2014

Rolla Municipal Utilities

Provided to Rolla City Council

November 17, 2014

Fiscal Year 4th Quarter Report

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TABLE OF CONTENTS

Board of Public Works Statement 3

Fourth Quarter Financial Recap 4

Status of Pending Projects 5-6

Miscellaneous 7

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Rolla Herald - November 1945

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FOURTH QUARTER FINANCIAL RECAP (Unaudited)

OPERATING INCOME and EXPENSES

4th Quarter FYTD 2013

4th Quarter FYTD 2014

CHANGE

OPERATING REVENUES $29,069,798 $31,075,924 $2,006,127

OPERATING EXPENSES ($29,695,166) ($31,787,522) ($2,093,356)

OPERATING INCOME ($625,368) ($711,560) ($86,230)

OTHER INCOME & EXP. $479,582 $631,505 $151,923

NET INCOME ($145,786) ($80,092) $65,694

Upon completion of the fourth quarter of FY 2014, Operating Revenues are up $2,006,127 as

compared to last year. Operating Expenses are up $2,093,356 for the same period resulting in an Operating Income of $711,560, which is down $86,230. When combined with miscellaneous income and expenses, RMU experienced a Net Income of $80,092, which is up $65,694 as compared to the fourth quarter of FY2013.

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STATUS OF PENDING PROJECTS

ELECTRIC DEPARTMENT

ELECTRICAL EXTENSIONS/UPGRADES

o Dewing Industrial Substations - New three-phase 12kV overhead primary distribution tie line installation and 12kV conversion. Started, November 5, 2013. Ongoing.

o Hy Point Industrial Park - 34kV system upgrades; 2 reclosers, replace poles and static wire installation. Started, July 16, 2014. Ongoing

o Johnson Laird Subdivision - Rebuild existing single-phase overhead distribution lines. Started, July 14, 2014. Ongoing.

o Wellington Place Retirement Community - Convert 4kV overhead distribution system to 12kV underground distribution system. Started, August 20, 2014. Completed, October 7, 2014.

o 101 East 3rd Street (new apartments) New transformer, secondary pedestal and meter installation. Completed, July 24, 2014.

o 100 West 13th Street (new townhouses) New pole, transformer, service and meter installation. Completed, July 29, 2014.

o 600 West Highway 72, Legends Bank (future building addition) New three-phase, underground primary, transformer and meter installation. Started, August, 13, 2014. Completed, August 14, 2014.

o 101 South Walker Avenue (new apartments) Pole and underground pedestal installation. Completed, September 22, 2014.

o Grove Substation - Installation of additional recloser and new underground distribution feeder circuit. Started, September 15, 2014. Ongoing.

o RMU Fiber and Communications - Hy Point Industrial Park - Fiber optic cable installation. Started, October 17, 2014. Ongoing.

POWER PRODUCTION o MoPEP 3rd quarter unit exercise - Units EP-01 thru EP-06, EP-15 thru EP-17; 18,366

kWh, August 3, 2014. Units EP-07 thru EP10; 8,098 kWh, August 4, 2014. Units EP-11 thru EP-14; 7.901 kWh, August 19, 2014.

o MoPEP 4th quarter unit exercise - Units EP-01 thru EP-04, EP-15 thru EP-17; 13,898 kWh, October 9, 2014. Units EP-05 thru EP-10; 11,964 kWh, October 10, 2014.

TRANSFORMERS o Heritage and Wyman Substations - Transformer testing and maintenance by Electric Power Systems. Completed, September 15-16, 2014. Testing indicated high voltage bushings require replacement. Work is being scheduled.

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WATER DEPARTMENT

WATER MAIN INSTALLATION o 12th Street from Pine to Holloway Streets - Replace existing 10" ductile iron with 12"

C900 plastic installed; 240 ft. of 6" C900; 40 ft. of C900; 2700 ft. of 12" C900. Started, June 14, 2014. Completed, October 17, 2014.

o Arkansas Avenue from Iowa to Holloway Streets - Replace existing 10" ductile iron with 16" C905 plastic. Started, October 20, 2014. Ongoing.

(12 ) WATER TAPS

(5) FIRE HYDRANT REPLACEMENTS

WELL MAINTENANCE o Well #7 - Performed pump test. Well back on line, August, 18, 2014.

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MISCELLANEOUS

PERSONNEL o Operations Foreman, Derek Carroll retired August 29, 2014 with over 26 years of

service. o Missouri One Call System Safety Meeting - "Underground Facility Safety and Damage

Prevention Act" - September 23, 2014 at Lake Ozark, MO. 2 RMU employees attended. o Missouri Water & Wastewater Annual Technical Program - September 30 & October 1,

2014 at Jefferson City, MO. 4 RMU employees attended.

MoPEP/MJMEUC UPDATES o MoPEP filed a Business Interruption claim due to the summer outage at Plum Point. o MC Power is looking for a possible site in the Rolla area for a solar project. They will be

presenting to the Rolla Board of Public Works and Rolla City council sometime in November or December.

o The Pool hit the kW peak on August 25th (531.2MW). Based on the Pool's peak, the Meter Rates and Services Committee recommended the demand charge increase from $8,105/MW to $9,350/MW, effective with September's billing. Current projected all-in power cost for RMU is $69.50/mWh (not including Ameren transmission) which is slightly higher than what was used in RMU's budgeting process. The MoPEP Board will make a final decision at their October 10th meeting with approval of the MoPEP budget.

o Bond covenants of the large power projects require collection of ten percent in addition to the debt service costs. These additional funds have been accumulating. The Rates and Service Committee's focus has been to apply these funds to reduce credit related costs by strengthening credit ratings. The Committee's recommendation is that a portion of these funds be allocated to Pool reserves. A portion of the remaining funds would be redirected back to the membership in the form of grants for electric system improvements. The Committee also recommended completing a Pool-wide peak shave and demand response study to determine if there could be savings achieved with a larger project.

MPUA SYSTEM ACHIEVEMENT AWARD o RMU received the MPUA System Achievement Award at the MPUA conference in

October. This is due to RMU's proactive work to improve reliability: Water service line replacement in 2014; 60% of water main replacement with PVC (mid-90's); Class 1 ISO rating of RMU's water system (2005); Two 1.2 million gallon water supply storage tanks and 35,636' of PVC water main (2003, $2.4M); Utility pole audits every five years; Power Supply Infrastructure (138kV) project (2008, $15M) completed in 2011 (Substations built entirely by RMU personnel; Project included 8 miles of 138kV line); Fourteen Caterpillar diesel generators (2000, $6M) with three additional units in 2003. (Project paid in full in 2010); LED streetlight project; Engineering and Tree Trimming staff (in-house, no contract); and Fleet management maintained by RMU crews that operate the trucks and/or equipment. Management invited six of RMU's foremen to attend the luncheon and award presentation.