CITY UTIL IT IES OF SPRINGFIELD

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EST. 1945

Annual Report

MADE IN THE USA

OUR PRIORItY

From the Board Chair and General Manager

Our Community

Our Customers

Our Employees

Financial Information

Board of Public Utilities

Executive Committee

3CONTENT

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CITY UTIL IT IES OF SPRINGFIELD

2 0 1 7

EST. 1945

Annual Report

MADE IN THE USA

OUR PRIORItY

From the Board Chair and General Manager

Our Community

Our Customers

Our Employees

Financial Information

Board of Public Utilities

Executive Committee

3CONTENT

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ANN MARIE BAKER, CHAIR Board of Public Utilities Springfield, Missouri

SCOTT MILLER, GENERAL MANAGERCity Utilities of SpringfieldSpringfield, Missouri

0ur Community. Our Customers. Our Employees. Three areas City Utilities makes a priority.

Throughout the year, City Utilities maintains a rigorous overview of projects that affect our community both near- and long-term. From water protection plans to electric, natural gas and water infrastructure, our staff continually evaluates our processes and looks to the future. We partner with the City, County and Chamber of Commerce to bring new development to our area, and continue to develop our broadband services to help small and large businesses connect to their consumers. Preserving and protecting our environment reflects the ingenuity and willingness to step beyond the norm through projects like the Cox Battery

Energy Storage System and the Duke Energy Renewable project which brought our renewable portfolio up to 35 percent.

We have made great strides to do better for our customers. The advanced metering program provides current usage data for participating customers to review at any time from the enhanced customer portal launched in 2017. Aside from the daily utility business, we seek op-portunities for one-on-one contact through safety fairs, community partnerships, and educational classes through our speakers bureau. We created short videos to educate our customers about our day-to-day processes, and we strive to bring energy management education and incentives to our customers.

City Utilities strives to create a safe and welcoming environment for employees. We joined together with many other public and nonpublic entities to share ideas on how to address diversity for employees and the business community. This resulted in the creation of an internal diversity committee who works to educate our employees on diversity and reflect on the benefit of a diverse workplace. Year round, safety and educational classes supported our employees working over 1.3 million hours without a lost-time accident in 2017. A very generous group, our employees not only raise money for local charities and United Way, but also donate their hard-earned money and free time to help others across our community.

We remain true to our community, customers and employees. As a member of this community, we embrace our priorities to ensure reliable and exceptional services to everyone.

City Utilities

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Our Community

SPRINGNET’S NETWORK OP-

ERATIONS CENTER SPECIALIST,

JAMES STRATHDEE, HELPS PRO-

VIDE BROADBAND COVERAGE

TO DIRECTOR OF ENGINEERING,

MARANDA PROVANCE, AND

HER LOCAL COMPANY, MOST-

LY SERIOUS. A GROWING NUM-

BER OF COMMUNITY USERS RELY

ON SPRINGNET’S FIBER OPTIC

NETWORK TO CONNECT THEIR

BUSINESSES.

As a valuable asset to the community, City Utilities continues to strengthen its resources, stay abreast of the needs in the community, and work toward a sustainable environment.

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WATER PROTECTION City Utilities developed a Source Water Protection Plan that includes several best management practices to protect water sources. With over $50,000 in grants from the Missouri Department of Natural Resources, City Utilities funded the eradication of hydrilla from critical water sources and plugged ten abandoned wells. This project will continue to protect, preserve, and enhance the quality of water resources used every day by our community.

City Utilities leased land to the Watershed Committee of the Ozarks to develop an agriculture site to demonstrate best management practices on rotational grazing to improve water and soil quality. The goal is to promote water quality in conjunction with promoting the predominant agricultural economic activity within our watersheds.

WATER RELIABILITYImprovements to the Fulbright Water Treatment Plant (FWTP) included the construction of a

sodium hypochlorite generation facility, allowing for the final removal of chlorine gas cylinders. Construction of the 10-million-gallon capacity tank (Phase I) was completed at the Blackman Water Treatment Plant (BWTP). These projects, along with system control upgrades at both plants, continue to improve reliability.

While City Utilities works to protect our water resources, work is also done to maintain a reliable system that provides daily benefits to our customers’ homes. Water Construction crews installed 5,500 feet of

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Our Community

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water main for an emergency tie-in to address water pressure issues our customers were experiencing and renewed 8.4 miles of main.

GAS INFRASTRUCTUREDowntown Springfield is the most densely developed area of taller buildings in the city, yet it has been served by the lowest pressure and oldest gas mains. Replacement of an aged district regulator station, and recent gas renewals along Walnut, from Campbell to Jefferson, have pushed high pressure gas into the area while replacing dated piping materials. Future gas renewals constructed with newer, safer and more-reliable piping materials will allow City Utilities to continue to convert the entire downtown area to better serve our customers.

ECONOMIC DEVELOPMENTElectric, gas and water commercial service requests were up four percent over last year. Service upgrades were completed for several major industries in the Springfield service territory. 3M announced a $40 million expansion, bringing 90 new jobs to Springfield. This project was made possible through the collaboration of the Economic Development Partnership, 3M officials and the State of Missouri.

BROADBAND SERVICESSpringNet, a division of City Utilities, gained a 17 percent growth in contracts in fiber delivery to Springfield businesses. Broadband services to small businesses, multi-tenant dwellings, and

customers providing wi-fi services continued to grow through 2017. SpringNet is committed to developing Springfield into a technology hub and broadband community, and will continue to lead the way as the premier fiber-to-business provider in southwest Missouri.

THE ENVIRONMENTPreserving and protecting our environment was demonstrated through efforts to eliminate all wet ash storage at City Utilities’ power plant sites. Over 600,000 tons of fly ash from four ponds was excavated and hauled to a dry, stable storage site. This effort met the highest standards of the Environmental Protection Agency’s Coal Combustion Residuals regulations.

MUNICIPAL RELOCATION PROJECTSCity Utilities is committed to working with the community on road improvement projects. A major project in 2017 centered around the widening of Republic Road to fives lanes, which included the relocation of gas and water mains. The work was completed by a contractor, and became one of the largest municipal relocation projects in City Utilities’ history.

A COMMUNITY NEEDThe Halloween Hustle, hosted by City Utilities, is an annual 5k/10k run/walk that provides awareness for a domestic violence shelter in our community and much-needed funds for this nonprofit organization.

In early 2017, City Utilities announced a partnership with NorthStar Battery, a world leader in battery technology and energy storage solutions, to develop a pilot utility-scale energy storage system to study the ability to supplement energy demand during times of peak usage. The Cox Battery Energy Storage System began service in September.

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THE ELECTRIC SYSTEMCity Utilities responded to six significant

electric outages in 2017 due to severe weather. Proactive maintenance and tree trimming efforts

helped reduce the impact to the system. The outage reporting system allowed City Utilities to

capture outage information and provide responsive updates to customers.

RENEWABLE ENERGYWith the addition of the purchase power agreement with Duke Energy Renewables for 200 megawatts of wind power, City Utilities renewable energy program of solar, wind, landfill gas, conservation programs, and the energy storage system increased City Utilities’ renewable portfolio to approximately 35 percent.

2017 CU ENERGY RESOURCES

49.5%CU-OWNED COAL-FIRED

GENERATION

4.7%CU-OWNED NATURAL

GAS GENERATION

22.9%SOUTHWEST POWER POOL INTEGRATED MARKETPLACE

3.0%SWPA

(HYDRO)

14.6%FRONTIER

WIND FARM

0.3%LANDFILL GAS GENERATION

4.8%SMOKEY HILLS WIND FARM

0.2%STRATA SOLAR

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ADVANCED METERINGCustomers served by Advanced Metering Infrastructure (AMI) now have access to hourly data for their electric, gas and water services. At the end of the year, 48,000 electric meters, 10,000 gas meters, and 3,000 water meters were changed to this new technology. Not only do customers benefit from hourly data, their electric meters now report outages almost instantaneously to City Utilities’ Outage Management System.

Our Customers

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Customer care and concern is a top priority for City Utilities. Decisions are made every day to improve customer relationships and develop business processes with the promise of making their lives easier.

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ELECTRIC LINE OPERATIONS

ANALYST, HALLIE HEINZLER,

JUGGLES VARIOUS PROJECTS

TO MAKE CERTAIN EVERY

PIECE AND PART USED IN AN

ELECTRIC PROJECT IS ACCU-

RATE AND ACCOUNTED FOR.

48,000 ELECTRIC METERS

10,000 GAS METERS

3,000 WATER METERS

Our Customers

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CUSTOMER SERVICE IMPROVEMENTS

An improved customer portal was launched in 2017. A new look and improved features

allow our customers to have access to their account

information at any time, including hourly data for

new AMI customers

NEIGHBORHOOD IMPROVEMENTSCommercial, industrial and residential development in the northeast portion of Springfield caused an increased demand on the water system. To address low pressure issues, to improve water quality, and to provide additional peak capacity, including fire protection, City Utilities installed approximately 5,500 feet of 16-inch water main to connect to a future elevated water storage tank. In late summer, City Utilities announced plans for a future tank and customers were invited to a public meeting to discuss options and possible locations. The completion of the tank is scheduled for late 2018.

COMMUNITY AWARENESSCity Utilities partnered with a local radio station to promote Project SHARE to raise funds for assistance with winter heating costs for income-eligible households from January through May. During the 2016 holiday season, messages ran several weeks prior to a one-day, live-radio broadcast. Springfield neighbors dropped off their donation at the station, or made a direct donation through the City Utilities’ website. Combined with year-long donations, over $100,000 were collected at the end of the fiscal year. Donations to this program are administered by the Ozarks Area Community Action Corporation.

INFORMATION SHARINGIn January 2017, City Utilities launched a new campaign, CUrious. The new campaign featured 21 short videos covering information from electric and gas safety, winter heating tips, to renewable energy projects. These videos, shared

through City Utilities’ social media efforts, provided a glimpse into the daily business of the utility.

Customers also receive pertinent and up-to-date information through monthly online residential/commercial newsletters, bill inserts, and social media messaging.

SAFETY MESSAGESOn an annual basis, City Utilities provides electric and natural gas safety messages through social and other media sources, and at safety expos. As part of City Utilities’ Speakers Bureau, trained staff are available to meet with schools or other organizations to share these messages.

During a summer school session, Camp Curious, Electric Line, Substation, Electric Safety, and Power Production staff hosted a week-long program for nearly 1,000 Springfield Public School students. The program covered how electricity is made and delivered from the power

plants to the homes. Electric safety was also a part of the program.

ENERGY EFFICIENCY SERVICESThe Energy Services and Renewables department joined in the community Zone Blitz effort by working with the Northwest Project in providing energy efficiency education to those residents living in northwest Springfield. They also worked with families and volunteers to install energy and water saving items in their homes.

With LED lighting and technology advancing in quality and reducing in price, many more commercial customers have been making significant lighting upgrades with the help of City Utilities’ Commercial Lighting Rebate Program. After listening to the needs of these customers, City Utilities expanded the amount available for rebates, and made it easier for customers with multiple locations to make more improvements each year.

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EMBRACING DIVERSITYCity Utilities strives to promote an inclusive and welcoming environment within the utility and throughout the community. A Diversity Team made up of employees across the utility works to increase awareness and understanding of diversity; and promotes and advances equality and inclusiveness of all cultural, ethnic, religious, and social backgrounds and beliefs. The team delivers diversity training throughout the utility, and hosts an annual Taste of the World event to introduce the various cultures within our utility.

A Public Entities Diversity Initiative of local colleges and schools, city and county groups, and Minorities in Business members meet on a regular basis to report on the community and organization’s progress.

Our Employees

In order for City Utilities to provide reliable services to the community, hiring educated and skilled staff is a priority.

SOFTWARE DEVELOPER, DUAN

GAVEL , PROVIDES CODE

WRITING SKILLS THAT PACK

A PUNCH AND SERVE BOTH

INTERNAL AND EXTERNAL

CUSTOMERS. WHEN HE’S NOT

WORKING, HE’S LIFTING OUR

COMMUNITY BY HELPING

ORGANIZATIONS SUCH AS

THE BOYS AND GIRLS CLUBS,

ARC OF THE OZARKS, AND

BIG BROTHERS BIG SISTERS.

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CU WELLIn an effort to promote health and wellness among all employees, the CU Well Committee works throughout the year to plan and prepare events, from health and nutrition programs to fitness challenges. Employees receive incentives for making changes toward a healthier lifestyle. City Utilities also has a health and wellness coach on staff to work with employees free of charge.

SAFETY AND TRAININGThe development of City Utilities’ employees remains a priority. During the past fiscal year, 2,092 training sessions were offered to ensure we work safely.

HELPING OTHERSThe generosity of employees grows every year. Not only do they step up to help their fellow employees in need, they also help others in the community. From fundraisers during 2017, their giving to local charities totaled over $4,600. The United Way Annual Employee Campaign netted over $165,000 in pledges.

LINEMAN’S RODEO

The utility participates in the International Lineman’s Rodeo in October each year because the event focuses on safe work practices, provides an opportunity for the public to learn about electric line craft skills, allows participants to showcase and receive recognition for their skills, and provides a setting for line workers to share their knowledge with others from around the nation and world. CU’s two competing rodeo teams finished 7th and 27th, respectively, in the municipal utility division.

GAS RODEO

In 2017, CU’s Gas department took part in the MEA Energy Association’s Gas Rodeo. This past year the utility’s 2-man team took 6th place and had the fastest time in the “Pit Dig” among all teams. CU’s 4-man team took 8th place. The competition tests the skills of the crews with an emphasis on safety.

Above: Prover Technician, Tim Jones, tests gas meters to prove they are working correctly. Jones has been a proud employee of City

Utilities since 1980.

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EYES AND EARSServing at the frontlines of our community are the City Utilities Bus Operators. These operators interact daily with customers and are encouraged to embrace their role as the “eyes and ears” of the community. This past year, two operators were instrumental in changing lives through the rescue of missing children, one resulting in the arrest of the kidnapper. TJ Davis (above) was recognized by the American Red Cross and received the United States Department of Justice Missing Children’s Citizen Award.

A BANNER YEAR FOR SAFETY2017 marked the lowest number of work-related injuries for City Utilities dating back to 1995. City Utilities has been on a downward trend since 2004 when the utility averaged 79 injuries per year. In 2017, there were 31 reported OSHA recordable injuries. The downward trend included Lost-Time Injuries. These types of injuries are typically more severe and require recovery time away from work. In 2004, the utility had a peak of 24 lost-time injuries. Since then, Lost-Time Injuries have dropped significantly to an average of three per year since 2011.

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OSHA RECORDABLE INJURIES AND LOST-TIME INJURIES 2000 - 2017

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HISTORICAL OPERATING STATISTICSFiscal Year Ended September 30

Operating Revenues Electric Natural Gas Telecommunications Transportation WaterTotal Operating Revenue

Sales Electric - Thousand Kilowatt Hours Natural Gas - Dekatherms Water - Thousand Gallons Revenue Bus Passengers Carried

Number of Customers Electric Natural Gas Water

Residential Customer Data (Average per Customer)Electric: Annual Electric Bill Kilowatt Hours Used Revenue per Kilowatt Hour

Natural Gas: Annual Natural Gas Bill Dekatherms Used Revenue per Dekatherm

Water: Annual Water Bill Thousand Gallons Used Revenue per Thousand Gallons

Miscellaneous Statistics: Maximum Hourly Peak Demand (Electric) - Megawatts Maximum Day Purchase (Natural Gas) - Dekatherms Maximum Day Pumpage (Water) - Thousand Gallons Total Annual Pumpage (Water) - Million Gallons Electric Line - Miles Natural Gas Main - Miles Water Main - Miles Number of Fire Hydrants Number of Streetlights

2017

$ 302,835,059 79,908,816 13,926,573 1,056,877 49,127,197 $ 446,854,523

3,757,325 12,267,090 8,134,419

1,292,335

114,556 83,449 82,372

$ 1,034.34 9,883 $ 0.1047

$ 529.08 60 $ 8.82

$ 396.45 54 $ 7.34

716 114,509 42,330 10,273 1,798 1,318 1,260 8,107 22,159

2015

$ 290,587,113

96,211,266 15,001,181 1,069,970 44,400,170

$ 447,269,701

3,596,502 13,894,047 7,902,655

1,488,883

112,376 83,016 81,538

$ 1,037.12 10,558

$0.0982

$ 670.14 76

$8.82

$ 357.14 53

$ 6.74

769 116,859 40,040

10,026 1,787 1,313 1,256 7,994 21,825

2016

$ 291,242,778 78,878,482 13,316,110 1,068,217 49,358,076

$ 433,863,664

3,572,874 13,981,146 8,157,003

1,389,574

113,721 83,287 81,969

$ 1,003.36 10,246

$0.0979

$519.40 64

$8.12

$ 398.96 54

$ 7.39

782 116,767 39,870

10,320 1,791 1,317 1,256 8,036

22,043

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Electric Natural Gas Water Total

City Hall $ 272,053 $ 20,054 $ 10,870 $ 302,977 Health Clinic 64,527 6,718 3,525 74,770 Fire Department 188,542 44,846 26,814 260,202 Hazelwood Cemetery 5,699 618 1,182 7,499 Police Station 123,109 2,611 4,257 129,976 Dog Pound 9,297 2,434 1,290 13,021 Municipal Court 19,975 1,770 1,044 22,789 Manpower Human Resources 35,211 3,942 1,590 40,742 Traffic Signal Shops 9,070 1,216 756 11,042 Service Center 128,061 27,207 30,594 185,862 Parking Lots 4,393 - - 4,393 Parks 1,108,788 71,798 1,131 1,181,718 Art Museum 59,236 11,821 2,010 73,067 Traffic Signal - State 144,055 - - 144,055 Traffic Signal - City 99,768 - - 99,768 Park Central Square - - 7,116 7,116 Storm Warning 23,032 - - 23,032 Communications Center 17,888 - - 17,888 Street Lighting 3,829,604 - - 3,829,604 Unmetered Fire Hydrant - - 2,616,675 2,616,675 Telecommunications - - - - Total Utility Services $ 6,142,307 195,035 2,708,856 9,046,198 Cash Payment to City in Lieu of Taxes (PILOT) 13,890,208 Right of Way Fee 472,000 Electric, Natural Gas & Water Relocations 2,173,441

Public Transit Services 8,502,632 Other Community Services 537,220 Total 34,621,699

* As set forth in the City Charter of the City of Springfield, Missouri, the Board of Public Utilities pays cash into the general revenue fund of the City each month.

PAYMENTS AND SERVICES TO THE CITY OF SPRINGFIELD IN LIEU OF TAXESFiscal Year Ended September 30, 2017

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2017 BOARD OF PUBLIC UTILITIES

1 Ann Marie Baker Chair UMB Bank

2 Jeff Childs Vice Chair Sperry Van Ness/Rankin Co.

3 Joe Reynolds Secretary Central States Industrial

4 Jeff Groves O’Reilly Automotive, Inc.

5 Skip Jansen Retired

6 Bill Kirkman Retired

7 Rob Rector Ozarks Technical Community College

8 Lynn Rowe Retired

9 Denise Silvey Paul Mueller Company

10 Stephen D. Stewart Stephen D. Stewart, PC

11 Jennifer Wilson N-FORM Architecture

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2017 EXECUTIVE COMMITTEE

1 Scott Miller General Manager

2 Amy Austin Associate General Manager Administration

3 John Black Associate General Manager General Counsel

4 Mike Finch Associate General Manager Finance, Chief Financial Officer 5 Gary Gibson Associate General Manager Customers Operations & Communications

6 Chris Jones Associate General Manager Electric Supply & Delivery

7 Brenda Putman Associate General Manager Chief Internal Auditor

8 Steve Stodden Associate General Manager Operations

9 Dean Thompson Associate General Manager Economic Dev and SpringNet

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2017 UTILITY EXPENSES

Electric66.33%

Electric59.88%

Natural Gas17.50%

Natural Gas18.36%

Transportation0.23%

Transportation2.90%

SpringNet/Trunked Radio3.05%

SpringNet/Trunked Radio2.71%

Water10.76%

Water8.63%

Interest and Other Income 2.13%

Interest and Other Expenses 7.52%

2017 CU Energy Resources (By kWh)

2017 Utility Revenues

2017 Utility Expenses

2017 CU Energy Resources (By kWh)

2017 Utility Revenues

2017 Utility Expenses

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2017 UTILITY REVENUES

FOR A DETAILED LOOK AT CITY UTILITIES OF SPRINGFIELD’S AUDIT REPORT VISIT CITYUTILITIES.NET.Published by: The Communications and Community Relations Department of City Utilities of Springfield, Missouri.

Special thanks to Mike Williams and Mike Brown.

From the Board Chair and General Manager

Our Community

Our Customers

Our Employees

Financial Information

Board of Public Utilities

Executive Committee

3CONTENT

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