Board of Directors Meeting. April 28, 2016

Transcription

1 Board of Directors Meeting April 28, 2016

2 March Operational Results Category March Variance 2016 Variance Municipal Demand (MW) (5.0%) (5.1%) Municipal Energy (MWh) 0.8% (0.3%) Baseload Generation (MWh) (20.4%) (24.3%) Wind Generation (MWh) 24.4% 21.5% Surplus Sales Volume (MWh) (51.3%) (55.0%) Surplus Sales Price ($/MWh) (20.0%) (16.1%) Dispatch Cost ($/MWh) 1.5% (3.6%) > 2% +\- 2% of budget < -2%

3 Board of Directors Meeting April 28, 2016

4 Financial Summary Category March Variance from Budget ($ in millions) Year to Date Variance from Budget ($ in millions) Net Income $0.6 $(0.3) Debt Coverage.27x (.07x) Revenues $(1.3) $(5.4) Operating Expenses $1.8 $5.0 Capital Additions $5.8 $7.9 > 2% +\- 2% of budget < -2%

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6 Debt Financing Summary Series JJ Bonds April 28, 2016

7 Overview Series JJ bonds were sold on April 12 Competitive sale process Total par sold was $147.2 million Proceeds of $179 million Use of proceeds: $60 million to fund transmission and production capital projects $119 million refund a portion of the outstanding Series HH bonds Bonds are rated AA by both Fitch and S&P Final maturity of the bonds is 2036 Bonds maturing after 2026 are callable in 2026 at par Closing occurred on April 26, 2016

8 Competitive Sale Results Sale occurred on April 12 at 8:30 a.m. Bidders were required to pre-register and submit bids via Parity platform as true interest cost or TIC Nine bidders with TIC bids ranging from 2.19% to 2.35% One basis point equals $128,000 of interest cost to Platte River $2M of total savings between lowest and highest bidder AA credit provides significant interest expense savings, A credit price approximately 27 bps higher or $3.5M Based on expected AA yields, Platte River results ranged 2-9 basis points lower depending on maturity Bidder (Investment Bank) TIC JP Morgan Securities LLC Bank of America/ Merrill Lynch Wells Fargo Bank, NA Goldman Sachs Citigroup Global Markets, Inc Morgan Stanley & Co, LLC RBC Capital Markets Jefferies LLC Robert W. Baird & Co, Inc

9 Series HH Refunding Advance refunded $105.4 million of Series HH bonds Maturity dates , callable 06/01/2019 Present value savings of $13.7 million, or 13% Average annual debt service savings of approximately $1.2 million from 2017 through 2029 Millions $16 $14 Series HH Bonds - Debt Service $12 $10 $8 $6 $4 $2 $ Prior Debt Service Refunding Debt Service

10 Debt Service $35 $30 Millions New Money DS Refunding DS Existing DS $25 $20 $15 $10 $5 $ Debt service on existing debt declines significantly in 2018, when Series GG Bonds mature

11 Summary Very successful bond sale, excellent results Lowest rate on our fixed rate debt in Platte River s history AA credit rating affirmed by S&P and Fitch Refunding of HH bonds Annual interest savings of $1.2 million through 2029 Present value savings on the refunding of $13.7M Funding for transmission & production capital projects Maintain SFP target of 200 days cash on hand

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13 Western IRP Requirements Andy Butcher Director of Operations

14 Western IRP Requirements A new rule with Integrated Resource Plan (IRP) requirements was approved and published in the Federal Registry on 10/20/1995. This rule made it a requirement for any Long Term Firm Electric Customer to file an IRP every 5 years. Platte River is a Long Term Firm Electric Customer of Western due to our Federal Hydropower contracts. On 7/27/2011, Western approved the last Platte River IRP and at the same time set the next due date to 6/15/2016.

15 Platte River IRP Timeline History Fall /20/95 11/20/96 3/28/97 6/12/02 7/9/02 4/06 5/1/06 6/10/2011 7/27/2011 IRP Year Energy Planning and Management Program takes effect Platte River files its inaugural IRP Platte River s inaugural IRP is approved Platte River files 2002 IRP Western approves IRP, States that 6/15/97 was inaugural IRP approval data Western approves early filing Platte River requests approval to submit the 2007 IRP in fall of 2006 Filing cover letter does not appear in Platte River s records Platte River files 2012 IRP Western approves 2012 IRP, states that it is effective through 6/15/16

16 Western IRP Requirements Req. Description Status 1 Identify and compare all practicable energy efficiency and energy supply resource options Gen Tech Review done in Include action plan with timing set by customer Draft IRP action plan finished 3 4 Describe efforts to minimize adverse environmental effects of new resource acquisitions Provide ample opportunity for full public participation Primary driver for analysis is CO2 reduction should be clear 2014 Outreach and Report 2015 Board Work Session 5 Conduct load forecasting Annual LF meets this requirement 6 Include brief description of measurement strategies for options identified in IRP to determine whether objectives are being met Annual progress update

17 100% Overall IRP Work is 85%+ Done 90% 80% 70% 60% 50% 40% 30% 20% 10% Outreach at 4 cities was done in 2014 Webinar conducted Summary report from 2014 outreach is complete 8/19/15 Board work session was open to public Need to include a summary in the IRP Report Report was written in 2015 Acts as culmination of public participation process Include as main feature of IRP Acts as filter for resource analysis Used 23+ scenarios from 8/19/15 Board work session Board has already approved Revise loss-ofload probability and other drivers Significant effort was made for a 2015 write-up This draft is being used to develop 2016 IRP document 0% Conclude Public Participation Process Complete Generation Technology Review Finalize Analysis of Resource Options Finalize IRP Report

18 IRP Completion Schedule Preparation 4/7 Final direction from management 4/8 Establish overall IRP message 4/13 Finalize public participation report 4/13 Finalize generation tech report Analysis Quality Check 4/15 Revise loss-of-load probability 4/19 Review load forecast with Finance 4/19 Review DSM with Customer Services 4/19 Complete review of 23+ scenarios and sensitivities 4/20 Review public part with Customer Services 4/20 Incorporate edits into document Document Review 4/15 Provide draft IRP at UD meeting 4/22 Platte River management review of 4/20 edits 4/28 Provide management s draft at board meeting 5/6 Edits due from board 5/13 IRP Presentation to UD Meeting 5/18 Final edits incorporated by Platte River 5/19 Provide advance copy to board 5/26 Board presentation / approval of IRP Distribution 6/10 Revisions, printing, publishing 6/15 Report due to Western

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20 Water Resources Discussion Board of Directors Meeting April 28, 2016

21 Agenda Water Discussion Background Platte River Water Portfolio Windy Gap Water Background, Uses, and Constraints Windy Gap Firming Project Project Timeline and Milestones Participation Considerations Water Discussion Upcoming Policy Decisions Next Steps

22 Water Discussion - Background Platte River s Water Portfolio: Windy Gap Project Poudre River (junior rights) Windy Gap Background: Assigned from municipalities: Fort Collins, Estes Park, Loveland 160 Units (out of project total of 480 units) Platte River assumed all debt final payment in 2016 Entitled up to 1/3 of the project production Fully consumable and reusable water Platte River s Use of Windy Gap: Process Water: 10 line from Horsetooth, direct delivery (600 AF/yr) Cooling Water: 24 line from Drake Treatment plant Reuse Agreement (4,200 AF contractual obligation)

23 Water Discussion - Background Windy Gap Project Constraints: Junior priority water not available to pump in dry years No dedicated storage no place to put water in wet years Annual firm yield of Windy Gap = 0 Platte River has to look for an alternative water supply in both wet and dry years this has occurred in 12 out the past 29 years Windy Gap Firming Project: 90,000 AF reservoir (firm yield of 30,000 AF) 13 Participants from the Northern Front Range Platte River evaluated several water project options, and the Windy Gap Firming Project was by far the best option both financially and operationally to firm the water supply that is critical to electrical operations

24 Windy Gap Firming Project Timeline Windy Gap Project Completed Reclamation published purpose/need report, and alternatives report State approved mitigation efforts and Final EIS Federal Approvals: Carriage Contract & ROD Begin Construction /2022 Firming Project formally entered the federal permitting process Reclamation published Draft EIS 401 State Certification, 404 Permit, Begin Design Construction Complete, Ready to Fill 1041 Permit approved, and other agreements for Colorado River improvements/benefits

25 Windy Gap Firming Participation Windy Gap Firming Project Participation Levels Units Requested Storage Participant Owned Volume (af) Broomfield 56 25,200 PRPA ,000 Longmont 80 12,000 Loveland 40 7,000 Greeley 52 7,000 Erie 14 6,000 Little Thompson WD 12 4,850 Superior 15 4,500 Louisville 6 2,700 Lafayette 1 1,800 Evans 0 1,750 Fort Lupton 3 1,050 CWCWD TOTAL ,180 Broomfield PRPA Longmont Loveland Greeley Erie Little Thompson WD Superior Louisville Lafayette Evans Fort Lupton CWCWD Unsubscribed Permitted Design = 90,000 AF

26 Windy Gap Firming Participation Windy Gap Firming Project Participation Levels Units Requested Storage Participant Owned Volume (af) Broomfield 56 25,200 PRPA ,000 Longmont 80 12,000 Loveland 40 7,000 Greeley 52 7,000 Erie 14 6,000 Little Thompson WD 12 4,850 Superior 15 4,500 Louisville 6 2,700 Lafayette 1 1,800 Evans 0 1,750 Fort Lupton 3 1,050 CWCWD TOTAL ,180 Broomfield PRPA Longmont Loveland Greeley Erie Little Thompson WD Superior Louisville Lafayette Evans Fort Lupton CWCWD Unsubscribed Permitted Design = 90,000 AF

27 Windy Gap Firming Project Windy Gap Firming Project Considerations: Current subscriptions are about 4,000 AF less than permitted capacity goal is to build to 90,000 AF Some entities may choose to go up or down in levels Platte River is also evaluating its own storage level Number of entities seeking additional units for the Firming Project, however - limited availability of Windy Gap units Some need units to firm what they have subscribed Some would like to firm additional capacity It s in everybody s best interest to build to full capacity Reduces $/AF for all participants Ensures full utilization of a storage project water storage project opportunities are limited Timing is paramount - participants need to finalize subscriptions by the end of this year

28 Water Policy Discussion Points Working Towards Water Policy Development Some concepts are currently clear: Maintain adequate water supplies for all existing operations Maintain adequate water supplies for all future generation resources Proactively manage water agreements necessary to meet current and future needs Some concepts need board input and direction: Windy Gap Firming Project Platte River final participation level Managing water as an asset for the benefit of Platte River, constituent Municipalities, and the region

29 Water Policy Discussion Points Board Decisions Needed for Draft Policy: Platte River s Windy Gap Firming Participation Level Decision needed in the next few months Windy Gap Firming Project Maximization Near-term Sale of Windy Gap Units for Firming Project Platte River s Future Water Position Disposition of Reserve Windy Gap Units Keep, Lease, Sell? Pending requests Associated risks Next Steps: Review of Platte River s Windy Gap Firming participation level

30 Questions?

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