board of directors meeting · 2.02.2018 · • on july 19, 2017, at hour ending 1600, the...
TRANSCRIPT
Board of Directors MeetingFebruary 22, 2018
Annual Meeting2017 Year In Review
February 22, 2018
2017 Operations Year-In-Review
Category YTD Variance
Municipal Demand (1.5%)
Municipal Energy (1.7%)
Baseload Generation (1.4%)
Wind Generation (1.4%)
Solar Generation (9.2%)
Surplus Sales Volume 9.7%
Surplus Sales Price (7.2%)
Dispatch Cost (1.1%)
Year-End Operational Results
Variance Key: Favorable: >2% | Near budget: +/- 2% | Unfavorable: <-2%
Surplus Sales Market
• Changes in market drivers resulted in lower than anticipated surplus sales pricing
PR Average Power Price
CIG Average Gas Price
$/MWh$/MMBtu
Impact of Joint Dispatch
Total Net PRPA Benefits Resulting from JDA
Total Benefits for 2017: $655,981Sales: $507,091 Purchases: $148,890
$-
$20,000.00
$40,000.00
$60,000.00
$80,000.00
$100,000.00
$120,000.00
Sales - Margin Expenditures - Savings
2017 Events of Significance
• There were no lost time safety incidents in 2017• Completed the purchase and installation of Fiber Manager. Began digitizing the
fiber system into Fiber Manager.• Completed all city-related Fiber inventories• No controllable losses of load or customer communications connectivity• 94.14 percent Equivalent Availability Factor for Rawhide• Rawhide Unit 1 had a calculated heat rate of 10,005 for October and 10,002 for
November. These calculated values are some of the best heat rates on record for this unit
• A new BNSF transportation contract for Rawhide was executed in June and went into effect on July 1, 2017. The contract runs through 2022
• Completed railcar replacement project; sold the existing fleet of steel railcars, and put the newly acquired aluminum rail car fleet into service in March
• Sold Windy Gap units, resulting in $39 million in revenue (additional sales pending)• Increased participation level in the Windy Gap Project to meet minimum target
level of 14,000 acre-feet (additional storage pending) • 99.95 percent Transmission Service Availability Factor• The Richard Lake, Rawhide-Ault, Rawhide-Timberline and Richard Lake-Linden
Tech air flow spoilers were installed, increasing the reliability of the lines by reducing galloping
2017 Events of Significance
• The three-year boundary meter calibration testing was completed in September• Construction of the new Foothills substation in Loveland was completed and it was
placed in service on July 5• As of December 2017, construction of the Boyd substation was 70 percent
complete with an estimated completion date of May 2018• Due to the reduced sales market, we were able to purchase replacement power for
the Rawhide spring outage at an average cost of $3.50/MWh below budget• On June 1, Joint Dispatch between Platte River, Public Service Company of
Colorado and Black Hills Power went live• On July 19, 2017, at hour ending 1600, the municipal peak load was 660.5 MW
which was an all-time high for municipal load• Platte River and the City of Fort Collins kicked off the demand response (DR) pilot
during the month of July• FERC docket ER17-1951 was approved on August 22, 2017. This docket was to
meter Craig generation from WAPA’s Balancing Authority into PSCo’s • Platte River and the City of Longmont kicked off the Voltage Reduction pilot
program on November 1• Negotiations with Enyo were completed to purchase 150 MW of wind which will
become commercial in December 2020
• The energy model for the Zero Net Carbon (ZNC) study was finalized and several additional projects to support the ZNC study, including reports on battery energy storage and decommissioning costs, were completed
• The non-Regional Transmission Organization Zero Net Carbon model results were presented to stakeholders across the four owner communities
2017 Events of Significance
Questions?
2017 Financial Year-In-Review
Significant EventsVery good budget/financial results
• Below-budget operating revenues (0.9%) and operating expenses (2%)
• Surplus sales pricing below budget, energy above
• Interest income above budget – higher interest rates and additional cash
• $39M in proceeds from Windy Gap unit sales
• Trapper Mine royalty reduction
• Forced outage exchange agreement payout by Tri-State
• Capital Projects• 23 out-of-budget projects for $3.9M
• 16 over budget projects for $1.4M
• 35 projects carried over to 2018 for $12.8M
• 87 projects completed
2017 Financial Results
Category Variance from Budget(in millions) Indicator
Net Income $2.3
Revenues ($1.2)
Operating Expenses $3.5
Capital Expenditures $15.1
Debt Expense $0.3
> 2% Favorable | 2% to -2% At or Near Budget | < -2% Unfavorable
* Capital carryover of $12.8M from 2017 Budget into 2018 Budget.
*
Operating Expenses
Below Budget Variances• $2.1M – Personnel expenses (wages & benefits)
• $1.1M – Fuel • $2.5M – Rawhide (under budget due to
lower transportation costs, less generation)
• At budget – Craig (higher mining costs, above budget generation, offset by royalty reduction)
• $1.4M – CTs (above budget due to generation)
• $0.4M – Wheeling• $0.3M – Joint Facilities• $0.3M – DR Pilot (timing)
Out of Budget• $1.1M – Impoundments (environmental obligation)
$65.6
$48.8
$35.4
$22.0
$63.8
$47.7
$35.4
$21.4
010203040506070
Operations & Maintenance Fuel Purchased Power A&G
$/M
illion
s
2017 Budget 2017 Actual
Variance from 2017 Budget: $3.5M
2017 Financial Summary
StrategicFinancial Plan Target 3 Yr Avg 2017 2016 2015
Net Income(In Millions) > $6 Million $13.0 $14.1 $18.0 $6.8
Debt Service Coverage > 1.5X 1.68 1.75 1.78 1.51
Days Cash On Hand > 200 Days 241 298 221 205
Debt to Capitalization < 50% 31% 30% 33% 29%
• All Strategic Financial Plan targets were exceeded.
• AA credit rating.
Questions?
2017 Corporate Services Year-In-Review
Significant Events - Safety
• Revised the Rawhide Lockout/Tagout (Clearance) program• Electrical Safety Program completed• Successfully piloted Active Release
Techniques (ART) soft tissue injury prevention program
2015 2016 2017
Recordable Incident Rate 2.19 3.15 0.87
Lost Time Case Rate 0.44 0.90 0.00DART (Days away restricted) 0.87 0.90 0.00
No lost time injuries in 2017!
Significant Events – Physical Security• Established guidelines for emergency events requiring
employee action• Completed CIP low impact intrusion detection program at
all wholly owned substations• Protection of critical assets• NERC CIP compliance exceeding Low-Impact requirements• Ability to quickly investigate and resolve intrusion events• Real-time, remote visibility for first responders
Significant Events - HR • New Employee and Intern On-Boarding• Supervisory/Leadership Development• Benefits Benchmarking
2015 2016 2017 Recruitment Total # of positions filled 40 50 54 % of positions filled internally 30% 30% 28%
Turnover Voluntary 0.88% 2.94% 2.89% Involuntary 1.32% 2.52% 0.82% Retirements 3.53% 2.52% 4.95% Total Turnover 5.73% 7.98% 8.66%
Employee Demographics Average Age of employees 47.76 47.33 46.84 % of employees eligible for retirement 38.20% 36.10% 32.79% % of DB employees 66.52% 58.92% 51.42% % of DC employees 33.48% 41.08% 48.58%
Significant Events - Technology• Upgraded all employees to Windows 10 and Office 365
• Administered Cyber Security Training
• Presented first annual update to the Board on cyber security
• Implemented Intrusion Detection program
Significant Events – HQ Campus Project• January – December progress
• Schematic and Design Development phases completed• Contracted with Construction Managers – FCI Constructors• Contracted with Owner’s Rep – Wm. T. Welch Company, LLC• Final site plan, updated cost model and schedule completed
Significant Events - Facilities• Completed:
• An upgrade of the substation signs at all wholly owned substations
• Rawhide Grading & Drainage project
• Replacement of the RailcarBuilding at Rawhide
Questions?
2017 Communications & Marketing Year-In-Review
Zero Net Carbon• Public meetings• Microsite• Stakeholder engagement• Media relations activities that led to significant regional
and national coverage (more than $250,000 of AVE)
• Open houses• Microsite• Media relations (small amount of coverage) transparency• Business meetings• Employee emails and special meetings
Collaboration with municipalcommunicators• Quarterly meetings established• Outage communications procedure developed• Issue specific meetings / calls• Sharing of materials• Joint press releases
Social Media
• Public engagement and education• Dedicated staff• Process for postings• More strategic posts • Audience building
+ +
Questions?
2017 General CounselYear-In-Review
• Legal Support For:• Water Transactions• Mountain West Transmission Group (MWTG)• Wind PPA• 2018 Outage Agreements• HQ Construction Contracts
• Private Letter Ruling Request• Board Governance Procedures• Settlement of ACC Dispute
2017 Accomplishments
• MWTG Implementation• Windy Gap Firming Project Funding• Policy Repository/Resolutions Rescission• Reliability Compliance• Fiber/Backhaul Support Entity
Efforts in 2018
Questions?
2017 General Manager Year-In-Review
2017 Key Accomplishments• Board of Directors Work Session• HQ Campus• Windy Gap Storage Acquisition, Sales and Funding• Expanded Energy Efficiency/Efficiency Works
Program• Demand Response Pilot Implementation• Joint Dispatch • Fiber Inventory/Fiber Optic Network Accounting Policy• MWTG/SPP Negotiations • 150 MW Wind RFP Completion • Customized Resource Portfolio – 9 Options Delivered• Zero Net Carbon Study • Railroad/Coal Contract Extension
Moving Forward Together
• Grid Modernization • Community Solar -
Battery Storage• MWTG/SPP• Cyber Security• Physical Security
Technology Utilization
Moving Forward Together
• Fiber/Backhaul Services
• Community Solar Program
• CRP – ZNC – IRP • Crisis Communication• Windy Gap Firming
Project Financing• Compliance Services• Engineering &
Substation Services
Municipal Collaboration/
Communication
Moving Forward Together
• Grid Modernization• 150 MW of
Wind/Transmission• 20 MW + Solar• New Integrated Resource
Portfolio• Craig Unit 2 Future
Resource Diversification & Alignment
Moving Forward Together
• Rate Restructuring –Unbundled & Transparent
• Renewable Tariff Solution• Large Commercial Renewable
Requests• Website - Custom Microsites• Expanded Efficiency Works
Prog.
Enhanced Customer
Experience
Questions?
Board of Directors MeetingFebruary 22, 2018
43PLATTE RIVER POWER AUTHORITY | NEW HEADQUARTERS CAMPUS | Board of Directors MeetingFEBRUARY 22, 2018
44
AGENDA
Headquarters Campus Project Activity Update• Current Project Processes• Project Timeline• Cost Model• Microwave Building• Site Development & Landscaping• Next Steps
45
CURRENT PROJECT PROCESSES
Design Completion Schedule
Completion of Design Development Phase (November 30th, 2017) 75% Construction Documents issued on February 8th, 2018 100% Construction Documents due – end March 2018 Project Hearing with City of Fort Collins
PDP Complete - One Round Only! P&Z Public Hearing (January 18th, 2018) - Passed on consent, appeal period
complete Final Site Plan submittal - February 14th, 2018 Final Site Plan submittal comments – March 14th, 2018FCI Constructors Activities Currently out for bids in Sub-Contractor Market with 75% CD Documents GMP Pricing due March 13th, 2018 Site Construction Mobilization – April 2018
46
CURRENT PROJECT PROCESSES
Ongoing General Project Activities• Bi-weekly comprehensive design review discussions with Sr. Leadership on
necessary decisions and direction• Detailed Plan Check Review• FF&E Procurement Process• Microwave Building Upgrades & Enhancements• City of Fort Collins Development Agreement• Public Outreach – Open House (March 28th, 2018)• Site Phasing – Planning and City Discussions
47
PROJECT TIMELINE
UPCOMING 2018 MILESTONES
JAN FEB
MAR
APR
MAY
JUN
JUL
AUG
48
COST MODEL SUMMARY
49
CONSTRUCTION BUDGET BREAKDOWN
50
CONTINGENCY USAGE
Increase Substation Garage Area Main Entrance Protection and Entry Drive Extend HQ Footprint by 900sf Add 2nd Utility Feed for Full HQ Power Redundancy Enlarge Pool Car Garage to include Bike Storage Add Fire Sprinkler to Fleet Garage A&B☒ Modify height of Maintenance Shop by 4’☒ Brick veneer to Warehouse and Substation Garage
Legend Accepted – Contingency Funds Used☒ Rejected – Contingency Funds Not Used
51
COST MODEL SUMMARYMICROWAVE BUILDING
Project Scope• Site Development Upgrade• Exterior Enclosure Upgrade• Add Standby Generator
52
LANDSCAPING & MONUMENT SIGN
53
LANDSCAPING DEVELOPMENT
54
LANDSCAPING DEVELOPMENT
55
LANDSCAPING DEVELOPMENT
56
NEXT STEPS
Feb. BOD Meeting
• Construction Documents & Phasing
March BOD Meeting
• Site Mobilization Plans
April BOD Meeting
• Ground-Breaking and Construction Update
57
QUESTIONS?
Board of Directors MeetingFebruary 22, 2018
Wind UpdateRoundhouse Energy (Enyo) -Power Purchase Agreement
(PPA)
Preferred Proposal – Roundhouse Renewable Energy (Enyo)
• Purchase 150 MW from about Dec 1, 2020 through May 31, 2042
• No third party transmission service or congestion risk
• Requires about 19 miles of transmission line construction to the Rawhide Substation
• Review transmission easement options
RoundhouseLocated on Duck Creek Ranch in southern Wyoming / northern Colorado
Enyo Wind Project
• Annual output 575,000 MWh per year for 150 MW wind purchase
• Annual capacity factor of approximately 44 percent
• Platte River will serve 48 percent of member load with carbon-free resources in 2021, compared to 30 percent carbon free today
• Option to purchase an additional 75 MW if we notify Enyo prior to December 31, 2018, at a price that is $0.60/MWh lower than the initial 150 MW purchase
RoundhouseLocated on Duck Creek Ranch in southern Wyoming / northern Colorado
Preferred Proposal – Roundhouse Renewable Energy (Enyo)
March 31, 2018 Enyo will provide plan for permitting transmission project and securing transmission right-of-way
June 30, 2019 Enyo will execute necessary easements and leases
June 30, 2019 Enyo will execute generator interconnection agreement with PRPA Transmission
January 1, 2020 Enyo will obtain all permits to construct and operate wind turbines and transmission line
December 1, 2020 Guaranteed Commercial Operation Date
Key Milestone Dates in PPA
$(4)
$(2)
$-
$2
$4
$6
$8
$10
$12
$14
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Mill
ions
Net Savings (Costs): RTO vs Non-RTO
RTO, Base Market Projections
RTO, Low Market Projections
Non-RTO, Low Market Projections
• Projected long-term financial benefit from increased sale, reduced operating expenses
• Financial benefit greater in an RTO (avoided integration costs)
• Projected Rate Savings*2021: (0.9%) to 1.4%2025: 0.5% to 3.4%2030: 2.4% to 4.8%
*2021 reflective of current market. Actual savings are dependent on the market
Financial Impact: 150 MW of Wind PPA
• Guaranteed Energy Amount is 575,000 MWh per year for 150 MW wind purchase
• Platte River has the option to purchase up to an addition 75 MW of wind
• Lower price than the initial 150 MW purchase• Must exercise option prior to December 31, 2018• Guaranteed Energy Amount increases to 837,500 MWh at the
maximum 225 MW purchase of wind• Construction and Operating Security Funds increase
proportionally to nameplate capacity amounts
Key Terms of the PPA
• Platte River will have two (2) opportunities to purchase the transmission line
Initial Option• If Platte River purchases the transmission line on commercial
operation date (12/1/2020), PPA price will decrease $1.70-2.00/MWh.
• Platte River must pay $900K/mile plus Rawhide Substation interconnection costs (Approx. $20M)
Second Option• If Platte River purchases the transmission line 5 years after
commercial operation date (12/1/2025), PPA price will decrease $0.85-1.00/MWh.
• Platte River must pay $750K/mile plus 83.3% Rawhide Substation interconnection costs (Approx. $16.7M)
Key Terms of the PPA (cont’d)
• Platte River will have the right to curtail wind output• 40 hour of curtailment rights without any cost or limitations• Unlimited curtailment rights if Platte River pays Enyo its lost
revenue
• Platte River will have the Right of First Offer to purchase the wind project if Enyo decides to sell
• Enyo will not have the right to deliver additional output into the Rawhide Substation without Platte River’s approval
Key Terms of the PPA (cont’d)
Questions?
Board of Directors MeetingFebruary 22, 2018
January Operational Results
Variance Key: Favorable: >2% | Near budget: +/- 2% | Unfavorable: <-2%
Category January Variance YTD Variance
Municipal Demand (1.7%) (1.7%)
Municipal Energy (0.5%) (0.5%)
Baseload Generation (5.0%) (5.0%)
Wind Generation (9.2%) (9.2%)
Solar Generation (12.7%) (12.7%)
Surplus Sales Volume (13.0%) (13.0%)
Surplus Sales Price (7.5%) (7.5%)
Dispatch Cost (4.3%) (4.3%)
Board of Directors MeetingFebruary 22, 2018
CategoryJanuary
Variance from Budget($ in millions)
Net Income $0.4
Debt Coverage .28x
Revenues ($0.7)
Operating Expenses $1.4
Capital Additions $1.3
Financial Summary
> 2% Favorable | 2% to -2% At or Near Budget | < -2% Unfavorable
Board of Directors MeetingFebruary 22, 2018