MEMORANDUM

Date: June 12, 2013

To: Board of Directors

From: Randy Cornelius, General Manager

Re: 2013 First Quarter Financials

The 2013 first quarter financial results are being sent as a separate file for review prior to the Board meeting. Included in the report are the Balance Sheet, Statement of Operations (along with a Notable Drivers analysis), Statement of Cash Flow (abbreviated), Island Network Financial Tracking Tool, Capital Projects Budget, Broadband expenses through April 2013, and the March 2013 RUS Form 7. Staff will be available to discuss the information in detail during the June 20 Board meeting.

First-Quarter 2013

FINANCIAL REPORT

ORCAS POWER & LIGHT COOPERATIVE

ORCAS POWER AND LIGHT COOPERATIVE

STATEMENT OF OPERATIONS

1 OPERATING REVENUES (6000 & 6001)2 Residential (6000)3 Commercial (6000)4 Other (6001)5 Total operating revenue6

7 OPERATING EXPENSES8 Cost of power (6100)9 Transmission (6200)

10 Distribution - operations (6300)11 Distribution - maintenance (6400)12 Consumer accounts (6500)1314 General and administration15 Administration G&A (6600)16 Energy services G&A (6601)17 Total general and administration1819 Depreciation and amortization (6700)20 Taxes (6800)2122 Total operating expenses2324 Operating margins before fixed charges2526 FIXED CHARGES27 Interest on long-term debt (6900)28 Other Interest (6900)2930 Total fixed charges3132 Operating margins after fixed charges3334 PATRONAGE CAPITAL CREDITS (7000)3536 Net operating margins3738 NON-OPERATING MARGINS39 Interest income (7100)40 Other income (7200 & 7201)41 Fiber Optics Division (7202)4243 Net non-operating margins44

45 NET MARGINS46

47 TIER48 Equity % of Total Cap

A. B. C. D. E. F.Audited Budget Budget Actual Budget Actual

Year End Year End Period End Period End Variance Period End12/31/2012 12/31/2013 3/31/2013 3/31/2013 (D - C) 3/31/2012

14,861,010$ 15,803,737$ 4,743,554$ 4,786,449$ 42,895 4,683,735$ 5,260,451 5,637,994 1,600,646 1,514,444 (86,202) 1,500,738

296,764 321,517 104,325 105,533 1,208 91,851 20,418,225 21,763,248 6,448,525 6,406,425 (42,100) 6,276,325

7,240,696 7,521,280 2,636,809 2,363,444 (273,365) 2,551,636 126,986 48,772 5,329 16,547 11,218 17,628

2,805,586 3,227,816 802,130 834,223 32,093 662,835 1,518,742 1,444,121 360,152 449,393 89,241 373,938

809,149 971,400 221,373 212,052 (9,321) 200,332

2,799,833 3,143,637 751,257 714,094 (37,163) 667,638 276,269 382,419 49,485 156,280 106,795 20,436

3,076,102 3,526,056 800,741 870,373 69,632 688,074

2,652,194 2,806,552 690,701 673,603 (17,098) 652,559 832,220 923,431 272,934 269,754 (3,180) 244,936

19,061,677 20,469,427 5,790,170 5,689,389 (100,781) 5,391,938

1,356,548 1,293,821 658,355 717,036 58,681 884,387

759,686 811,379 201,858 193,477 (8,381) 189,091 - - - - - -

759,686 811,379 201,858 193,477 (8,381) 189,091

596,861 482,442 456,497 523,559 67,062 695,297

40,416 50,672 20,222 23,035 2,813 16,129

637,277 533,114 476,719 546,594 69,875 711,426

32,228 33,316 8,065 8,219 154 7,802 21,995 20,193 4,410 4,522 112 4,693

123,024 117,360 45,158 19,071 (26,087) 47,773

177,246 170,869 57,633 31,812 (25,821) 60,268

814,524$ 703,983$ 534,352$ 578,406$ 44,053 771,694$

2.07 1.87 3.65 3.99 72.1% 68.4% 73.1% 73.3%

6/7/2013 Page 1 of 1

Statement of Operations Budget to Actual

Detailed Breakout of Notable Drivers

1 I OPERATING REVENUES2 Operating Revenue - Line 5 Detail Breakout:3 Residential Sales4 Commercial Sales5 Other Operating Revenue6 TOTAL OPERATING REVENUES7

8

9 II OPERATING EXPENSES10

11 Cost of Power - Line 812

13 Purchased Power

14 BPA - COU Allocation15 Subtotal Cost Of Power16

17 Transmission - Line 9 Detail Breakout:18 Submarine Cable Expenses

19 Misc. Transmission Expense

20 Maint-OH Lines/Transmission

21 Multiple Accounts

22 Subtotal Transmission23

24 Distribution - Operations - Line 10 Detail Breakout:

25

26 Distribution - Maintenance - Line 11 Detail Breakout:

A. B. C. D.

Budget Actual BudgetYTD YTD Variance

Through Through YTD3/31/2013 3/31/2013 (B - A) Comments: Budget To Actual (Column C.)

6,448,525 6,406,425 (42,100) Decrease in income

42,894 Normal fluctuation of power sales (86,202) Normal fluctuation of power sales

1,208 Variance among multiple general ledger accounts (5 accounts)6,448,525 6,406,425 (42,100)

5,790,169 5,689,389 (100,780) Overall decrease in operating expenses

2,636,809 2,363,444 (273,365) Decrease in expense

(273,734) Lower demand than statistically predicted

369 BPA's 2013 Residential Exchange Refund amount was adjusted in December 2012 (273,365)

5,329 16,547 11,218 Increase in expense 3,560 Additional submarine cable maintenance

2,089 WECC BPA Load Assessment increase

4,528 Additional OH transmission maintenance - ROW

1,041 Variance among multiple general ledger accounts (4 accounts)

11,218

802,130 834,223 32,093 Increase in expense - Variance among multiple general ledger accounts (15 accounts)

360,152 449,393 89,241 Increase in expense

6/7/2013 Page 1 of 4

Statement of Operations Budget to Actual

Detailed Breakout of Notable Drivers

27 Station Equipment Maintenance

28 Line Maintenance

29 Multiple Accounts

30 Subtotal Distribution Maintenance31

32 Consumer accounts - Line 12 Detail Breakout:33 Customer Collections34 Uncollectible Accounts35 Subtotal Consumer Accounts36

37 Total General and Administrative (G&A):38

39 Administration G&A - Line 15 Detail Breakout:40

41 Donations42 Informational/Instruction Expense/Advertising/Annual Meeting43 Outside Services

44 Administrative Salary

45 IN Strategic Planning

46 General Plant Maintenance47 Multiple Accounts48 Subtotal Administration G&A49

50 Energy Services G&A - Line 16

51

52 Total General and Administrative (G&A)53

54 Deprec. & Amort. - Line 19

A. B. C. D.

Budget Actual BudgetYTD YTD Variance

Through Through YTD3/31/2013 3/31/2013 (B - A) Comments: Budget To Actual (Column C.)

20,070Increase in relay/equipment training and testing

90,383 Increase in URD outages as seen in outage report.

(21,212) Variance among multiple general ledger accounts (5 accounts)

89,241

221,373 212,052 (9,321) Decrease in expense(7,166) Labor expense reduction due to gap in coverage of MSR open position.(2,155) Variance among multiple general ledger accounts (2 accounts)(9,321)

800,741 870,373 69,632 Increase in expense

751,257 714,094 (37,163) Decrease in expense

4,688 Island Stewards 501(c)(3) unbudgeted expense2,661 Annual meeting expenses that were paid in the 1st Q.

(8,521) Cost of service study not yet completed (currently in the rate design portion)

(76,241) Variance due to increase over 2012 labor coded to IN Strategic Planning

53,137 Broadband effort budgeted at $700k for the entire year. 2011-2013 project total to date (March) is $958k

(9,287) FH maintenance contractor not in place(3,600) Variance among multiple general ledger accounts (14 accounts)

(37,163)

49,485 156,280 106,796 Increase in expense - $100k funding to occur in future quarters. ($53,600 funded in April)

69,632 Overall increase in expense

690,701 673,603 (17,098) Decrease in expense - variance within expectations

6/7/2013 Page 2 of 4

Statement of Operations Budget to Actual

Detailed Breakout of Notable Drivers

55

56 Taxes - Line 20 Detail Breakout: 57 Property Tax and Other58 Utility Tax

59 Subtotal Taxes60

61 TOTAL OPERATING EXPENSES62

63

64 III FIXED CHARGES - Interest Expense - Line 27

65

66 IV PATRONAGE CAPITAL CREDITS - Line 3467

68

69 TOTAL NET OPERATING MARGINS70

71

72 V NON-OPERATING MARGINS73

74 Interest and Dividend Income - Line 2575

76 Other Income - Line 26

77

78 Fiber Optics Division - Line 27 Detail Breakout: 79

80 Island Network Income

81 Island Network Expenses82

83 Circuit Equipment/Internet Connection Expense84 Executive Expense

A. B. C. D.

Budget Actual BudgetYTD YTD Variance

Through Through YTD3/31/2013 3/31/2013 (B - A) Comments: Budget To Actual (Column C.)

272,934 269,754 (3,180) Decrease in expense10,827 Increase in property tax over budgeted amount

(14,007) Public utility tax less based on a reduction in budgeted sales and refund of taxes previous paid

(3,180)

5,790,169 5,689,390 (100,780) Overall decrease in expense

201,858 193,477 (8,381) Decrease in expense - RUS interest expense lower than budgeted due to reduced loan draws

20,222 23,035 2,813 Increase in income - Variance within expectations.

476,720 546,594 69,874 Increase in margin

57,633 31,812 (25,821) Decrease in margin

8,065 8,219 154 Increase in income - Variance within expectations.

4,410 4,522 112 Increase in income - Variance within expectations.

45,158 19,071 (26,087) Decrease in margin

89,666 91,420 1,754 Increase in income.

44,508 72,350 27,842 Increase in expense

24,531 Additional new connection expense (prior to moratorium)10,032 More time spent on new IN customers (prior to moratorium)

6/7/2013 Page 3 of 4

Statement of Operations Budget to Actual

Detailed Breakout of Notable Drivers

85 Multiple Accounts86 Subtotal Island Network Expenses87

88 Total Fiber Optics Division - Line 2789

90 TOTAL NON-OPERATING MARGINS91

92

93 GRAND TOTAL NET MARGIN DETAIL BREAKOUT

A. B. C. D.

Budget Actual BudgetYTD YTD Variance

Through Through YTD3/31/2013 3/31/2013 (B - A) Comments: Budget To Actual (Column C.)

(6,722) Variance among multiple general ledger accounts (13 accounts)27,842 Increase in expense

29,596 Decrease in margin

57,633 31,811 (25,821) Decrease in margin

534,353 578,406 44,053 Increase in margin

6/7/2013 Page 4 of 4

ORCAS POWER AND LIGHT COOPERATIVE

BALANCE SHEET

1 ASSETS23 UTILITY PLANT, at cost4 Electric plant in service (3200, 3201, 3202, 3203 & 3206)5 Construction work in progress (3204)67

8 Less accumulated depreciation and amortization (3300)9

10 Net utility plant1112 OTHER PROPERTY AND INVESTMENT, at cost13 Non-utility property (3205 & 3207)14 Less accumulated depreciation (3301 & 3302)1516

17 Investments in associated organizations (2900)1819 Other property and investments2021 CURRENT ASSETS22 Cash and cash equivalents (2000)23 Cash and cash equivalents - board designated (2001)24 Accounts receivable, less doubtful accts allowance25 (2300, 2301, 2302 & 2303)26 Interest receivable (2304)27 Materials and supplies (2500)28 Prepaid expenses (2600)2930 Total current assets3132 DEFERRED CHARGES (3400)3334 Total assets

A. B. C. D.Audited Actual Actual

Year End Period End Change Period End12/31/2012 3/31/2013 (B - A) 3/31/2012

82,840,443$ 83,193,879$ 353,436$ 81,146,513$ 1,438,043 1,687,199 249,156 963,094

84,278,486 84,881,078 602,592 82,109,608 34,068,592 34,680,337 611,744 32,734,259

50,209,894 50,200,741 (9,152) 49,375,349

317,280 396,481 79,201 258,372 64,426 66,515 2,089 58,239

252,854 329,966 77,112 200,132 929,141 941,004 11,863 915,578

1,181,995 1,270,969 88,975 1,115,710

2,091,466 2,697,012 605,546 2,635,025 2,002,236 2,003,336 1,100 2,005,535 2,388,170 2,256,356 (131,815) 2,526,419

6,848 13,553 6,704 12,518 1,502,931 1,665,800 162,870 1,412,545

115,232 105,099 (10,133) 105,216

8,106,883 8,741,156 634,273 8,697,257

- - - -

59,498,772$ 60,212,867$ 714,095$ 59,188,316$

6/7/2013 Page 1 of 2

ORCAS POWER AND LIGHT COOPERATIVE

BALANCE SHEET

3536 EQUITIES, MARGINS, AND LIABILITIES3738 EQUITIES AND MARGINS39 Memberships (5400)40 Patronage capital (5401)41 Donated and other equities (5402)4243 Total equities and margins4445 LONG-TERM DEBT, less current maturities46 RUS mortgage notes (5000)47 CFC mortgage notes (5001)4849 Total long-term liabilities5051 CURRENT LIABILITIES52 Accounts payable (4000)53 Customer deposits (4200)54 Accrued liabilities (4300, 4301 & 4302)55 Current maturities of long-term debt (5003)5657 Total current liabilities5859 DEFERRED CREDITS (4600)6061 Total equities and liabilities

A. B. C. D.Audited Actual Actual

Year End Period End Change Period End12/31/2012 3/31/2013 (B - A) 3/31/2012

54,800$ 54,685$ (115)$ 60,545$ 37,473,607 37,895,399 421,792 38,751,900 3,643,203 3,737,829 94,626 2,988,809

41,171,610 41,687,913 516,303 41,801,254

12,769,260 12,047,880 (721,381) 11,056,339 2,693,103 2,659,742 (33,361) 2,810,280

15,462,363 14,707,621 (754,742) 13,866,619

1,297,200 2,066,394 769,194 2,144,919 77,002 104,404 27,403 69,656

854,196 981,996 127,800 857,723 479,289 497,311 18,023 315,439

2,707,686 3,650,105 942,419 3,387,736

157,113 167,227 10,115 132,708

59,498,772$ 60,212,867$ 714,095$ 59,188,316$

6/7/2013 Page 2 of 2

ORCAS POWER AND LIGHT COOPERATIVE

STATEMENT OF CASH FLOW

NON GAAP

1 OPERATING ACTIVITIES:2 Margins3 Plus Depreciation/Amortization4 Cash Flow Operations5

6 PLANT INVESTMENT (NET) (Note 1)7 Cash Flow From Operations and Plant Investment:8

9 CASH FLOWS FROM PATRONAGE CAPITAL10 Cash Flow Before Borrowings11

12 NET BORROWINGS (Note 2)13 Cash Increase (decrease) After Net Borrowings14

15

16

17 OUTSTANDING DEBT BALANCE (Note 3)18

19 Notes: 20 1 Net Plant calc represents capital projects flowing through the Work Order module and inclu21 2 Net Borrowings for 2012 include $506k in principal payments, $1.5M loan draw on 6/8, an22 and a net $650k RUS Cushion of Credit increase.23 3 Outstanding debt balance is net of RUS Cushion of Credit (-$546,044 as of 12/31/12 and -$

A. B. C. D. E.Audited Annual Budget Actual

Year-End Budget Period End Period End Variance12/31/2012 12/31/2013 3/31/2013 3/31/2013 ( D - C )

815,000$ 704,000$ 534,000$ 578,000$ 44,000$ 2,652,000 2,807,000 691,000 674,000 (17,000) 3,467,000 3,511,000 1,225,000 1,252,000 27,000

(3,955,000) (5,671,000) (1,082,000) (956,000) 126,000 (488,000) (2,160,000) 143,000 296,000 153,000

(659,000) (697,000) (209,000) (204,000) 5,000 (1,147,000) (2,857,000) (66,000) 92,000 158,000

1,132,000 2,717,000 (863,000) 126,000 989,000 (15,000) (140,000) (929,000) 218,000 1,147,000

(15,942,000) (18,659,000) (15,079,000) (15,205,000) (126,000)

udes changes in general plant and material inventory.

nd a net $138k in RUS Cushion of Credit decrease. Net borrowings for 2013 include $87k in principal payments

$1,196,146 as of 3/31/13).

6/7/2013 Page 1 of 1

ORCAS POWER AND LIGHT COOPERATIVE

CAPITAL PROJECTS BUDGETA. B. C. D.

Budget Actual Calculated EstimatedYTD 1st Quarter Actual to Budget Completion2013 2013 (B / A) 3/31/2013

1 DISTRIBUTION2 100 New Line 156,000$ 12,469$ 8% 14%3 200 New Tie Line 91,500 5,563 6% 8%4 300 Conversion and Line Changes 1,900,000 132,219 7% 10%5 400 New Substations, switching station, metering point, etc6 500 Substation, Switching Station, Metering Point Changes 120,000 - 2%7 600 Miscellaneous Distribution Equipment8 601 Transformers and Meters 264,000 20,202 8% 23%9 602 Sets of Service Wires to increase Capacity

10 603 Sectionalizing Equipment 371,000 9,290 3% 21%11 604 Regulators 38,000 121,882 321% 25%12 605 Capacitors13 606 Ordinary Replacements 170,000 39,478 23% 38%14 608 URD Cable Replacement 531,000 86,543 16% 14%15 700 Other Distribution Items16 701 Engineering Fees17 704 LMS & SCADA 55,000 16,727 30% 10%18 705 AMR19 706 Communications20 706.0 Island Network New Services 90,000 76,662 85% 68%21 706.1 Fiber Infrastructure 285,000 30,832 11% 15%22 TRANSMISSION23 800 New Line24 900 New Substations, switching station, metering point, etc25 1000 Line and Station Changes 180,000 5,425 3% 3%26 1100 Other Transmission27 GENERATION28 1200 Generation29 OTHER30 1300 Headquarters Facilities 309,500 2,486 1% 6%31 1400 Acquisitions32 1500 All Other (Transportation, Etc.)33 1501 * Transportation/Equipment/Tools/Radios 363,000 3,535 1% 3%34 1502 * Office Equipment/Furniture/Etc. 75,000 6,793 9% 33%35 1503 * Computer/Servers/Software 182,000 116,322 64% 46%36 1600 Minor Projects 305,000 213,515 70% 64%37

38 RUS CWP SUBTOTAL 5,486,000 899,945 16% 22%39 CONTRIBUTION IN AID OF CONSTRUCTION (CIAC)40 New Services (OPALCO), Transformers, Meters, New Services (IN) (293,000) (106,722) 36%41

42 NET TOTAL 5,193,000$ 793,223$ 15% 22%

Note: * Board approved capital items not previously reported in Capital Project Budget

RUS CWP DESCRIPTION

ORCAS POWER AND LIGHT COOPERATIVE

ISLAND NETWORKSTATEMENT OF OPERATIONS

1 OPERATING REVENUES2 2.5010.0000 Non Profit/Public3 2.5014.0000 I-I Additional VLAN4 2.5017.0000 Spec Consideration5 2.5020.0000 Interisland Trn6 2.5030.0000 WS Internet Sp7 2.5035.0000 WS Int Acc Vol8 2.5040.0000 Wholesale Priv9 2.5050.0000 Wireless Loc

10 2.5060.0000 Customer Config11 2.5230.0000 Miscellaneous Revenue12 2.5230.1000 Misc. Revenue - Product Sales13 2.5231.1000 Misc. Sales - CGS14 2.5260.0000 Penalty Revenue15 Total Operating Revenues1617 OPERATING EXPENSES18 2.6124.1000 License Fees19 2.6230.0000 Central Office Transmission 20 2.6232.0000 Circuit Exp21 2.6232.1000 Circuit Equip Exp-Outage22 2.6310.1000 Internet Connection Exp23 2.6310.2000 Wireless Exp24 2.6310.3000 Network Operations Exp25 2.6530.0000 Network Operatn26 2.6531.0000 Power Expense27 2.6532.0000 Network Admin28 2.6533.0000 Testing and Analysis Expense29 2.6540.0000 Access Expense30 2.6561.0000 Depreciation31 2.6562.0000 Amortization32 2.6610.0000 Marketing33 2.6623.0000 Customer Serv34 2.6711.0000 Executive35 2.6720.0000 Gen'l & Admin36 2.6721.0000 Accounting and Finance37 2.6725.000 Legal38 2.6727.1000 Engineering Exp39 2.6727.2000 Eng Consult40 2.6730.0000 Insurance Exp41 2.7240.0000 Operating Taxes42 Total Operating Expenses4344 NET MARGINS

A. B. C. D. E.

Audited Annual 1st Quarter ActualYear End Budget Budget 1st Quarter Variance

12/31/2012 12/31/2013 3/31/2013 3/31/2013 (D - C)

185,378 191,992 58,116 41,665 (16,451) - - - -

30,210 31,116 7,680 7,455 (225) 21,000 21,630 5,409 5,250 (159)

84 87 21 21 - 31,572 32,519 8,130 7,740 (390) 67,143 54,743 10,351 28,780 18,429

600 621 156 150 (6) 10,500 4,429 - 100 100

13 - - - - - - - - - - - - - -

1,619 1,705 (195) 259 454 348,119 338,842 89,668 91,420 1,752

- - - - - - - - - -

6,999 3,434 60 5,315 5,255 4,218 6,720 - 709 709

34,618 24,546 - 19,277 19,277 724 691 174 - (174)

1,665 659 - - 17,376 17,897 12,366 4,560 (7,806)

828 861 189 199 10 16,339 21,290 8,490 8,267 (223)

423 497 - - - 3,334 3,367 - 1,966 1,966 8,197 8,445 2,095 2,089 (6) 5,660 5,874 1,467 1,415 (52)

- 136 33 - (33) 1,281 1,320 1,320 - (1,320)

69,913 71,432 5,031 15,063 10,032 157 165 - - - - - - - - 473 - - - - 138 142 - - -

46,200 47,586 11,898 12,150 252 1,146 1,189 297 287 (11) 5,406 5,232 1,088 1,055 (33)

225,095 221,482 44,508 72,350 27,842

123,024 117,360 45,160 19,071 (26,089)

Page 1 of 1

ORCAS POWER AND LIGHT COOPERATIVE

ISLAND NETWORKBALANCE SHEET

1 ASSETS

2 UTILITY PLANT, at cost3 Fiber Plant in Service4 Fiber plant in service56 Less accumulated depreciation7 Net utility plant89 CURRENT ASSETS10 Accounts receivable11 Prepaid expenses1213 Total current assets1415 Total assets1617 EQUITIES AND MARGINS18 Memberships19 Memberships Issued20 Margins & Equity21 Net Margins & Equity2223 Total equities and margins2425 CURRENT LIABILITIES26 Accounts payable27 Accrued liabilities28 Total current liabilities2930 Total equities, margins, and liabilities

A. B. C.

Audited Actual Year End 1st Quarter Change

12/31/2012 3/31/2013 (B - A)

307,286 386,487 79,201

(54,432) (56,521) (2,089)252,854 329,966 77,112

57,534 41,360 (16,175)478 191 (287)

58,012 41,551 (16,461)

310,866 371,516 60,651

15 15 0

123,024 142,095 19,071

123,039 142,110 19,071

187,321 227,762 40,441505 1,644 1,139

187,827 229,406 41,580

310,866 371,516 60,650

Page 1 of 1

ORCAS POWER AND LIGHT COOPERATIVE

BROADBAND EXPENSES THROUGH APRIL 30, 2013

A. B. C. D.Audited Audited Expenses Project

Year End Year End Through Total2011 2012 4/30/2013 To Date

CATEGORY

1 Staff Labor/Benefits 47,169.26 187,654.67 91,892.36 326,716.29

2 TAD 1,578.50 41,774.96 18,496.19 61,849.65

3 IDCS 79,215.00 16,600.00 - 95,815.00

4 GVNW - 214,909.30 30,687.33 245,596.63

5 Cascadia Archaeology LLC - 18,921.50 - 18,921.50

6 Creative Resource Consulting 19,899.75 40,548.75 26,667.25 87,115.75

7 Ulteig Engineers Inc - 6,972.82 - 6,972.82

8 Venable LLP - 18,410.00 18,288.00 36,698.00

9 Harrington - 11,244.50 2,200.00 13,444.50

10 Mountain Cedar Partners LLC - - 9,970.00 9,970.00

11 Enviroissues Inc - - 39,454.34 39,454.34

12 Legal Expense 2,603.50 43,228.86 4,196.25 50,028.61

13 Pixel Spoke - - 9,221.25 9,221.25

14 Rock Island Internet - - 2,990.00 2,990.00

15 Other Misc Expenses 12,339.16 14,972.77 7,965.17 35,277.10

16 Total Costs 162,805.17 615,238.13 262,028.14 1,040,071.44

ORCAS POWER AND LIGHT COOPERATIVE

RUS FORM 7STATEMENT OF OPERATIONS

According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid OMBcontrol number. The valid OMB control number for this information collection is 0572-0032. The time required to complete this information collection is estimated to average 16 hours perresponse, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

BORROWER DESIGNATION WA0009BORROWER NAME AND ADDRESS

FINANCIAL AND STATISTICAL REPORT Orcas Power & Light Cooperative

INSTRUCTIONS-For detailed instructions, see RUS Bulletin 1717B-2 PERIOD ENDED This data will be used by RUS to review your financial situation. Your response is Mar-13required (7 U.S.C 901 et. Seq.) and may be confidential.

CERTIFICATION

We recognize that statements contained herein concern a matter within the jurisdiction of an agency of the United States and the making of a false, fictitious or fraudulent statement may render the maker subject to prosecution under Title 18, United States Code Section 1001.

_______ All of the obligations under the RUS loan documents have been fulfilled in all material respects.

_________ There has been a default in the fulfillment of the obligations under the RUS loan documents. Said default(s) is/arespecifically described in Part D of this report.

DATE

YEAR-TO-DATEITEM LAST YEAR THIS YEAR BUDGET THIS MONTH

(a) (b) (c) (d) 1. Operating Revenue and Patronage Capital............................ 6,276,325 6,406,425 6,448,523 2,020,973 2. Power Production Expense.................................................... - - - - 3. Cost of Purchased Power....................................................... 2,551,636 2,363,444 2,645,383 779,012 4. Transmission Expense........................................................... 17,628 16,547 5,330 3,558 5. Regional Market Expense...................................................... 6. Distribution Expense-Operation.............................................. 662,835 834,223 769,601 295,797 7. Distribution Expense-Maintenance......................................... 373,938 449,393 360,153 132,115 8. Consumer Accounts Expense................................................ 200,332 212,052 221,373 66,358 9. Customer Service and Informational Expense....................... 38,319 169,688 62,611 72,712 10. Sales Expense....................................................................... 3,655 4,259 4,220 952 11. Administrative and General Expense.................................... 646,101 691,739 733,913 249,296 12. Total Operation and Maintenance Expense (2 thru 11)......... 4,494,443 4,741,345 4,802,584 1,599,799 13. Depreciation and Amortization Expense................................ 652,559 673,603 690,701 225,267 14. Tax Expense - Property and Gross Receipts........................ 35,143 45,932 35,104 15,311 15. Tax Expense - Other.............................................................. 209,793 223,822 237,829 69,146 16. Interest on Long-Term Debt................................................... 189,091 193,477 201,857 54,477 17. Interest Charged to Construction - Credit.............................. - - - 18. Interest Expense - Other........................................................ - - - - 19. Other Deductions................................................................... - 4,688 - 4,688 20. Total Cost of Electric Service (12 thru 19)............................. 5,581,028 5,882,866 5,968,075 1,968,687 21. Patronage Capital and Operating Margins (1 minus 20)....... 695,297 523,559 480,448 52,286 22. Non Operating Margins - Interest.......................................... 7,802 8,219 8,066 3,040 23. Allowance for Funds Used During Construction.................... - - - 24. Income (Loss) from Equity Investments................................ - - - 25. Non Operating Margins - Other............................................. 52,466 23,593 49,571 10,094 26. Generation and Transmission Capital Credits....................... - - - - 27. Other Capital Credits and Patronage Dividends.................... 16,129 23,035 20,222 - 28. Extraordinary Items................................................................ - - - - 29. Patronage Capital or Margins (21 thru 28)............................ 771,694 578,406 558,307 65,419

DURING THE PERIOD COVERED BY THIS REPORT PURSUANT TO PART 1718 OF 7 CFR CHAPTER XVII(check one of the following

SIGNATURE OF MANAGER

PART A. STATEMENT OF OPERATIONS

UNITED STATES DEPARTMENT OF AGRICULTURERURAL UTILITIES SERVICE

We hereby certify that the entries in this report are in accordance with the accounts and other records of the system and reflect the status of the system to the best of our knowledge and belief.

ALL INSURANCE REQUIRED BY PART 1788 OF 7 CFR CHAPTER XVII, RUS, WAS IN FORCE DURING THE REPORTING PERIOD AND RENEWALS HAVE BEEN OBTAINED FOR ALL POLICIES.

ORCAS POWER AND LIGHT COOPERATIVE

RUS FORM 7BALANCE SHEET

USDA - RUS BORROWER DESIGNATION

FINANCIAL AND STATISTICAL REPORT PERIOD ENDED Mar-13 INSTRUCTIONS - See RUS Bulletin 1717B-2

PART B. DATA ON TRANSMISSION AND DISTRIBUTION PLANT YEAR-TO-DATE YEAR-TO-DATE

ITEM LAST YEAR THIS YEAR ITEM LAST YEAR THIS YEAR(a) (b) (a) (b)

1. New Services Connected 27 20 5. Miles Transmission 42.65 42.656. Miles Distribution-

2. Services Retired Overhead 160.50 156.707. Miles Distribution-

3. Total Services in Place 14,644 14,758 Underground 1,118.50 1,122.304. Idle Services 8.Total Miles Energized (Exclude Seasonal) 1,011 1,086 (5 + 6 + 7) 1,321.65 1,321.65

PART C. BALANCE SHEET ASSETS AND OTHER DEBITS LIABILITIES AND OTHER CREDITS 1. Total Utility Plant in Service............................................ 83,193,879 30. Memberships............................................................... 54,685 2. Construction Work in Progress....................................... 1,667,556 31. Patronage Capital........................................................ 36,502,469 3. Total Utility Plant (1 + 2)................................................. 84,861,434 32. Operating Margins - Prior Years.................................. 814,524 4. Accum. Provision for Depreciation and Amort................ 34,660,693 33. Operating Margins - Current Year............................... 548,582 5. Net Utility Plant (3 - 4).................................................... 50,200,741 34. Non-Operating Margins............................................... 29,824 6. Non-Utility Property - Net................................................ 329,966 35. Other Margins and Equities......................................... 3,737,829 7. Investments In Subsidiary Companies........................... - 36. Total Margins and Equities (30 thru 35)...................... 41,687,913 8. Invest. In Assoc. Org. - Patronage Capital.................... 375,730 37. Long-Term Debt - RUS (Net)....................................... 3,824,647 9. Invest. In Assoc. Org. - Other - General Funds.............. 7,000 38. Long-Term Debt - FFB - RUS Guaranteed................... 9,799,313 10. Invest. In Assoc. Org. - Other -Nongeneral Funds........ 558,274 39. Long-Term Debt - Other - RUS Guaranteed............... - 11. Investments In Economic Development Projects.......... - 40. Long-Term Debt - Other (Net)..................................... 2,777,120 12. Other Investments......................................................... - 41. Long-Term Debt - RUS - Econ. Devel. (Net)............... - 13. Special Funds................................................................ 2,169,759 42. Payments-Unapplied (1,196,146)14. Total Other Property and Investments (6 thru 13)........ 3,440,728 43. Total Long-Term Debt (37 thru 41-42)......................... 15,204,93315. Cash - General Funds................................................... 1,865,360 44. Obligations Under Capital Leases-Noncurrent............ -

16. Cash - Construction Fund - Trustee.............................. 30,917 - 17. Special Deposits............................................................ - 46. Total Other Noncurrent Liabilities (44+45).................. - 18. Temporary Investments................................................. 634,312 47. Notes Payable............................................................. - 19. Notes Receivable (Net)................................................. - 48. Accounts Payable........................................................ 2,066,395 20. Accounts Receivable - Sales of Energy (Net)............... 1,403,521 49. Consumers Deposits................................................... 104,404 21. Accounts Receivable - Other (Net)................................ 88,352 50. Current Maturities Long-Term Debt.............................. - 22. Renewable Energy Credits...................................... - 51. Current Maturities Long-Term Debt-Ec.Dev................. - 23. Materials and Supplies - Electric and Other.................. 1,665,800 52. Current Maturities Capital Leases............................... - 24. Prepayments................................................................. 105,099 53. Other Current and Accrued Liabilities........................... 981,996 25. Other Current and Accrued Assets............................... 778,036 54. Total Current and Accrued Liabilities (47 thru 53)........ 3,152,795 26. Total Current and Accrued Assets (15 thru 25)............. 6,571,397 55. Regulatory Liabilities.................................................... - 27. Regulatory Assets......................................................... - 56. Other Deferred Credits................................................. 167,227 28. Other Deferred Debits.................................................... - 57. Total Liabilites and Other Credits29. Total Assets and Other Debits (5+14+26 thru 28)......... 60,212,867 (36+43+46+54 thru 56)............................................... 60,212,867

PART D. NOTES TO FINANCIAL STATEMENTSTHIS SPACE IS PROVIDED FOR IMPORTANT DISCLOSURE NOTES TO THE FINANCIAL STATEMENT CONTAINED IN THIS REPORT. REPORT ITEMS

CONTAINED IN THE INSTRUCTIONS AND ADDITIONAL MATERIAL ITEMS. (A SEPARATE SHEET MAY BE USED IF ADDITIONAL SPACE IS NEEDED.)

RUS Form 7

45. Accumulated Operating Provisions and Asset Retirement Obligations...................................