Fiscal Year 2017 Columbia Generating Station Annual Operating Budget

Transcription

1 Fiscal Year 2017 Columbia Generating Station Annual Operating Budget

2 Table of Contents Table Page Summary 3 Key Assumptions/Qualifications 4 Memorandum of Agreement (MOA) Table 1 5 Columbia Station Costs - Memorandum of Agreement Comparison Table 2 6 Summary of Costs Table 3 7 Summary of Full Time Equivalent Table 4 8 Positions Projects Non-Labor Table 5 9 Capital Projects Non-Labor Table 5A 10 Over $1.25 Million Expense Projects Non-Labor Table 5B 10 Over $725 Thousand Treasury Related Expenses Table 6 11 Cost-to-Cash Reconciliation Table 7 13 Statement of Funding Requirements Table 8 14 Monthly Statement of Funding Requirements Table

3 Summary Energy Northwest's Columbia Generating Station (Columbia) is a 1,150 megawatt boiling water nuclear power station utilizing a General Electric nuclear steam supply system. The project is located on the Department of Energy's Hanford Reservation near Richland, Washington. The project began commercial operation in December This Columbia Generating Station Fiscal Year 2017 Annual Operating Budget has been prepared by Energy Northwest pursuant to the requirements of Board of Directors Resolution No. 640, the Project Agreement, and the Net Billing Agreements. This document includes all capitalized and non-capitalized costs associated with the project for Fiscal Year In addition this document includes all funding requirements. The total cost budget for Fiscal Year 2017 for Expense and Capital related costs are estimated at $665,085,000 (Table 3), with associated total funding requirements of $885,473,000 (Table 8). Using the Memorandum of Agreement basis for measuring Columbia's costs, budget requirements for Fiscal Year 2017 have been established at $444,125,000 (Table 1) including escalation. In Fiscal Year 2017, Bonneville Power Administration will be directly paying the funding requirements on a monthly basis under the provisions of the Direct Pay Agreements. This will take the net billing requirements to zero, for the statements which are normally sent to participants in the project, and will be paid in accordance with the terms of the Net Billing Agreements. The Net Billing Agreements are still in place, but the direct cash payments from Bonneville Power Administration will simply take the participant payment amounts to zero. In the Direct Pay Agreements, Energy Northwest agreed to promptly bill each participant its share of the costs of the project under the Net Billing Agreements, if Bonneville fails to make a payment when due under the Direct Pay Agreements. Fiscal Year 2017 Capital costs will be funded by bond proceeds and are not included in the Fiscal Year 2017 direct pay requirements. Total direct pay requirements of $662,326,000 (Table 8) will be the basis for billing directly to Bonneville Power Administration. This budget is presented on a cost basis and includes a cost to cash reconciliation (Table 7) converting cost data to a cash basis. Cost and cash data are presented on white and green pages, respectively. The Columbia Generating Station's Annual Budget (Table 8) is required by the various project agreements. Comparison of the Fiscal Year 2017 Budget to the Fiscal Year 2016 Long Range Plan for Fiscal Year 2017 is included (Table 1). Comparison of the Fiscal Year 2017 Budget is made to the original budget for Fiscal Year 2016, dated April 23,

4 Key Assumptions/Qualifications This budget is based upon the following key assumptions and qualifications: Fiscal Year 2017 cost of power is based on net generation of 8,550 GWh. There is a refueling outage planned for Fiscal Year Risk reserves consist of a total of $8.8 million. Unknown NRC mandates are excluded. All assumptions associated with Nuclear Fuel are referenced in the Columbia Fuel Plan Section. Other Specific Inclusions: o Sales tax calculated at 8.6 percent for appropriate items All Fiscal Year 2017 Capital expenses were previously financed through the 2015AB long-term bond issuance that closed in May Fuel Revenue of $25 million is expected to be received in Fiscal Year 2017 from the Tennessee Valley Authority (TVA) related to the Depleted Uranium Enrichment Program. Under the TVA Agreement, TVA is obligated to pay prior to September 30, Note / Line of Credit draws for Operations and Maintenance associated with the acceleration of the Regional Cooperation Debt initiative are anticipated through September

5 Table 1 Memorandum of Agreement (MOA) (1) FY 2016 (2) FY 2017 LRP for Description Budget FY 2017 (2) Variance Baseline $ 146,390 $ 151,279 $ (4,889) Indirect Allocations O&M 70,864 65,663 5,201 Expense Projects 33,167 31,551 1,616 Risk Reserve 2,455 4,383 (1,928) Operations & Maintenance Total $ 252,876 $ 252,876 $ - Capital Projects $ 118,090 $ 118,501 $ (411) Indirect Allocations Capital 19,171 18, Risk Reserve 6,338 6,834 (496) Capital Total $ 143,599 $ 143,599 $ - Nuclear Fuel Related Costs $ 47,650 $ 47,650 $ - Fuel Total $ 47,650 $ 47,650 $ - Total $ 444,125 $ 444,125 $ - Net Generation (GWh) 8,550 8, Cost of Power ($/MWh) $ $ $ (0.24) (1) Columbia costs as defined by the Memorandum of Agreement between Energy Northwest and BPA. This measure includes operations and maintenance, capital additions and fuel related costs as well as an appropriate allocation of indirect costs (such as employee benefits, A&G, and information technology expenses). (2) Fiscal Year 2016 Long Range Plan for Fiscal Year

6 Table 2 Columbia Station Costs - Memorandum of Agreement Comparison (1) Original FY 2017 FY 2016 Description Budget Budget Variance Controllable Costs Energy Northwest Labor $ 83,071 $ 84,332 $ (1,261) Baseline Non-Labor 54,967 54, Incremental Outage 27,529-27,529 Expense Projects Non-Labor 30,982 7,378 23,604 Capital Projects Non-Labor 101,098 81,106 19,992 Indirect Allocations 90,035 85,799 4,236 Risk Reserve 8,793 5,460 3,333 Subtotal Controllable $ 396,475 $ 318,500 $ 70,406 Nuclear Fuel Related Costs Nuclear Fuel Amortization $ 47,650 $ 53,482 $ (5,832) Subtotal Nuclear Fuel Related $ 47,650 $ 53,482 $ (5,832) Total $ 444,125 $ 371,982 $ 64,574 Net Generation (GWh) 8,550 9,586 (1,036) Cost of Power ($/MWh) $ $ $ (1) Columbia Costs as defined by the Memorandum of Agreement between Energy Northwest and BPA. This cost measure includes operations and maintenance and capital additions, fuel related costs as well as an appropriate allocation of indirect costs (such as employee benefits, and corporate programs). 6

7 Original FY 2017 FY 2016 Description Budget Budget Variance Controllable Expense Energy Northwest Labor $ 66,079 $ 67,165 $ (1,086) Base Non-Labor 54,967 54, Expense Projects Non-Labor (1) 30,982 7,378 23,604 Incremental Outage 27,529-27,529 Indirect Allocations 70,864 68,460 2,404 Risk Reserve 2,455 2,960 (505) Subtotal Controllable $ 252,876 $ 200,388 $ 52,488 Incremental Nuclear Fuel Amortization $ 47,650 $ 53,482 $ (5,832) Generation Taxes 4,720 5,626 (906) Subtotal Incremental $ 52,370 $ 59,108 $ (6,738) Fixed Treasury Related Expenses (2) $ 132,010 $ 135,004 $ (2,994) Decommissioning (3) 7,759 7, Depreciation 76,471 69,621 6,850 Subtotal Fixed $ 216,240 $ 212,001 $ 4,239 Total Operating Expense $ 521,486 $ 471,497 $ 49,989 Capital Energy Northwest Labor $ 16,992 $ 17,167 $ (175) Capital Projects Non-Labor (4) 101,098 81,106 19,992 Indirect Allocations 19,171 17,339 1,832 Capital Risk Reserve 6,338 2,500 3,838 Total Capital $ 143,599 $ 118,112 $ 25,487 Total Expense and Capital $ 665,085 $ 589,609 $ 75,476 (1) See Table 5B (page 10). (2) See Table 6 (page 11). (3) Includes ISFSI Decommissioning. (4) See Table 5A (page 10). Table 3 Summary of Costs 7

8 Table 4 Summary of Full Time Equivalent (FTE) Positions* Direct Corporate Laboratories FY 2017 FY 2016 Organization Charge Allocation** Support Budget Budget Variance Chief Executive Officer General Counsel (7) Chief Operating Officer/Chief Nuclear Officer*** (40) General Manager Energy Services & Development**** Vice President Corporate Services/Chief Financial Officer/Chief Risk Officer (7) Total ,091 1,145 (54) * Includes project positions * Includes employees supporting Capital Projects * Excludes temporary positions ** Includes allocation of Corporate FTE Positions (95% in FY 2017 and FY 2016) *** Includes employment "pipeline" for Operations and Security **** Includes Environmental and Calibrations Laboratories support (20 FTE in FY 2017 and FY 2016) 8

9 Table 5 Projects Non-Labor Original FY 2017 FY 2016 Description Budget Budget Variance Capital Projects Plant Modifications $ 91,868 $ 70,447 $ 21,421 Facilities Modifications 1,438 1,971 (533) Information Technology 7,792 8,688 (896) Subtotal Capital Projects $ 101,098 $ 81,106 $ 19,992 Expense Projects Plant Modifications $ 30,107 $ 6,525 $ 23,582 Facilities Modifications Subtotal Expense Projects $ 30,982 $ 7,378 $ 23,604 Total $ 132,080 $ 88,484 $ 43,596 9

10 Plant Modifications Table 5A Capital Projects Non-Labor Over $1.25 Million FY 2017 Budget Fukushima Project $ 11,316 Cyber Security Program 7,791 Install Residual Heat Removal Flush Ports 5,590 Low Pressure Turbine Rotor Replacement 5,467 Plant Fire Detection System 4,912 Control Rod Drive Repair/Refurbishment 3,500 Replace Condensate Heat Exchanger - 5A & 5B 3,000 Open Phase Design Vulnerability 2,572 Circulating Water Pump 1A Replace/Refurbishment 2,493 Replace Obsolete Safety Related 480V Starters 2,146 Flow Accelerated Corrosion Pipe Minimum Wall Inspection 1,961 Local Power Range Monitor Replacement 1,775 Electronic Work Packages 1,759 Scram Discharge Volume Instrument Modifications 1,485 Circulating Water Motor - Pump 1A Replace/Refurbishment 1,471 Condenser Expansion Joint/Piping Replacement 1,410 Independent Spent Fuel Storage Installation Pad Expansion 1,288 Shooting Range 1,250 All Other Projects < $1.25 million 39,912 Total Capital Projects Non-Labor $ 101,098 Table 5B Expense Projects Non-Labor Over $725 Thousand Plant Modifications & Major Maintenance(MM) FY 2017 Budget Vessel Services $ 6,496 Main Turbine Inspection 3,727 Plant Valve Project 3,725 In-Service Inspection Programs 2,950 Flow Accelerated Corrosion Program 1,794 Disassemble/Inspect Main Steam Isolation Valves 1,275 Spent Fuel Pool Cleanup 1,100 Outage Temporary Power 1,000 Cooling Tower Circulation Water Prevention Maintenance 835 Valve Program 735 Calculation and Drawing Backlog Reduction 734 All Other Projects < $725 Thousand 6,611 Total Expense Projects Non-Labor $ 30,982 10

11 Original FY 2017 FY 2016 Description Budget Budget Variance Interest Expense (1) $ 147,173 $ 151,729 $ (4,556) Build America Bond Subsidy (2) (4,089) (4,067) (22) Interest on Note (3) 2, ,366 Amortized Financing Cost (4) (13,649) (12,940) (709) Investment Income (5) (429) (411) (18) Treasury Svcs/Paying Agent Fees (6) (55) Total $ 132,010 $ 135,004 $ (2,994) Assumptions Table 6 Treasury Related Expenses (1) Budget assumes approximately $96.4 million in principal will be refunded in FY (2) Build America Bonds were expected to receive a subsidy from the Treasury for 35% of the interest payments. A reduction of approximately $300K (7%) was implemented as part of the Congressional budget cuts surrounding the Sequestration events. (3) A line of credit in the amount of up to $251 million to fund O&M & interest expense, in order to free up monies that enable the acceleration of federal debt repayments as part of the regional cooperation debt initiative. (4) The amortized financing costs are driven by the amortization of the premiums on bond issues. (5) Includes income on investment of monies held in the Interest and Principal Accounts and the Capital Fund which can be transferred periodically to the Revenue Fund. Projected investment income earning rates are forecasted to average 0.40%. (6) Includes all non-interest costs of fixed rate debt and internal labor and overheads. 11

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13 Table 7 Cost-to-Cash Reconciliation FY 2017 Deferred Prior FY 2017 Total Non-Cash Non-Cost Cash Year Total Description Cost Items Items Requirements Commitments Cash Operating Controllable - Expense $ 252,876 $ - $ - $ - $ - $ 252,876 Controllable - Capital 143,599-3, ,328 Nuclear Fuel 47,650 (47,165) 73, ,587 Fuel Litigation Spares/Inventory Growth - - 5, ,000 Generation Taxes 4, ,518 Subtotal Operating $ 448,845 $ (47,165) $ 82,879 $ - $ - $ 484,559 Fixed Expenses Treasury Related Expense Interest on Bonds $ 147,173 $ - $ - $ - $ - $ 147,173 Build America Bond Subsidy (4,089) (4,089) Interest on Note Payable 2, ,453 Payoff of Note Principal , ,000 Bond Retirement Amortized Cost (13,649) 13, Investment Income-Revenue Fund (429) (158) Treasury Services Decommissioning(1) 7,612 (7,612) 3, ,459 ISFSI Decommissioning 147 (147) Depreciation 76,471 (76,471) Subtotal Fixed Expenses $ 216,240 $ (70,581) $ 254,984 $ 271 $ - $ 400,914 Total $ 665,085 $ (117,746) $ 337,863 $ 271 $ - $ 885,473 (1) Decommissioning paid directly by the Bonneville Power Administration Note: Controllable cost and cash is equal due to BPA decision to Direct Pay and the institution of contractor time & labor. 13

14 Table 8 Annual Budget Statement of Funding Requirements (Revenue Fund) Original FY 2017 FY 2016 Description Budget Budget Variance Operating Controllable Expense $ 252,876 $ 200,388 $ 52,488 Controllable Capital 147, ,182 27,146 Nuclear Fuel 73,587 12,063 61,524 Fuel Litigation (100) Spares/Inventory Growth 5,000 6,500 (1,500) Generation Taxes 5,518 4, Subtotal Operating Requirements $ 484,559 $ 344,246 $ 140,313 Fixed Treasury Related Expenses Interest on Bonds $ 147,173 $ 151,729 $ (4,556) Build America Bond Subsidy (4,089) (4,067) (22) Interest on Note 2, ,366 Payoff of Note Principal 251,000 69, ,040 Bond Retirement (1) ,960 (75,610) Investment Income-Revenue Fund (158) (73) (85) Treasury Services/Paying Agent Fees (55) Decommissioning Costs (2) 3,459 3, ISFSI Decommissioning Costs Subtotal Fixed $ 400,914 $ 297,688 $ 103,226 Total Funding Requirements $ 885,473 $ 641,934 $ 243,539 Funding Sources Direct Pay from BPA / Net Billing (3) $ 662,326 $ 424,166 $ 238,160 Note / Line of Credit Draws (4) 47,463-47,463 Bond Proceeds 147, ,182 27,043 Fuel Revenue 25,000 94,260 (69,260) Bonneville Direct Funding Decommissioning 3,459 3, Total Funding Sources $ 885,473 $ 641,934 $ 243,539 (1) Approximately $96.4 million of maturing July 2017 bonds are expected to be extended. The remaining $350k is expected to be paid off as scheduled. (2) BPA directly funds the requirements for the Decommissioning Fund on behalf of Energy Northwest. (3) Bonneville will direct pay the monthly funding requirements under the provisions of the Direct Pay Agreement. (4) Draws against the existing Note / Line of Credit to continue through September

15 Table 9 Monthly Statement of Funding Requirements Description Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total Beginning Balance $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 FY 2017 Disbursements Operating Controllable Expense $ 16,776 $ 15,321 $ 15,366 $ 16,753 $ 16,009 $ 14,403 $ 19,749 $ 17,551 $ 20,858 $ 24,690 $ 38,657 $ 36,743 $ 252,876 Controllable Capital 10,874 6,891 8,882 8,305 7,167 6,962 9,273 6,430 10,342 23,510 26,454 22, ,328 Nuclear Fuel In Process 2, ,427 29, , , ,587 Fuel Litigation Spares/Inventory Growth - 1, , , ,250-5,000 Generation Taxes ,518 5,518 Subtotal Operating $ 30,502 $ 23,951 $ 25,675 $ 54,581 $ 24,990 $ 21,929 $ 29,581 $ 25,720 $ 34,446 $ 48,689 $ 99,801 $ 64,694 $ 484,559 Fixed Treasury Related Expenses Interest on Bonds $ - $ - $ - $ - $ - $ 72,568 $ - $ - $ - $ - $ - $ 74,605 $ 147,173 BABs Subsidy (2,044) (2,045) (4,089) Interest on Note ,453 Payoff of Note Principal , ,000 Bond Retirement (1) Investment Income (12) (12) (12) (12) (12) (19) (12) (12) (12) (12) (12) (19) (158) Treasury Services Decommissioning - - 3, ,459 ISFSI Decommissioning Subtotal Fixed $ 379 $ 224 $ 3,702 $ 243 $ 243 $ 70,760 $ 243 $ 243 $ 243 $ 243 $ 244 $ 324,147 $ 400,914 Total Disbursements $ 30,881 $ 24,175 $ 29,377 $ 54,824 $ 25,233 $ 92,689 $ 29,824 $ 25,963 $ 34,689 $ 48,932 $ 100,045 $ 388,841 $ 885,473 Funding Sources BPA Direct Pay (2) $ 3,231 $ 1,963 $ 1,670 $ 46,519 $ 18,066 $ 85,727 $ 20,551 $ 19,533 $ 24,347 $ 25,422 $ 73,591 $ 341,706 $ 662,326 Note / Line of Credit Draws 16,776 15,321 15, ,463 Bond Proceeds 10,874 6,891 8,882 8,305 7,167 6,962 9,273 6,430 10,342 23,510 26,454 22, ,225 Fuel Revenue ,000 25,000 BPA - Decommissioning - - 3, ,459 Total Funding Sources $ 30,881 $ 24,175 $ 29,377 $ 54,824 $ 25,233 $ 92,689 $ 29,824 $ 25,963 $ 34,689 $ 48,932 $ 100,045 $ 388,841 $ 885,473 Ending Balance $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000 (1) $96,365,000 of 7/1/2017 maturing bonds are expected to be refunded. The remaining $350,000 are expected to be paid off. (2) BPA is billed, through the Direct Pay Agreements, one month in advance for the following month's expenses. 15

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