owned renewable generation, (a) when necessary in order to construct, install, maintain, repair, replace, remove, investigate, or inspect any Utility equipment or part of the Utility electric system; or (b) if either FMPA or Utility determine, in their sole judgment, that curtailment, interruption, or reduction is necessary because of emergencies, forced outages, force majeure, or compliance with any applicable electric code or standard. Section 5. Renewable Energy Credits Page 2 of 6 Page 88 of 153

89 5.01. RGS Owner shall offer FMPA a first right of refusal before selling or granting to any third party the right to the Green Attributes associated with its customer-owned renewable generation that is interconnected to Utility s electric distribution system. The term Green Attributes shall include any and all credits, certificates, benefits, environmental attributes, emissions reductions, offsets, and allowances, however entitled, attributable to the generation of electricity from the customer owned-renewable generation and its displacement of conventional energy generation Any additional meter(s) installed to measure total renewable electricity generated by the RGS Owner for the purposes of measuring Green Attributes, including and renewable energy certificates (or similarly titled credits for renewable energy generated), shall be installed at the expense of the RGS Owner, unless determined otherwise during negotiations for the sale of the RGS Owner s credits to FMPA. Section 6. Term and Termination This Agreement shall become effective upon execution by all Parties, and shall remain in effect thereafter on a month-to-month basis until terminated by any Party upon thirty (30) days written notice to all other Parties This Agreement shall terminate immediately and without notice upon: (a) termination of the electric distribution service by Utility to Premises; or (b) failure by RGS Owner to comply with any of the terms and conditions of this Agreement, the ARP Net Metering Policy, or Utility s Standard Interconnection Agreement for Customer-Owned Renewable Generation This Agreement supersedes and replaces any previous Tri-Party Net Metering Power Purchase Agreement among FMPA, Utility and RGS Owner for the net metering of customer-owned renewable generation at the Premises. Section 7. Miscellaneous Provisions Assignment. It is understood and agreed that no party may transfer, sell, mortgage, pledge, hypothecate, convey, designate, or otherwise assign this Agreement, or any interest herein or any rights or obligations hereunder, in whole or in part, either voluntarily or by operation of law, (including, without limitation, by merger, consolidation, or otherwise), without the express written consent of the other parties (and any such attempt shall be void), which consent shall not be unreasonably withheld. Subject to the foregoing, this Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and permitted assigns Indemnification. To the fullest extent permitted by laws and regulations, RGS Owner shall defend, indemnify, and hold harmless FMPA and Utility, their officers, directors, agents, guests, invitees, and employees from and against all claims, damages, losses to persons or property, whether direct, indirect, or consequential (including but not limited to fees and charges of attorneys, and other professionals and court and arbitration costs) arising out of, Page 3 of 6 Page 89 of 153

90 resulting from, occasioned by, or otherwise caused by the operation or misoperation of the customer-owned renewable generation, or the acts or omissions of any other person or organization directly or indirectly engaged by the RGS Owner to install, furnish, repair, replace or maintain the customer-owned renewable generation system, or anyone for whose acts any of them may be liable Governing Law. The validity and interpretation of this Agreement and the rights and obligations of the parties shall be governed and construed in accordance with the laws of the State of Florida without regard for any conflicts of law provisions that might cause the law of other jurisdictions to apply. All controversies, claims, or disputes arising out of or related to this Agreement or any agreement, instrument, or document contemplated hereby, shall be brought exclusively in the County or Circuit Court for [xxxxxx] County, Florida, or the United States District Court sitting in [xxxxxxxxxx], Florida, as appropriate Enforcement of Agreement. In the event that any party to this Agreement is required to enforce this Agreement by court proceedings or otherwise, the prevailing party shall be entitled to recover all fees and costs incurred, including reasonable attorney s fees and costs for trial, alternative dispute resolution, and/or appellate proceedings Severability. To the extent any provision of this Agreement is prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement Third Party Beneficiaries. This Agreement is solely for the benefit of FMPA, Utility, and RGS Owner and no right nor any cause of action shall accrue upon or by reason, to or for the benefit of any third party not a formal party to this Agreement. Nothing in this Agreement, expressed or implied, is intended or shall be construed to confer upon any person or corporation other FMPA, Utility, or RGS Owner, any right, remedy, or claim under or by reason of this Agreement or any of the provisions of conditions of this Agreement; and, all provisions, representations, covenants, and conditions contained in this Agreement shall inure to the sole benefit of and be binding upon FMPA, Utility, and RGS Owner and their respective representatives, successors, and assigns. IN WITNESS WHEREOF, RGS Owner and Utility have executed this Agreement the day and year first above written. [UTILITY NAME] By: Title: Date: Page 4 of 6 Page 90 of 153

91 FLORIDA MUNICIPAL POWER AGENCY By: Title: Date: RGS OWNER By: (Signature) (Print Name) (RGS Owner Account Number) [if applicable] Date: Page 5 of 6 Page 91 of 153

92 Tri-Party Net Metering Power Purchase Agreement Schedule A I. All-Requirements Project Calculation of Excess Customer-Owned Renewable Generation Credit a) FMPA shall pay Utility for the excess kwh energy delivered by customer-owned renewable generation to Utility s electric system. Every month, Utility shall determine the total kwh of customer-owned renewable generation that is delivered to Utility s electric system, and shall send the information to FMPA as soon as it becomes available, but no later than the 2 nd working day of every month. FMPA will then provide a monthly payment to Utility in the form of a credit on the ARP power bill for the excess energy delivered to the distribution grid. The ARP Renewable Generation Credit will be calculated as follows: ARP Renewable Generation Credit = Quarterly Energy Rate * Monthly kwh of excess customer-owned renewable generation Quarterly Energy Rate = 3 month average of ARP energy rate. FMPA will update the Quarterly Energy Rate every April 1, July 1, October 1 and January 1. b) As part of the monthly bill adjustment, FMPA will also increase Utility s kwh billing amount by the same kwh amount as the customer-owned renewable generation purchased by FMPA. This adjustment is necessary because excess customer generation that flows onto Utility s system has been purchased by FMPA, but will remain on Utility s system and be used by Utility to meet its other customers electric needs. As a result, Utility s monthly ARP bill will be adjusted accordingly to reflect FMPA s subsequent sale of this energy to Utility. II. Payment for Unused Excess Energy Credits a) Monthly excess energy credits shall accumulate and be used to offset the RGS Owner s following month energy consumption bill for a period of not more than twelve (12) months. b) At the end of each calendar year, Utility shall pay the RGS Owner for any unused excess energy credits in accordance with the Utility s Net Metering Service Rate Schedule. Page 6 of 6 Page 92 of 153

93 FLORIDA MUNICIPAL POWER AGENCY All-Requirements Project Net Metering Policy Section 1. Establishment of ARP Participant Net Metering Policy ARP Participant may establish a Net Metering program in accordance with this Net Metering Policy (this Policy ). ARP Participant may offer Net Metering to eligible customers who intend to operate customer-owned renewable generation in parallel with ARP Participant s electric distribution system that is primarily intended to offset all or part of the customer s electric consumption at the specific site where the customer-owned renewable generation is installed (the Premises ). In this context,the term customer-owned renewable generation means an electric generating system located on a customer's premises that is primarily intended to offset part or all of the customer's electricity requirements with renewable energy. The term customer-owned renewable generation does not preclude the customer of record from contracting for the purchase, lease, operation, or maintenance of an on-site renewable generation system with a third-party under terms and conditions that do not include the retail purchase of electricity from the third party, and the term includes landlord-owned renewable generation, where ARP Participant s customer is the tenant occupying or using the Premises. ARP Participant may interconnect with and allow net metering of eligible customer-owned renewable generation in accordance with this Policy Eligible customers must operate theirthe customer-owned renewable energy generation must be operated in parallel with ARP Participant s electric distribution system, and shall provide as-available generation to ARP Participant at the point of interconnection. Before beginning or resuming parallel operations, the customers or renewable generation owner, as applicable, must enter into (1) the Tri-Party Net Metering Power Purchase Agreement, a copy of which is attached to this Policy as Appendix A; and (B) Utility s Standard Interconnection Agreement for Customer- Owned Renewable Generation. Section 2. Customer Metering ARP Participant shall cause to be installed metering equipment at the point of delivery capable of recording two separate meter readings: (1) the flow of electricity from ARP Participant to the CustomerPremesis, and (2) the flow of excess electricity from the Customer Premises to ARP Participant. ARP Participant shall take meter readings on the same cycle as the otherwise applicable rate schedule. Section 3. Customer Billing and Crediting Pursuant to the All-Requirements Power Supply Contract between ARP Participant and Florida Municipal Power Agency, dated as of (the ARP Contract ), ARP Participant has contractually agreed to purchase from FMPA, and FMPA has agreed to sell to ARP Participant, all capacity and energy necessary to operate ARP Participant s electric system. Because of this, ARP Participant may not directly purchase excess customer-owned renewable generation supplied to ARP Participant s electric distribution system. However, in order to promote the development of small customer-owned renewable generation, FMPA has developed this Policy, pursuant to which FMPA will purchase excess customer-owned renewable generation from eligible ARP Participant s customers that take part in ARP Participant s Net Metering program and are interconnected to ARP Participant s electric system. Page 93 of 153

94 3.02. Customer-owned renewable generation shall first be used for Customer s own load, and shallto offset Customer s the demand for electricity at the Premises from ARP Participant. Excess customer-owned renewable generation that is not used to offset the demand for electricity at the Premisesfor Customer s load shall be delivered to ARP Participant s electric distribution system. Excess customer-owned renewable generation delivered to ARP Participant s electric distribution system shall be recorded separately from electricity delivered to Customer the Premises from ARP Participant. All electric power and energy delivered by ARP Participant to the Premises shall be received and paid for pursuant to the terms, conditions, and rates of the ARP Participant s rate schedule otherwise applicable to the Premises at the time of delivery.customer shall be charged for electricity delivered to Customer by ARP Participant in accordance with the otherwise applicable retail rate schedule. Excess customer-owned renewable generation shall be credited by ARP Participant on Customer s the monthly electric consumption bill for the Premises at a rate determined by FMPA, which shall be calculated in accordance with Appendix B, which is attached to this Policy ARP Participant may, in its sole discretion and at its sole cost and expense, offer its net metering customers a renewable production incentive for excess kilowatt hours generated by the customer-owned renewable generation and delivered to ARP Participant s electric distribution system. Section 4. ARP Participant Billing and Crediting On a monthly basis, ARP Participant shall calculate the total kilowatt hours of all excess customer-owned renewable generation that is delivered to ARP Participant s electric distribution system for the previous month. FMPA shall purchase such kilowatt hours of customerowned renewable generation in the form of a credit on ARP Participant s ARP Bill. This process and rate calculation is more fully described in Appendix B FMPA shall not reimburse ARP Participant for any renewable production incentives provided by ARP Participant to its net metering customers in accordance with Section Excess customer-owned renewable generation that has been purchased by FMPA pursuant to Section 4.01 remains on ARP Participant s electric system and is used by ARP Participant to meet the electric needs of its other customers. Therefore, as part of the monthly ARP billing adjustment, excess customer-owned renewable generation will be reflected on ARP Participant s monthly ARP Bill, as more fully described in Appendix B. Section 5. Program Administration ARP Participant shall be responsible for developing and administering an application process for interconnection and net metering of customer owned renewable generation in accordance with the Policy. ARP Participant shall be responsible for ensuring the necessary metering equipment as well as conducting the appropriate inspections of customer-owned generation systems As a condition of providing Net Metering service, ARP Participant and eligible customers or renewable generation owners, as applicable, shall be required to execute the Tri-Party Net Metering Power Purchase Agreement. The Tri-Party Net Metering Power Purchase Agreement shall set forth the terms and conditions of FMPA s purchase of excess energy from interconnected renewable generators in accordance with this Policy. Page 94 of 153

95 5.03. ARP Participant shall develop and administer a separate agreement between ARP Participant and Customer setting forth the terms and conditions for interconnection and net metering of customer-owned renewable generation that is consistent with this Policy ARP Participant shall be responsible for collecting the necessary information and making the required annual filings with the Public Service Commission to fulfill the requirements of Rule of the Florida Administrative Code, as it may be amended. Section 6. Limit on Enrollment Each ARP Participant may offer net metering service to customer-owned renewable generators under this Policy on a first-come first-served basis until the time that the total rated generating capacity used by eligible customer-owned renewable generators exceeds 2.5% of the ARP Participants aggregate customer peak demand In the event that the total rated generating capacity of an ARP Participant s net metering customers meets the limit on enrollment set forth above, subsequent applicants for net metering service shall be considered on an individual basis by FMPA, with due consideration given to the customer s impact on ARP Participant s system and the rate impact on all ARP Participants customers. Section 7. Green Attributes/Renewable Energy Certificates FMPA and ARP Participant shall negotiate with net metering customersnet metered renewable generator owners for the right to all Green Attributes associated with the customer- owned renewable generation that is interconnected to ARP Participants electric distribution system. The term Green attributes Attributes shall include any and all credits, certificates, benefits, environmental attributes, emissions reductions, offsets, and allowances, however entitled, to the generation of electricity from the customer-owned renewable generation and its displacement of conventional energy generation. Page 95 of 153

96 FLORIDA MUNICIPAL POWER AGENCY All-Requirements Project Net Metering Policy Section 1. Establishment of ARP Participant Net Metering Policy ARP Participant may establish a Net Metering program in accordance with this Net Metering Policy (this Policy ). ARP Participant may offer Net Metering to eligible customers who intend to operate customer-owned renewable generation in parallel with ARP Participant s electric distribution system that is primarily intended to offset all or part of the electric consumption at the specific site where the customer-owned renewable generation is installed (the Premises ). The term customer-owned renewable generation means an electric generating system located on a customer's premises that is primarily intended to offset part or all of the customer's electricity requirements with renewable energy. The term customer-owned renewable generation does not preclude the customer of record from contracting for the purchase, lease, operation, or maintenance of an on-site renewable generation system with a third-party under terms and conditions that do not include the retail purchase of electricity from the third party, and the term includes landlord-owned renewable generation, where ARP Participant s customer is the tenant occupying or using the Premises. ARP Participant may interconnect with and allow net metering of eligible customer-owned renewable generation in accordance with this Policy The customer-owned renewable energy generation must be operated in parallel with ARP Participant s electric distribution system, and shall provide as-available generation to ARP Participant at the point of interconnection. Before beginning or resuming parallel operations, the customer or renewable generation owner, as applicable, must enter into (1) the Tri-Party Net Metering Power Purchase Agreement, a copy of which is attached to this Policy as Appendix A; and (B) Utility s Standard Interconnection Agreement for Customer-Owned Renewable Generation. Section 2. Customer Metering ARP Participant shall cause to be installed metering equipment at the point of delivery capable of recording two separate meter readings: (1) the flow of electricity from ARP Participant to the Premesis, and (2) the flow of excess electricity from the Premises to ARP Participant. ARP Participant shall take meter readings on the same cycle as the otherwise applicable rate schedule. Section 3. Customer Billing and Crediting Pursuant to the All-Requirements Power Supply Contract between ARP Participant and Florida Municipal Power Agency, dated as of (the ARP Contract ), ARP Participant has contractually agreed to purchase from FMPA, and FMPA has agreed to sell to ARP Participant, all capacity and energy necessary to operate ARP Participant s electric system. Because of this, ARP Participant may not directly purchase excess customer-owned renewable generation supplied to ARP Participant s electric distribution system. However, in order to promote the development of small customer-owned renewable generation, FMPA has developed this Policy, pursuant to which FMPA will purchase excess customer-owned renewable generation that take part in ARP Participant s Net Metering program and are interconnected to ARP Participant s electric system. Page 96 of 153

97 3.02. Customer-owned renewable generation shall first be used to offset the demand for electricity at the Premises from ARP Participant. Excess customer-owned renewable generation that is not used to offset the demand for electricity at the Premises shall be delivered to ARP Participant s electric distribution system. Excess customer-owned renewable generation delivered to ARP Participant s electric distribution system shall be recorded separately from electricity delivered to the Premises from ARP Participant. All electric power and energy delivered by ARP Participant to the Premises shall be received and paid for pursuant to the terms, conditions, and rates of the ARP Participant s rate schedule otherwise applicable to the Premises at the time of delivery. Excess customer-owned renewable generation shall be credited by ARP Participant on the monthly electric consumption bill for the Premises at a rate determined by FMPA, which shall be calculated in accordance with Appendix B, which is attached to this Policy ARP Participant may, in its sole discretion and at its sole cost and expense, offer its net metering customers a renewable production incentive for excess kilowatt hours generated by the customer-owned renewable generation and delivered to ARP Participant s electric distribution system. Section 4. ARP Participant Billing and Crediting On a monthly basis, ARP Participant shall calculate the total kilowatt hours of all excess customer-owned renewable generation that is delivered to ARP Participant s electric distribution system for the previous month. FMPA shall purchase such kilowatt hours of customerowned renewable generation in the form of a credit on ARP Participant s ARP Bill. This process and rate calculation is more fully described in Appendix B FMPA shall not reimburse ARP Participant for any renewable production incentives provided by ARP Participant to its net metering customers in accordance with Section Excess customer-owned renewable generation that has been purchased by FMPA pursuant to Section 4.01 remains on ARP Participant s electric system and is used by ARP Participant to meet the electric needs of its other customers. Therefore, as part of the monthly ARP billing adjustment, excess customer-owned renewable generation will be reflected on ARP Participant s monthly ARP Bill, as more fully described in Appendix B. Section 5. Program Administration ARP Participant shall be responsible for developing and administering an application process for interconnection and net metering of customer owned renewable generation in accordance with the Policy. ARP Participant shall be responsible for ensuring the necessary metering equipment as well as conducting the appropriate inspections of customer-owned generation systems As a condition of providing Net Metering service, ARP Participant and eligible customers or renewable generation owners, as applicable, shall be required to execute the Tri-Party Net Metering Power Purchase Agreement. The Tri-Party Net Metering Power Purchase Agreement shall set forth the terms and conditions of FMPA s purchase of excess energy from interconnected renewable generators in accordance with this Policy. Page 97 of 153

98 5.03. ARP Participant shall develop and administer a separate agreement between ARP Participant and Customer setting forth the terms and conditions for interconnection and net metering of customer-owned renewable generation that is consistent with this Policy ARP Participant shall be responsible for collecting the necessary information and making the required annual filings with the Public Service Commission to fulfill the requirements of Rule of the Florida Administrative Code, as it may be amended. Section 6. Limit on Enrollment Each ARP Participant may offer net metering service to customer-owned renewable generators under this Policy on a first-come first-served basis until the time that the total rated generating capacity used by eligible customer-owned renewable generators exceeds 2.5% of the ARP Participants aggregate customer peak demand In the event that the total rated generating capacity of an ARP Participant s net metering customers meets the limit on enrollment set forth above, subsequent applicants for net metering service shall be considered on an individual basis by FMPA, with due consideration given to the customer s impact on ARP Participant s system and the rate impact on all ARP Participants customers. Section 7. Green Attributes/Renewable Energy Certificates FMPA and ARP Participant shall negotiate with net metered renewable generator owners for the right to all Green Attributes associated with the customer-owned renewable generation that is interconnected to ARP Participants electric distribution system. The term Green Attributes shall include any and all credits, certificates, benefits, environmental attributes, emissions reductions, offsets, and allowances, however entitled, to the generation of electricity from the customer-owned renewable generation and its displacement of conventional energy generation. Page 98 of 153

99 AGENDA ITEM 9 ACTION ITEMS a) Approval of Alternative Quincy Credit Provisions Executive Committee March 19, 2015 Page 99 of 153

100 AGENDA PACKAGE MEMORANDUM TO: FMPA Executive Committee FROM: Frank Gaffney DATE: March 10, 2015 ITEM: EC 9b Approval of Alternative Quincy Credit Provisions Strategic Relevance FMPA s Relevant Strategic Goals As a wholesale power provider, become and remain competitive in the Florida market Introduction As has been discussed at recent Audit and Risk Oversight Committee ( AROC ) and Executive Committee meetings, the City of Quincy ( Quincy or the City ) is currently not meeting two credit-related requirements of the Full-Requirements Power Sales Contract between FMPA (ARP) and Quincy (the Contract ). As discussed in more detail below, the City s required $1,000,000 Line of Credit was cancelled, and Quincy additionally currently does not meet a required Creditworthiness metric. While it is important to note that (1) the City has always paid the full invoice amount on time, and (2) FMPA staff currently does not have any information that suggests the City will fail to do so in the future, this does increase the risk exposure to the ARP should the City for whatever reason become unable to pay the amounts invoiced under the Contract. Staff has been pursuing contractual remedies. In addition, while recognizing the financial burden these remedies would cause to Quincy, staff has also been working with representatives from Quincy on an alternative solution that would mitigate FMPA s risk and be agreeable to the City. As discussed during the January 2015 AROC and Executive Committee meetings and the February 2015 Executive Committee meeting, and based on direction received from the committees, the FMPA staff and Quincy staff have agreed in principle to Alternative Credit Provisions, which are defined below and intended to be memorialized in the attached amendment to the Contract. This amendment will require the approval of both Quincy s city commission and the Executive Committee. If Quincy either does not approve the amendment or fails to meet its obligations for both the Alternative Credit Provisions and the Contract, FMPA will bring this further information and a recommendation for action to the Executive Committee. Discussion As part of the Contract, Quincy agreed to meet certain financial requirements to protect the ARP. One of these requirements was that the City maintain over the term Page 100 of 153

101 EC 9b Approval of Quincy Alternative Credit Provisions March 11, 2015 Page 2 of the Contract a minimum $1 million Line of Credit (as defined in the Contract) for use as overdraft protection in the event the City had insufficient funds to pay its invoice. During November 2014, FMPA learned that the City s Line of Credit had been cancelled, and Quincy had not been able to obtain a replacement that would satisfy the requirements in the Contract. In such an event, the Contract requires that Quincy pay to FMPA a deposit equal to the City s highest monthly invoice under the Contract during the previous 12 months, with such deposit paid in three monthly installments. Based on direction from the AROC at its December 2014 meeting, staff moved forward with this remedy and notified Quincy that it would be required to pay a deposit equal to $551, The three deposit installments, each approximately $183,903, were included on the invoices issued between December 2014 and February Quincy has paid the first two installments when due 1, and the final installment will be due on March 18, The Contract also requires that Quincy maintain Acceptable Creditworthiness. In simple terms, Quincy is required to (1) maintain a credit rating of either at least Baa2 by Moody s or at least BBB by S&P, and (2) meet both of the following financial ratios: A Ratio of General Fund Balance to Total Revenues of at least 0.20 (20%); and A Coverage Ratio of at least In order to determine Quincy s creditworthiness, FMPA requested that the City provide its current audited financial statements. Quincy completed its audited financial statements for the fiscal year ended September 30, 2013 ( 2013 Audited Financials ) on January 9, While the City has not yet completed its audited financial statements for the fiscal year ended September 30, 2014, Quincy did provide unaudited financial statements for that period on February 16, 2015 ( 2014 Unaudited Financials ). Based on a review of the information contained in the 2013 Audited Financials and the 2014 Unaudited Financials, staff has determined that Quincy did not meet the Contract requirement for Ratio of General Reserve Balance to Total Revenues in either year. Therefore, staff determined that Quincy currently does not meet the requirements for Acceptable Creditworthiness, as provided for in Section 13.2(a) of the Contract. In the event that the City ceases to maintain Acceptable Creditworthiness, the Contract requires that the City provide Performance Assurance to FMPA within 15 Business Days of the date on which it ceased to maintain Acceptable Creditworthiness. Such Performance Assurance may be satisfied by the City providing either (1) Eligible Collateral equal to the amount that FMPA reasonably 1 As an act of good faith, the City paid both its monthly power costs for January 2015 service and the second deposit installment on February 18, 2015 (in advance of the February 19, 2015 Executive Committee meeting), even though such amounts were not due until February 20, Page 101 of 153

102 EC 9b Approval of Quincy Alternative Credit Provisions March 11, 2015 Page 3 estimates that the City would owe to FMPA for the three months of the calendar year in which the City s bills are expected to be the highest, or (2) advance payment for each month s service based on FMPA s reasonable estimate of the amount that the Customer will owe for that month, trued up to actual costs on the second succeeding month s invoice. Staff has computed the amount of Eligible Collateral that the City would be required to pay to be approximately $1.3 million, based on our current estimate of the amount that the City would owe to FMPA for the three months of calendar year 2015 in which the City s bills are expected to be the highest, unless Quincy elected to begin prepaying for service. 2 Staff has notified Quincy that it does not currently meet the Acceptable Creditworthiness criteria and that the Contract requires that the City provide Performance Assurance. However, staff recognizes that this Performance Assurance requirement, especially when combined with the deposit currently being collected due to the cancellation of the Line of Credit, could be financially unachievable for the City. As discussed during the January 2015 AROC and Executive Committee meetings and the February 2015 Executive Committee meeting, and based on direction received from the committees, FMPA staff and Quincy staff have agreed in principle to an alternative arrangement to both the Line of Credit and Performance Assurance requirements in the Contract that is intended to both minimize the risk to FMPA and be achievable for the City ( Alternative Credit Provisions ). In the interim, we have notified Quincy that, while we will continue to collect the required deposit relating to the cancellation of the Line of Credit, we are placing our right to collect Performance Assurance in abeyance pending agreement to the Alternative Credit Provisions. An amendment to the Contract that memorializes this alternative arrangement is attached to this memorandum. In essence, the Alternative Credit Provisions require the City, by no later than June 2015, to provide FMPA with $1,000,000 in funds to which FMPA has direct access ( Alternative Collateral ) as a replacement for both the Line of Credit and Performance Assurance requirements. The Alternative Collateral can be satisfied by a combination totaling at least $1,000,000 of a cash deposit held by FMPA and an irrevocable standby letter of credit to which FMPA is the beneficiary. The City can utilize the deposit amounts paid for the cancellation of the Line of Credit towards meeting the Alternative Collateral requirement. The $1,000,000 figure represents approximately 2.5 months of the highest projected invoices for Quincy for In the event that Quincy becomes unable in the future to pay its invoices, FMPA can draw on the Alternative Collateral to protect the ARP and significantly reduce the risk exposure to the ARP while we pursue contractual remedies, including suspension or termination of service. It should be noted that the Alternative Credit Provisions could still expose the ARP to some risk. Assuming the ARP was able to suspend or terminate service in the event of non-payment, the total exposure is approximately three months of service. 2 In the event the City elected the prepayment option, it would also be required to immediately pay for any service that had been provided by FMPA to date but had not yet been either invoiced or paid. Page 102 of 153

103 EC 9b Approval of Quincy Alternative Credit Provisions March 11, 2015 Page 4 Staff currently estimates that the average bill to Quincy for calendar year 2015 will be approximately $375,000 (excluding any amounts billed for deposits), and the maximum for 3 months of approximately $1.3 million as discussed earlier, so there could be a portion of one month of service that would not be covered by the Alternative Collateral. However, staff believes the Alternative Collateral will provide greater financial assurance to FMPA than the existing Line of Credit requirement in the Contract. The attached amendment has been provided to Quincy and will require the approval of both Quincy s city commission and the Executive Committee. If Quincy either does not approve the amendment or fails to meet its obligations for both the Alternative Credit Provisions and the Contract, FMPA will bring this further information and a recommendation for action to the Executive Committee. Recommended Motion Move approval of Amendment No. 1 to the Full Requirements Power Sales Contract between the Florida Municipal Power Agency (All-Requirements Power Supply Project) and the City of Quincy, Florida, with such changes as are approved by the General Manager and CEO and the General Counsel, provided that Quincy agrees to provide at least $1,000,000 in funds to which FMPA has direct access, and authorize its execution by the General Manager and CEO. Page 103 of 153

104 AMENDMENT NO. 1 TO FULL REQUIREMENTS POWER SALES CONTRACT This amendment no. 1 is dated as of, 2015, and is between FLORIDA MUNICIPAL POWER AGENCY (ALL-REQUIREMENTS POWER SUPPLY PROJECT), a governmental legal entity created and existing pursuant to Florida law ( FMPA ) and THE CITY OF QUINCY, FLORIDA, a body politic organized and existing under the laws of the State of Florida (the City ). FMPA and the City are parties to the Full Requirements Power Sales Contract, dated as of December 9, 2010 (the Contract ). As set forth in this amendment no. 1, the parties now desire to amend certain provisions of the Contract. FMPA and the City therefore agree as follows: 1. Defined Terms. Defined terms used but not defined in this amendment no. 1 are as defined in the Contract. 2. Amendment to Section 5.2. Section 5.2 of the Contract is hereby amended by amending and restating subsections (b), (c), and (d), and deleting subsection (e), as follows: (b) (c) The City shall provide to FMPA a total of $1,000,000 in available funds as provided in this subsection (b), to which FMPA has direct access in the event of any failure of the City to meet a payment obligation to FMPA (the Alternative Collateral ). The City must meet its Alternative Collateral obligation by paying to FMPA a cash deposit, unless the exception in subsection (c) applies, to be collected as follows: $551, in a cash deposit to be paid by the City in three approximately equal installments on the City s monthly invoices payable on January 20, 2015, February 18, 2015, and March 18, 2015, notwithstanding section 5.1(c); and $448, in a cash deposit to be paid by the City in three approximately equal installments on the City s monthly invoices payable on the Due Dates in April 2015, May 2015, and June However, if the City secures an irrevocable, standby letter of credit acceptable to FMPA in its sole judgment, where FMPA is the sole beneficiary (the Letter of Credit ), the parties agree the amount of the Letter of Credit is to be applied towards the $1,000,000 Alternative Collateral requirement, for so long as the Letter of Credit is effective, and FMPA shall return to the City its cash deposit held by FMPA, or relieve the City of additional cash deposit payments, or both, but only to the extent that the cash deposits already collected, together with the amount of the Letter of Credit, exceeds the $1,000,000 Alternative 1 Page 104 of 153

105 Collateral requirement. Such Letter of Credit must require the bank to provide notice to FMPA prior to any non-renewal of the Letter of Credit. If at anytime FMPA receives such a non-renewal notice from the Letter of Credit bank, the City shall within ten days secure a replacement Letter of Credit, or, if not, FMPA may begin collecting from the City the additional amounts in cash deposit necessary to bring the City s deposits on hand with FMPA up to the $1,000,000 Alternative Collateral requirement; such additional amounts in additional deposit shall be paid by the City to FMPA in substantially equal amounts, as determined by FMPA, over no more than a four month period of monthly invoices under this contract. (d) The Alternative Collateral cash deposits will be held by FMPA in an interest-bearing account. All amounts held in cash as Alternative Collateral, including accrued interest, remain the property of the City, until drawn upon by FMPA in accord with this subsection (d). FMPA may draw against the Alternative Collateral in the event(s) the City fails to timely pay any amount due to FMPA. Should FMPA draw against the Alternative Collateral, FMPA may, at its option, draw against either the available cash or the Letter of Credit, as FMPA in its discretion deems appropriate, but the City remains responsible for payment of all amounts owed to FMPA under this contract, including applicable interest and Delinquency Charge in accordance with section 5.1 (Billing and Payment). In the event FMPA draws against the Alternative Collateral, the parties agree such draw is not, nor is it to be construed to be, a payment by the City pursuant to this contract, and FMPA has all rights and remedies available to it, and may exercise such rights and remedies for a failure of the City to make a payment as required by this contract, including suspending performance under, and terminating, this contract in accordance with Article 12 (Events of Default and Termination). 3. Amendment to Article 12. Article 12 of the Contract is hereby amended as follows: (1) by deleting the words or its Guarantor, if any from the beginning of clause (3) of section 12.1; (2) by deleting the words or its Guarantor s from clause (3)(K) of section 12.1; and (3) by adding the following sentence after the first sentence of section 12.4(b): The City may cure its Event of Default for payment described in clause (1) of section 12.1 (Events of 2 Page 105 of 153

106 Default) by replenishing all amounts drawn by FMPA from the Alternative Collateral in accordance with section 5.2(d) (Automatic Debit Authorization). 4. Amendment to Article 13. Article 13 of the Contract is hereby amended as follows: (1) by deleting sections 13.1, 13.2, and 13.3; (2) by renumbering section 13.4 as section 13.1; and (3) by deleting the title of article 13 and replacing it with Revenue Covenant. 5. Amendment to Section Section 18.1 of the Contract is hereby amended by deleting the following defined terms: Acceptable Credit Bank, Acceptable Rating, Affected Party, Cash Security, Eligible Collateral, Eligible Guaranty, Eligible Line of Credit, Guarantor, and Non-Affected Party. 6. Remaining Terms Unchanged. Except as modified in this amendment no. 1, all other terms and conditions of the Contract remain unchanged. [SIGNATURE PAGE FOLLOWS] 3 Page 106 of 153

107 The parties are signing this amendment no. 1 as of the date stated in the introductory clause. FLORIDA MUNICIPAL POWER AGENCY (ALL- REQUIREMENTS POWER SUPPLY PROJECT) By: Nicholas P. Guarriello General Manager and CEO THE CITY OF QUINCY, FLORIDA By: [Signature Page to Amendment No. 1 Full Requirements Power Sales Contract between FMPA and QUINCY, dated as of, 2015] 4 Page 107 of 153

108 AGENDA ITEM 10 INFORMATION ITEMS a) Extension of FGT Firm Capacity Executive Committee March 19, 2015 Page 108 of 153

109 AGENDA PACKAGE MEMORANDUM TO: FMPA Executive Committee FROM: Joe McKinney DATE: March 10, 2015 ITEM: EC10a. - FGT Firm Capacity Contract Entitlement Extension Strategic Relevance FMPA s Relevant Strategic Goals Goal A As a wholesale power provider, become and remain competitive in the Florida market. Strategy A2 Identify, understand, and manage risk responsibly Introduction FMPA has an existing firm gas transportation contract with Florida Gas Transmission (FGT) for a quantity of 6,000 MMBtu/d. This FTS-2 capacity was permanently assigned to FMPA by Ft Pierce Utilities (FPUC) as a part of the development of the Treasure Coast Energy Center and the planned decommissioning of FPUC s H.D. King Power Plant. This assignment was presented and approved by the ARP Committee during their December, 2004 meeting. This transportation contract s termination date is February 29, As an existing holder of capacity, FGT s tariff provides FMPA with the right to extend any existing firm capacity contract for a predefined term of ten years. Exercising this right requires FMPA to notify FGT of its intent to extend the term of the contract no less than one year in advance of the termination date. At the direction of staff, Florida Gas Utilities (FGU), as agent for FMPA, has provided FGT with this notification, meeting the tariff notification requirements. However, FGT has indicated that an executed contract extension is expected. Explanation The TCEC generating facility is a vital asset for serving ARP Member s load within the FPL service territory. It currently operates with an annual capacity factor of approximately 80%. The ability to reliably deliver natural gas fuel is key for maintaining this level of energy generation. The TCEC facility is geographically located in a capacity constrained area on the FGT pipeline system and all FTS-1 and FTS-2 capacity is fully Page 109 of 153

110 EC10a. FGT Firm Capacity Contract Entitlement Extension March 10, 2015 Page 2 subscribed. In the event that incremental capacity was deemed necessary, such capacity, if available, would cost substantially more than this FTS-2 entitlement. Maintaining all of FMPA s current capacity entitlements is a key component of ensuring continued reliable natural gas fuel deliveries to the TCEC generation facility. In addition, because TCEC is our furthest south gas-fired generating resource, and since FGT is constrained north to south, this gas pipeline capacity can be used to supply our other gas-fired generation when TCEC is offline or running at a lower output, providing increased value to the ARP. There is no additional cost impact to the ARP with the extension of this gas transportation contract. The contract and the exhibit are the pro forma agreements for FGT Rate Schedule FTS-2 as defined in the current FGT tariff and have been reviewed by Legal. Recommended Motion For information only. No action requested. JRM Page 110 of 153

111 FOR INTERNAL USE ONLY Request No Contract No Legal Entity No DUNS No SERVICE AGREEMENT Firm Transportation Service - Market Area Rate Schedule FTS-2 Contract No THIS AGREEMENT entered into this day of, 2015, by and between Florida Gas Transmission Company, LLC, a limited liability company of the State of Delaware (herein called "Transporter"), and FLORIDA MUNICIPAL POWER AGENCY (herein called "Shipper"), W I T N E S S E T H NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, the sufficiency of which is hereby acknowledged, Transporter and Shipper do covenant and agree as follows: ARTICLE I Definitions In addition to the definitions incorporated herein through Transporter's Rate Schedule FTS-2, the following terms when used herein shall have the meanings set forth below: 1.1 The term "Rate Schedule FTS-2" shall mean Transporter's Rate Schedule FTS-2 as filed with the FERC and as may be changed and adjusted from time to time by Transporter in accordance with Section 4.2 hereof or in compliance with any final FERC order affecting such rate schedule. 1.2 The term "FERC" shall mean the Federal Energy Regulatory Commission or any successor regulatory agency or body, including the Congress, which has authority to regulate the rates and services of Transporter. 1.3 The term "Facilities" shall mean any facilities necessary to render service under this Agreement. 1.4 The term "In-Service Date" shall mean the date the Facilities, as defined in 1.3, shall go into service. ARTICLE II Quantity 2.1 The Maximum Daily Transportation Quantity ("MDTQ") is set forth on a seasonal basis, and by Division if applicable, on Exhibit B attached hereto as the same may be amended from time to time. The applicable MDTQ shall be the largest daily quantity of gas expressed in MMBtu, that Transporter is obligated to transport and make available for delivery to Shipper under this Service Agreement on any one day. 2.2 During the term of this Agreement, Shipper may tender natural gas for transportation to Transporter on any day, up to the MDTQ plus Transporter's fuel, if applicable. Transporter agrees to receive the aggregate of the quantities of natural gas that Shipper tenders for transportation at the Receipt Points, up to the maximum daily quantity ("MDQ") specified for each receipt point as set out on Exhibit A, plus Transporter's fuel, if applicable, and to transport and make available for delivery to Shipper at each Delivery Point specified on Exhibit B, up to the amount scheduled by Transporter less Transporter's fuel, if applicable (as provided in Rate Schedule FTS-2), provided however, that Transporter shall not be required to accept for transportation and make available for delivery more than the MDTQ on any day. ARTICLE III Payment and Rights in the Event of Non-Payment 3.1 Upon the commencement of service hereunder, Shipper shall pay Transporter, for all service rendered hereunder, the rates established In Article IV herein. 3.2 Termination for Non-Payment. In the event Shipper fails to pay for the service provided under this Agreement, pursuant to the condition set forth in Section 15 of the General Terms and Conditions of Transporter's FERC Gas Tariff, Transporter shall have the right to suspend or terminate this Agreement pursuant to the condition set forth in said Section 15. Page 111 of 153

112 ARTICLE IV Rates and Terms and Conditions of Service 4.1 This Agreement in all respects shall be and remain subject to the provisions of Rate Schedule FTS-2 and of the applicable provisions of the General Terms and Conditions of Transporter on file with the FERC (as the same may hereafter be legally amended or superseded), all of which are made a part hereof by this reference. 4.2 Transporter shall have the unilateral right to file with the appropriate regulatory authority and seek to make changes in (a) the rates and charges applicable to its Rate Schedule FTS-2, (b) Rate Schedule FTS-2 including the Form of Service Agreement and the existing Service Agreement pursuant to which this service is rendered; provided however, that the firm character of service shall not be subject to change hereunder by means of a Section 4 Filing by Transporter, and/or (c) any provisions of the General Terms and Conditions of Transporter's Tariff applicable to Rate Schedule FTS-2. Transporter agrees that Shipper may protest or contest the aforementioned filings, or seek authorization from duly constituted regulatory authorities for such adjustment of Transporter's existing FERC Gas Tariff as may be found necessary in order to assure that the provisions in (a), (b) or (c) above are just and reasonable. 4.3 Not applicable. 4.4 Not applicable. ARTICLE V Term of Agreement 5.1 This Agreement shall become effective on 03/01/2016 and shall continue in effect through 02/28/2026. In accordance with the provisions of Section 20 of the General Terms and Conditions of the Transporter s Tariff, Shipper has elected Rollover. 5.2 In the event the capacity being contracted for was acquired pursuant to Section 18.C.2 of Transporter's Tariff, then this Agreement shall terminate on the date set forth in Section 5.1 above. Otherwise, upon the expiration of the primary term and any extension or roll-over, termination will be governed by the provisions of Section 20 of the General Terms and Conditions of Transporter's Tariff. 5.3 For a Shipper in the business of generating and distributing electricity and who sign a Service Agreement with a term of twenty (20) years or more, in the event of the enactment of any statute or the issuance of any order, rule, or regulation by a state or federal governmental authority that changes the electric market structure in the State of Florida, Shipper shall have the right, upon three (3) years prior written notice to Transporter, to terminate that portion of the firm quantity provided for in Shipper's Service Agreement utilized for electric generation at any time after the tenth anniversary of the commencement of the primary term of the Shipper's Service Agreement. 5.4 Shipper may buy out of a Service Agreement for all or a portion of its transportation capacity ("MDTQ") thereunder, at any time, by paying Transporter the net present value of Shipper's remaining reservation charge obligations for such capacity, discounted at a reasonable rate to be mutually agreed upon by the parties at the time of such buy-out. 5.5 Notwithstanding any other provision in this Agreement, after commencement of service under this Agreement, in the event that: (1) Shipper is capable of using gas; and (2) Transporter is unable to deliver Shipper's designated volumes at the specified Delivery Point(s) and at the pressures provided for in this Agreement for a period of two consecutive days ("Service Cessation"), Shipper shall have the right to reduce the MDTQ by the volumes not delivered, without costs or penalty, by providing written notice to Transporter within forty-five (45) days of such occurrence; provided, however, that if a Service Cessation occurs more than five (5) times in any calendar year, Shipper shall have the right to terminate this Agreement by providing written notice to Transporter within forty-five (45) days of such occurrence; provided further, however, that if Transporter's failure to deliver is due to events of Transporter's force majeure as defined in Rate Schedule FTS-2, Shipper shall have the right to terminate or to reduce the MDTQ only in the event such force majeure continues for more than one hundred eighty-five (185) consecutive days of any three hundred sixty-five (365) day period. ARTICLE VI Point(s) of Receipt and Delivery and Maximum Daily Quantities 6.1 The Primary Point(s) of Receipt and maximum daily quantity for each Primary Point of Receipt, for all gas delivered by Shipper to Transporter under this Agreement shall be at the Point(s) of Receipt on the pipeline system of Transporter or any Transporting Pipeline as set forth in Exhibit A attached hereto, as the same may be amended from time to time. In accordance with the provisions of Section 8.A. of Rate Schedule FTS-2 and Section 21.F. of the General Terms and Conditions of Transporter's Tariff, Shipper may request changes in its Primary Point(s) of Receipt. Transporter may make such changes in accordance with the terms of Rate Schedule FTS-2 and the applicable General Terms and Conditions of its Tariff. 6.2 The Primary Point(s) of Delivery and maximum daily quantity for each point for all gas made available for delivery by Transporter to Shipper, or for the account of Shipper, under this Agreement shall be at the Point(s) of Delivery as set forth in Exhibit B hereto, as same may be amended from time to time, and shall be in Transporter's Market Area; provided, however, that a Shipper who acquires a segment of FTS-2 capacity in the Western Division may only request new Delivery Points in Transporter's Western Division. In accordance with the provisions of Section 9.A. of Rate Schedule FTS-2 and Section 21.F. of the General Terms and Conditions of Transporter's Tariff, Shipper may request Page 112 of 153

113 changes in its Primary Point(s) of Delivery provided that such new requested Primary Delivery Points must be located in Transporter's Market Area; provided, however, that a Shipper who acquires a segment of FTS-2 capacity in the Western Division may only request new Delivery Points in Transporter's Western Division. Transporter may make such changes in accordance with the terms of Rate Schedule FTS-2 and the applicable General Terms and Conditions of its Tariff. Transporter is not obligated to accept changes where the new Primary Delivery point is also a delivery point under a Rate Schedule SFTS Service Agreement and the load to be served is an existing behind-the-gate customer of a Rate Schedule SFTS Shipper as defined in Section 11 of Rate Schedule SFTS. ARTICLE VII Notices All notices, payments and communications with respect to this Agreement shall be in writing and sent to Transporter's address posted on Transporter's Internet website or to Shipper's address stated below or at any other such address as may hereafter be designated in writing: Shipper: FLORIDA MUNICIPAL POWER AGENCY 8553 COMMODITY CIRCLE ORLANDO FL Attention: JOE MCKINNEY Telephone FAX ARTICLE VIII Construction of Facilities 8.1 To the extent that construction of new or requested facilities is necessary to provide service under this Service Agreement, such construction, including payment for the facilities, shall occur in accordance with Section 21 of the General Terms and Conditions of Transporter's Tariff. 8.2 Unless otherwise agreed to by the parties, Shipper is obligated to reimburse Transporter within fifteen (15) days of receipt of invoice for the costs of the construction of new or requested taps, meters, receipt and delivery point upgrades, and supply and delivery laterals and any other construction necessary to receive gas into, and deliver from, Transporter's existing or proposed facilities. To the extent such reimbursement qualifies as a contribution in aid of construction under the Tax Reform Act of 1986, P.L (1986), Shipper also shall reimburse Transporter for the income taxes incurred by Transporter as a direct result of such contribution in aid of construction by Shipper; as calculated pursuant to FERC's order in Transwestern Pipeline Company, 45 FERC Paragraph 61,116 (1988). Unless otherwise agreed to, Transporter shall have title to and the exclusive right to operate and maintain all such facilities. ARTICLE IX Not Applicable ARTICLE X Pressure 10.1 The quantities of gas delivered or caused to be delivered by Shipper to Transporter hereunder shall be delivered into Transporter's pipeline system at a pressure sufficient to enter Transporter's system, but in no event shall such gas be delivered at a pressure exceeding the maximum authorized operating pressure or such other pressure as Transporter permits at the Point(s) of Receipt Transporter shall have no obligation to provide compression and/or alter its system operation to effectuate deliveries at the Point(s) of Delivery hereunder Not applicable. ARTICLE XI Not Applicable ARTICLE XII Miscellaneous 12.1 (a) This Agreement shall bind and benefit the successors and assigns of the respective parties hereto; provided however, that neither party shall assign this Agreement or any of its rights or obligations hereunder without first obtaining the written consent of the other party, which consent shall not be unreasonably withheld. (b) Shipper may also assign its rights under the Final Rate Cap but only in the event that such assignment is to third party that has a Moody's credit rating equal to or greater than that of Shipper No waiver by either party of any one or more defaults by the other in the performance of any provisions of this Agreement shall operate or be construed as a waiver of any future defaults of a like or different character. Page 113 of 153

114 12.3 This Agreement contains Exhibits A and B which are incorporated fully herein THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO ANY CONFLICT OF LAWS DOCTRINE WHICH WOULD APPLY THE LAWS OF ANOTHER JURISIDCTION. ARTICLE XIII Superseding Prior Service Agreements This Agreement supersedes and cancels the following Service Agreements between Transporter and Shipper: Contract No dated 03/01/1995. IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers effective as of the date first written above. TRANSPORTER SHIPPER FLORIDA GAS TRANSMISSION COMPANY, LLC FLORIDA MUNICIPAL POWER AGENCY By: By: Name: Luke Fletcher Name: Title: Executive Vice President - Interstate Title: Date: Date: Page 114 of 153

115 EXHIBIT C TO RATE SCHEDULE FTS-2 SERVICE AGREEMENT BETWEEN FLORIDA GAS TRANSMISSION COMPANY, LLC AND FLORIDA MUNICIPAL POWER AGENCY DATED 03/01/1995 Contract No Amendment No. 1 Effective Date of this Exhibit C: 03/01/2016 FOR INTERNAL USE ONLY Request No Contract No Legal Entity No DUNS No The parties hereby agree: [Mark the applicable section(s) below for each amendment number.] Realignment of Points Contract Quantity _X_ Contract Extension Administrative Contract Consolidation Service Agreement Number MDTQ ,000 Termination Date 02/28/2026 Extension Rights Rollover TRANSPORTER SHIPPER FLORIDA GAS TRANSMISSION COMPANY, LLC FLORIDA MUNICIPAL POWER AGENCY By: By: Luke Fletcher Name: Title: Executive Vice President-Interstate Title: Date: Date: Page 115 of 153

116 AGENDA ITEM 10 INFORMATION ITEMS b) Revision to CROD Implementation Protocols Executive Committee March 19, 2015 Page 116 of 153

117 AGENDA PACKAGE MEMORANDUM TO: FMPA Executive Committee FROM: Frank Gaffney DATE: March 11, 2015 ITEM: EC 10b Revision to CROD Implementation Protocols Strategic Relevance FMPA s Relevant Strategic Goals As a wholesale power provider, become and remain competitive in the Florida market Introduction In November 2014, the Executive Committee approved a document to guide the implementation of CROD for Fort Meade and any future non-zero CROD Participant (the CROD Implementation Protocols or Protocols ). As staff noted at the time, this is the first time FMPA has implemented CROD for a nonzero CROD Participant, and the CROD Implementation Protocols were intended to be a living document. Staff noted that if we determined over time that the Protocols were operating in a way that was unintended and were causing harm to a CROD Participant, the ARP, or both, we would propose revisions to the Executive Committee. Recently, staff has discovered that language in the CROD Implementation Protocols pertaining to the amount of capacity credited for Excluded Power Supply Resources in a situation in which (1) the CROD Participant has waived its right to receive Backup and Support Services, and (2) some or all of the Excluded Power Supply Resource capacity is unavailable during the hour of the ARP system peak, would actually cause the ARP to charge the CROD Participant for Backup and Support Services that the ARP did not provide. Due to an unplanned outage for St. Lucie Unit No. 2 during February 2015, this situation may have occurred for Fort Meade, although staff does not yet have complete information. Therefore, staff is proposing revised language for that portion of the CROD Implementation Protocols, as described herein. Discussion Effective January 1, 2015, Ft. Meade limited the amount of electric capacity and energy required to be sold and delivered by FMPA and purchased and received by Ft. Meade as All-Requirements Services for the remaining term of its ARP Contract so as not to exceed its Contract Rate of Delivery ( CROD ). In doing so, Ft. Meade became the first ARP Participant to be served capacity and energy by the ARP under CROD. Page 117 of 153

118 EC 10b Revision to CROD Implementation Protocols March 11, 2015 Page 2 The ARP Contract (in particular, Sections 3(a) and Schedule C) outlines the calculation and implementation of CROD; however, there are many facets of CROD implementation that are not addressed in detail in the contract. In addition, the wholesale power market and related regulations have changed since the ARP Contract was developed, and there are requirements of operating today that were not in place at that time. As part of the preparation for Ft. Meade s conversion to CROD, staff developed the CROD Implementation Protocols to use as a guide for implementing CROD for Fort Meade as well as any future ARP Participant that elected CROD. The Protocols outlined staff s recommendations, taking into account changes in the industry since the drafting of the ARP Contract while being true to the terms and intent of the contract. The initial CROD Implementation Protocols were approved by the Executive Committee on November 20, 2014, and these protocols serve as FMPA s business practices and guide for the detailed implementation of non-zero MW CROD. Fort Meade also has a MW (winter) Power Entitlement Share in the St. Lucie Project. This Power Entitlement Share is treated as an Excluded Power Supply Resource for Fort Meade under the ARP Contract. The ARP Contract provides for the ARP to provide Backup and Support Services to ARP Participants for their Excluded Power Supply Resources, including those ARP Participants under CROD. Backup and Support Services are defined in Section 3(b) of the ARP Contract as generating support services for such Excluded Power Supply Resources including reserves, deficiency energy (which is energy in an amount equal to up to the Project Participant s Excluded Power Supply Resources whenever the units providing such Excluded Power Supply Resources are operating at less than a 100% capacity factor based on the seasonal net capability of such Excluded Power Supply Resources adjusted for losses), transmission losses and firming capacity associated with the delivery of the Excluded Power Supply Resources or the replacement thereof, including any associated transmission and dispatching services. Fort Meade elected to waive its right to purchase and receive Backup and Support Services upon its conversion to CROD. In the current version of the CROD Implementation Protocols, the last paragraph of the section entitled Backup and Support Services reads as follows: If a CROD Participant waives its right to receive Backup and Support Services, the credited capacity for its Excluded Power Supply Resources utilized in the calculation of its CROD Monthly Billing Demand will be based on the capacity that was actually available from those Excluded Power Supply Resources during the hour of the ARP system peak. For example, if a CROD Participant s Excluded Power Supply Resource is under a scheduled maintenance outage at Page 118 of 153

119 EC 10b Revision to CROD Implementation Protocols March 11, 2015 Page 3 the time of the ARP System Peak, the CROD Participant s metered demand will have no reduction for Excluded Power Supply Resource capacity before it is multiplied by the CROD/MAXD ratio. While this approach sounds correct on the surface, staff now believes that the opposite is true that a CROD Participant that has waived Backup and Support Services should always receive credit for its full Excluded Power Supply Resource capacity, regardless of the actual output of the resource. This is because the CROD Participant has elected to obtain replacement capacity and energy from other sources, and the ARP does not provide that replacement capacity and energy. For a simplified example, assume a CROD Participant with 3.0 MW of Excluded Power Supply Resource capacity and a CROD/MAXD ratio of 1.0. If the CROD Participant has waived Backup and Support Services, and its demand during the hour of the ARP system peak was 10.0 MW, FMPA would have planned (assuming perfect knowledge) to serve 7.0 MW of the CROD Participant s load. The remaining 3.0 MW would either come from the CROD Participant s Excluded Power Supply Resource or, if such resource was unavailable, from replacement capacity the CROD Participant would be responsible for procuring. However, based on the current CROD Implementation Protocols, if the Excluded Power Supply Resource was unavailable during that hour, FMPA would charge the CROD Participant based on a CROD Monthly Billing Demand of 10.0 MW. In essence, FMPA would be charging the CROD Participant for Backup and Support Services that FMPA did not provide. Staff proposes revising the previously quoted paragraph from the CROD Implementation Protocols to read as follows below. This language has also been expanded to cover the amount of capacity credited in the calculation of scheduled energy. Notwithstanding any election by a CROD Participant to waive its right to receive Backup and Support Services, the credited capacity for the CROD Participant s Excluded Power Supply Resource(s) utilized in the calculation of its CROD Monthly Billing Demand will be based on the full seasonal capacity from the Excluded Power Supply Resource(s), regardless of the availability of such resource(s) during the hour of the ARP system peak. A redlined draft of the proposed revised CROD Implementation Protocols is also attached. Staff made this determination based on an actual situation that may have impacted Fort Meade during February On February 15, 2015, St. Lucie Unit No. 2 was forced out of service. The ARP system peak for February 2015 occurred during the hour ending 8:00 a.m. on February 20, During this hour, St. Lucie Unit No. 2 was reportedly in the process of ramping back up from the outage and may not have reached 100 percent power at that time. During this Page 119 of 153

120 EC 10b Revision to CROD Implementation Protocols March 11, 2015 Page 4 outage, the CROD energy schedules were correctly developed by netting out Fort Meade s full St. Lucie Project Power Entitlement Share capacity (assuming 100 percent output). However, based on the language in the CROD Implementation Protocols, the credited capacity for Fort Meade s Excluded Power Supply Resources utilized in the calculation of its CROD Monthly Billing Demand for February 2015 can only be based on the capacity that was available from its St. Lucie Project Power Entitlement Share during the peak hour. Staff has requested actual meter data for St. Lucie from FPL for that hour in order to determine the amount of capacity that would be credited pursuant to the current Protocols; however, FPL had not provided this information as of the time Fort Meade s bill for February was issued. Because staff did not have better information at that time, Fort Meade was credited its full St. Lucie Project Power Entitlement Share winter demand credit of MW. We have notified Fort Meade of this issue, and we have noted with the bill that the CROD Monthly Billing Demand utilized in the bill is subject to true-up if necessary. Fort Meade s total demand during the hour of the ARP system peak during February 2015 was MW. Fort Meade s CROD Monthly Billing Demand for February 2015 therefore equaled MW 1, which is less than Fort Meade s CROD amount of MW. If meter data indicated that Fort Meade should only have received a partial credit; however, Fort Meade s CROD Monthly Billing Demand may have been increased up to the CROD amount, and staff believes that Fort Meade would have been charged for up to MW of demand that effectively represents Backup and Support Services that the ARP did not provide. Based on the February 2015 ARP Demand Rate of $22.86/kW-mo., this could have equaled a cost to Fort Meade of up to approximately $600. Using a reduced capacity for St. Lucie may also impact the calculation of MAXD and, therefore, the CROD/MAXD ratio for Fort Meade. Based on the current CROD Implementation Protocols, with a reduced capacity for St. Lucie, Fort Meade s new MAXD may have exceeded the CROD amount, and the resulting CROD/MAXD ratio (until such time as a new MAXD is set) would drop below 1.0. However, in anticipation of the Executive Committee approving the revision to the CROD Implementation Protocols, staff is moving forward assuming a MAXD of MW and a CROD/MAXD ratio capped at 1.0 for scheduling purposes. If the Executive Committee does not approve the revision to the CROD Implementation Protocols, staff will make any appropriate adjustments to MAXD and the CROD/MAXD ratio at that time. Recommended Motion For information only. No action requested. 1 Based on the peak demand of MW less MW of Excluded Power Supply Resource capacity, multiplied by the current CROD/MAXD ratio of 1.0. Page 120 of 153

121 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS This document has been developed to establish protocols for both FMPA and an All Requirements Power Supply Project Participant ( Project Participant or ARP Participant ) that has irrevocably limited the maximum amount of energy that it purchases and receives from the All Requirements Project ( ARP ) so as not to exceed its Contract Rate of Delivery ( CROD ). As utilized for purposes of this document, a Project Participant that has provided notice to FMPA to establish its CROD, or has established its CROD, is referred to herein as a CROD Participant. CROD Calculation Section 3(a) of the All Requirements Power Supply Project Contract between FMPA and the Project Participant, as amended, (the ARP Contract ) sets forth the calculation of the Project Participant s CROD amount: [T]he Project Participant may irrevocably limit the maximum amount of electric capacity and energy required to be sold and delivered by FMPA and purchased and received by the Project Participant hereunder as All Requirements Services for the remainder of the term hereof so as not to exceed its Contract Rate of Delivery determined as follows: ( i ) the "Contract Rate of Delivery" shall be the peak demand of the Project Participant for electric capacity and energy as All Requirements Services under this Contract during the 12 months preceding the date one month prior to the date such limitation shall commence, as determined by FMPA, adjusted up or down by not more than a 15% reserve margin so as to provide optimal utilization of the FMPA power supply resources, such adjustment to be made by FMPA in its sole discretion; and ( ii ) such Contract Rate of Delivery shall be reduced by FMPA by the total of the Project Participant's then current Capacity Credit Resources, and Partial Requirements Purchase Contract and any power supply resources the Project Participant is obligated to purchase from other FMPA power supply projects, if any, as defined and determined pursuant to the Project Participant's Capacity and Energy Sales Contract, if applicable. However, such reduction of the Contract Rate of Delivery shall not result in a negative amount of the Contract Rate of Delivery. Based on the formula set forth in Section 3(a), FMPA shall make the CROD calculation as follows: 1 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 121 of 153

122 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS Table 1 CROD Calculation Step Action Description 1 Project Participant s Maximum CP Demand [1] 2 Project Participant s Capacity from Excluded Power Supply Resources [2] 3 = All Requirements Services Demand [3] 4 +/ Adjustments to All Requirements Services Demand [4] 5 = Adjusted All Requirements Services Demand [5] 6 Capacity Credit Resources [6] 7 = CROD [7] [1] Equals the Project Participant s highest peak demand at the time of the ARP monthly system peak over the period beginning December 1 in the year that is two years prior to the CROD start date and ending November 30 in the year prior the CROD start date. Such amount shall be expressed in (MW) and rounded to the nearest kilowatt (kw). [2] The amount of capacity included here shall equal the amount of the Project Participant s demand credit for its Excluded Power Supply Resources capacity in the month in which Step 1 occurs, if any. Such amount shall be expressed in megawatts (MW) and rounded to the nearest kilowatt (kw). [3] Equals the value from Step 1 plus the value from Step 2. [4] The adjustment can be a positive (addition) or negative (subtraction) amount that is no more than 15 percent of the amount computed in Step 3. Such amount shall be expressed in (MW) and rounded to the nearest kilowatt (kw). [5] In the event of a positive adjustment in Step 4, equals Step 3 plus Step 4. In the event of a negative adjustment in Step 4, equals the value from Step 3 minus the value from Step 4. [6] The amount of capacity included here shall equal the then current capacity credit rating of the Project Participant s capacity credit resources as set forth in the Project Participant s Capacity and Energy Sales Contract, or, in the event that the Project Participant has separately assigned capacity resources to the ARP, the then current capacity rating of the Project Participant s ownership or purchase entitlement of such resource(s) as utilized by FMPA s System Planning department in the month in which Step 1 occurs. For a resource to be included in this calculation, it must have met the availability requirements for receipt of capacity credits pursuant to the requirements of the Capacity and Energy Sales Contract. If a resource was not available or was derated, the Project Participant must demonstrate that it has returned to service before and is available on December 1 of the year prior to the CROD start date. For purposes of this calculation, FMPA reserves the right to test for unit availability and capacity. The value of any capacity credit resources shall be expressed in (MW) and rounded to the nearest kilowatt (kw). [7] Equals the value from Step 5 minus the value from Step 6. In the year prior to the year a CROD Participant begins service under CROD, FMPA staff will perform the CROD calculation on a monthly basis, including the full range of any potential adjustments to the CROD amount. In any month in which the projected CROD amount has changed, FMPA will communicate the updated range of potential CROD amounts to the CROD Participant. During the December meeting of the FMPA Executive Committee in the year prior to the CROD start date, the Executive Committee will vote to set the amount of the adjustment if any to be made to the CROD Participant s CROD amount. As part of this process, staff will present the Executive Committee with the CROD Participant s unadjusted CROD amount and a recommendation on any percentage adjustment to be made to the CROD amount. Staff will perform a cost benefit analysis that evaluates the financial impact to the ARP of advancing or deferring the next capacity addition by adjusting the CROD up or down, respectively, as well as the impact on existing ARP demand costs of 2 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 122 of 153

123 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS such adjustments, essentially comparing the present value of rate impacts of (i) increasing or decreasing CROD and allowing the CROD Participant to grow into that increase or not serve a decrease; against (ii) increasing or decreasing CROD and its impacts on either accelerating or decelerating the need for the next resource by committing to supply that increase/decrease. Staff will utilize the results of this analysis, as well as qualitative considerations, to present its recommendation to the Executive Committee of what percentage adjustment to the CROD amount, if any, would be projected to be most beneficial to the ARP. As soon as practicable after the Executive Committee has established the CROD Participant s CROD amount, FMPA will provide formal written communication to the CROD Participant that documents the CROD amount. Once established, the CROD amount will not be further adjusted over the term of the CROD Participant s ARP Contract. Schedule C Calculations The supply of capacity and energy by FMPA to the CROD Participant, as well as the billing for such amounts, is set forth in Schedule C to the ARP Contract. Under Schedule C, the demand and energy quantities provided and billed for CROD service are to be based on the following formulae: Where: D = E = RD = Shall be (a) metered demand determined pursuant to paragraph 5 of Schedule A and paragraph 5 of Schedule B, giving effect to all adjustments, plus (b) the metered demand determined in similar manner to paragraph 5 of Schedule B, giving effect to all adjustments, at all other Points of Measurement, if any, on the Participant's system. Shall be (a) metered energy determined pursuant to paragraph 5 of Schedule A and paragraph 5 of Schedule B, giving effect to all adjustments, plus (b) the metered energy determined in similar manner to paragraph 5 of Schedule B, giving effect to all adjustments, at all other Points of Measurement, if any, on the Participant's system. Shall be (a) metered reactive demand determined pursuant to paragraph 5 of Schedule A and paragraph 5 of Schedule B, giving effect to all adjustments, plus (b) the metered reactive demand determined in a similar manner to paragraph 5 of Schedule B, giving effect to all adjustments, at all other Points of Measurement, if any, on the Participant s system. CROD = Shall be the Project Participant s Contract Rate of Delivery determined pursuant to Section 3(a) of the Contract. MAXD = Shall be the highest demand (factor D ) during the 12 months ending with the end of the current billing month. 3 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 123 of 153

124 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS And where the ratio CROD/MAXD shall never be greater than one. Paragraph 5 of Schedule A sets forth the Project Participant s metering point identity and location and metering voltage(s). Paragraph 5 of Schedule B outlines the billing metering for All Requirements Services as follows: The metered demand in KW in each month shall be the individual Project Participant's total 60 minute integrated demand at the time of the highest 60 minute integrated demand for the total of all ARP system Project Participants (or corrected to a 60 minute basis if demand registers other than 60 minute demand registers are installed) measured during the month. The metered reactive demand in kvar in each month shall be the reactive demand, which occurred during the same 60 minute demand interval in which the metered kilowatt demand occurred. 1 Demand and energy meter readings shall be adjusted, if appropriate, as provided in Schedule A of the All Requirements Power Supply Project Contract. Based on a review of the above and other contract provisions, FMPA believes that the ARP Contract provides that the amounts measured for factors D, E, and MAXD are not to be reduced by the amount of the CROD Participant s Excluded Power Supply Resources, if any. However, under a scenario that assumes a perfect forecast and a CROD/MAXD ratio equal to 1.0, such an approach could lead to a CROD Participant essentially purchasing its entire capacity and energy requirements from the ARP under CROD and having to sell its Excluded Power Supply Resource entitlements in every hour. FMPA believes that such an approach would be punitive to the CROD Participant and that the intent of the contract was that these amounts would be adjusted, as necessary, to account for Excluded Power Supply Resources. Therefore, computed amounts for factors D, E, and MAXD will be reduced to account for the CROD Participant s Excluded Power Supply Resources, if any. 2 Scheduling CROD Energy Section 7(d) of the ARP Contract states: In addition to the delivery of electric capacity and energy pursuant to this All Requirements Power Supply Project Contract and the performance of all acts and actions incident thereto, FMPA agrees that it will perform or cause to be performed services, including, but not limited to: (iii) planning, undertaking, coordinating, and monitoring the economic dispatching and scheduling of electric capacity and energy to the Project 1 Schedule B refers to Schedule B 1, which is the ARP rate schedule. Schedule B 1 is subject to periodic revision by the EC. The language shown reflects the Schedule B 1 approved by the EC effective October 1, See the discussion under the section entitled Backup and Support Services regarding the capacity value that will be utilized each month in the calculation of factor D for the CROD Participant s Excluded Power Supply Resource(s) in the event the CROD Participant waives its right to receive Backup and Support Services from the ARP. 4 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 124 of 153

125 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS Participants; and (iv) providing such other services as FMPA from time to time shall determine to be appropriate or necessary to provide an adequate, reliable and economical supply of electric capacity and energy to the Project Participants. As such, FMPA has the contractual right to determine the amount of must take CROD energy and to schedule that energy with any associated e tags for hourly CROD energy quantities provided to the CROD Participant. Unless otherwise agreed upon between FMPA and the CROD Participant, the CROD Participant will need to hire a scheduling agent to handle the tagging of any additional energy requirements in excess of the CROD schedules. In determining the amount of CROD energy to be scheduled to a CROD Participant, FMPA recognizes two issues, which are discussed below: First, FMPA believes that Schedule C to the ARP Contract provides for FMPA to establish a normal hourly load pattern for a month for the CROD Participant as the basis for the quantity of energy to be delivered during that month. However, FMPA believes a weekly load pattern would be beneficial to both the ARP and the CROD Participant. Second, pursuant to Schedule C, the calculation of MAXD includes the CROD Participant s demand (factor D ) for the current billing month. However, when scheduling energy to a CROD Participant during a month, FMPA will not know what the CROD Participant s actual coincident peak demand for that month will be, so the MAXD calculation cannot include the factor D for that month. Therefore, for scheduling purposes only, the calculation of MAXD will be based on the highest factor D during the 12 months prior to the month for which energy is being scheduled ( MAXD Sched ). 3 For illustration purposes, if FMPA is scheduling energy for January 2015, MAXD Sched would be based on the CROD Participant s highest factor D over the period January 2014 through December FMPA will use the following methodology for determining the amount of CROD energy to be scheduled to a CROD Participant: a) The CROD energy schedules, and tags for the CROD Participant will be developed by the Florida Municipal Power Pool ( FMPP ), which handles these functions for all full requirements Project Participants. The FMPP will develop the amount of CROD energy to be delivered to the CROD Participant based on the CROD Participant s normal hourly load pattern using modifications to the FMPP s processes. (1) FMPP will forecast the daily energy requirements for the entire FMPP 4 in whole MW amounts. FMPP forecasts a rolling one week forecast (including the current day and six additional days) with emphasis on the next day. 3 For CROD schedules for the first few days of a month, FMPA may not have complete peak demand information available for the preceding month. Such schedules will be based on the information available at that time. Once the information for the preceding month becomes available, to the extent that it would cause a new MAXDSched to be set, FMPA will revise the CROD/MAXDSched ratio applied to future CROD schedules as soon as possible. 4 FMPP load consists of the FMPP member native loads (currently the FMPA ARP full requirements Project Participants, the City of Lakeland, and the Orlando Utilities Commission), as well as any scheduled sale obligations of the members (excluding Quincy). 5 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 125 of 153

126 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS (2) FMPP will apply a ratio (historical percent of the CROD Participant s daily load divided by total FMPP daily load (without the CROD Participant s load), based on the most recent five years of actual monthly data) to the total FMPP daily load forecast to develop the CROD Participant s daily energy requirements. (3) FMPP will apply those total energy requirements to the CROD Participant s normal hourly load pattern to develop the weather adjusted normal hourly load pattern for that day. i. The CROD Participant s normal hourly load pattern will be based on five years of historical meter data, broken down into a typical week shape by season, with extreme hot day and extreme cold day shapes. ii. If the Florida Reliability Coordinating Council forecasts a Generating Capacity Advisory due to an extreme weather forecast for the next day for the portion of the state in which the CROD Participant is located, the extreme hot day or extreme cold day shape, as appropriate, will be utilized for the two day ahead CROD energy schedule. b) FMPP will subtract off the CROD Participant s applicable seasonal Excluded Power Supply Resource capacity, if any, to reduce the weather adjusted normal hourly load pattern for that day prior to the CROD/MAXD Sched adjustment. c) FMPP will apply the current CROD/MAXD Sched ratio that was established for scheduling purposes to these daily energy amounts to determine the All Requirements Services CROD energy that would be scheduled following the normal hourly load pattern. (1) CROD is as determined by contract and the CROD Calculation section of this document. (2) MAXD Sched is be the maximum billed coincident peak demand quantity for the CROD Participant over the 12 months ending with the end of the month prior to the month in which energy is delivered (e.g., for capacity and energy supplied during January 2015, MAXD would be computed using data from January 1, 2014 through December 31, 2014). (3) CROD/MAXD Sched can never be greater than 1. (4) Any resulting energy amounts that would be greater than the CROD amount will be capped at the CROD amount. d) As discussed under the section below entitled Transmission Losses, the All Requirements Services CROD energy will be grossed up based on the then current applicable transmission loss factors to account for transmission losses that will be incurred between the CROD Point of Delivery and the CROD Point of Measurement. Because scheduling must be done in whole MWs (in accordance with NAESB standards and Federal Energy Regulatory Commission ( FERC ) Pro Forma Open Access Transmission Tariff ( OATT ) requirements), for purposes of scheduling, the resulting energy amounts will then each be rounded up or down to the nearest whole MW amount. 6 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 126 of 153

127 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS e) No later than the close of business each day (except for weekends and holidays discussed below), FMPP would provide the CROD Participant with a six day ahead CROD energy schedule (including associated losses). CROD Billing (1) This time schedule will allow the CROD Participant time to make any additional arrangements necessary to meet its total load requirements. (2) Information that would otherwise be provided on a weekend or holiday will be provided on the preceding business day. (3) The CROD Participant will have the opportunity to suggest revisions to the CROD energy schedule. FMPA will consider any such suggestions; however, FMPA will not be obligated to revise the CROD energy schedule. Charges for All Requirements Services under CROD will be as set forth in ARP Rate Schedule B 1, unless a separate rate schedule for CROD service is established by the FMPA Executive Committee. Collectively, ARP Rate Schedule B 1 and any future additional rate schedule that addresses CROD are referred to herein as the ARP Rate Schedule. Specific issues relating to CROD service billing are outlined below. For billing purposes, MAXD will be computed in accordance with the definition in Schedule C to the ARP Contract, which would equal the highest demand (factor D ) during the 12 months ending with the end of the current billing month. For example, if during February 2015, FMPA is computing billing quantities for capacity and energy supplied to the CROD Participant during January 2015, MAXD would be computed as the CROD Participant s highest monthly peak demand coincident with the monthly ARP system peak over the period February 2014 through January 2015, giving effect to applicable adjustments. According to the formula in Schedule C, Monthly Billing Demand quantities under CROD will be based on the CROD/MAXD ratio multiplied by the CROD Participant s hourly demand at the time of the monthly ARP system peak, giving effect to applicable adjustments. 5 FMPA believes that CROD demand charges should be based on the ARP demand rate charged to full requirements Project Participants without additional adjustment. According to the formula in Schedule C, Monthly Billing Energy quantities under CROD will be based on the CROD/MAXD ratio multiplied by the CROD Participant s monthly adjusted metered energy quantities. However, because CROD energy deliveries to the CROD Participant will be 1) based on the schedules developed under the section above entitled Scheduling CROD Energy, and 2) scheduled in whole megawatts, the total amount of energy delivered during the month will differ from the amount computed using the Monthly Billing Energy formula. FMPA believes that during months in which the actual energy quantities supplied are greater than the Monthly Billing Energy amount, the ARP must recover the cost of all of the energy it supplied. Additionally, FMPA believes that during months in 5 See the discussion under the section entitled Backup and Support Services regarding the capacity value that will be utilized each month for the CROD Participant s Excluded Power Supply Resource(s)in the calculation of the Monthly Billing Demand in the event the CROD Participant waives its right to receive Backup and Support Services from the ARP. 7 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 127 of 153

128 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS which the actual energy quantities supplied are less than the Monthly Billing Energy amount, it would be punitive for the CROD Participant to pay for energy that the ARP did not deliver. Therefore, the ARP Rate Schedule will include a true up adjustment to the CROD Monthly Billing Energy quantity to equal the amount of CROD energy actually supplied (net of any energy losses supplied beyond the Point(s) of Delivery, as discussed below under Transmission Losses ). With regards to the Monthly Billing Reactive Demand, the ARP currently does not have a rate established for reactive power. Therefore, FMPA will not compute the amount of reactive demand for a CROD Participant on a monthly basis, and charges for such are not discussed further herein. However, in the event that the ARP in the future implements a charge for reactive power, this document will be revised to address this CROD component. Billing for transmission is discussed under Transmission below. The ARP Contract provides for the recovery of costs incurred by FMPA in the provision of CROD capacity and energy to the CROD Participant. For example, there may be additional FMPP charges to the ARP specific to the effort of developing the energy schedules for a CROD Participant. Additionally, FMPA may incur costs to install metering equipment on CROD Participant generating resources. To the extent that the ARP incurs such charges, these charges will be passed through to the CROD Participant. Calculation of ARP System Peak with CROD Participants Paragraph 5 of Rate Schedule B 1 to the ARP Contract defines Billing Metering for All Requirements Services as, The metered demand in kw in each month shall be the individual Project Participant's total 60 minute integrated demand at the time of the highest 60 minute integrated demand for the total of all ARP system Project Participants (or corrected to a 60 minute basis if demand registers other than 60 minute demand registers are installed) measured during the month. However, the hourly metered CROD amount (based on the CROD/MAXD x D formula) will differ from the CROD energy scheduled to a CROD Participant during that hour. For purposes of computing the monthly ARP system peak, FMPA believes the intent of the ARP Contract is that the CROD Participant s metered CROD amount, and not the amount of energy scheduled in that hour, should serve as the CROD Participant s ARP demand in that hour. As previously discussed, for billing purposes, the CROD Participant s billing demand will be based on its metered CROD amount without consideration for what was actually scheduled in that hour, and any difference between the metered CROD demand and the actual scheduled CROD energy during the peak hour is simply part of the monthly difference between what is scheduled and what is metered. Transmission Section 3(a) of the ARP Contract states that the Project Participant shall reimburse FMPA for all transmission costs incurred by FMPA with respect to the Project Participant during the remainder of the term hereof. FMPA will use its best efforts to arrange for and provide to the Project Participant the transmission services required by the Project Participant for its capacity and energy requirements in excess of its Contract Rate of Delivery and all costs related thereto shall be borne by the Project Participant. Currently, all Project Participants that take full requirements service from the ARP other than KUA receive transmission service under either the ARP s Network Integration Transmission Service ( NITS ) agreement with Duke Energy Florida ( DEF ) or the ARP s NITS agreement with Florida Power & Light Company ( FPL ). As a CROD Participant prepares to convert to CROD, it will first need to 8 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 128 of 153

129 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS determine whether it wants to continue to receive transmission service under a NITS arrangement, or whether it wishes to have capacity and energy delivered using Point to Point Transmission Service ( PTP ). 6 Based on the nature of NITS, it appears highly unlikely that a CROD Participant could remain under the ARP s NITS agreements with either DEF or FPL once it establishes its CROD, and unless otherwise agreed to between FMPA and the CROD Participant, the CROD Participant will need to make its own arrangements for NITS service with the applicable transmission provider ( Transmission Provider ). 7 If the CROD Participant wishes to have capacity and energy (from CROD or other sources) delivered to it using Firm PTP Transmission Service, FMPA will if requested by the CROD Participant arrange for such transmission service to be provided to the CROD Participant, and the costs of such service will be borne by the CROD Participant. Regardless of the choice the CROD Participant makes regarding transmission service, in order for FMPA to meet its obligations under the ARP Contract, the CROD Participant will need to communicate its intentions regarding such to FMPA in a timely manner. The CROD Participant will still be responsible for some ARP transmission costs as part of receiving service under CROD. These costs include a portion of the PTP transmission service costs used to wheel Stanton 1, Stanton 2, Stanton A, and Indian River CT A D capacity and energy from these units to the DEF and FPL interfaces. Additionally, there are other costs currently included in the ARP transmission rate that may not benefit the CROD Participant directly but that represent obligations undertaken by the ARP as a whole. Such costs include but are not necessarily limited to non firm transmission service costs over the transmission line jointly owned by Key West and the Florida Keys Electric Cooperative, and transmission charges associated with periodic short term capacity and/or energy purchases. To the extent a new CROD rate schedule is adopted that reflects this, once CROD service commences, the CROD Participant s ARP transmission charges will consist of the following: 1) any transmission charges directly assignable to the CROD Participant, as outlined in Section 3(a) of Amendment 1 to the ARP Contract, and 2) its load ratio share (based on its monthly transmission billing demand as a percentage of the sum of all Project Participants monthly transmission billing demands) of all charges and credits included in the ARP transmission rate (except for those charges and credits associated with the ARP s NITS agreements). Assuming the ARP is only responsible for transmission of the CROD Participant s CROD obligation, the CROD Participant s monthly transmission billing demand determinant will be equal to its Monthly Billing Demand as previously outlined in this document. However, if FMPA and the CROD Participant mutually agree that the ARP will also be responsible for the transmission of the CROD Participant s Excluded Power Supply Resources or other non CROD power supply resources to a designated Point of Delivery, and such transmission will utilize existing ARP transmission agreements, the capacity associated with those resources (in the case of Excluded Power Supply Resources, the CROD Participant s monthly demand credit) will need to be added to the Monthly Billing Demand for purposes of computing the CROD Participant s monthly ARP transmission billing demand. 6 Because the billing determinant for NITS is the transmission customer s monthly load, while the billing determinant for PTP is the full amount of the transmission customer s reserved capacity, NITS would typically be a more cost effective option for the CROD Participant. 7 FMPA can assist the Project Participant with the NITS application as needed; however, since FMPA will not have control over any additional resources (above CROD and Excluded Power Supply Resources, if any) that the Project Participant may acquire to serve its needs, FMPA would not be a suitable NITS transmission service customer. 9 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 129 of 153

130 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS CROD Responsibility Agreement FMPA and the CROD Participant will develop an agreement to delineate each party s ongoing responsibilities under CROD ( CROD Responsibility Agreement ). Among other things, the CROD Responsibility Agreement will document (1) each party s responsibility with regards to transmission service once CROD service commences, (2) identify the Point(s) of Delivery for capacity and energy supplied by FMPA to the CROD Participant under the ARP Contract, any other FMPA Project, or any other agreement between FMPA and the CROD Participant, and (3) identify the CROD Participant s Point(s) of Measurement (as discussed below in the section entitled Metering ). Transmission Losses The ARP supplies capacity and energy to each Project Participant taking full requirements service from the ARP at the Project Participant s point of interconnection with the transmission grid (the city gate ). In addition, the city gate is also where the ARP measures the Participant s receipt of capacity and energy (the Point of Measurement). In the CROD Responsibility Agreement, FMPA and the CROD Participant may ultimately agree upon a Point(s) of Delivery for CROD deliveries ( CROD Point of Delivery ) that differs from the city gate, and thus, differs from the Point of Measurement for CROD capacity and energy ( CROD Point of Measurement ). This would primarily occur when the CROD Participant elects to receive NITS, and the Point of Delivery would become FMPA s applicable interface with the Transmission Provider. As CROD capacity and energy will be calculated based on meter information at the CROD Point of Measurement, FMPA will increase the amount of CROD energy it schedules to the CROD Participant to account for transmission losses between the generator(s) and the CROD Point of Measurement, including any transmission losses that will be incurred beyond the CROD Point of Delivery. So long as the cost of providing such losses is embedded in the ARP energy rate, the CROD Participant s demand and energy billing determinants (factors D and E, respectively) will not be increased to reflect transmission losses. Metering Under the ARP Contract, the point at which FMPA is required to meter electric capacity and energy that is delivered to a Project Participant is defined as the Point of Measurement. For a CROD Participant, the ARP Contract requires that the Point of Measurement include any additional point or point required to meter electric capacity and energy delivered to the Project Participant from any other power supplier or from any Project Participant owned generating resource located on the Project Participant s System. The CROD Participant must identify to FMPA any owned or purchased resources that will be used to serve any portion of its retail load once its CROD is effective and must cooperate with FMPA to ensure that FMPA will have access to meter information for each resource. It is important to note that this would also include city owned backup generation that can backfeed into the distribution system and serve retail load, as well as net metered customer owned resources. FMPA will need to meter these resources, or if the CROD Participant or the applicable Transmission Provider will meter the resources, then FMPA will need access to the meter information. All Points of Measurement for the CROD Participant will be listed in the CROD Responsibility Agreement. Backup and Support Services 10 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 130 of 153

131 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS Backup and Support Services for a Project Participant s Excluded Power Supply Resources are defined in Section 3(b) of the ARP Contract as generating support services for such Excluded Power Supply Resources including reserves, deficiency energy (which is energy in an amount equal to up to the Project Participant s Excluded Power Supply Resources whenever the units providing such Excluded Power Supply Resources are operating at less than a 100% capacity factor based on the seasonal net capability of such Excluded Power Supply Resources adjusted for losses), transmission losses and firming capacity associated with the delivery of the Excluded Power Supply Resources or the replacement thereof, including any associated transmission and dispatching services. Further, Section 3(b) states that the obligation of FMPA to sell and deliver and of the Project Participant to purchase and receive the Backup and Support Services shall not be affected in any way by any election of the Project Participant to limit its obligation under paragraph (a) of this Section 3 to its Contract Rate of Delivery. Therefore, unless the CROD Participant waives such contractual right, the ARP will provide Backup and Support Services to the CROD Participant. Any waiver of Backup and Support Services can later be revoked by the CROD Participant. This applies to all CROD Participants, including those CROD Participants with a zero MW CROD. Notwithstanding any election byif a CROD Participant to waives its right to receive Backup and Support Services, the credited capacity for the CROD Participant sits Excluded Power Supply Resource(s) utilized in the calculation of its CROD Monthly Billing Demand will be based on the full seasonal capacity that was actually available from theose Excluded Power Supply Resource(s), regardless of the availability of such resource(s) during the hour of the ARP system peak. For example, if a CROD Participant s Excluded Power Supply Resource is under a scheduled maintenance outage at the time of the ARP System Peak, the CROD Participant s metered demand will have no reduction for Excluded Power Supply Resource capacity before it is multiplied by the CROD/MAXD ratio. Ancillary Services FERC defines Ancillary Services as Those services that are necessary to support the transmission of capacity and energy from resources to loads while maintaining reliable operation of the Transmission Provider s Transmission System in accordance with Good Utility Practice. There are several Ancillary Services that the ARP either provides or acquires from others on behalf of full requirements Project Participants. 8 The provision of these Ancillary services may change for a CROD Participant, and the CROD Participant will need to understand and consider its options. These Ancillary Services are discussed in more detail below. 1) Scheduling, System Control and Dispatch Service: This service is required to schedule the movement of power through, out of, within, or into a Balancing Authority Area ( BAA ). This service can be provided only by the operator of the BAA in which the transmission facilities used for transmission service are located. Scheduling, System Control and Dispatch Service is to be provided directly by the Transmission Provider (if the Transmission Provider is the BAA operator) or indirectly by the Transmission Provider making arrangements with the BAA operator that performs this service for the Transmission Provider's transmission system. A transmission 8 The ARP Contract is a grandfathered agreement, and the ancillary services that FMPA provides to Project Participants under the ARP Contract do not necessarily agree with FERC s definition of Ancillary Services. 11 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 131 of 153

132 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS customer must purchase this service from the Transmission Provider or the BAA operator. For energy that the ARP supplies to Project Participants, the ARP incurs charges for Scheduling, System Control and Dispatch Service in several ways: For energy moved throughout the FMPP BAA, these charges are included as part of the FMPP costs charged to FMPA. These costs are included in the ARP demand rate. FMPA believes it is appropriate for all Project Participants, including those under CROD, to pay their respective share of these charges. Therefore, no adjustment will be made to remove these costs for a CROD Participant. For energy delivered to Project Participants under the ARP NITS agreements with FPL and DEF into the FPL or DEF BAA, or through any other BAA, these charges are included as Schedule 1 ancillary service charges under the respective transmission service bills. These costs are included in the ARP transmission rate and, for a CROD Participant, would be handled as discussed under Transmission above; that is, costs associated with the ARP s NITS Agreements with FPL or DEF will effectively be removed from the ARP transmission rate for the CROD Participant. However, a CROD Participant will need to purchase Scheduling, System Control and Dispatch Service for its energy transfers (including CROD and Excluded Resource energy transfers) into the FPL or DEF BAA from its Transmission Provider. As previously noted, there may be additional charges by the FMPP to the ARP for the effort of developing the energy schedules for a CROD Participant. If so, these charges will be passed through to the CROD Participant on its ARP bill. Such charges could include, but may not necessarily be limited to, the cost of metering any additional power supply resources of the CROD Participant. 2) Reactive Supply and Voltage Control from Generation or Other Sources Service: In order to maintain transmission voltages on a Transmission Provider's transmission facilities within acceptable limits, generation facilities and non generation resources capable of providing this service that are under the control of the BAA operator are operated to produce (or absorb) reactive power. Thus, Reactive Supply and Voltage Control from Generation or Other Sources Service must be provided for each transaction on a Transmission Provider's transmission facilities. The amount of Reactive Supply and Voltage Control from Generation or Other Sources Service that must be supplied with respect to a transmission customer's transaction is determined based on the reactive power support necessary to maintain transmission voltages within limits that are generally accepted in the region and consistently adhered to by the Transmission Provider. Reactive Supply and Voltage Control from Generation or Other Sources Service is to be provided directly by the Transmission Provider (if the Transmission Provider is the BAA operator) or indirectly by the Transmission Provider making arrangements with the BAA operator that performs this service for the Transmission Provider's transmission system. A transmission customer must purchase this service from the Transmission Provider or the BAA operator. For energy that the ARP supplies to Project Participants, the ARP incurs charges for Reactive Supply and Voltage Control from Generation or Other Sources Service in several ways: For energy moved on OUC s transmission facilities, any such charges are included as part of the ARP s or the ARP Project Participants costs associated with Stanton Units 12 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 132 of 153

133 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS 1&2, Indian River CTs A D, or Stanton A. As owners of and/or purchasers of power from these facilities, the ARP and Project Participants own (or pay for) their share of the plant equipment used to provide reactive support and voltage control pursuant to OUC s schedule for such services. These costs, if any, are included in the ARP demand rate. All Project Participants, including those under CROD, share in these charges for energy transactions on OUC s transmission facilities. Therefore, no adjustment will be made to remove these costs for a CROD Participant. For energy delivered to Project Participants on the transmission facilities of FPL and DEF, or on the facilities of any other transmission service provider, these charges are included as Schedule 2 ancillary service charges under the respective transmission service bills. These costs are included in the ARP transmission rate and, for a CROD Participant, would be handled as discussed under Transmission above; that is, costs associated with the ARP s NITS Agreements with FPL or DEF will effectively be removed from the ARP transmission rate for the CROD Participant. However, a CROD Participant will need to purchase Reactive Supply and Voltage Control Service for its energy transactions (including CROD and Excluded Resource energy transactions) on FPL or DEF transmission facilities from FPL or DEF. 3) Regulation and Frequency Response Service (Load Following Service): Regulation and Frequency Response Service is necessary to provide for the continuous balancing of resources (generation and interchange) with load and for maintaining scheduled Interconnection frequency at sixty cycles per second (60 Hz). Regulation and Frequency Response Service is accomplished by committing on line generation whose output is raised or lowered (predominantly through the use of automatic generating control equipment) and by other non generation resources capable of providing this service as necessary to follow the moment by moment changes in load. The obligation to maintain this balance between resources and load lies with the Transmission Provider (or the BAA operator that performs this function for the Transmission Provider). The ARP through the FMPP provides this service 9 for the Project Participants taking full requirements service from the ARP, and the charges for such are embedded in the ARP energy rate. Because (1) FMPA will block schedule CROD energy to a CROD Participant, and (2) will no longer be responsible for following the CROD Participant s moment by moment changes in load, the ARP will not provide this service to a CROD Participant. Unless it can otherwise secure this service, a CROD Participant will need to purchase Regulation and Frequency Response Service from its Transmission Provider. FMPA believes the ARP should provide some form of credit to the CROD Participant to account for the fact that the CROD Participant will be paying for the load following service through the ARP energy rate but not receiving it from the ARP. FMPA will implement the following procedure for determining and applying such a credit on a CROD Participant s monthly ARP bill: a. The FMPP calculates an hourly cost incurred by each FMPP participant and service revenue (if any) to be received by each FMPP participant, for FMPP regulation and frequency response service (this is currently referred to within the FMPP as load 9 Referred to within the FMPP as load following service. 13 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 133 of 153

134 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS following service). FMPA s aggregation of hourly costs and any revenues are part of the total monthly energy costs that are used to determine the ARP energy rate. b. Each month, FMPA will determine a credit for the CROD Participant no longer receiving load following service as follows: i. FMPA will determine its monthly costs for FMPP load following service from the FMPP settlement database for the most recent settled month. This will typically be the month prior to the billing month (a two month lag) for the CROD Participant. ii. FMPA will divide the costs for load following service by the amount of ARP MWh billed in the same month the costs were incurred. This becomes the load following credit rate to be applied to CROD Participants. iii. FMPA will multiply the load following credit rate as determine in 3.b.i and 3.b.ii to the CROD Participant s energy billing determinant (kwh) for the same month. This becomes the load following credit to be applied to the CROD Participant s bill in the current billing month. c. This procedure will be modified in the event that the FMPP changes its methodology for allocating costs to FMPP members for load following service. In the event of a change in FMPP cost allocation methodology, FMPA will use its best efforts to provide an appropriate credit to ensure the CROD participant is not being charged, as part of the ARP energy rate or other rate, for load following service not rendered. 4) Energy Imbalance Service: Energy Imbalance Service is provided when a difference occurs between the scheduled and the actual delivery of energy to a load located within a Control Area over a single hour. Because (1) FMPA will block schedule CROD energy to a CROD Participant (i.e., not load following), and (2) CROD energy will be scheduled in whole MW and metered in kwh, a CROD Participant will incur hourly energy imbalance. Unless it can otherwise secure this service, a CROD Participant will need to purchase Energy Imbalance Service from its Transmission Provider. During hours in which scheduled energy is less than the CROD Participant s load, the Transmission Provider will provide the deficient energy quantity and will charge the CROD Participant based on the Transmission Provider s hourly incremental cost. During hours in which scheduled energy is greater than the CROD Participant s load, the Transmission Provider will absorb the excess energy and will credit the CROD Participant based on the Transmission Provider s hourly decremental cost. There are typically tiered deviation bands for imbalance with increasing penalties (increased cost or decreased credit) as the deviation increases. 5) Spinning Reserve Service and 6) Supplemental Reserve Service: Spinning Reserve Service is needed to serve load immediately in the event of a system contingency. Spinning Reserve Service may be provided by generating units that are on line and loaded at less than maximum output and by non generation resources capable of providing this service. Supplemental Reserve Service is needed to serve load in the event of a system contingency; however, it is not available immediately to serve load but rather within a short period of time. Supplemental Reserve Service may be provided by generating units that are on line but unloaded, by quick 14 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 134 of 153

135 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS start generation or by interruptible load or other non generation resources capable of providing this service. The ARP through the FMPP provides these services for the Project Participants taking full requirements service from the ARP, and the charges for such are embedded in the ARP demand and energy rates. For a CROD Participant, FMPA believes that the ARP Contract requires that the ARP continue to provide these services up to the CROD amount and unless the Project Participant waives Backup and Support Services for the CROD Participant s Excluded Power Supply Resources; however, the CROD Participant will need to make arrangements for these services for the balance of its load requirements. Should the CROD Participant elect to purchase these services from the applicable Transmission Provider, FMPA and the CROD Participant will need to coordinate with the Transmission Provider to try to obtain a credit for the reserves provided by FMPA. Long Term Load and Demand Forecasting for Non Zero CROD Participants In order to properly plan ARP capacity additions to fulfill long term ARP demand and energy requirements, for those CROD Participants with a non zero MW CROD, FMPA needs to incorporate the CROD Participant s long term forecast of its demand and energy needs, as limited by the CROD, along with the load forecasts for full requirement Project Participants. FMPA will adjust the CROD Participant s long term load forecast to account for the CROD capacity and energy delivery limitation according to the following methodology: a) FMPA will work with the CROD Participant in the same manner as it had prior to the implementation of CROD to develop a full requirements demand and energy forecast pursuant to procedures described in the document FMPA Scope and Details of ARP Customer Data: Demand, NEL and DSM: i) FMPA will collect retail sales data from the CROD Participant on a quarterly, annual or other routine basis. ii) FMPA will seek the CROD Participant s input on a preliminary 20 year forecast of the CROD Participant s non coincident and coincident peak demand and energy requirements, and will incorporate the CROD Participant s comments as applicable. iii) FMPA will seek an indication of final acceptance of the 20 year forecast from the CROD Participant. b) For each month of the forecast period, FMPA will determine MAXD for the CROD Participant as the maximum of the CROD Participant s peak demand coincident with the ARP peak over the preceding twelve month period minus any excluded resource capacity of the CROD Participant. c) FMPA will develop the appropriate CROD/MAXD ratio to be applied for limiting the forecasted coincident peak demand for the CROD Participant for each month of the forecast period. d) FMPA will apply the CROD/MAXD ratio developed in c) to the forecasted monthly coincident peak demand to derive the CROD limited monthly CP demand of the CROD Participant, where the resulting demand will never be greater than CROD. e) FMPA will apply the CROD/MAXD ratio developed in c) to the forecasted energy requirements to derive the CROD limited monthly energy of the CROD Participant. 15 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 135 of 153

136 CONTRACT RATE OF DELIVERY IMPLEMENTATION PROTOCOLS f) The results of d) and e) become the CROD Participant s long term forecast of its coincident peak demand and energy needs, as limited by the CROD, for integration with the forecast of fullrequirements Project Participants to develop the long term ARP forecast. FMPA will publish the non zero CROD Participant s long term forecast of its demand and energy needs, as limited by the CROD, in its Load Forecast report. FMPA will provide the non zero CROD Participant with a copy of both its full requirements demand and energy forecast and its forecast as limited by CROD. Other Contracts Impacted by CROD The following is a list of additional contracts that FMPA may have with a CROD Participant that will terminate upon the effective date of CROD. This list is not intended to be exhaustive. Capacity and Energy Sales Contract Agreement for Purchase and Storage of Fuel Oil Inventory Mandatory Reliability Standards Compliance Contract Tri Party Net Metering Power Purchase Agreements These agreements do not automatically terminate upon the commencement of CROD service; however, FMPA will provide the contractually specified notice to terminate any such agreements effective with the commencement date of CROD service. 16 Draft of 3/4/2015Approved by FMPA Executive Committee 11/20/20 Page 136 of 153

137 AGENDA ITEM 10 INFORMATION ITEMS c) Taylor Swaps Termination Alternatives and Permanent Financing Structure Alternatives Executive Committee March 19, 2015 Page 137 of 153

138 TO: FROM: Executive Committee (EC) Mark Larson DATE: March 11, 2015 ITEM: AGENDA PACKAGE MEMORANDUM EC 10c: Taylor Swaps Termination Alternatives and Permanent Financing Structure Alternatives Strategic Relevance EC s Relevant Strategic Goals 1. As a wholesale power provider, become and remain competitive in the Florida market Discussion Nat Singer and Craig Dunlap will make presentations and lead discussions on two separate topics relating to the Taylor Swaps and future actions. Nat will discuss swap termination alternatives and the associated advantages and disadvantages of each. He will also explain the relatedness of the decision on swap termination to the decision on refinancing the ARP Series 2008A and 2009A bonds. Following Nat, Craig will discuss the permanent debt structure alternatives and the interplay with the refinancing choices for the ARP Series 2008A and 2009A bonds as well. A key focus of the different choices that Craig will highlight will be the rate impact over time. In addition, he will note the total cost of interest and the term over which the debt is paid, explaining the differences between alternatives. Other members of the Finance Team will either be present or on the phone in order to answer questions or participate in the discussions around these presentations. Presentation materials will be sent out as soon as available ahead of the EC meeting. Recommended None. For information only. Page 138 of 153

139 AGENDA ITEM 10 INFORMATION ITEMS d) Policy and Procedure Modifications to Address the Auditor General s Preliminary and Tentative Findings Executive Committee March 19, 2015 Page 139 of 153

140 AGENDA PACKAGE MEMORANDUM TO: FROM: FMPA Executive Committee Nicholas P. Guarriello, General Manager and CEO DATE: 11 March 2015 ITEM: 10.d. Policy and Procedure Modifications to Address the Auditor General s Preliminary and Tentative Findings Introduction On January 21, 2015, FMPA received the Auditor General s preliminary and tentative findings (P&T Report), following its operational audit of the Agency. The P&T Report included 15 enumerated findings and recommendations. FMPA submitted its response to the P&T Report to the Auditor General on February 20, 2015, following a workshop and multiple meetings, and extensive discussion, of the Executive Committee. At its last meeting in February, the Executive Committee approved a process to issue an RFP to retain a management consultant to advise the Executive Committee on the Auditor General s finding nos. 1, 2, 3, 13, and 14. This memo addresses certain of the other findings in addition to the costs that have been eliminated as discussed in the response to the P&T Report (in its response, FMPA committed to eliminate the purchase of Orlando Magic tickets, the indoor plant service, Christmas tree rental, and FMPA will stop hosting a dinner during the annual legislative rally in Washington, D.C., which will eliminate this meal cost and the rate occasion where alcoholic beverages were provided). Staff Efforts Purpose Since the submittal of FMPA s response to the P&T Report last month, staff has been working on addressing the remaining ten enumerated findings. The purpose of this memorandum is to update the Executive Committee on staff s efforts to address the Auditor General s findings and recommendations. A more detailed discussion of staff s efforts to date will be provided at the meeting on March 19. Page 140 of 153

141 10.d. Policy and Procedure Modifications to Address the Auditor General s Preliminary and Tentative Findings 11 March 2015 Page 2 Updates FINDING NO. 11: Credit Cards Finding: The FMPA did not always follow its policies regarding credit card issuance and purchases, and did not employ procedures for monitoring credit limits for reasonableness. Recommendation: The FMPA should enhance its procedures to ensure compliance with its policies regarding credit card user agreements. The FMPA should also enhance its existing policies to clarify responsibilities regarding notification of credit card user termination and associated card cancelation, including notification requirements of member municipalities; require all credit card users to sign the monthly credit card activity reports; and require periodic reviews of credit card user credit limits for reasonableness. FMPA Update: The Auditor General recommended that FMPA should enhance policies and procedures to address perceived deficiencies in current practices. This has been done. Attached as Attachment A is a summary of changes to existing procedures that have and will be implemented to address finding no. 11. FINDING NO. 15: Disaster Recovery Plan Finding: The FMPA s disaster recovery plan could be enhanced. Recommendation: The FMPA should enter into a written agreement to procure an alternate processing site that is sufficiently geographically distant to minimize the risk of being unable to continue critical operations in the event of a hurricane or other geographically large disaster. FMPA Update: The Auditor General recommended that FMPA obtain an alternate processing site for the Agency s information technology (IT) operations in the event of a disaster. Staff is addressing this. The current agreement for FMPA s alternate processing site had a March 1, 2015 expiration date. A renewal that is in line with the Auditor General s recommendation has been negotiated and signed. The renewal contract is for one year instead of five years, which is standard, and contains a no cost option of moving the location of our backup equipment and systems from the current location in Orlando to either of the company s other locations: Atlanta, Georgia or Boise, Idaho. During the coming Page 141 of 153

142 10.d. Policy and Procedure Modifications to Address the Auditor General s Preliminary and Tentative Findings 11 March 2015 Page 3 months, staff will evaluate these and other location options, including the cost impact of moving the current alternate processing site, and present a recommendation to FMPA s governing bodies. Recommended Action For information only. No action requested. Attachment: Attachment A (FINDING NO. 11: Credit Cards) NPG:jlf Page 142 of 153

143 Attachment A FINDING NO. 11: CREDIT CARDS Auditor General Recommendation: The FMPA should enhance its procedures to ensure compliance with its policies regarding credit card user agreements. The FMPA should also enhance its existing policies to clarify responsibilities regarding notification of credit card user termination and associated card cancellation, including notification requirements of member municipalities; require all credit card users to sign the monthly credit card activity reports; and require periodic reviews of credit card user credit limits for reasonableness. FMPA CHANGES TO EXISTING PROCEDURES: 1. Maintain credit card use agreement file: Current: Employee-signed credit card use agreements are required before an employee receives a credit card. Electronic copies are ed to the employee and HR and filed with the Credit Card Administrator. Change: Add to current practices an annual credit card use agreement file review. This annual review will be done by Risk Department staff independent of finance staff. 2. Notification of employee and non-employee terminations: Current: FMPA employee notifications come from HR as separations occur. The FMPA credit card is returned and/or destroyed, and the credit limit authorization is updated by FMPA s Credit Card Administrator accordingly. Separations of plant personnel from Fort Pierce Utility Authority (FPUA) and Keys Energy are not reported to the Credit Card Administrator through a formal process involving the employer s HR department or FMPA s staff managing the power plant sites. (There are no KUA plant employees holding FMPA credit cards.) Change: Establish an additional reporting requirement from FMPA s Orlando-based plant management to FMPA s Credit Card Administrator wherein the employee separation processes used by FPUA and Keys Energy are also used to obtain FMPA s credit card prior to employee separation and forwarded to FMPA s Credit Card Administrator with notification to FMPA s staff managing the power plant sites. Page 143 of 153

144 3. Credit card users to sign monthly card activity report: Current: FMPA credit card users must file expense reports or turn in miscellaneous receipts for all of their credit card charges. Documentation of this and any bank charge without a receipt is noted by Accounting on the managers monthly credit card statement summary and this is provided to each manager to review for their employees who use FMPA credit cards. Any transaction that does not have such documentation must be addressed with the employee by either the providing of a receipt or a filing of an Affidavit of Fraud, signed by the employee, with the credit card company through the Credit Card Administrator. All charges that are not properly documented are held in the credit card clearing account, which is reconciled monthly by Accounting, who inquires of the Credit Card Administrator on outstanding amounts. The monthly summary report mentioned in the AG s recommendation is a report to the Managers so that they can see all charges and hold each of their direct reports accountable. Each Manager is required to sign off on the monthly charge report. Employees currently using SharePoint are required to attest to their charges before submitting them to their Manager electronically, therefore are already meeting the AG s finding on this point. Change: All of the above would continue. Additionally, once all Orlando employees are migrated to the SharePoint credit card process, this finding will be addressed electronically. Plant personnel will be required to sign off on a summary page by their Manager. Until then, each Manager will require each of their direct reports who have FMPA credit card usage to sign off on their monthly charges summary page as well. 4. Documentation of periodic credit card limit reviews: Current: The Credit Card Administrator gets the appropriate AGM or Manager to recommend a credit card limit for each FMPA employee with a FMPA credit card when a new one is requested, or when a change in amount is requested by the employee or Manager. This is done by . The Credit Card Administrator evaluates the requested amount, and if reasonable in their assessment, grants the request. If not seen as reasonable discusses with the appropriate AGM and /or Manager. The Credit Card Administrator periodically reviews the setup of all credit card users. No written documentation of this review is done. Change: Add an annual review of credit card spending limits that is documented in writing. A listing of all FMPA credit card holders and their current credit card spending limit will be provided to each AGM, General Manager, General Counsel, and Risk Manager for which written sign-off, to retain or modify spending limits, will be required. Overall, once action is approved on the above areas, update the Credit Card language in the FMPA Policy and Employee Manual. Page 144 of 153

145 AGENDA ITEM 10 INFORMATION ITEMS e) Hedge Portfolio Update January 2015 Executive Committee March 19, 2015 Page 145 of 153

146 TO: Audit and Risk Oversight Committee & Executive Committee FROM: Rich Popp DATE: March 10, 2015 ITEM: EC 10e-Hedge Portfolio Position Update January 2015 Strategic Relevance FMPA s relevant strategic goals Be the lowest cost wholesale electricity provider in Florida through strategy to identify, understand and manage risk responsibly. Policy decisions/implications The Natural Gas and Fuel Oil Risk Policy (Versions 8 and 9) requires that specified hedge program reports be presented at each Audit and Risk Oversight Committee ( AROC ) and Executive Committee meeting. Introduction Version 9 of the Natural Gas and Fuel Oil Risk Policy ( the Policy ) was approved November 2010 but grand-fathered existing transactions entered into under Version 8. Staff will continue to report on Version 8 hedge positions until all existing contracts are exited. The natural gas hedging strategy approved in Version 9 is referred to as FST. The Policy requires the Agency Risk Manager to report the following at each AROC and Executive Committee meeting: 1. Current hedge position 2. Monthly gain or loss 3. Monthly liquidity exposure 4. Fuel storage activity 5. Fuel hedging risk metrics Explanation The following exhibits illustrate the All-Requirements Project s hedge positions and results on January 31, 2015 unless otherwise noted and are based on projected natural gas needs effective February Exhibits exclude natural gas volume needed to serve the City of Quincy capacity and energy sale since the City opted not to participate in the ARP s hedge program. Exhibit B Natural Gas January 31 Hedge Limits Exhibit B reports the ARP s January 31 hedge positions (Version 8 and Version 9) on a notional basis as of January 31, No hedges are owned as of January 31, Page 146 of 153