Preliminary 2019 Corporate Operating Plan. Javier Fernandez Vice President & CFO

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1 Preliminary 2019 Corporate Operating Plan Javier Fernandez Vice President & CFO

2 Assumptions Alignment with Board Strategic Directives Revenue Adjustments No General rate increase No change in the fuel and purchase power factor Resetting the fuel and purchase power base rate Retail Energy Sales (MWh) 3.10% increase from 2018 budget 0.02% decrease from 2018 projected Wholesale Revenue 23.09% decrease from 2018 budget 38.13% decrease from 2018 projected 2

3 Assumptions Expenditures Capital and operating and maintenance expenditures are planned to maintain system reliability and future load growth Funding for Fort Calhoun Station Decommissioning Trust Financing Outstanding Revenue Bond balance not planned to be impacted by new money financing plan Financing plan provides flexibility to capitalize on market conditions Rate Stabilization Reserve Maintain $50 million balance 3

4 4 Assumptions Decommissioning and Benefit Reserve New Fund Started with $35 million in 2017 Fund additional $35 million in 2018 for a total of $70 million Fund additional $12 million in 2019 for a total $82 million Fort Calhoun Station Decommissioning funding supports both Safstor or Decon implementations 2019 Planned Outages Nebraska City Station Unit No. 1 Turbine Nebraska City Station Unit No. 2 Catalyst Sarpy County Station Units No. 4 and No. 5 Inspections Several shorter unit outages

5 $ Millions 5 Retail Revenue* $1,200 $1,000 $880 $947 $954 $958 $969 $800 $600 $400 $200 $ Projected 2019 Budget Residential Commercial Industrial Gov't & Muni * Excludes activity for Rate Stabilization and the Decommissioning and Benefit Reserves

6 $ Millions 6 Wholesale Revenue $250 $200 $150 $100 $195 $64 $177 $73 $164 $70 $171 $71 $105 $50 $131 $104 $94 $100 $61 $44 $ Projected Other NC2 Participant 2019 Budget

7 $ Millions 7 Other Operating Revenue & Non-Operating Income* $80 $70 $74 $60 $55 $50 $40 $30 $20 $10 $36 $38 $39 $ Projected Transmission Wheeling Revenue Products & Services Investment Income Other Electric Revenues 2019 Budget** *Excludes transfers from Debt Retirement Account, Allowance for Funds Used During Construction (AFUDC), and Misc. Non-Operating Income **Average investment earnings rates used for 2019 are 2.6%, compared to 1.2% in 2018

8 $ Millions 8 Operation and Maintenance Expense* $900 $832 $824 $800 $700 $653 $685 $663 $600 $500 $400 $300 $200 $100 $ Projected 2019 Budget Fuel Production A&G T&D Purchased Power Customer Accounts * Excludes Fort Calhoun Station decommissioning funding and expenditures

9 $ Millions 9 Capital Expenditures $300 $250 $200 $209 $200 $150 $100 $143 $99 $123 $50 $ * Projected 2019 Budget T&D Nuclear Production Other Fossil Production * 2016 Excludes activity related to the Fort Calhoun Station Decommission decision

10 Large Capital Programs/Projects Transmission & Distribution Millions Installation of new substation $18 Substation communications fiber and equipment $13 New transmission line $11 Production Nebraska City Station Unit 1 Finishing Super $8 Heater Replacement Nebraska City Station Unit 2 Lime Optimization $6 Nebraska City Station Furnace Front Lower Slope $4 Business Technology Upgrade Intranet Customer Information System $3 Asset Suite Upgrade $2 Other Projects Medium/Heavy Truck Replacement $2

11 $ Millions 11 Long-Term New Money Debt Financings* $90 $80 $82 $70 $60 $50 $40 $30 $20 $10 $0 $0 $0 $0 $ Projected 2019 Budget * Outstanding Revenue Bond balance is not expected to be impacted by Financing Plan and the graph excludes the 2018 issuance as it did not increase the net revenue bond balance.

12 12 Net Income $120 $77 $100 $65 $78 $80 $60 $40 $34 $26 $120 $100 $90 $20 $25 $52 $0 ($20) $9 ($26) ($35) ($35) ($12) ($40) ($8) ($60) * Projected 2019 Budget Base Decommissioning and Benefit Reserve Rate Stabilization Reserve * Excludes the $959.6 million write-off from the Fort Calhoun Station decision

13 $ Millions 13 Rate Stabilization Account Balances* $60 $50 $40 $30 $20 $33 $50 $50 $50 $10 $0 * At year end $ Projected Rate Stabilization 2019 Budget

14 $ Millions Decommissioning and Benefit Reserve Account Balances* $90 $80 $70 $60 $50 $70 $35 $82 $12 $40 $30 $20 $10 $0 $0 $0 $35 $35 $ Projected Decommissioning and Benefit Reserve Current Year Funding $ Budget * At year end 14

15 $ Millions 15 Decommissioning Fund Balances* $520 $488 $523 $390 $374 $382 $421 $260 $130 $147 $154 $117 $95 $143 $124 $0 $18 $18 $5 $4 $8 $9 $8 $ Projected 2019 Budget Ending Balance Trust Contributions Trust Withdrawals Trust Earnings * At year end

16 16 Debt Ratio* 70% 60% 66% 64% 61% 59% 50% 51% 40% 30% 20% 10% 0% Projected 2019 Budget * Total Debt Outstanding as a percentage of Total Capitalization at year end

17 17 Coverage Ratios Total Debt Coverage Target >=2.00x Projected Debt Service (Sr. Lien) Fixed Charge Total Debt 2019 Budget Number of times that Net Revenue covers Debt Payments Supports Board Strategic Directive Policy SD-3: Access to Credit Markets

18 Days 18 Days Cash on Hand* Minimum 100 Days Projected 2019 Budget * Number of days that operating expenses can be paid with current cash, excluding liquidity facilities which directly supports Board Strategic Directive Policy SD-3: Access to Credit Markets

19 Fuel & Purchase Power Recovery Fuel & purchase power is collected through two mechanisms General rates (base rate) Fuel & Purchase Power Factor General Rates Collects base fuel & purchased power costs Fuel & Purchase Power Factor Collects the changes in fuel, purchased power, and consumables costs Formula rate that is automatically adjusted annually 19

20 2018 and 2019 FPPA The FPPA is projected to have an under collected amount of $30.2 million through the end of This under collection was materially affected by unplanned and sustained high voltage transmission outages dating back to Specifically, approximately $22 million of under collection occurred from December 2017 to May The balance of the under collected occurred outside of that period. The District also received compensation from effective transmission hedges that has offset a majority of the financial under collection from December 2017 to May Resetting the fuel and purchase power base rate more accurately reflects the District s ongoing variable cost of energy will not result in an increase in the general rates or the fuel and purchase power factor. 20

21 Cents per Kwh Illustrative Example - Residential No change in average all in rate Proposed FPPA Base Fuel/PP All Other

22 22 NewGen Strategies and Solutions, LLC Review Customer Usage Forecasts / Methodology Revenue Forecasts Resource Planning Generation Plan / Scheduling Fuel Budget Operation & Maintenance Expense Budget Fort Calhoun Station Decommissioning Capital Expenditure Plan Preliminary review complete, final report expected in December

23 Next Steps December 13 Board action to approve the 2019 Corporate Operating Plan 23

Preliminary 2018 Corporate Operating Plan. Mr. L. Javier Fernandez, Vice President and Chief Financial Officer

Preliminary 2018 Corporate Operating Plan. Mr. L. Javier Fernandez, Vice President and Chief Financial Officer Preliminary Corporate Operating Plan Mr. L. Javier Fernandez, Vice President and Chief Financial Officer Assumptions Alignment with Board Strategic Directives Revenue Adjustments No General rate increase