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Board of Directors Regular Meeting 2000 East Horsetooth Road, Fort Collins, Colorado Thursday, March 31, 2016, 9:00 a.m. Call to Order 1) Consent Agenda Motion to Approve a. Minutes of the Regular Meeting of February 25, 2016 b. Fire Service Mutual Aid IGAs Resolutions 05-16 and 06-16 2) Items Removed from Consent Agenda 3) Public Comment 4) Retirement Committee Report Other Action Items 5) Foothills (FEMA) Solar Project Approval Motion to Approve 6) Debt Financing Authorization a. Eleventh Supplement Resolution Resolution 07-16 b. Escrow Agreement c. Summary Notice of Bond Sale d. Official Notice of Bond Sale e. Preliminary Official Statement 7) HQ Campus Decision Resolution 08-16 8) 2015 BKD Audit Report Motion to Accept a. Fee Proposal and Contract Extension Management Reports 10) Legal & Governmental Affairs Report 11) February 2016 Operating Report 12) February 2016 Financial Report 13) Management Report a. Community Solar Program Update b. Water Discussion Roundtable Adjournment Page 1 9) Fort Collins Study Request Motion to Approve

Board of Directors Regular Meeting€¦ · Board of Directors Regular Meeting 2000 East Horsetooth Road, Fort Collins, Colorado Thursday, March 31, ... • Clean Power Plan Modeling

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Page 1: Board of Directors Regular Meeting€¦ · Board of Directors Regular Meeting 2000 East Horsetooth Road, Fort Collins, Colorado Thursday, March 31, ... • Clean Power Plan Modeling

Board of Directors Regular Meeting 2000 East Horsetooth Road, Fort Collins, Colorado

Thursday, March 31, 2016, 9:00 a.m.

Call to Order

1) Consent Agenda Motion to Approve a. Minutes of the Regular Meeting of February 25, 2016b. Fire Service Mutual Aid IGAs Resolutions 05-16 and 06-16

2) Items Removed from Consent Agenda3) Public Comment4) Retirement Committee Report

Other Action Items

5) Foothills (FEMA) Solar Project Approval Motion to Approve 6) Debt Financing Authorization

a. Eleventh Supplement Resolution Resolution 07-16 b. Escrow Agreementc. Summary Notice of Bond Saled. Official Notice of Bond Salee. Preliminary Official Statement

7) HQ Campus Decision Resolution 08-16 8) 2015 BKD Audit Report Motion to Accept

a. Fee Proposal and Contract Extension

Management Reports

10) Legal & Governmental Affairs Report11) February 2016 Operating Report12) February 2016 Financial Report13) Management Report

a. Community Solar Program Updateb. Water Discussion

Roundtable

Adjournment

Page 1

9) Fort Collins Study Request Motion to Approve

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2016 BOARD MEETING PLANNING CALENDAR

APRIL 28, 2016

Regular Board of Directors Meeting: • Acceptance of 2015 Annual Report • Revision to TARIFF— SCHEDULE 4:

Wholesale Transmission Service • Mountain West Transmission Group • Debt Financing Recap • Clean Power Plan Modeling Update • Water Discussion

MAY 26, 2016 Regular Board of Directors Meeting

• Integrated Resource Plan (IRP) Update

• Synopsis of State Legislation of Interest

• Water Discussion

Retirement Committee Meeting

JUNE 10 – 15, 2016 APPA National Conference Phoenix, AZ

www.publicpower.org

JULY 28, 2016

Regular Board of Directors Meeting: • Retirement Committee Report • Energy Efficiency Program Update • Community Solar Program • Water Discussion

AUGUST 25, 2016 Regular Board of Directors Meeting

• Wholesale Rate Forecast • Clean Power Plan Update • Water Discussion and Draft Water

Policy Retirement Committee Meeting

SEPTEMBER 29, 2016

Regular Board of Directors Meeting • Retirement Committee Report • 2017 Proposed Annual Budget Work

Session • Demand Response Pilot Update • 2017 Draft Strategic Plan • Potential Water Policy Approval

Calendar subject to change. Used for planning purposes only. Last updated: March 2016

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2016 BOARD MEETING PLANNING CALENDAR

OCTOBER 27, 2016 Regular Board of Directors Meeting

• 2017 Proposed Annual Budget Update (first public hearing)

• 2017 Proposed Rate Tariff(s) • 2017 BKD Audit Plan • Rawhide rail contract • Clean Power Plan Update

NOVEMBER 18, 2016 No Board of Directors Meeting

Retirement Committee Meeting

DECEMBER 8, 2016 Regular Board of Directors Meeting

• Retirement Committee Report • 2017 Annual Budget Review (second

public hearing and adoption) • 2017 Proposed Board of Directors

Regular Meeting Schedule • 2017 Strategic Plan (Approval) • Integrated Resource Plan (IRP)

Update

Calendar subject to change. Used for planning purposes only. Last updated: March 2016

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2016 Board of Directors

Term Expiration

Town of Estes Park P.O. Box 1200, Estes Park, Colorado 80517

Mayor Bill Pinkham April 2016 Reuben Bergsten—Vice Chairman, Board of Directors December 2019

City of Fort Collins P.O. Box 580, Fort Collins, Colorado 80522

Mayor Wade Troxell April 2017 Mayor Pro Tem Gerry Horak December 2016

City of Longmont 350 Kimbark Street, Longmont, Colorado 80501

Mayor Dennis Coombs November 2017 Tom Roiniotis—Chairman, Board of Directors December 2018

City of Loveland 500 East Third Street, Suite 330, Loveland, Colorado 80537

Mayor Cecil Gutierrez—Secretary, Board of Directors November 2017 Steve Adams December 2017

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Vision, Mission, and Values Vision: As a respected leader and responsible energy partner, improve the quality of life for the citizens served by our owner communities. Mission: Provide safe, reliable, environmentally responsible, and competitively priced energy and services. Values: • Safety – Working safely and protecting the public, our employees, and the assets

we manage is non-negotiable.

• Integrity – Being ethical and holding ourselves accountable to conduct business in a fair, honest, open, compliant, and environmentally responsible manner is at the core of what we do.

• Customer Service – Providing quality service at a competitive price while being responsive to our owners’ needs creates added value and improves customer satisfaction.

• Respect – Encouraging constructive dialogue that promotes a culture of inclusiveness, recognizes our differences, and accepts varying viewpoints will lead us to optimal solutions for even the most difficult challenges.

• Operational Excellence – Engaging employees to strive for excellence and continuous improvement ensures that we provide reliable service while managing costs and creating a rewarding work environment.

• Innovation – Supporting the development of technologies to promote the efficient use of electricity, protect the environment, and create a diversified energy supply portfolio mitigates risk and creates opportunities.

• Sustainability – Maintaining financial integrity, minimizing our environmental impact, and supporting responsible economic development in our owner communities ensures the long-term viability of the organization and the communities we serve.

2000 East Horsetooth Road • Fort Collins, Colorado 80525-5721 970-226-4000 • www.prpa.org

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Regular Meeting Minutes of the Board of Directors 2000 East Horsetooth Road, Fort Collins, Colorado

Thursday, February 25, 2016 ATTENDANCE Board Members Representing Estes Park: Mayor Bill Pinkham and Reuben Bergsten Representing Fort Collins: Mayor Wade Troxell1 and Mayor Pro Tem Gerry Horak2 Representing Longmont: Mayor Dennis Coombs and Tom Roiniotis Representing Loveland: Mayor Cecil Gutierrez and Steve Adams Platte River Staff Jackie Sargent (General Manager/CEO) Joe Wilson (General Counsel) Jason Frisbie (Chief Operating Officer) Dave Smalley (Chief Financial & Risk Officer) John Bleem (Strategic Planning & Customer Service Director) Karin Hollohan (Corporate Services Director) Pete Hoelscher (Communications & Marketing Director) Deb Schaneman (Chief Compliance Officer) Heather Banks (Fuels & Water Manager) Julie Depperman (Treasury Manager) Jeff Menard (Facilities & Security Supervisor) Baird Cook (Facilities Project Coordinator) Shelley Nywall (Controller) Ryan Donovan (Associate General Counsel) Paul Davis (Customer Services Manager) Joel Danforth (Customer Services Program Manager) Angela Walsh (Executive Assistant) Guests Kevin Gertig (Fort Collins Utilities Executive Director) Dan Hartman (Public Financial Management) Peter O’Neil (Chairperson, Fort Collins Energy Board) CALL TO ORDER Chairman Roiniotis called the meeting to order at 9:00 a.m. A quorum of Board Members was present and the meeting, having been duly convened, was ready to proceed with business. ACTION ITEMS (1) Consent Agenda Director Coombs moved to approve the consent agenda as presented and approve Resolution No. 01-16, the General Manager/General Counsel Annual Review Policy Revision. Director

1 Dismissed himself at 12:10pm prior to Executive Session. 2 Absent.

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Regular Board Meeting Minutes: February 25, 2016

Pinkham seconded, and the motion carried 7-0. (2) Items Removed from the Consent Agenda. None. (3) Public Comment. None. (4) Platte River Power Authority Annual Meeting

a. Election of Officers

Chairman Roiniotis noted the present elected officers are: • Tom Roiniotis, Chairman • Bill Pinkham, Vice Chairman • Cecil Gutierrez, Secretary • David Smalley, Treasurer • Jackie Sargent, General Manager/CEO

Chairman Roiniotis reminded the Directors the officers serve for one year. If the Board receives multiple nominations for any office a vote will be called for each office separately. The floor was opened for nominations. Director Bergsten made a motion to keep the existing slate of officers with the exception of the Vice Chairman because Mayor Pinkham is term limited. Director Gutierrez nominated Director Reuben Bergsten to the Vice Chairman position. Director Wade Troxell also nominated Director Gerry Horak to the Vice Chairman position. With multiple nominations for Vice Chairman, Chairman Roiniotis called a vote. Director Horak received one vote, Director Bergsten received six votes. Chairman Roiniotis restated the elected officers for clarity; Tom Roiniotis for Chairman, Reuben Bergsten for Vice Chairman, Cecil Gutierrez for Secretary, and the staff members David Smalley for Treasurer and Jackie Sargent for General Manager/CEO. Director Pinkham moved to accept Resolution No. 02-16, Annual Election of Officers as presented. Director Adams seconded, and the motion carried 7-0.

b. Annual Retirement Committee Appointments

Chairman Roiniotis stated the present Retirement Committee consists of the following members:

• Directors: Bill Pinkham, Dennis Coombs, Gerry Horak, and Steve Adams • Management: Jackie Sargent and David Smalley

For 2016, no changes are proposed for management members. Chairman Roiniotis explained the Board needs to appoint four Directors and two management members to the committee, and opened the floor for nominations. If there are more than four nominations a vote will be called for each of the individuals nominated. The present slate of committee members as listed above were nominated by Director Bergsten to serve on the Retirement Committee in 2016, and Director Gutierrez seconded. Director Pinkham moved to accept Resolution No. 03-16, Annual Retirement Committee Appointments as presented. Director Gutierrez seconded, and the motion carried 7-0.

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Regular Board Meeting Minutes: February 25, 2016

c. 2015 Operations and Financial Review Jason Frisbie, chief operating officer, reviewed the 2015 events of significance for power production and power delivery, operational highlights, major accomplishments and year-end variance results listed in the Board packet starting on page 45. Mr. Frisbie provided an update regarding the re-filing of the revised Joint Dispatch Agreement (JDA) with the Federal Energy Regulatory Commission (FERC) in that FERC approved the agreement on February 18, 2016. Discussion between Directors and staff regarding resource management and how it relates to the JDA followed. Staff will continue to update the Board throughout the year. Dave Smalley, chief financial and risk officer, reviewed 2015 financial results, highlights, significant events, variances and yearly trends also provided in the Board packet starting on page 53. Overall, even with a soft surplus sales market, Platte River met all of the Strategic Financial Plan targets for 2015. Mr. Smalley noted that surplus sales continue to lag in 2016. Director Bergsten asked about projections for 2016 net income, noting that the approved rates included an additional increase in preparation for the Clean Power Plan (CPP). Staff responded that 2016 rates included a minimal increase with regard to planning for the CPP which would not have a significant impact on 2016 net income. Soft surplus sales revenues would continue to reduce net income. Further discussion between Directors and staff regarding resource management and utilization, efficiencies in the system and how modeling ties into yearly budget preparation followed. (5) Windy Gap Firming Project Funding Resolution (presenter: Heather Banks)

a. Fifth Interim Agreement, Windy Gap Firming Project – Design Phase Heather Banks, fuels and water manager, introduced the memo, resolution and agreement associated with the design phase of the Windy Gap Firming Project provided in the Board packet starting on page 67. Staff recommended the approval of the resolution to move forward with the project. Director Adams moved Resolution No. 04-16, accepting the Windy Gap Firming Project Funding as presented. Director Gutierrez seconded, and the motion carried 7-0. (6) Legal & Governmental Affairs Report (presenter: Joe Wilson) Joe Wilson, general counsel, presented a few highlights from the legal and government affairs report starting on page 77 of the packet. Discussion took place between Directors and staff regarding commercial use of the fiber optic cable installed on the Western Area Power Administration transmission lines between Loveland and Estes Park. A Director also asked for an update regarding the depositions that were taken regarding the Zayo matter. General counsel shared that the depositions went well and he is guardedly optimistic that a settlement in this case may be reached by the end of summer. (7) Operating Report, January, 2016 (presenter: Jason Frisbie)

Mr. Frisbie, chief operating officer, reviewed the January operational budget variances and noted the full report for January is in the Board packet starting on page 81.

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Regular Board Meeting Minutes: February 25, 2016

(8) Financial Report, January, 2016 (presenter: Dave Smalley) Mr. Smalley, chief financial & risk officer, highlighted the financial budget variances for January. The full report for January is in the Board packet starting on page 89.

a. Debt Financing Overview (presenters: Julie Depperman, Dan Hartman-PFM) Julie Depperman, treasury manager, gave a brief overview of Platte River’s interest in debt financing highlighted in the memo on page 99 of the Board packet. Dan Hartman, managing director with PFM, gave an overview of current market conditions (rates at all time lows for municipal bonds), the process for the bond issuance and the rating agency’s role. Joe Wilson previewed the supporting documents that will be brought to the Board in March for approval. (9) Management Report (presenter: Jackie Sargent) Jackie Sargent, general manager/CEO, recognized John Bleem, strategic planning & customer service director, and noted his retirement scheduled for March 4, 2016. Chairman Roiniotis read a recognition and overview of Mr. Bleem’s nearly 25 years of service at Platte River, noting major accomplishments and recognitions received. Ms. Sargent referred to the safety, environmental, legal, operational, and financial updates as well as upcoming Board approvals for the March Board meeting. All are covered in the Board packet beginning on page 101. The general manager shared information regarding two recent security incidents that occurred at the Rawhide Energy Station and highlighted the additional security measures that have already been implemented to enhance and strengthen security at the site.

a. Community Solar Update (presenter: Paul Davis) Paul Davis, customer services manager, provided an overview and update of the community solar pilot project that is being considered in coordination with municipality staff. He highlighted the project schedule and next steps. No action was required from the Board and the presentation was provided for informational purposes only. Discussion took place between Directors and staff regarding the issues that the municipalities may need to consider and the process for integrating solar into the system. The general manager noted that an IGA will likely need to be executed to facilitate this project and that it may make sense to include other distributed energy resource options within the scope of such agreement. Platte River staff will continue to keep the Board informed as progress continues.

b. Headquarters Campus Discussion (presenters: Karin Hollohan, Baird Cook)

Karin Hollohan, corporate services director, gave a brief review of the December HQ campus project presentation and reviewed the alternatives Platte River has been considering in the evaluation phase of the project. As part of a location assessment, staff has conducted a review of traffic patterns and vehicle miles traveled between facilities and to attend meetings. Preliminary results confirm that Fort Collins affords the most central location for Platte River’s HQ campus. Baird Cook, facilities project coordinator, provided further project details including an overview of the project schedule and next steps. No decision was requested from the Board and the presentation was for informational purposes only. A Board decision regarding how to

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Regular Board Meeting Minutes: February 25, 2016

move forward will be requested at the March Board meeting. (10) Executive Session Director Pinkham moved that the Board go into executive session for the purposes of considering information concerning the purchase, lease, transfer, or sale of real property associated with the Platte River Power Authority headquarters campus and for the purpose of receiving legal advice on specific legal questions. The general counsel advised that an executive session is authorized in this instance pursuant to Colorado Revised Statutes, Section 24-6-402, subsections (4)(a) and (b); provided that, no formal action will be taken during the executive session. Director Coombs seconded, and the motion carried 6-0. (11) Reconvene Regular Session The Chairman reconvened the Regular Board Meeting. (12) Roundtable Due to time constraints, no Board member shared news. ADJOURNMENT With no further business, the meeting adjourned at 1:04 p.m. The next regular Board meeting is scheduled for March 31, 2016, at 9:00 a.m. in the Platte River Power Authority Board Room, 2000 East Horsetooth Road, Fort Collins, Colorado.

AS WITNESS, I have executed my name as Assistant Secretary and have affixed the corporate seal of the Platte River Power Authority this day of , 2016.

Assistant Secretary

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Memorandum Date: March 23, 2016

To: Board of Directors

From: Jackie A. Sargent, General Manager/CEO Ryan Donovan, Associate General Counsel

Subject: Fire Service Mutual Aid Agreements between Platte River Power Authority and the Loveland Fire Rescue Authority and the Estes Valley Fire Protection District

Platte River entered into a Fire Service Mutual Aid Agreement with the Town of Estes Park Fire Department in 2003. Recently, the Estes Valley Fire Protection District (EVFPD) replaced the Town’s Fire Department and now provides fire protection, emergency medical, rescue, ambulance, and hazardous materials services within the Town of Estes Park. This change requires Platte River to renew the agreement with the proper entity, EVFPD. The attached agreement with EVFPD is substantially similar to the 2003 agreement with the Town’s Fire Department. In 2003, Platte River also entered into Fire Service Mutual Aid Agreements with both the Loveland Fire and Rescue Department and the Loveland Rural Fire Protection District. These two parties have subsequently formed, by intergovernmental agreement, a separate entity known as the Loveland Fire Rescue Authority (LFRA). Again, this change requires Platte River to renew the agreement with the proper entity, LFRA. The attached agreement with LFRA is substantially similar to the agreements entered into with its predecessor entities, as well as substantially similar to the attached agreement with EVFPD. Each agreement authorizes the provision of mutual aid in the form of fire and emergency services within the service territory of the other party upon request. Neither agreement mandates the provision of aid, but rather establishes a process for requesting assistance. The responding party retains discretion as to the personnel and equipment, if any, that can be safely dispatched to the emergency. The management of Platte River recommends approval of the amended agreements. Both agreements have been signed by the counter parties. Two resolutions are attached. The first resolution approves the Fire Service Mutual Aid Agreement between Platte River and EVFPD and the second resolution approves the Fire Service Mutual Aid Agreement between Platte River and the LFRA. Attachments

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FIRE SERVICE MUTUAL AID AGREEMENT BETWEEN LOVELAND FIRE RESCUE AUTHORITY AND PLATTE RIVER POWER AUTHORITY

1. PARTIES. This Agreement is between the Platte River Power Authority (Platte River) and the Loveland Fire Rescue Authority (LFRA) (collectively, the "parties11

).

2. RECITALS OF PURPOSE AND AUTHORITY.

2.1 Each party maintains a fire department, together with appropriate personnel and equipment, but from time to time is faced with emergencies beyond the capacity of its individual forces.

2.2 lt is to the mutual benefit of each of the parties to assist the other when necessary in providing additional fire and emergency equipment and personnel for the purpose of fighting fires and responding to other emergency calls within the boundaries of the other party, and in turn to receive such assistance.

2.3 Sections 29-5-103 through 29-5-110, C.R.S., provide authority for the parties to give mutual aid.

2.4 Section 29-1-203, C.R.S., provides authority for the parties to enter into intergovenunental agreements.

2.5 Platte River previously entered into mutual aid agreements with both the Loveland Fire & Rescue Department, dated April 17, 2003, and the Loveland Rural Fire Protection District, dated April 17, 2003 (collectively, the "Prior Agreements").

2.6 By an intergovernmental agreement, the Loveland Fire & Rescue Department and the Loveland Rural Fire Protection District created a separate governmental entity ,LFRA, to provide fire services to each jurisdiction ..

2.7 The parties desire to continue providing mutual aid to one another and replace all Prior Agreements with this Agreement.

3. DEFINITIONS.

3.1 The party responding to a request for mutual aid within the boundaries of the other party is the "answering party."

3.2 The party requesting aid under this agreement is the 11requesting party."

3.3 "Fire Chief" means the Olief of the respective fire department or the Chief's authorized representative.

4. MUTUAL ASSISTANCE AND AID.

Pagel of4

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4.1 Upon request of the requesting Fire Chief at any time, each of the parties agrees to respond to requests for assistance within the boundaries of the other party. Provided, however, it shall be entirely within the discretion of the Fire Chief of the ans~ering party as to what personnel and equipment shall answer such call and whether or not, in any event, such call can be answered consistently with the safety and protection of the citizens and property of the answering party. Nothing in this Agreement shall be construed as a limitation upon the respective governing bodies of the parties to limit the exercise of the Fire Chief's discretion by ordinance/regulation or by directive. 4.2 Any request for assistance should include a statement of the amount and type of equipment and personnel requested, and shall specify the location to which the equipment and personnel are to be dispatched, but the Fire Chief of the answering party shall determine the amount and type of equipment and number of personnel to be furnished.

4.3 The answering party shall report to the designated staging area for assignment by the requesting party's incident commander. The equipment and personnel that are assigned shall be under the immediate command of a superior officer designated by the answering party and accompanying them.

4.4 An answering party's resources will be released by the requesting party when the services of the answering party are no longer required or when the answering party's resources are needed within the area for which it normally provides fire protection, emergency medical services or other emergency public safety services, or for matters of cost, as determined by the Fire Chief of the answering party.

4.5 The Fire Chiefs of the respective parties are authorized to establish such written protocols, plans, and procedures as they deem useful and upon which they mutually agree, so long as they are consistent with this agreement and do not divest the answering party of its absolute discretion over the level of response, if any, to be provided in each case, and when it is to end.

5. FINANCIAL PROVISIONS.Any dispatch of equipment and personnel pursuant to this agreement is subject to the following additional conditions:

5.1 The answering party shall continue to be responsible for the pay and benefits of its firefighters, including any overtime, and the expenses incident to the operation and maintenance of its equipment. If the requesting party provides fuel or other incidental expendables, it shall do so without reimbursement by the answering party.

5.2 Each party waives all claims against the other party for compensation for any loss of or damage to firefighting equipment and for any loss, damage, personal injury or death sustained by firefighting personnel, which occurs as a consequence of the performance of this agreement. The provisions of this agreement shall not affect the right of any member of the answering fire department to receive workmen's compensation's benefits pursuant to Section 29-5-109, C.R.S., or pension fund payments pursuant to Section 29-5-110, C.R.S.

5.3 The provisions of this agreement shall not affect the allocation of civil liability pursuant to Section 29-5-108, C.R.S.

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5.4 This Agreement shall not be construed as to limit reasonable compensation, as defined in C.R.S. §29-22-104, in l'esponse to hazardous materials incidents. Furthermore, the requesting party agrees that it will reasonably pursue any legal reimbursement possible, from any local, state and federal agencies, other than a party to this agreement, and that, upon receipt of any such reimbursement (after subtracting the reasonable costs of pursuing and collecting the reimbursement), will distribute the received funds in a fair and equitable manner to the responding party based upon a pro rata share of documented expenses.

6. GENERAL PROVISIONS.

6.1 Nothing in this agreement shall be deemed a waiver of any immunity granted under the Colorado Governmental Immunity Act, 24-10-101 et seq., C.R.S.

6.2 Nothing in this agreement confers any benefits on any person not a party to this agreement.

6.3 This agreement is effective upon approval by the general Manager of the Platte River Power Authority and the LFRA Board in accordance with Section 29-1-203(1), C.R.S., and continues until such time as either party gives sixty days advance written notice to the other party of its intention to terminate this agreement.

6.4 This Agreement shall be governed by the laws of the State of Colorado and venue shall lie in the Cow1ty of Larimer.

6.5 The Participating Agencies enter into this Agreement as separate and independent governmental entities and each shall maintain such status throughout the term of this Agreement.

Dated this __ _..2"-Y,..._T_~ _ _ _ day of

WVELAND FIRE RESCUE AUTHORITY PLATIE RNER POWER AUTHORITY

By: ___________ _ General Manager Platte River Power Authority

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Attest Attest

Secretary

Approved as to form:

Associate General Counsel

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RESOLUTION NO. __- 16

WHEREAS, the Platte River Power Authority (“Platte River”) and the Town of Estes Park

Fire Department (“Town Department”) entered into a Fire Service Mutual Aid Agreement (“Prior

Agreement”), dated May 5, 2003; and

WHEREAS, the Estes Valley Fire Protection District (“EVFPD”) replaced the Town

Department for the provision of fire protection, emergency medical, rescue, ambulance and

hazardous materials services within the Town of Estes Park.; and

WHEREAS, Platte River and EVFPD desire to enter an agreement substantially similar

to the Prior Agreement that reflects EVFPD as the proper counter party; and

WHEREAS, the parties have negotiated such a Fire Service Mutual Aid Agreement for

this purpose (the “EVFPD Agreement”); and

WHEREAS, under Colorado law an intergovernmental agreement must be approved by

the legislative body of each of the contracting parties; and

WHEREAS, the management of Platte River recommends approval of the EVFPD

Agreement attached to this Resolution.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of Platte River Power

Authority that the EVFPD Agreement between Platte River Power Authority and the Estes

Valley Fire Protection District, in substantially the form presented, is approved for execution and

the General Manager/CEO is authorized to so execute. AS WITNESS, I have executed my name as Assistant Secretary and have affixed the corporate seal of the Platte River Power Authority this day of , 2016. Assistant Secretary

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RESOLUTION NO. __- 16

WHEREAS, the Platte River Power Authority (“Platte River”) and the Loveland Fire &

Rescue Department (“LFRD”) entered into a Fire Service Mutual Aid Agreement (“LFRD

Agreement”), dated April 17, 2003; and

WHEREAS, the Platte River and the Loveland Rural Fire Protection District (“LRFPD”)

entered into a Fire Service Mutual Aid Agreement (“LRFRD Agreement”), dated April 17, 2003;

and

WHEREAS, the LVRD and the LRFPD, by an intergovernmental agreement, created the

Loveland Fire Rescue Authority to provide fire protection and emergency services within the

areas previously served by LFRD and LRFPD; and

WHEREAS, Platte River and Loveland Fire Rescue Authority desire to enter an

agreement substantially similar to the agreements with LFRD and LRFPD that reflects Loveland

Fire Rescue Authority as the proper legal entity; and

WHEREAS, the parties have negotiated such a Fire Service Mutual Aid Agreement for

this purpose (the “Loveland Fire Rescue Authority Agreement”); and

WHEREAS, under Colorado law an intergovernmental agreement must be approved by

the legislative body of each of the contracting parties; and

WHEREAS, the management of Platte River recommends approval of the Loveland Fire

Rescue Authority Agreement attached to this Resolution.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of Platte River Power

Authority that the Loveland Fire Rescue Authority Agreement between Platte River Power

Authority and the Loveland Fire Rescue Authority, in substantially the form presented, is

approved for execution and the General Manager/CEO is authorized to so execute. AS WITNESS, I have executed my name as Assistant Secretary and have affixed the corporate seal of the Platte River Power Authority this day of , 2016. Assistant Secretary

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No materials at this time.

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There are no materials for this section.

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Memorandum Date: March 23, 2016

To: Board of Directors

From: Jackie A. Sargent, General Manager/CEO

Subject: Retirement Committee Report

The Retirement Committee held its quarterly meeting February 25, 2016. The minutes of that meeting are attached.

At the March Board meeting, the Committee Chairman will provide a summary of the February meeting.

No action by the Board is required.

Attachment

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Retirement Committee Meeting Minutes 2000 East Horsetooth Road, Fort Collins, Colorado

Thursday, February 25, 2016

ATTENDANCE Committee Members

Bill Pinkham (Chairman) Jackie Sargent (Plan Administrator) Dennis Coombs David Smalley Steve Adams Absent: Gerry Horak

Platte River Staff

Jason Frisbie (Chief Operating Officer) Julie Depperman (Treasury Manager) Caroline Schmiedt (Associate General Counsel) Karin Hollohan (Corporate Services Director) Becky Avery (Manager of Internal Audit) Brandi Walker (Contract Specialist) Tracy Thompson (Executive Assistant)

Guests Wendy Dominguez and Peter Mustian of Innovest Portfolio Solutions, LLC (“Innovest”)

CALL TO ORDER Chairman Bill Pinkham called the meeting to order at 1:31 p.m. A quorum was present and the meeting having been duly convened, was ready to proceed with business. ACTION ITEMS (1) Review Minutes of November 20, 2015 Meeting. Chairman Bill Pinkham asked for a motion to approve the minutes from the November 20, 2015 meeting. Dennis Coombs moved to approve the minutes as submitted. Steve Adams seconded the motion. Motion passed 5-0. (2) Review of 2015: 4th Quarter and Annual Investment Performance. Wendy Dominguez and Peter Mustian reviewed the fourth quarter and annual investment results and highlighted the Plan’s performance relative to its benchmarks (included in the Retirement Committee materials). As of December 31, 2015, Plan assets totaled $89.5 million compared to $88.4 million on September 30, 2015. For the quarter, the portfolio gained 1.6%, above the Custom Index benchmark of 1.4%. The portfolio allocation as of December 31, was 25% U.S. equities, 13% non-U.S. equities, 11% fixed income, 9% floating rate corporate loans, 5% commodities, 16% real estate, 16% hedge fund-of-funds, 4% MLPs, and 1% money market accounts. For the year, the portfolio decreased $2.0 million, which includes an investment loss of $0.6 million and net contributions of ($1.3) million. The Plan Sponsor Peer Group Analysis depicted on page 22 of the portfolio review packet shows that the Platte River Custom Index is at the 100th percentile over the last one-year period, which indicates the

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Retirement Committee Meeting Minutes: February 25, 2016 Page 2 lowest ranking in the peer group. Innovest will research the custom index ranking to determine if it is accurate and report back to the Committee. Innovest indicated that qualitatively they are pleased with the Plan’s fund managers. Wellington Opportunistic Growth fund was removed from the Watchlist. Innovest reported that DFA World ex US Val;I fund remains on the Watchlist, but has been reduced to a minor concern. No action is recommended. Innovest mentioned that they will be performing an asset allocation study to be presented at the May meeting. Platte River recently received the Actuarial Valuation – January 1, 2016 from Willis Towers Watson (formerly Towers Watson). Dave Smalley provided a brief overview of the funding requirements, with funding increasing to $6.2 million in 2017 compared to $2.9 million in 2016. The Committee had anticipated funding increasing in 2017 to approximately $3.5 million based on assumption changes that were effective January 1, 2016. The remainder of the increase is due to market returns (-1% compared to the 8% Plan return target.) Per standard pension actuarial valuations, the market return impact increases funding to $4.0 million. In addition to this, Platte River adopted an “additional funding charge” policy when assets fall below the value of accrued benefits. The additional $2.3 million would be funded under this policy, however, for rate stability; Platte River amortizes the additional funding over ten years. A full report will be brought to the Committee in May. (3) Election of Committee Chairperson. Due to term limitations, Mayor Pinkham will no longer be available to serve as a Committee member beginning in April. Chairman Bill Pinkham nominated Steve Adams as the Committee Chairperson. Dennis Coombs seconded the motion. Motion passed 5-0. (4) Other Business.

• No further business The next regularly scheduled Committee meeting is scheduled for May 26, 2016, at 12:30 p.m. in Platte River’s Board room. The meeting adjourned at 2:11 p.m. Chairman Adams

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Memorandum Date: March 23, 2016

To: Board of Directors

From: Jackie A. Sargent, General Manager/CEO Joe Wilson, General Counsel Paul Davis, Customer Services Manager

Subject: Foothills Solar Project

Loveland owned and operated 900kW of hydro generation that was destroyed during the 2013 flood. This hydro generation pre-dated the creation of Platte River and its output was “grandfathered” from the all-requirements obligation under the Power Supply Agreements. Loveland is seeking a FEMA grant to replace the hydro generation with a solar facility. The new solar facility will be owned by the city (a FEMA requirement) and, subject to final design, will have a nameplate capacity rating of 3.0 MW.1 Platte River staff has worked with Loveland staff to consider the implications of the solar installation within the context of the Power Supply Agreement between Platte River and Loveland. Staff is seeking Board acknowledgment that 2.5 MW of Loveland’s Foothills Solar Project is exempt from the all-requirements obligation otherwise contained in the Power Supply Agreement.

The Power Supply Agreement provides two exceptions to the all-requirements obligation that are relevant to this situation: 1) grandfathered generation; and, 2) new municipally owned generation in an amount of 1 MW or one percent of municipal peak, whichever is greater. Under the second exception, Loveland’s maximum peak to date was 160 MW; 1% of this value is 1.6 MW. The sum of the 1.6 MW allowed for new municipal generation and the 900 kW of grandfathered generation is 2.5 MW.

What is unique about the present situation is the replacement of a grandfathered unit with a new generation unit in a different location using a different generation technology. When Platte River initially entered Power Supply Agreements with the Municipalities there were three grandfathered hydro units, one each in Estes Park, Longmont and Loveland. Subsequently the Estes Park unit was destroyed in a flood and never rebuilt; the Longmont unit experienced some damage in the 2013 flood, but is being repaired. Because the Power Supply Agreements are silent about replacing a grandfathered unit in the manner being purposed by Loveland, both Loveland and Platte River staff believe it prudent to reflect in the minutes an acknowledgment by the Board that a grandfathered unit destroyed by a natural disaster may be rebuilt and that the proposal by Loveland is not inconsistent with the intent of the Power Supply Agreements. Therefore, we are requesting a Board motion and a vote in support of the position described

1 The 3.0-MW capacity based on the system’s alternating current (“AC”) rated output. All MW ratings for the remainder of this memo are assumed to be AC unless otherwise noted. Solar photovoltaic systems are also commonly rated in terms of their direct current (“DC”) output, which is simply the sum of all of the photovoltaic cells’ output under standard rating conditions. AC output is typically 80% to 90% of its DC output.

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MEMO: Foothills Solar Project

March 2016 Page 2 of 2

above; namely, recognizing the authority of Loveland own and operate 2.5 MW of generation at the Foothills Solar Project, consistent with the intent of the Power Supply Agreements, for the purpose of providing energy that reduces its all-requirements purchase obligation from Platte River.

Platte River staff will return in a future Board meeting to discuss and seek approval of an Intergovernmental Agreement through which Platte River will purchase the output of the remaining 0.5 MW of capacity in the Foothills Solar Project.

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Memorandum Date: March 23, 2016

To: Board of Directors

From: Jackie A. Sargent, General Manager/CEO Dave Smalley, Chief Financial and Risk Officer Joe Wilson, General Counsel Julie Depperman, Treasury Manager

Subject: Debt Financing Authorization

Staff and Platte River’s financial advisor, Public Financial Management (PFM), have been preparing a financing plan for a $60 million new money transaction for capital projects and a possible advance refunding of a portion of the outstanding Series HH Bonds. At the February Board meeting, staff presented an overview of the debt market and discussed the financing plan. At the March Board meeting, staff will provide a brief update on the financing plan and introduce bond documents requiring Board approval.

Update on Advance Refunding of Series HH Bonds

As discussed at the February meeting, Platte River may refund a portion of the outstanding Series HH Bonds (up to $105.4 million) if certain savings thresholds are met. As common practice, refunding is considered when savings are greater than 5% and escrow efficiency is greater than 50%.

The savings from the advance refunding are interest rate dependent. At the February Board meeting, PFM explained that a 25 basis-point increase in rates could reduce the present value savings by $2 million. When PFM presented the information to the Board, the present value savings were in excess of $11 million (11%) based on interest rates at the time. Interest rates across the yield curve have increased and, as such, the present value savings are now approximately $10.9 million (10%). At present, we are moving forward assuming the refunding will be included in the Series JJ Bond offering, but we will continue to monitor interest rates to ensure that savings thresholds are met. Platte River will have the opportunity to include or exclude the refunding up to 48 hours prior to the competitive sale date. Capital Projects to Be Funded by Series JJ Bonds

Production Projects Costs Project Timeframes Generator rotor & blower replacement, generator stator rewind $12,000,000 2017 - 2018 RH Unit 1 DCS replacement/expansion $7,697,000 2014 - 2016 Dust collection system upgrades $3,145,000 2018 - 2018 Coal dust pneumatic conveying system $1,775,000 2016 - 2017 Soldier Canyon 10” line modifications $1,398,000 2015 - 2016 Air heater basket replacement $1,300,000 2017 - 2018 HVMCC switchgear replacement $1,116,000 2018 - 2018 Miscellaneous production projects* $3,940,000 2014 - 2017

Total Production Projects $32,371,000

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MEMO: Debt Financing Authorization

March 2016 Page 2 of 3

Transmission Projects Costs Project Timeframes LaPorte Substation – 230kV expansion $7,116,000 2014 - 2016 Boyd 115/230kV substation transformer $6,953,000 2015 - 2017 Foothills Substation $4,098,000 2015 - 2017 Generation availability transformer – RH $1,655,000 2016 - 2016 Solar interconnection transformer – RH Flats $1,054,000 2015 - 2016 Miscellaneous transmission projects* $6,753,000 2014 - 2018

Total Transmission Projects $27,629,000

* Miscellaneous production projects include large equipment purchases; miscellaneous transmission projects include several breaker replacement projects. Key Upcoming Dates

March 23: Rating agency presentations (S&P, Fitch) March 31: Authorizing Resolution and other bond documents approved by the Board April 4: Receive ratings April 5: Begin marketing effort, including mailing Preliminary Official Statement and

Notice of Sale to potential investors April 12: Competitive bond sale April 13: Purchase escrow securities April 19: Mail final Official Statement April 20: Execute documents April 26: Bond closing

Board Authorization of Bond Documents

In preparation for issuing the Series JJ Bonds, Sherman & Howard (bond counsel) has drafted documents which will require Board approval in order to move forward with the bond transaction. Below is a list of documents and a brief description of each.

1. Eleventh Supplemental Resolution

This Resolution, which supplements the 1987 General Power Bond Resolution of Platte River, contains general terms of the Series JJ Bonds, establishes pricing parameters for the Series JJ Bonds, specifies the application of Series JJ Bonds proceeds, and contains certain “springing” amendments to the 1987 General Power Bond Resolution.

2. Escrow Agreement The Escrow Agreement with Wells Fargo Bank provides for the deposit and investment of the portion of the Series JJ Bonds to be used to refund the Series HH Bonds until such proceeds are used to redeem the Series HH Bonds on June 1, 2019.

3. Summary Notice of Bond Sale The Summary will be published in the Fort Collins Coloradoan and The Bond Buyer to give notice of the competitive sale of the Series JJ Bonds, as required by Colorado statute.

4. Official Notice of Bond Sale The Official Notice of Bond Sale will be electronically posted to give notice to underwriting firms of the competitive sale of the Series JJ Bonds. It contains a summary of the Series JJ Bond terms and specifies the bidding requirements to be followed.

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MEMO: Debt Financing Authorization

March 2016 Page 3 of 3

5. Preliminary Official Statement The Preliminary Official Statement sets forth the details of the Series JJ Bonds, the 1987 General Power Bond Resolution, and the Eleventh Supplemental Resolution, as well as material information about Platte River, its operations, and its financial condition. It will be used first in connection with the competitive sale of the Series JJ Bonds to give the prospective bidders information about the bonds and Platte River. Then, in final form, it will be used by the winning bidder to resell the Series JJ Bonds to the public.

Kurt Kaufmann from Sherman & Howard will review the documents at the Board meeting and staff will be available to answer questions.

Attachments

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PLATTE RIVER POWER AUTHORITY

RESOLUTION NO. __-16

AUTHORIZING THE ISSUANCE OF

A MAXIMUM PRINCIPAL AMOUNT OF $165,000,000

POWER REVENUE BONDS, SERIES JJ

(ELEVENTH SUPPLEMENTAL POWER BOND RESOLUTION)

ADOPTED MARCH 31, 2016

Resolution No. __-16 – Eleventh Supplemental Bond Resolution Authorizing Issuance of

Not to Exceed $165,000,000 Power Revenue Bonds, Series JJ Page 1 of 36

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TABLE OF CONTENTS Page

ARTICLE I DEFINITIONS AND STATUTORY AUTHORITY ........................................... 6

SECTION 1.01. Supplemental Resolution. ..................................................................................6 SECTION 1.02. Definitions..........................................................................................................6 SECTION 1.03. Election to Apply Supplemental Public Securities Act to the Series JJ

Bonds. ................................................................................................................8 SECTION 1.04. Authority for this Eleventh Supplemental Power Bond Resolution. ...............10

ARTICLE II AUTHORIZATION AND FORM OF SERIES JJ BONDS ............................ 11

SECTION 2.01. Principal Amount and Designation of Series. ..................................................11 SECTION 2.02. Purposes; Designation of 2016 Project. ...........................................................11 SECTION 2.03. Date, Maturities, Interest Rates and Sinking Fund Installments for Series

JJ Bonds. ..........................................................................................................11 SECTION 2.04. Denominations, Numbers and Letters..............................................................12 SECTION 2.05. Payment and Paying Agent. .............................................................................12 SECTION 2.06. Optional Redemption Price and Terms. ...........................................................12 SECTION 2.07. Provisions for Book-Entry System. .................................................................12 SECTION 2.08. Maximum Bond Reserve Account Requirement. ............................................14 SECTION 2.09. Approval of Forms of 2016 Escrow Agreement, Continuing Disclosure

Certificate and Preliminary Official Statement. ...............................................14 SECTION 2.10. Sale of the Series JJ Bonds. .............................................................................15 SECTION 2.11. Form of Series JJ Bonds and Trustee’s Authentication Certificate. ................15

ARTICLE III USE OF PROCEEDS OF SERIES JJ BONDS ............................................... 24

SECTION 3.01. Establishment of 2016 Project Account and 2016 Escrow Account. ..............24 SECTION 3.02. Deposit and Application of Proceeds of Series JJ Bonds. ...............................24 SECTION 3.03. Tax Covenants. ................................................................................................24 SECTION 3.04. Rebate Account. ...............................................................................................25 SECTION 3.05. Establishment of Series JJ Sub-Account in the Bond Service Account. .........25

ARTICLE IV AMENDMENTS TO GENERAL POWER BOND RESOLUTION ............. 26

SECTION 4.01. Springing Amendments to Section 1.01 of General Power Bond Resolution. .......................................................................................................26

SECTION 4.02. Springing Amendments to Sections 2.03, 5.03, 6.05, 6.14 and 6.15 of General Power Bond Resolution. .....................................................................27

SECTION 4.03. Deemed Consent by Series JJ Bondholders. ....................................................35

ARTICLE V MISCELLANEOUS ............................................................................................ 36

SECTION 5.01. Ratification. ......................................................................................................36 SECTION 5.02. Additional Actions. ..........................................................................................36 SECTION 5.03. Severability. .....................................................................................................36

Resolution No. __-16 – Eleventh Supplemental Bond Resolution Authorizing Issuance of

Not to Exceed $165,000,000 Power Revenue Bonds, Series JJ Page 2 of 36

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SECTION 5.04. Repealer. ..........................................................................................................36

Resolution No. __-16 – Eleventh Supplemental Bond Resolution Authorizing Issuance of

Not to Exceed $165,000,000 Power Revenue Bonds, Series JJ Page 3 of 36

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RESOLUTION NO. __-16

AUTHORIZING THE ISSUANCE OF A MAXIMUM PRINCIPAL AMOUNT OF $165,000,000 POWER REVENUE BONDS SERIES JJ

(Eleventh Supplemental Power Bond Resolution)

WHEREAS, the Board of Directors (“Board”) of Platte River Power Authority (“Platte River”) has duly adopted its Resolution No. 5-87 on November 26, 1987 (the “General Power Bond Resolution”), which Resolution No. 5-87 duly provided for the issuance of Power Revenue Bonds for the purposes therein stated, and it is necessary and desirable to authorize the issuance thereunder of a maximum $165,000,000 principal amount of Power Revenue Bonds, Series JJ (the “Series JJ Bonds”) for the purposes herein set forth; and

WHEREAS, the Board has determined that it is in the best interests of Platte River that the Series JJ Bonds shall be sold to the entity submitting the best bid for the Series JJ Bonds at a competitive sale thereof, which entity shall be designated in a certificate executed by an officer delegated such responsibility under Part 2 of Article 57 of Title 11, Colorado Revised Statutes, as amended (the “Supplemental Public Securities Act”); and

WHEREAS, the Board has determined to issue the Series JJ Bonds to (i) provide funds to finance a portion of the costs of the 2016 Project (as defined below) pursuant to Part 2 of Article 1 of Title 29, Colorado Revised Statutes, as amended (the “Act”) and Part 4 of Article 35 of Title 31, Colorado Revised Statutes, as amended (the “Bond Act”), and the Supplemental Public Securities Act, and (ii) provide funds sufficient, together with amounts deposited by Platte River, to provide for the refunding and payment, on June 1, 2019, of the principal of and interest on such portion, if any, of Platte River’s outstanding Power Revenue Bonds, Series HH designated in the certificate referred to above (the “Refunded Bonds”) for the purpose of reducing the interest costs payable on Platte River’s outstanding revenue bonds pursuant to Article 56 of Title 11, Colorado Revised Statutes, as amended (the “Refunding Act”); and

WHEREAS, the portion, if any, of the Series JJ Bonds used to refund the Refunded Bonds (the “Refunding Series JJ Bonds”) will constitute “Refunding Bonds” under (and as defined in) the General Power Bond Resolution and the remaining portion of the Series JJ Bonds (the “Construction Series JJ Bonds”) will constitute “Construction Bonds” under (and as defined in) the General Power Bond Resolution; and

WHEREAS, the Board determines that the provisions and limitations in the Bond Act, the Refunding Act and other applicable law imposed on the issuance of bonds under the Bond Act and the Refunding Act will be met; and

WHEREAS, all acts, conditions and things required by law and the General Power Bond Resolution to exist, to have happened and to have been performed precedent to and in the issuance of the Series JJ Bonds do exist, have happened and have been performed in regular and in due time, form and manner as required by law, and Platte River has duly and regularly complied with all applicable provisions of law and is duly authorized to issue the Series JJ Bonds

Resolution No. __-16 – Eleventh Supplemental Bond Resolution Authorizing Issuance of

Not to Exceed $165,000,000 Power Revenue Bonds, Series JJ Page 4 of 36

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in the manner and upon the terms as in the General Power Bond Resolution and this Eleventh Supplemental Power Bond Resolution provided.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of Platte River Power Authority, as follows:

Resolution No. __-16 – Eleventh Supplemental Bond Resolution Authorizing Issuance of

Not to Exceed $165,000,000 Power Revenue Bonds, Series JJ Page 5 of 36

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ARTICLE I

DEFINITIONS AND STATUTORY AUTHORITY

SECTION 1.01. Supplemental Resolution. This resolution is amendatory of, supplemental to and is adopted in accordance with Article II and Article VIII of the General Power Bond Resolution.

SECTION 1.02. Definitions.

(a) All terms which are defined in Section 1.01 of the General Power Bond Resolution shall have the same meanings, respectively, in this Eleventh Supplemental Power Bond Resolution as such terms are given in Section 1.01 of the General Power Bond Resolution (as such definitions may be modified by Section 4.01 of this Eleventh Supplemental Bond Resolution).

(b) In this Eleventh Supplemental Power Bond Resolution:

Beneficial Owners

“Beneficial Owners” means actual purchasers of the Series JJ Bonds whose ownership interest is evidenced only in the Book-Entry System maintained by the Depository hereunder.

Book-Entry System

“Book-Entry System” means a system for clearing and settlement of securities transactions among participants of a Depository (and other parties having custodial relationships with such participants) through electronic book-entry changes in accounts of such participants maintained by the Depository hereunder, for recording ownership of the Series JJ Bonds by Beneficial Owners and transfers of ownership interests in the Series JJ Bonds.

Depository

“Depository” means The Depository Trust Company, New York, New York, or any successor securities depository appointed under Section 2.07(c) hereof.

Effective Date

“Effective Date” means the earlier of the date on which (a) none of the Series GG Bonds, the Series HH Bonds or the Series II Bonds are Outstanding or (b) the holders of not less than 60% in aggregate principal amount of the sum of the Series GG Bonds, the Series HH Bonds, the Series II Bonds, the Series JJ Bonds and any other Series of Bonds hereafter issued then Outstanding, as well as any other entities whose consent is required, have consented, or in the case of the Series JJ Bonds or any other Series of Bonds hereafter issued are deemed to have consented, to the provisions contained in this Eleventh Supplemental Power Bond Resolution to which the Effective Date pertains.

Resolution No. __-16 – Eleventh Supplemental Bond Resolution Authorizing Issuance of

Not to Exceed $165,000,000 Power Revenue Bonds, Series JJ Page 6 of 36

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Official Notice of Sale

“Official Notice of Sale” means the Official Notice of Sale relating to the competitive sale of the Series JJ Bonds made available by Platte River to prospective purchasers of the Series JJ Bonds.

Platte River

“Platte River” means Platte River Power Authority, a separate governmental entity, constituting a political subdivision and a public corporation of the State of Colorado.

Purchaser

“Purchaser” means the purchaser of the Series JJ Bonds designated in the Supplemental Public Securities Act Certificate.

Refunded Bonds

“Refunded Bonds” means that portion, if any, of Platte River’s Power Revenue Bonds, Series HH which are being refunded by the Refunding Series JJ Bonds, as set forth in the Supplemental Public Securities Act Certificate.

Series JJ Bonds

“Series JJ Bonds” means the Bonds authorized by Article II of this Eleventh Supplemental Power Bond Resolution.

Supplemental Public Securities Act

“Supplemental Public Securities Act” means Part 2 of Article 57 of Title 11, Colorado Revised Statutes, as amended.

Supplemental Public Securities Act Certificate

“Supplemental Public Securities Act Certificate” means the certificate of an authorized officer of Platte River described in Section 1.03 hereof.

2016 Escrow Account

“2016 Escrow Account” means the Platte River Power Authority 2016 Refunding Escrow Account created in Section 3.01 hereof.

2016 Escrow Agreement

“2016 Escrow Agreement” means the Series HH Refunding Trust and Escrow Agreement between the Trustee and Platte River providing for the deposit of proceeds of the

Resolution No. __-16 – Eleventh Supplemental Bond Resolution Authorizing Issuance of

Not to Exceed $165,000,000 Power Revenue Bonds, Series JJ Page 7 of 36

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Refunding Series JJ Bonds and other available amounts to refund and redeem on June 1, 2019 the Refunded Bonds.

2016 Project

“2016 Project” means (a) transmission projects consisting of (i) the engineering, procurement, and installation of a 115/230kV autotransformer and associated facilities for the Boyd Substation, (ii) the engineering, design, and construction of a new substation to be known as the Foothills Substation to serve the City of Loveland, Colorado, (iii) the procurement and installation of a generation availability transformer at the Rawhide Substation, (iv) the engineering, design, and construction of a six bay 230kV breaker-and-a-half and a new autotransformer for the LaPorte Substation, (v) the procurement and installation of a new 230/34.5kV interconnection transformer and associated facilities to support the new Rawhide Flat Solar Project, and (vi) miscellaneous transmission projects, including numerous breaker replacements throughout the System, and (b) generation projects at the Rawhide Generating Station consisting of (i) the procurement and installation of replacement air heater baskets, (ii) the procurement, construction and installation of a new pneumatic conveying coal dust collection system, (iii) the procurement and installation of replacements to the existing dust collection system in the Rawhide Transfer Building and the Crusher Building, (iv) the procurement and installation of replacements to the existing generator rotor and blower, and the on-site rewind of the existing stator at Rawhide Unit 1, (v) the procurement and installation of replacement HVMCC switchgear facilities, (vi) the procurement and installation of replacement programmable logic controllers at Rawhide Unit 1, (vii) the procurement and installation of an approximately 500,000 gallon water tank and associated valves for raw water storage at the Rawhide Generating Station, and (viii) miscellaneous generation projects, including several large coal handling equipment purchases.

Tax Code

“Tax Code” means the Internal Revenue Code of 1986, as amended to the date of delivery of the Series JJ Bonds.

Tax Compliance Certificate

“Tax Compliance Certificate” means the tax compliance certificate delivered by Platte River on the date the Series JJ Bonds are issued, as the same may be amended and supplemented in accordance with the terms thereof.

SECTION 1.03. Election to Apply Supplemental Public Securities Act to the Series JJ Bonds. The Board hereby elects to apply the Supplemental Public Securities Act to the Series JJ Bonds. Pursuant to such election to apply Section 11-57-205 of the Supplemental Public Securities Act to the Series JJ Bonds, the Board hereby delegates to the Treasurer/Chief Financial & Risk Officer, or in his absence, the General Manager, the power to make the following determinations with respect to the Series JJ Bonds without any requirement that the Board approve such determinations:

Resolution No. __-16 – Eleventh Supplemental Bond Resolution Authorizing Issuance of

Not to Exceed $165,000,000 Power Revenue Bonds, Series JJ Page 8 of 36

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(a) Interest Rate. The rates of interest to be borne by the Series JJ Bonds; provided that (i) no Series JJ Bond shall bear interest at a rate exceeding 6.00% per annum, (ii) the “net effective interest rate” (as such term is defined in the Refunding Act and the Bond Act) of the Series JJ Bonds shall not exceed 4.75% per annum, and (iii) the true interest cost of the Series JJ Bonds shall not exceed 4.50% per annum.

(b) Purchase Price. The price at which the Series JJ Bonds will be sold to the Purchaser; provided that such purchase price of the Series JJ Bonds (including underwriting discount and net original issue premium) shall not be less than 100% of the aggregate principal amount of the Series JJ Bonds.

(c) Principal Amount. The respective principal amounts of the Refunding Series JJ Bonds, if any, and the Construction Series JJ Bonds, and the aggregate principal amount of the Series JJ Bonds; provided that the aggregate principal amount of the Series JJ Bonds shall not exceed $165,000,000.

(d) Maturity Schedule. The amount of principal of the Series JJ Bonds maturing, or subject to mandatory sinking fund redemption, in any particular year; provided that the principal amount of the Series JJ Bonds maturing or, if applicable, subject to mandatory sinking fund redemption, in any particular year shall not exceed $100,000,000; provided further that (i) such maturity or mandatory sinking fund schedule shall commence not later than June 1, 2021 for the Refunding Series JJ Bonds, (ii) such maturity or mandatory sinking fund schedule shall commence not later than June 1, 2018 for the Construction Series JJ Bonds, and (iii) the final maturity date of the Series JJ Bonds shall be no later than June 1, 2046.

(e) Capitalized Interest or Reserve Fund. The existence and amount of any capitalized interest or reserve fund requirement; provided that such funds shall be funded only from bond proceeds and the maximum amount of such funds shall not exceed $5,000,000.

(f) Redemption Provisions. The conditions on which and the prices at which the Series JJ Bonds may be redeemed before maturity; provided that (i) mandatory sinking fund redemptions shall be at par, (ii) optional redemption prices shall not exceed 100% plus accrued interest to the redemption date, and (iii) the Series JJ Bonds will first be subject to optional redemption not later than June 1, 2026.

(g) Refunded Bonds. The Refunded Bonds to be refunded, if any.

(h) Purchaser. The identity of the entity submitting the best bid for the Series JJ Bonds pursuant to the Official Notice of Sale.

Such determinations shall be evidenced by a certificate signed by the Treasurer/Chief Financial & Risk Officer or the General Manager dated and delivered as of a date not more than five days after the date of the receipt of bids for the purchase of the Series JJ Bonds pursuant to the Official Notice of Sale, which certificate date shall not be more than one year from the date of adoption of this resolution.

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If no Refunded Bonds are designated in the Supplemental Public Securities Act Certificate, all references in this Eleventh Supplemental Power Bond Resolution to the refunding of the Series HH Bonds, including all references to “Refunded Bonds,” “Refunding Series JJ Bonds,” “2016 Escrow Account” and “2016 Escrow Agreement,” shall be of no force and effect and this Eleventh Supplemental Bond Power Bond Resolution shall be read and construed without regard to such refunding of the Series HH Bonds and such terms.

SECTION 1.04. Authority for this Eleventh Supplemental Power Bond Resolution. This Eleventh Supplemental Power Bond Resolution is adopted pursuant to the provisions of the Act, the Bond Act, the Refunding Act and the Supplemental Public Securities Act.

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ARTICLE II

AUTHORIZATION AND FORM OF SERIES JJ BONDS

SECTION 2.01. Principal Amount and Designation of Series. Pursuant to the provisions of the General Power Bond Resolution, a Series of Bonds entitled to the benefit, protection and security of such provisions is hereby authorized in the maximum aggregate principal amount of $165,000,000. Such Series of Bonds shall be designated as, and shall be distinguished from the Bonds of all other Series, by the title, “Power Revenue Bonds, Series JJ.” Such Series of Bonds shall be a consolidated Series of Bonds for purposes of issuance and sale, as authorized by and subject to Section 2.01 of the General Power Bond Resolution, with each of the two separate Series of Bonds which are consolidated for such purposes of issuance and sale by this Eleventh Supplemental Power Bond Resolution to be issued in the herein provided respective principal amounts, for the herein provided respective purposes, with the herein provided respective dates, maturities and interest.

SECTION 2.02. Purposes; Designation of 2016 Project. The purposes for which the Series JJ Bonds are issued are (i) to provide funds to pay a portion of the Cost of Construction of the 2016 Project of Platte River (which Bonds issued for such purpose are a separate Series and are herein called the “Construction Series JJ Bonds”); and (ii) to provide a portion of the funds required for the refunding and payment on June 1, 2019 of the Refunded Bonds by providing an escrow sufficient to pay the interest on the Refunded Bonds as the same becomes due from and after the date of issuance of the Series JJ Bonds through and including December 1, 2018 and to pay the principal of and interest on the Refunded Bonds due on June 1, 2019, the date on which the Refunded Bonds will be redeemed (which Bonds issued for such purpose are a separate Series and are herein called the “Refunding Series JJ Bonds”). The 2016 Project is hereby designated as a Project pursuant to the General Power Bond Resolution.

SECTION 2.03. Date, Maturities, Interest Rates and Sinking Fund Installments for Series JJ Bonds. The Series JJ Bonds, as a single Series of Bonds into which has been consolidated for purposes of issuance and sale the Construction Series JJ Bonds and the Refunding Series JJ Bonds, shall be dated, and shall bear interest from, the date of their initial issuance and delivery. The Series JJ Bonds, as a single Series of Bonds into which has been consolidated for purposes of issuance and sale the Construction Series JJ Bonds and the Refunding Series JJ Bonds, shall mature on June 1 of the years and in the principal amounts, and shall bear interest payable on December 1, 2016 and semiannually thereafter on June 1 and December 1 in each year at the rates per annum, set forth in the Supplemental Public Securities Act Certificate. Series JJ Bonds of a designated maturity or maturities are subject to mandatory sinking fund redemption at a Redemption Price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date to the extent, if any, designated in the Supplemental Public Securities Act Certificate. The maturities, principal amount of the Series JJ Bonds to be redeemed, and the dates of such mandatory sinking fund redemption shall be as set forth in the Supplemental Public Securities Act Certificate.

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SECTION 2.04. Denominations, Numbers and Letters. Except as provided

in Section 2.07 hereof, the Series JJ Bonds shall be issued as fully registered Bonds in the denomination of $5,000 or any integral multiple of $5,000 (not exceeding the principal amount of Series JJ Bonds maturing at any one time). The Series JJ Bonds shall be lettered R, in each case followed by the number of the Series JJ Bond.

SECTION 2.05. Payment and Paying Agent. The principal and Redemption Price of the Series JJ Bonds shall be payable at the corporate trust office of the Trustee in Denver, Colorado, which bank is hereby appointed Paying Agent for the Series JJ Bonds as provided in the General Power Bond Resolution. Interest shall be paid to registered owners of the Series JJ Bonds as provided in the General Power Bond Resolution.

SECTION 2.06. Optional Redemption Price and Terms. Series JJ Bonds of a designated maturity or maturities are subject to optional redemption at a Redemption Price not to exceed 100% of the principal amount thereof plus accrued interest to the Redemption Date to the extent, if any, designated in the Supplemental Public Securities Act Certificate. If less than all Outstanding Series JJ Bonds are called for such optional redemption on any date, the maturities of Series JJ Bonds to be so redeemed may be selected by Platte River in its discretion. If less than all of the Series JJ Bonds of a maturity are called for optional redemption, the particular Series JJ Bonds of such maturity to be redeemed shall be selected in such manner as the Trustee shall deem appropriate and fair.

SECTION 2.07. Provisions for Book-Entry System. Pursuant to Section 2.02(a)(18) of the General Power Bond Resolution the Board has determined that the Series JJ Bonds will be subject to a book-entry system of ownership and transfer, except as provided in paragraph (c) of this Section. The provisions for effecting such book-entry system are as follows:

(a) The Board hereby designates The Depository Trust Company, New York, New York as the initial Depository hereunder. The Board hereby finds and determines that The Depository Trust Company is a “clearing corporation” within the meaning of the Colorado Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended.

(b) Notwithstanding the provisions regarding exchange and transfer of Bonds under the General Power Bond Resolution, the Series JJ Bonds shall initially be evidenced by one certificate for each year in which principal of the Series JJ Bonds matures and bears interest at the same rate, in a denomination equal to the stated maturity amount of principal coming due in each such year for such rate. The Series JJ Bonds so initially delivered shall be registered in the name of “Cede & Co.” as partnership nominee for The Depository Trust Company. The Series JJ Bonds may not thereafter be transferred or exchanged on the registration books held by the Trustee except:

(1) to any successor Depository designated pursuant to paragraph (c) of this Section;

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(2) to any successor Depository or its nominee designated by a Depository; or

(3) if the Board elects or is required to discontinue the Book-Entry System pursuant to paragraph (c) of this Section, Platte River will cause the Trustee to authenticate and deliver replacement Series JJ Bonds (upon receipt of the Outstanding certificates and written instructions for transfer satisfactory to the Trustee) in fully registered form in denominations of $5,000 or any integral multiple thereof in the names of the Beneficial Owners or their nominees; thereafter the provisions of Article III of the General Power Bond Resolution regarding registration, transfer and exchange of Bonds shall apply to the Series JJ Bonds.

(c) Any institution acting as Depository hereunder may resign as Depository by giving notice to the Trustee and Platte River. In addition, Platte River may determine that: (i) any institution acting as Depository is unable to discharge its responsibilities with respect to the Series JJ Bonds, or (ii) continuation of the Book-Entry System is not in the best interests of the Beneficial Owners or of Platte River. In the event of resignation or disability of an institution acting as Depository, Platte River will attempt to identify another institution qualified to act as Depository hereunder. An institution may be designated as a Depository hereunder only if such institution: (i) is a “clearing corporation” as defined in Colorado Uniform Commercial Code; and (ii) is a qualified and registered “clearing agency” under Section 17A of the Securities Exchange Act of 1934, as amended. If Platte River is unable to identify such a successor Depository prior to the effective date of the resignation or in the event that Platte River determines that discontinuance of the Book-Entry System is in the best interests of the Beneficial Owners or of Platte River, the Board shall discontinue the Book-Entry System as provided in paragraph (b)(3) of this Section.

(d) Platte River and the Trustee may treat the Depository (or its nominee) as the sole and exclusive owner of the Series JJ Bonds registered in its name for the purpose of payment of the principal of or interest or premium, if any, on the Series JJ Bonds, selecting Series JJ Bonds and portions thereof to be redeemed, giving any notice permitted or required to be given to registered owners under the General Power Bond Resolution, including any notice of redemption, registering the transfer of Series JJ Bonds, obtaining any consent or other action to be taken by registered owners and for all other purposes whatsoever, and shall not be affected by any notice to the contrary. As long as the Book-Entry System is used for the Series JJ Bonds, Platte River and the Trustee will give any notice of redemption or any other notices required to be given to registered owners of the Series JJ Bonds only to the Depository or its nominee registered as the owner thereof. Any failure of the Depository to advise any of its participants, or of any participant to notify any Beneficial Owner, of any such notice and its content or effect will not affect the validity of the redemption of the Series JJ Bonds called for redemption or of any other action premised on such notice. Neither Platte River nor the Trustee is responsible or liable for the failure of the Depository or any participant thereof to make any payment or give any notice to a Beneficial Owner in respect to the Series JJ Bonds or any error or delay relating thereto.

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(e) Upon any partial redemption of any maturity of the Series JJ Bonds, the Depository in its discretion may request the Trustee to deliver a new Series JJ Bond in a principal amount equal to the amount of the Series JJ Bonds not so redeemed or shall make an appropriate notation on the Series JJ Bond indicating the date and amount of prepayment, except in the case of payment of the balance of such maturity, in which case the Series JJ Bond must be presented to the Trustee prior to payment.

(f) Platte River and the Trustee shall endeavor to cooperate with The Depository Trust Company or any successor or new Depository in effectuating payment of principal and interest on the Series JJ Bonds by arranging for payment in such a manner that funds representing such payments are available to the Depository on the date they are due. Platte River and the Trustee shall have no responsibility for transmitting payments to the Beneficial Owners of the Series JJ Bonds, notwithstanding any notice to the contrary received by any of them.

SECTION 2.08. Maximum Bond Reserve Account Requirement. Pursuant to Section 2.02(a)(15) of the General Power Bond Resolution, the maximum amount of the Bond Reserve Account Requirement established under clause (ii) of the definition of such term shall be an amount equal to $0; provided that if the Treasurer/Chief Financial & Risk Officer or, in his absence, the General Manager shall determine that a reserve funding is required in connection with the issuance of the Series JJ Bonds, the amount of such Bond Reserve Account Requirement shall be the amount set forth in the Supplemental Public Securities Act Certificate subject to the limitations in Section 1.03 hereof.

SECTION 2.09. Approval of Forms of 2016 Escrow Agreement, Continuing Disclosure Certificate and Preliminary Official Statement. The form, terms and provisions of the 2016 Escrow Agreement are hereby approved. The Chairman or Vice Chairman is hereby authorized and directed to execute and deliver the 2016 Escrow Agreement, and the Secretary or any Assistant Secretary is hereby authorized and directed to affix the seal of Platte River to and to attest the 2016 Escrow Agreement, in substantially the form presented at this meeting with such changes as are consistent with the terms of this resolution. All other officers and agents of Platte River are hereby authorized and directed to carry out, or cause to be carried out, all obligations of Platte River under the 2016 Escrow Agreement. It is hereby found and determined that it is necessary, in connection with the authorization and sale of the Series JJ Bonds, and in order to assist the Purchaser in complying with Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, that Platte River agree to provide certain continuing disclosure information with respect to itself, its electric System, the Colorado municipalities of Estes Park, Fort Collins, Longmont and Loveland and the Series JJ Bonds, and that the Treasurer/Chief Financial & Risk Officer and the Treasury Manager each be, and hereby are, authorized on behalf of Platte River, to execute a Continuing Disclosure Certificate relating to the Series JJ Bonds containing substantially the terms described in the Preliminary Official Statement relating to the Series JJ Bonds and to deliver it to the Purchaser, and that all other officers and agents of Platte River are hereby authorized and directed to carry out, or cause to be carried out, all obligations of Platte River under said Continuing Disclosure Certificate. The form, terms and provisions of the Preliminary Official

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Statement relating to the Series JJ Bonds (the “Preliminary Official Statement”) are hereby approved in substantially the form presented at this meeting, with such changes as are consistent with the terms of this resolution. The electronic posting of the Preliminary Official Statement and the preparation, electronic posting and distribution of a final Official Statement in substantially the form of the Preliminary Official Statement is hereby authorized. The Chairman of the Board of Directors and the General Manager are hereby authorized to approve, on behalf of Platte River, the final Official Statement. The execution of the final Official Statement by such persons shall be conclusively deemed to evidence the approval of the form and contents thereof by Platte River. The Treasurer/Chief Financial & Risk Officer is hereby authorized to designate the Preliminary Official Statement as a “nearly final Official Statement” for purposes of Rule 15c2-12 of the Securities and Exchange Commission.

SECTION 2.10. Sale of the Series JJ Bonds. The Series JJ Bonds shall be sold to the entity submitting a conforming bid with the lowest true interest cost for such Series JJ Bonds, which Purchaser shall be designated by the Supplemental Public Securities Act Certificate. Bids for the Series JJ Bonds shall be submitted electronically, and the Treasurer/Chief Financial & Risk Officer or, in his absence, the General Manager is hereby authorized and directed to communicate Platte River’s acceptance of such bid to such Purchaser on behalf of and in the name of Platte River.

SECTION 2.11. Form of Series JJ Bonds and Trustee’s Authentication Certificate. Subject to the provisions of the General Power Bond Resolution, the form of the Series JJ Bonds and the Trustee’s Certificate of Authentication shall be of substantially the following tenor with such omissions, insertions, endorsements and variations as to any recitals of fact or other provisions as may be required by the circumstances, be required or permitted by this resolution, or be consistent with this resolution and necessary or appropriate to conform to the rules and requirements of any governmental authority or any usage or requirement of law with respect thereto:

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[FORM OF SERIES JJ BONDS]

No. R__

PLATTE RIVER POWER AUTHORITY POWER REVENUE BOND

SERIES JJ

MATURITY DATE ORIGINAL ISSUE DATE INTEREST RATE CUSIP

June 1, 20__ _________ __, 2016 ______% _________

REGISTERED OWNER:

PRINCIPAL AMOUNT: $

Platte River Power Authority, a separate governmental entity, constituting a political

subdivision and a public corporation of the State of Colorado, duly organized and existing under and by virtue of the laws of the State of Colorado (“Platte River”), for value received, hereby promises to pay, from the sources hereinbelow described, to the registered owner identified above, or registered assigns, the principal amount specified above on the maturity date specified above (unless this bond shall have been called for prior redemption, in which case on such redemption date), upon presentation and surrender hereof at the corporate trust office of Wells Fargo Bank, National Association in Denver, Colorado, or at the corporate trust office of its successor in trust (the “Trustee”) under Resolution No. 5-87, duly adopted by Platte River on November 26, 1987, entitled “General Power Bond Resolution,” as supplemented by Resolution No. __-16, duly adopted by Platte River on March 31, 2016, entitled “Eleventh Supplemental Power Bond Resolution” (which resolutions are herein referred to collectively as the “Resolution”), and to pay, from such sources, to the registered owner identified above, or registered assigns, as of the 15th day of the month preceding the interest payment date or as of any other date established in respect of defaulted interest (the “Record Date”) by check or draft mailed to such registered owner at such owner’s address as it last appears on the registration books kept for that purpose by the Trustee, at the rate per annum specified above, interest on said sum in like coin or currency from the interest payment date next preceding the date of registration and authentication of this bond (unless this bond is registered as of an interest payment date, in which event it shall bear interest from that date, or unless this bond is registered prior to December 1, 2016, in which event it shall bear interest from the original issue date set forth above, or unless, as shown by the records of the Trustee, interest hereon shall be in default, in which event it shall bear interest from the date to which interest has been paid in full), payable semiannually on each June 1 and December 1, commencing December 1, 2016, until payment of the principal amount specified above has been made or provided for.

This bond is one of a duly authorized issue of bonds of Platte River designated as its “Power Revenue Bonds” (the “Bonds”) issued and to be issued in various series under and pursuant to Title 29, Article 1, Part 2, Colorado Revised Statutes, as amended (the “Act”), and

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under and pursuant to the Resolution. This bond is a special obligation of Platte River payable both as to principal and interest, and as to any premium upon the redemption thereof, solely from and secured by: (i) a pledge of the Net Revenues (as defined in the General Power Bond Resolution) of Platte River, and (ii) other funds of Platte River as in the General Power Bond Resolution provided, subject only to the provisions thereof permitting the application thereof for the purposes and on the terms and conditions set forth in the Resolution.

This bond is one of a series of Bonds of various maturities designated as “Power Revenue Bonds, Series JJ” (herein called the “Series JJ Bonds”), issued pursuant to the Act, and portions of which where issued pursuant to Title 31, Article 35, Part 4, Colorado Revised Statutes, as amended (the “Bond Act”), [and Title 11, Article 56, Colorado Revised Statutes, as amended (the “Refunding Act”),] to provide a portion of the funds required for: (i) the financing of a construction project known as the 2016 Project, [and (ii) the refunding and payment on June 1, 2019 of a portion of Platte River’s Outstanding Power Revenue Bonds, Series HH (the “Refunded Bonds”) by providing an escrow sufficient to pay the interest on the Refunded Bonds due prior to June 1, 2019 and to pay the principal of and interest on the Refunded Bonds on June 1, 2019, all as provided in the Series HH Refunding Trust and Escrow Agreement between Platte River and Wells Fargo Bank, National Association]. The Series JJ Bonds are issued in the aggregate principal amount of $__________ under the Resolution. Copies of the Resolution are on file at the office of Platte River and at the above-mentioned office of the Trustee, and reference to the Resolution and to the Act, the Bond Act [and the Refunding Act] is made for a description of the pledge and covenants securing the Series JJ Bonds, the nature, extent and manner of enforcement of such pledge, the rights and remedies of the registered owners of the Series JJ Bonds with respect thereto and the terms and conditions upon which the Bonds are issued and may be issued thereunder; and all the terms of the Resolution constitute a contract between Platte River and the registered owner of this bond, to all of the provisions of which Resolution the registered owner of this bond, by acceptance hereof, assents and agrees.

Bonds may be issued from time to time pursuant to supplemental resolutions in one or more series, in various principal amounts, may mature at different times, may bear interest at different rates, and may otherwise vary as provided in the Resolution. The aggregate principal amount of Bonds which may be issued under and in accordance with the terms of the Resolution is not limited, and all Bonds issued and to be issued under the Resolution are and will be equally secured by the pledge and covenants made therein, except as otherwise expressly provided or permitted in the Resolution.

To the extent and in the manner permitted by the terms of the Resolution, the provisions of the Resolution, or any resolution amendatory thereof or supplemental thereto, may be modified or amended.

*The Series JJ Bonds are issuable in the form of fully registered Bonds without coupons in the denomination of $5,000 or any integral multiple of $5,000 (not exceeding the principal amount of Series JJ Bonds maturing at any one time). This bond is transferable by the registered owner hereof in person, or by his duly authorized attorney on the registration records kept at the principal office of the Trustee, upon surrender of this bond together with a written instrument of

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transfer satisfactory to the Trustee duly executed by the registered owner or his duly authorized attorney, and thereupon a new fully registered Series JJ Bond or Series JJ Bonds, in the same aggregate principal amount, the same interest rate and the same maturity shall be issued to the transferee in exchange therefor as provided in the Resolution, and upon payment of the charges therein prescribed.*

** This bond may not be exchanged or transferred except as specifically permitted in Section 2.07 of the Eleventh Supplemental Power Bond Resolution.**

Platte River and the Trustee may deem and treat the person in whose name this bond is registered as of the Record Date as the absolute owner hereof for the purpose of receiving payment of, or on account of, the principal or redemption price hereof and interest due hereon and on any other date for all other purposes.

[The Series JJ Bonds maturing on June 1, 20__ are subject to redemption prior to maturity, upon notice as hereinafter provided by operation of the Bond Service Account to satisfy Sinking Fund Installments, at a redemption price equal to 100% of the principal amount thereof together with accrued interest to the redemption date.]

At the option of Platte River, the Series JJ Bonds are subject to redemption upon notice as hereinafter described, in whole or in part at any time on or after June 1, 20__, at a redemption price equal to 100% of the principal amount thereof together with accrued interest to the redemption date. If less than all Series JJ Bonds are called for such optional redemption on any date, the maturities of Series JJ Bonds to be so redeemed may be selected by Platte River in its discretion.

If less than all of the Series JJ Bonds of any maturity are to be redeemed on any date, the particular Series JJ Bonds of such maturity to be redeemed shall be selected in such manner as the Trustee shall deem appropriate and fair.

Notice of redemption of Series JJ Bonds shall be given by mail, not less than 30 nor more than 45 days prior to the redemption date to the registered owners of the Series JJ Bonds to be redeemed, all in the manner and upon the terms and conditions set forth in the Resolution. If notice of redemption has been duly given as aforesaid, and moneys for payment for the redemption price, together with interest to the redemption date on the Series JJ Bonds so called for redemption, are held by the Trustee, then such Series JJ Bonds shall, on the redemption date designated in such notice, become due and payable at the redemption price specified in such notice and interest accrued to the redemption date; and from and after the redemption date so designated interest on the Series JJ Bonds so called for redemption shall cease to accrue and registered owners of such Series JJ Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof and interest accrued thereon to such redemption date.

If an event of default, as defined in the Resolution, shall occur, the principal of all Series JJ Bonds may be declared due and payable upon the conditions, in the manner and with the effect provided in the Resolution. The Resolution provides that in certain events such declaration and

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its consequences may be rescinded by the registered owners of at least 25% in aggregate principal amount of the Bonds then Outstanding.

Neither this bond nor the interest hereon shall constitute a debt of Platte River or the cooperating or contracting municipalities that established Platte River within the meaning of any constitutional, home rule charter or statutory limitations or provisions.

It is hereby certified and recited that all acts, conditions and things required by law and the Resolution to exist, to have happened and to have been performed precedent to and in the issuance of this bond, do exist, have happened and have been performed in regular and in due time, form and manner as required by law and that the issue of the Series JJ Bonds, together with all other indebtedness of Platte River, is within every debt and other limit prescribed by the Constitution or laws of the State of Colorado, and is not in excess of the amount of Bonds permitted to be issued under the Resolution.

This bond is issued under authority of the Bond Act [and the Refunding Act]. The Bond Act [and the Refunding Act] provide that such a recital conclusively imparts full compliance with all relevant provisions and limitations of the Bond Act [and the Refunding Act], respectively; and this bond issued containing such recital is incontestable for any cause whatsoever after its delivery for value.

This bond is further issued under the authority of the Supplemental Public Securities Act, being Part 2 of Article 57 of Title 11, Colorado Revised Statutes, as amended. Such recital shall be conclusive evidence of the validity and the regularity of the issuance of this bond after its delivery for value.

This bond shall not be entitled to any benefit under the Resolution or be valid or become obligatory for any purpose until this bond shall have been authenticated by the execution by the Trustee of the Trustee’s Certificate of Authentication hereon.

IN WITNESS WHEREOF, Platte River Power Authority has caused this bond to be signed on its behalf by the manual or facsimile signature of its Chairman or Vice Chairman, and its corporate seal to be reproduced hereon and attested by the manual or facsimile signature of its Secretary or an Assistant Secretary, all as of the original issue date set forth above.

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PLATTE RIVER POWER AUTHORITY By:

Chairman or Vice Chairman (SEAL) Attest:

Secretary or Assistant Secretary * Delete in bonds registered in the name of a Depository or its nominee, pursuant to

Section 2.07 hereof. ** Delete in bonds delivered to Beneficial Owners upon discontinuance of Book-Entry

System. Note: Insert or delete bracketed language as applicable to indicate the determinations made at

pricing of Bonds subsequent to adoption of this Resolution (i) regarding the use of Series JJ Bond proceeds to refund certain outstanding bonds and (ii) regarding the sinking fund redemption of the Series JJ Bonds.

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[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]

This is one of the Series JJ Bonds described in the within-mentioned Resolution.

WELLS FARGO BANK, NATIONAL ASSOCIATION By:

Authorized Signatory

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*[FORM OF ASSIGNMENT]

For value received __________________________________ hereby sell, assign and transfer unto __________________________________ the within bond and hereby irrevocably constitute and appoint __________________________________ attorney, to transfer the same on the books of Platte River at the office of the Trustee, with full power of substitution in the premises.

Dated: Signature Guarantee: Address of transferee: Social Security number or other tax identification number of transferee:

* Delete in bonds registered in the name of a Depository or its nominee, pursuant to

Section 2.07 hereof.

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*[PREPAYMENT PANEL]

The following installments of principal (or portions thereof) of this Bond have been prepaid in accordance with the terms of the Resolution.

Date of Prepayment

Principal Prepaid

Signature of Authorized Representative of DTC

* Delete in bonds delivered to Beneficial Owners upon discontinuance of Book-Entry System.

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ARTICLE III

USE OF PROCEEDS OF SERIES JJ BONDS

SECTION 3.01. Establishment of 2016 Project Account and 2016 Escrow Account. There is hereby created in the Construction Fund a separate Project Account to be known as the “2016 Project Account,” from which the Cost of Construction of the 2016 Project shall be paid as provided by the General Power Bond Resolution. The “Platte River Power Authority 2016 Refunding Escrow Account” is hereby established, to be maintained by Platte River with the Trustee under the terms and conditions of the 2016 Escrow Agreement.

SECTION 3.02. Deposit and Application of Proceeds of Series JJ Bonds. From the net proceeds derived from the sale of the Series JJ Bonds, there shall be deposited (i) with the Trustee for credit to the 2016 Escrow Account, an amount sufficient, together with other amounts deposited therein, to refund and pay or redeem the Refunded Bonds, and (ii) with Platte River for credit to the 2016 Project Account in the Construction Fund, the remainder of such net proceeds. The Treasurer and Treasury Manager are hereby authorized to (i) effect the transfer of any amounts in the Bond Service Account allocable to the Refunded Bonds or any other available amounts for deposit to the 2016 Escrow Account, and (ii) subscribe for or authorize the subscription for or other purchase of the Investment Securities to be deposited into the 2016 Escrow Account and paid for from proceeds of the Series JJ Bonds and other amounts available therefor.

SECTION 3.03. Tax Covenants. Platte River covenants for the benefit of the owners of all Series JJ Bonds at any time Outstanding that it will not take any action or omit to take any action with respect to the proceeds of the Series JJ Bonds, any funds reasonably expected to be used to pay the principal of or interest on the Series JJ Bonds, or any other funds of Platte River, or any facilities financed or refinanced with the proceeds of the Series JJ Bonds (including the output therefrom) which would: (i) cause interest on the Series JJ Bonds to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Tax Code or (ii) cause interest on the Series JJ Bonds to lose its exclusion from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code, except to the extent such interest is required to be included in the current earnings adjustment applicable to corporations in calculating the corporate alternative minimum tax, or (iii) cause interest to be included in Colorado taxable income or Colorado alternative minimum taxable income under Colorado income tax laws.

Platte River further covenants, represents and warrants that the procedures set forth in the Tax Compliance Certificate shall be complied with to the extent necessary to maintain the exemption for interest on the Series JJ Bonds from federal income taxation (except to the extent noted in the previous paragraph).

The foregoing covenants shall remain in full force and effect notwithstanding the defeasance of any Series JJ Bonds pursuant to Article XI of the General Power Bond Resolution until all obligations of Platte River under the Tax Code necessary to be met in order to assure

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that interest on the Series JJ Bonds is excluded from gross income and alternative minimum taxable income to the extent described above have been met.

SECTION 3.04. Rebate Account. There is hereby established within the General Fund a separate account to be designated “Series JJ Rebate Account.” To the extent required by Section 3.03 hereof, all of the amounts on deposit in the funds and accounts created and established pursuant to this Article III and all amounts pledged to the payment of Bond Service for the Series JJ Bonds pursuant to Article II hereof (i) shall be invested in compliance with the Tax Code, and (ii) to the extent required by the Tax Code and subject to the 2016 Escrow Agreement, shall be deposited into the Rebate Account sufficient to permit timely payment of all amounts due and owing to the United States Treasury. Any other provision of this Eleventh Supplemental Power Bond Resolution to the contrary notwithstanding, amounts on deposit in the Series JJ Rebate Account shall not be subject to the lien or pledge of the General Power Bond Resolution to the extent such amounts are required to be paid to the United States Treasury.

If the balance in the Series JJ Rebate Account is insufficient for the purposes thereof on the date of any required payment to the United States Treasury, Platte River shall transfer moneys to the Series JJ Rebate Account from the following Funds and Accounts in the following order of priority: other amounts in the General Fund and the Reserve and Contingency Fund. If the balance in the Series JJ Rebate Account is in excess of the amount required to be paid to the United States Treasury on any date, such excess shall be transferred to the Revenue Fund.

SECTION 3.05. Establishment of Series JJ Sub-Account in the Bond Service Account. The Trustee is hereby directed to establish in the Bond Service Account a separate sub-account, to be designated as the “Series JJ Sub-Account.” Accurate records of all interest or other income received as a result of any investments or reinvestments of any amounts in the “Bond Service Account - Series JJ Sub-Account” shall be kept by the Trustee.

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ARTICLE IV

AMENDMENTS TO GENERAL POWER BOND RESOLUTION

SECTION 4.01. Springing Amendments to Section 1.01 of General Power Bond Resolution. (a) On and after the Effective Date, the following definitions contained in Section 1.01 of the General Power Bond Resolution shall read as follows:

Date of Commercial Operation

“Date of Commercial Operation” means, with respect to any Project, the date upon which such Project has been completed and tested and is, in the opinion of the Authority, as evidenced by a Written Certificate of the Authority filed with the Trustee, ready for commercial operation; provided, however, that in the case of the acquisition of a Project which has been completed and tested and is in the opinion of the Authority, as evidenced by a Written Certificate of the Authority filed with the Trustee, ready for commercial operation, such term shall mean the date of such acquisition.

Electric Service Contracts

“Electric Service Contracts” means the Amended Contract for the Supply of Electric Power and Energy dated March 31, 1980, between the Authority and the Town of Estes Park, Colorado, the Amended Contract for the Supply of Electric Power and Energy dated March 31, 1980, between the Authority and the City of Fort Collins, Colorado, the Amended Contract for the Supply of Electric Power and Energy dated March 31, 1980, between the Authority and the City of Longmont, Colorado, the Amended Contract for the Supply of Electric Power and Energy dated March 31, 1980, between the Authority and the City of Loveland, Colorado, and each contract hereafter entered into between the Authority and a Power Purchaser, designated in a Supplemental Resolution as an “Electric Service Contract” under the Resolution, the term of which does not end earlier than the final maturity date of all Bonds Outstanding on the date of adoption of such Supplemental Resolution and pursuant to which:

(a) The Authority agrees to sell and deliver to such Power Purchaser and such Power Purchaser agrees to purchase and receive from the Authority all electric power and energy which such Power Purchaser shall require for the operation of its electric system to the extent that the Authority shall have such power and energy available; provided, however, that such Power Purchaser may reserve the right to continue to generate power and energy to the extent of the capacity of its generating facilities in service on the date of such Supplemental Resolution (or such earlier date as may be provided in such contract);

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(b) such Power Purchaser agrees to take and pay for all power and energy generated by the Authority or purchased by the Authority for resale which is furnished to such Power Purchaser pursuant to such contract, said payments to be made pursuant to a rate schedule subject to revision from time to time and designed to provide Revenues to the Authority which, together with the Revenues of the Authority from all other sources, will be at least sufficient in each Calendar Year during the term of such contract to enable the Authority to satisfy the requirements of Section 6.12 hereof; and

(c) such Power Purchaser agrees to maintain rates for electric power and energy furnished to its electric utility customers which will produce revenues at least sufficient to pay all of such Power Purchaser’s cost of operations and maintenance of its electric system, including the payments to the Authority required under such contract, and all other obligations of such Power Purchaser payable from the revenues of its electric system.

For the purposes of this definition, the term of an Electric Service Contract may include the successive terms of two or more such contracts, under which it is estimated by the Authority, as evidenced by a Written Certificate of the Authority, that the respective Power Purchasers will require substantially the same amount of power and energy.

Estimated Net Revenues

“Estimated Net Revenues” means, for any Calendar Year, the estimated Net Revenues for such Calendar Year, based upon estimates prepared by the Authority.

(b) On and after the Effective Date, the definitions of “Engineer’s Certificate” and “Qualified Independent Engineer” in Section 1.01 of the General Power Bond Resolution shall be deleted.

SECTION 4.02. Springing Amendments to Sections 2.03, 5.03, 6.05, 6.14 and 6.15 of General Power Bond Resolution. (a) On and after the Effective Date, Section 2.03 of the General Power Bond Resolution shall read as follows:

Section 2.03. Special Provisions for the Issuance of Construction Bonds.

(a) One or more Series of Construction Bonds may be authenticated and delivered upon original issuance from time to time in such principal amount for each such Series as may be determined by the Authority for the purpose of paying or providing for the payment of all or a portion of the Cost of Construction of a Project. Each such Series shall be in such principal amount which, when taken together with funds previously raised or otherwise provided by the Authority for such Project, will provide the Authority with funds not in excess of the estimated Cost of Construction of such Project, as set forth in a Written

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Certificate of the Authority furnished pursuant to paragraph (2) of subsection (c) of this Section.

(b) Each Supplemental Resolution authorizing the issuance of a Series

of Construction Bonds shall specify the Project for which the proceeds of such Series of Construction Bonds will be applied, and shall provide for Principal Installments commencing (i) in the case of a Series of Construction Bonds the proceeds of which are to be applied to pay the Cost of Construction of a Project referred to in clause (viii) of the definition of “Project” in Section 1.01, not later than thirty-six (36) months after the date of original issuance thereof, and (ii) in all other cases, not later than thirty-six (36) months after the then estimated Date of Commercial Operation of such Project, as set forth in a Written Certificate of the Authority furnished pursuant to paragraph (2) of subsection (c) of this Section.

(c) Each Series of Construction Bonds shall be authenticated and

delivered by the Trustee only upon receipt by the Trustee (in addition to the documents required by Section 2.02 hereof and the following subsections of this Section) of the following documents, all dated as of the date of such delivery (unless the Trustee shall accept any of such documents bearing a prior date):

(1) An Opinion of Counsel to the effect that the Authority has

good right and lawful authority under the Act to undertake the Project being financed with the proceeds of such Series of Bonds;

(2) A Written Certificate of the Authority setting forth the then

estimated Date of Commercial Operation and the then estimated Cost of Construction of the Project being financed by such Series of Bonds; and

(3) A Written Certificate of the Authority to the effect that,

upon the authentication and delivery of the Bonds of such Series, the Authority will not be in default in the performance of any of the covenants, conditions, agreements, terms or provisions of the Resolution or of any of the Bonds.

(d) Each Series of Construction Bonds, the proceeds of which are to be

applied to pay the Cost of Construction of any Project for which Construction Bonds or Prior Lien Bonds have not theretofore been issued, shall be authenticated and delivered by the Trustee only upon receipt by the Trustee (in addition to the documents required by Section 2.02 hereof and subsection (c) of this Section) of the following documents, all dated as of the date of such delivery (unless the Trustee shall accept any of such documents bearing a prior date):

(1) An Accountant’s Certificate setting forth (A) for any period

of twelve (12) consecutive calendar months within the twenty-four (24) calendar months next preceding the authentication and delivery of such Series of Bonds, the Net Revenues for such period, and (B) the Adjusted Aggregate Bond Service

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and the Adjusted Aggregate Prior Lien Bond Service during the twelve-month period so selected with respect to all Series of Bonds which were then Outstanding and with respect to all Prior Lien Bonds which were considered to be then outstanding under the Prior Lien Resolution pursuant to the definition of “Adjusted Aggregate Prior Lien Bond Service” herein; and showing that such Net Revenues for such twelve-month period were at least equal to 1.10 times the sum of such Adjusted Aggregate Bond Service plus such Adjusted Aggregate Prior Lien Bond Service for such twelve-month period;

(2) A Written Certificate of the Authority to the effect that (A)

such Project can be beneficially used by the Authority to meet the long-term power and energy requirements of Power Purchasers, and (B) as to any Calendar Year referred to in a Written Certificate of the Authority delivered pursuant to paragraph (3) below in which the entire energy, capacity, use or services of such Project is not needed to meet such requirements of Power Purchasers, and in which a part of the Estimated Net Revenues set forth in a Written Certificate of the Authority delivered pursuant to paragraph (3) below are estimated to be derived from sales of surplus energy or capacity, or the furnishing of use or services of such Project to other than Power Purchasers, that there is a market for such surplus energy, capacity, use or services at the rates used in computing that part of Estimated Net Revenues applicable to such sale or furnishing to others;

(3) A Written Certificate of the Authority setting forth the

Estimated Net Revenues (assuming the completion of all uncompleted Projects on their then estimated Dates of Commercial Operation and setting out estimated Maintenance and Operation Costs, estimated Revenues and estimated transfers, if any, from the Rate Stabilization Reserve Account in each Year) either

(A) If the Supplemental Resolution authorizing the

Series of Bonds being issued contains the requirement referred to in subsection (g) of Section 5.03 hereof, for each of the five (5) Calendar Years succeeding the latest estimated Date of Commercial Operation of any uncompleted Project, or

(B) If (A) shall not be the case, for the then current

Calendar Year and each succeeding Calendar Year to and including the fifth Calendar Year succeeding the latest estimated Date of Commercial Operation of any uncompleted Project; and

(4) A Written Certificate of the Authority showing the

Adjusted Aggregate Bond Service and Adjusted Aggregate Prior Lien Bond Service for each of the Calendar Years set forth in such Written Certificate of the Authority delivered pursuant to paragraph (3) above and showing that the Estimated Net Revenues as shown in such Written Certificate of the Authority for each of such Calendar Years are not less than 1.10 times the sum of (i) Adjusted Aggregate Bond Service for each of such Calendar Years with respect to all

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Series of Bonds to be Outstanding immediately after the authentication and delivery of such Series of Construction Bonds being issued and, if there are any other uncompleted Projects, with respect to each future Series of Construction Bonds, if any, which the Authorized Officer signing such Written Certificate of the Authority shall estimate will be required to complete payment of the Cost of Construction of each such uncompleted Project, plus (ii) the Adjusted Aggregate Prior Lien Bond Service on all Prior Lien Bonds then considered to be outstanding under the definition of such term, for each of such Calendar Years.

For the purposes of paragraph (3) of this subsection, in the event

that there shall not then be any uncompleted Project, the Written Certificate of the Authority delivered pursuant thereto shall set forth the Estimated Net Revenues for the then current Calendar Year and for each of the five (5) succeeding Calendar Years.

For the purposes of paragraph (4) of this subsection, in the event

that one or more Series of Construction Bonds shall be required, in addition to that being authenticated and delivered, to complete payment of the Cost of Construction of any uncompleted Project, or in the event Variable Rate Bonds have been issued, the Adjusted Aggregate Bond Service shall be calculated on the following basis: with respect to (a) any Bonds which are not Outstanding on the date such certificate is delivered but which are projected to be issued during the period covered by such certificate, and (b) any Variable Rate Bonds Outstanding on the date such certificate is delivered, the Authorized Officer signing such Written Certificate of the Authority shall estimate the Bond Service on such Bonds upon such assumptions as the Authorized Officer signing such Written Certificate of the Authority shall consider reasonable and set forth in such certificate, including assumptions with respect to the interest rate or rates to be borne by such Bonds and the amounts and due dates of the Principal Installments for such Bonds; provided, however, that the interest rate or rates assumed to be borne by any Variable Rate Bonds shall not be less than the interest rate borne by such Variable Rate Bonds at the time that the Authorized Officer signing such Written Certificate of the Authority delivers such certificate.

For the purposes of paragraph (4) of this subsection, in the event

Cross-over Refunding Bonds have been issued, the Adjusted Aggregate Bond Service (in the case of refunded Bonds) or the Adjusted Aggregate Prior Lien Bond Service (in the case of refunded Prior Lien Bonds) shall be calculated for any period after the Cross-over Date related to such Cross-over Refunded Indebtedness on the assumption that the principal or Redemption Price of the Cross-over Refunded Indebtedness will be paid on the Cross-over Date.

Notwithstanding any other provision of the Resolution, the

provisions of this subsection (d) shall not apply to any Series of Construction Bonds all of the proceeds of which are to be applied to pay the Cost of

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Construction of a Project necessary, in the opinion of the Authority as expressed in a Written Certificate of the Authority delivered to the Trustee, to keep the System in good operating condition or to prevent a loss of Revenues therefrom, or to comply with requirements of any governmental agency having jurisdiction over any facilities of the System.

(e) Each Series of Construction Bonds, the proceeds of which are to be

applied to pay the Cost of Construction of any Project for which Construction Bonds have theretofore been issued, or for which Prior Lien Bonds have theretofore been issued, shall be authenticated and delivered by the Trustee only upon receipt by the Trustee of the documents required by Section 2.02 hereof and subsection (c) of this Section all dated as of the date of such delivery (unless the Trustee shall accept any of such documents bearing a prior date).

(f) The Authority shall not be required to deliver in connection with

any Project referred to in clause (viii) of the definition of “Project” in Section 1.01 hereof a Written Certificate of the Authority pursuant to paragraph (2) of subsection (c) or paragraph (2) of subsection (d) hereof.

(g) The proceeds, including accrued interest, of the Construction

Bonds of each Series shall be applied simultaneously with the delivery of such Bonds, as follows:

(1) There shall be deposited in the Bond Reserve Account in

the Bond Fund the amount required by Section 2.02(a)(15) hereof; (2) There shall be deposited in the Reserve and Contingency

Fund and in such other funds or accounts as may be established by the Supplemental Resolution such amounts, if any, as may be provided in the Supplemental Resolution authorizing the issuance of such Series of Construction Bonds; and

(3) The remaining balance of the proceeds of such Series of

Construction Bonds shall be deposited in the appropriate Project Account established in the Construction Fund for the Project being financed with such Series of Construction Bonds.

(b) On and after the Effective Date, Section 5.03 of the General Power Bond

Resolution shall read as follows:

Section 5.03. Construction Fund.

(a) There shall be paid into the Construction Fund the amounts required to be so paid by the provisions of the Resolution, and there may be paid into the Construction Fund, at the option of the Authority, any moneys received

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for or in connection with the System by the Authority from any other source, unless required to be otherwise applied as provided by the Resolution.

(b) The Authority shall establish within the Construction Fund a separate Project Account for each Project of the Authority.

(c) The proceeds of insurance maintained pursuant to the Resolution against physical loss of or damage to the System, or of contractors’ performance bonds with respect thereto, pertaining to the period of construction thereof, shall be paid into the appropriate Project Account in the Construction Fund.

(d) Amounts in each Project Account established for a Project shall be applied to the purpose or purposes specified in the Supplemental Resolution authorizing the Construction Bonds issued with respect to such Project, or, if no Bonds are so issued, to the purpose or purposes specified in a resolution of the Board, a certified copy of which shall be filed with the Trustee.

(e) The Authority shall make payments from the Construction Fund in the amounts, at the times, in the manner and on the other terms and conditions established by a resolution of the Board, a certified copy of which shall be filed with the Trustee. After any such payment is made, an Authorized Officer of the Authority shall give written notice to the Trustee stating in respect of each payment made (i) the particular Project Account established within the Construction Fund from which such payment was made, (ii) the name and address of the person, firm or corporation to whom payment was made (which may have been the Authority if the Authority provided the Cost of Construction which was the basis of such payment), (iii) the amount paid and (iv) the particular item of the Cost of Construction paid and that the cost or the obligation in the stated amount was a proper charge against the Construction Fund which has not been previously paid.

(f) Notwithstanding any of the other provisions of this Section, to the extent that other moneys are not available therefor, amounts in the Construction Fund shall be applied to the payment of the principal of and interest on Bonds when due.

(g) If the Supplemental Resolution authorizing the issuance of any Series of Construction Bonds for any Project requires the Authority to deposit into the Bond Service Account in the Bond Fund:

(1) funds from the proceeds of the sale of the initial Series of Construction Bonds sufficient to pay when due all or a portion of the interest on such Bonds accrued and to accrue to the date set forth in the Written Certificate of the Authority delivered with respect to such Series pursuant to Section 2.03(c)(2) hereof; or

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(2) funds from the proceeds of the sale of any additional Series of Construction Bonds issued for such Project sufficient to pay when due all or a portion of the interest of such additional Series of Bonds accrued and to accrue to the date set forth in the Written Certificate of the Authority delivered with respect to such Series pursuant to Section 2.03(c)(2) hereof;

then, from and after the delivery of such Series of Construction Bonds for such Project all interest earned on any moneys or investments in the Project Account established in the Construction Fund for such Project shall be held in such Project Account for the purposes thereof. If such Supplemental Resolution does not contain the requirement referred to above, then, except as above provided, interest earned on any moneys or investments in such Project Account shall be paid into the Revenue Fund.

(h) The substantial completion of construction of each Project shall be evidenced by a Written Certificate of the Authority, which shall be filed with the Trustee stating (i) that such Project has been completed substantially in accordance with the plans and specifications applicable thereto, (ii) the date of such substantial completion and (iii) the amounts, if any, required in the opinion of the signer or signers for the payment of any remaining part of the Cost of Construction of such Project. Upon the filing of such Certificate, the balance in the Project Account in the Construction Fund established therefor in excess of the amount, if any, stated in such Certificate shall be paid over to the Trustee for deposit in the Bond Reserve Account in the Bond Fund, if and to the extent necessary to make the amount in such Account equal to the Bond Reserve Account Requirement, and any balance shall be deposited in the Revenue Fund.

(c) On and after the Effective Date, Section 6.05 of the General Power Bond Resolution shall read as follows:

Section 6.05. Maintenance and Operation of System. The Authority will operate the System continuously, to the extent practicable under conditions as they may from time to time exist, in an efficient and economical manner, and will at all times maintain, preserve and keep or cause to be maintained, preserved and kept, the System, including all parts thereof and appurtenances thereto, in good repair, working order and condition, and in such manner that the operating efficiency thereof will be of high character, and the Authority will from time to time make, or cause to be made, all necessary and proper repairs and replacements so that the business carried on in connection with the System by the Authority for the production, transmission and distribution of electric power and energy at all times may be properly and advantageously conducted in a manner consistent with prudent management, and the rights and security of the Owners of the Bonds fully protected and preserved.

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(d) On and after the Effective Date, Section 6.14 of the General Power Bond Resolution shall read as follows:

Section 6.14. Eminent Domain. If all or any part of the System shall be taken by eminent domain proceedings or conveyance in lieu thereof, the net proceeds realized by the Authority therefrom shall be deposited with the Trustee in a special fund in trust and shall be applied and disbursed by the Trustee subject to the following conditions:

(a) If such funds are sufficient to provide for the payment of the entire amount of principal due or to become due upon all of the Bonds, together with all of the interest due or to become due thereon and any redemption premiums thereon, so as to enable the Authority to retire all of the Bonds then Outstanding, either by call and redemption at the then current Redemption Prices or by payment at maturity or partly by redemption prior to maturity and partly by payment at maturity, the Trustee shall apply such moneys to such retirement and to the payment of such interest. Pending the application of such proceeds for such purpose, such moneys shall be invested by the Trustee in the manner provided in Article X hereof for investment of moneys in the Bond Reserve Account in the Bond Fund. The balance of such moneys, if any, shall be transferred to the Authority.

(b) If such proceeds are insufficient to provide the moneys required for the purposes set forth in subsection (a) of this Section, the Authority shall file with the Trustee a Written Request of the Authority requesting the Trustee to apply such proceeds for one of the following purposes:

(1) If such Written Request requests the Trustee to apply such proceeds to the purchase, redemption or retirement of Bonds, the Trustee shall apply such proceeds to the purchase, redemption or retirement of Bonds then Outstanding. If more than one Series of Bonds are then Outstanding, such proceeds shall be applied pro rata to the purchase, redemption or retirement of the Bonds of each Series in the proportion which the principal amount of Bonds of each such Series then Outstanding bears to the aggregate principal amount of all Bonds then Outstanding. Pending the application of such proceeds for such purpose, such moneys shall be invested by the Trustee in the manner provided in Article X hereof for the investment of moneys in the Bond Reserve Account in the Bond Fund.

(2) If such Written Request requests the Trustee to deliver such proceeds to the Authority to apply to the cost of additions, betterments, extensions or improvements to the System, the Written Request shall show the loss in annual Revenues, if any, suffered, or to be suffered, by the Authority by reason of such eminent domain proceedings, together with a general description of the additions, betterments, extensions or improvements to the System then proposed to be acquired or constructed by the Authority from such proceeds. If, in the opinion of

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the Authority (as set forth in such Written Request) the additional Revenues to be derived from such additions, betterments, extensions or improvements will sufficiently offset the loss of Revenues resulting from such eminent domain proceedings so that the ability of the Authority to meet its obligations hereunder will not be substantially impaired, the Trustee shall pay such proceeds to the Authority. The Authority shall hold such proceeds in trust and apply them to the acquisition or construction of the additions, betterments, extensions or improvements substantially in accordance with such Written Request of the Authority. Any balance of such proceeds not required by the Authority for the purposes aforesaid shall be accounted for as Revenues.

(3) If such Written Request requests the Trustee to deliver such proceeds to the Authority upon the ground that such eminent domain proceedings have had no effect, or at the most a relatively immaterial effect, upon the security of the Bonds, the Trustee shall pay such proceeds to the Authority, which shall account for them as Revenues.

(e) On and after the Effective Date, Section 6.15 of the General Power Bond Resolution shall read as follows:

Section 6.15. Reconstruction of the System; Application of Insurance Proceeds. If any useful portion of the System shall be damaged or destroyed, the Authority shall, as expeditiously as possible, continuously and diligently prosecute or cause to be prosecuted the reconstruction or replacement thereof, unless the Authority shall file with the Trustee a Written Certificate of the Authority to the effect that such reconstruction or replacement is not in the interests of the Authority and the Bondholders. The proceeds of any insurance paid on account of such damage or destruction, other than business interruption loss insurance, shall, if the related Project Account has not been closed, be paid into such Project Account as provided in Section 5.03(c) hereof, or if such Project Account has been closed, shall be held by the Authority in a special account and made available for, and to the extent necessary applied to, the cost of such reconstruction or replacement, if any. Pending such application, such proceeds may be invested by the Authority in Investment Securities which mature not later than such times as shall be necessary to provide moneys when needed to pay such cost of reconstruction or replacement. Any balance of such proceeds of insurance shall be applied in the same manner as provided in Section 5.03(h) hereof.

SECTION 4.03. Deemed Consent by Series JJ Bondholders. By their

purchase thereof, the Owners of the Series JJ Bonds shall be deemed to have irrevocably consented to each of the amendments to the General Power Bond Resolution contained in Sections 4.01 and 4.02 hereof.

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ARTICLE V

MISCELLANEOUS

SECTION 5.01. Ratification. All actions heretofore taken (not inconsistent with the provisions of this resolution) by the Board and the officers of Platte River directed toward the undertaking and construction of the 2016 Project, the refunding, redemption and defeasance of the Refunded Bonds, and the sale and issuance of the Series JJ Bonds for such purposes be, and the same hereby are, ratified, approved and confirmed, including, without limitation, the distribution of the Official Notice of Sale relating to the competitive sale of the Series JJ Bonds and the publication of a summary notice of bond sale pursuant to Section 31-35-404 of the Bond Act.

SECTION 5.02. Additional Actions. The Chairman, Vice Chairman, Secretary, General Manager, Treasurer/Chief Financial & Risk Officer and all other officers of Platte River be, and they hereby are , authorized and directed to take and do any such acts and to execute and deliver any such documents as may be necessary and appropriate to effectuate the sale and delivery of the Series JJ Bonds including the execution of such certificates as may be reasonably be requested by the Purchaser.

SECTION 5.03. Severability. If any section, paragraph, clause or provision of this resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this resolution.

SECTION 5.04. Repealer. All bylaws, orders or resolutions, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revive any bylaw, order or resolution, or part thereof, heretofore repealed.

AS WITNESS, I have executed my name as Assistant Secretary and have affixed the corporate seal of the Platte River Power Authority this 31st day of March, 2016.

Assistant Secretary (SEAL) Adopted: Vote:

Resolution No. __-16 – Eleventh Supplemental Bond Resolution Authorizing Issuance of Not to Exceed $165,000,000 Power Revenue Bonds, Series JJ

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PLATTE RIVER POWER AUTHORITY SERIES HH REFUNDING TRUST AND ESCROW AGREEMENT

DATED as of April 1, 2016, made by and between PLATTE RIVER POWER AUTHORITY

(“Platte River”) and WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Trustee”), a commercial bank having and exercising full and complete trust powers, duly organized and existing under the laws of the United States of America, being a member of the Federal Deposit Insurance Corporation and the Federal Reserve System, and having a place of business in Denver, Colorado.

A. WHEREAS, pursuant to proceedings duly had and taken, including, without limitation, Resolution No. 5-87 (the “General Power Bond Resolution”) duly adopted by the Board of Directors of Platte River (the “Board”) on February 26, 1987, as amended and supplemented by a resolution duly adopted by the Board on March 31, 2016 (the “Eleventh Supplemental Resolution” and together with the General Power Bond Resolution, the “Resolution”), the Board has provided for the issuance of Platte River’s $__________ Power Revenue Bonds, Series JJ (the “Series JJ Bonds”) for the purpose, in part, of defraying the cost of advance refunding Platte River’s outstanding Power Revenue Bonds, Series HH maturing on June 1, ____ (the “Series HH Refunded Bonds”); and

B. WHEREAS, Platte River has authorized the Series JJ Bonds to advance refund the Series HH Refunded Bonds pursuant to the Public Securities Refunding Act, Sections 11-56-101 to 117, Colorado Revised Statutes, as amended (the “Refunding Act”), and in connection therewith has authorized its officers to enter into this Series HH Refunding Trust and Escrow Agreement (this “Agreement”) pursuant to Section 11-56-108 of the Refunding Act; and

C. WHEREAS, the Board, pursuant to the Eleventh Supplemental Resolution and this Agreement has:

(i) Created and established a special and separate escrow account to be known as the “Platte River Power Authority 2016 Refunding Escrow Account” (the “2016 Escrow Account”), to be maintained by Platte River with the Trustee for the advance refunding of the Series HH Refunded Bonds; and

(ii) Provided for the purchase, from proceeds of the Series JJ Bonds and other amounts available therefor, and deposit into the 2016 Escrow Account of direct obligations of or obligations the principal of and interest on which are guaranteed by the United States of America, which are listed in the certified public accountant’s report attached as Exhibit 1 hereto (the “Verification Report”) (the “Initial Securities”) and the deposit of a $_____ initial cash deposit; and

(iii) Authorized the completion and execution of this Agreement; and

D. WHEREAS, the schedule of receipts from the principal and interest payable on such Initial Securities and the schedule of debt payments and disbursements set forth in the Verification Report demonstrate the sufficiency of such Initial Securities credited to the 2016 Escrow Account and uninvested moneys accounted for thereunder to pay an amount equal to the interest due on the Series HH Refunded Bonds as the same becomes due prior to June 1, 2019 and to pay an amount

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equal to the principal of and interest on Series HH Refunded Bonds due on the prior redemption thereof on June 1, 2019 (the “Series HH Refunded Bonds Refunding Amount”); and

E. WHEREAS, the Series HH Refunded Bonds maturing after June 1, 2019 are callable for redemption prior to maturity on June 1, 2019 at a redemption price equal to the principal amount of such Series HH Refunded Bonds (together with accrued interest thereon to such redemption date), upon notice of redemption given as provided in the General Power Bond Resolution; the Trustee is required to give notice of such prior redemption by registered mail as further provided in the General Power Bond Resolution not less than thirty nor more than forty-five days prior to the redemption date, which notice is required to be given for and on behalf and at the expense of Platte River at the written request of Platte River (which request shall be given to the Trustee at least sixty days prior to the date fixed for redemption); Platte River is required to deposit with, or otherwise make available, to the Trustee the money required for payment of the redemption price of (and accrued interest to the redemption date) such Series HH Refunded Bonds not later than 12:00 noon, Denver, Colorado time on the business day prior to such redemption date; and in order to comply with these provisions Platte River has established the procedures set forth in Sections 5 and 6 hereof; and

F. WHEREAS, it is the intention of Platte River that neither it nor any of its creditors nor any others shall be able to rescind or revoke the trust created hereby or obtain access to the assets dedicated to satisfying Platte River’s obligations with respect to the Series HH Refunded Bonds Refunding Amount; and

G. WHEREAS, the Trustee, by virtue of its articles of association and its bylaws, is empowered to undertake the obligations and commitments on its part herein set forth; and

H. WHEREAS, the proper officers of the Trustee are duly authorized to execute and deliver this Agreement in the Trustee’s name and on its behalf; and

I. WHEREAS, Platte River is empowered to undertake the obligations and commitments on its part herein set forth; and

J. WHEREAS, the proper officers of Platte River are duly authorized to execute and deliver this Agreement in Platte River’s name and on its behalf pursuant to the Resolution and the Refunding Act.

NOW, THEREFORE, THIS AGREEMENT WITNESSETH:

That in consideration of the mutual agreements herein contained, in consideration of the fee referred to in Section 8 hereof duly paid by Platte River to the Trustee at or before the execution and delivery of this Agreement, the receipt whereof is hereby acknowledged, and in order to: (i) secure the payment of the Series HH Refunded Bonds Refunding Amount as the same becomes due prior to and on June 1, 2019, and (ii) to provide specifically for the payment and redemption of the Series HH Refunded Bonds from amounts and securities deposited herewith all pursuant to the terms and conditions set forth herein and in Article XI of the General Power Bond Resolution, the parties hereto mutually undertake, promise and agree for themselves, their respective representatives, successors and assigns, as follows (all capitalized terms used herein which are not otherwise defined

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shall have the meanings such terms are given in Section 1.01 of the General Power Bond Resolution):

Section 1. Acceptance of Trust. Platte River hereby appoints the Trustee as holder of the escrow created hereunder, and the Trustee accepts the trust created by this Agreement upon the terms and conditions hereof.

Section 2. Creation of Escrow.

A. Simultaneously with the delivery of the Series JJ Bonds, Platte River shall cause to be purchased (with proceeds of the Series JJ Bonds and other available amounts ) the Initial Securities and shall cause the same to be credited to and accounted for in the 2016 Escrow Account, together with the initial cash deposit of $_____.

B. Such Initial Securities and cash, according to the Verification Report attached as Exhibit 1, are sufficient to pay when due the Series HH Refunded Bonds Refunding Amount, which consists of the interest to become due on the Series HH Refunded Bonds prior to June 1, 2019, the Redemption Price to become due on the Series HH Refunded Bonds on June 1, 2019 and the interest to become due on the Series HH Refunded Bonds on June 1, 2019.

C. The proceeds of the Initial Securities and the proceeds of any additional securities as are described in subsection (a) of the definition of “Investment Securities” in the General Power Bond Resolution which shall not be subject to redemption prior to their maturity (“Permitted Investment Securities”) subsequently acquired as an investment or reinvestment of moneys accounted for in the 2016 Escrow Account, and any additional Permitted Investment Securities themselves (other than Permitted Investment Securities held as book-entries) shall also be deposited with the Trustee, and all such proceeds and all such additional Permitted Investment Securities (whether or not held as book-entries), if any, shall also be credited to and accounted for in the 2016 Escrow Account. The securities and moneys accounted for in the 2016 Escrow Account shall be submitted for payment upon maturity, paid out and otherwise administered by the Trustee for the benefit of the holders of the Series HH Refunded Bonds as provided in this Agreement.

D. The Trustee by execution of this Agreement acknowledges receipt of the Initial Securities and the initial cash deposit.

Section 3. Purpose of Escrow.

A. Except as provided in Sections 12 and 13 hereof, the Trustee shall hold all Permitted Investment Securities and any moneys deposited in, or accounted for, in the 2016 Escrow Account and the moneys received from time to time as principal of and interest on such Permitted Investment Securities, and any other Permitted Investment Securities acquired pursuant to Section 13 hereof, in trust to secure and for the payment of Series HH Refunded Bonds Refunding Amount as the same becomes due prior to and on June 1, 2019, and the Trustee shall collect the principal of and interest on such securities initially acquired, and any other securities accounted for in the 2016 Escrow Account under this Agreement, promptly as such principal and interest become due.

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B. The Trustee shall apply all money so collected to the payment of the Series HH Refunded Bonds Refunding Amount as such Series HH Refunded Bonds Refunding Amount becomes due, provided when the Series HH Refunded Bonds Refunding Amount shall have become due and payment shall have been made by the Trustee, the Trustee shall immediately pay over any remaining moneys in the 2016 Escrow Account in accordance with Section 7 hereof.

Section 4. Creation of Lien. The escrow created hereby shall be irrevocable. The holders of the Series HH Refunded Bonds shall have an exclusive lien on the 2016 Escrow Account.

Section 5. Accounting for Escrow; Transfers.

A. The moneys, the Initial Securities and any other securities from time to time accounted for in the 2016 Escrow Account shall not be subject to withdrawal by Platte River nor otherwise subject to its order.

B. Prior to June 1, 2019, the Trustee shall apply from the 2016 Escrow Account sufficient moneys and disburse amounts therein to pay, without any default, interest on the Series HH Refunded Bonds, as the same becomes due as hereinabove referred to. On June 1, 2019, the Trustee shall apply from the 2016 Escrow Account sufficient moneys and disburse amounts therein to pay, without any default, the Redemption Price to become due on the Series HH Refunded Bonds on June 1, 2019 and the interest to become due on the Series HH Refunded Bonds on June 1, 2019.

C. Except as provided in Section 12 hereof, no Initial Securities or any other Permitted Investment Securities held in the 2016 Escrow Account shall be sold, except if necessary to avoid a default in the payment of the Series HH Refunded Bonds Refunding Amount.

Section 6. Optional Redemption of Refunded Bonds; Notice of Defeasance.

A. Platte River hereby irrevocably exercises its option to redeem the Series HH Refunded Bonds on June 1, 2019. Platte River irrevocably instructs that the Trustee shall, on or before May 1, 2019, mail to the registered owners of the Series HH Refunded Bonds the Notice of Redemption in the form provided in Exhibit 2 hereto.

B. The Trustee shall immediately notify the registered owners of the Series HH Refunded Bonds that it is holding securities which will yield an amount equal to the Series HH Refunded Bonds Refunding Amount, by mailing to the registered owners of the Series HH Refunded Bonds the Notice of Defeasance in the form provided in Exhibit 3 hereto.

Section 7. Termination of Escrow Account; Excess Amounts.

A. When all of the Series HH Refunded Bonds Refunding Amount shall have been paid on June 1, 2019, the Trustee shall immediately transfer the moneys, if any, then remaining in the 2016 Escrow Account to the Bond Service Account of the Bond Fund created under the Resolution, and shall forthwith make a final report to Platte River covering all money which the Trustee shall have received and all payments which it shall have made or caused to be made hereunder.

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B. The amount of any earnings upon reinvestment pursuant to Section 12 hereof, and any amounts (the “Excess Amounts”) identified as being in excess of the amount required to be in the 2016 Escrow Account as a result of any substitution for the Initial Securities pursuant to Section 13 hereof, shall be immediately transferred by the Trustee to the Bond Service Account of the Bond Fund created under the Resolution. The dates and amounts of any Excess Amounts shall be identified in the certified public accountant’s report made in connection with any substitution pursuant to Section 13 hereof.

Section 8. Fees and Costs.

A. The Trustee’s total fees and costs for and in carrying out the provisions of this Agreement have been fixed at $6,500, which amount is to be paid at or prior to the time of the issuance of the Series JJ Bonds as payment in full of all charges of the Trustee pertaining to this Agreement for services performed hereunder. Notwithstanding the foregoing, Platte River shall be obligated to pay to the Trustee from legally available moneys any expenses (including attorney’s fees) incurred pursuant to Section 12 hereof.

B. Such payment for services rendered and to be rendered by the Trustee shall not be for deposit in the 2016 Escrow Account, and the fees of and the costs incurred by the Trustee shall not be deducted from the 2016 Escrow Account. The Trustee hereby waives any and all statutory or common law rights to set-off any claims which it has against the 2016 Escrow Account.

Section 9. Possible Deficiencies.

A. If at any time it shall appear to the Trustee that the money and any principal of and interest on the Initial Securities or other Permitted Investment Securities as they become due in the 2016 Escrow Account will not be sufficient to make any payment due to the holders of any of the Series HH Refunded Bonds as the Series HH Refunded Bonds Refunding Amount becomes due, the Trustee shall give written notice to Platte River’s Treasurer/Chief Financial & Risk Officer as soon as reasonably practicable stating such fact, and the amount of such deficiency.

B. Upon receipt of the notice described in subsection A of this Section, Platte River shall forthwith deposit with the Trustee for deposit in the 2016 Escrow Account such additional moneys as may be required to meet fully the Series HH Refunded Bonds Refunding Amount as the same becomes due.

Section 10. Character of Deposit. The Trustee shall hold all such moneys and securities accounted for in the 2016 Escrow Account as a special trust fund for the benefit of the owners of the Series HH Refunded Bonds in an account separate and wholly segregated from all other securities and funds of the Trustee or deposited with the Trustee, and shall never commingle for accounting purposes such securities or money with other securities or money.

Section 11. Securing Deposit.

A. All uninvested money held at any time in the 2016 Escrow Account shall either: (i) not exceed $100,000, or (ii) be continuously secured by a pledge of Permitted Investment

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Securities in a principal amount and value always not less than the total amount of uninvested money in the 2016 Escrow Account.

B. Such Permitted Investment Securities so held as a pledge shall be used whenever necessary to enable the Trustee to make available moneys to pay the Series HH Refunded Bonds Refunding Amount as the same becomes due, to the extent the uninvested moneys accounted for in the 2016 Escrow Account are for any reason not available to make such payments.

C. If due to the negligence of the Trustee, such moneys or Permitted Investment Securities cannot be identified (other than any Permitted Investment Securities held as book-entries), all other assets of the Trustee shall be imposed with a trust for the amount thereof and the holders of the Series HH Refunded Bonds shall be entitled to a preferred claim upon such assets.

D. No money paid into and accounted for in the 2016 Escrow Account shall ever be considered as a banking deposit and the Trustee shall not have any right or title with respect thereto, except as Trustee under this Agreement.

Section 12. Reinvestments. The Trustee, at the written direction of Platte River, shall invest the initial cash and shall reinvest in Permitted Investment Securities any moneys received in payment of the principal of and interest on any Permitted Investment Securities accounted for in the 2016 Escrow Account, subject to the following limitations:

(1) Permitted Investment Securities shall mature on or prior to the date or dates when the proceeds thereof must be available for the prompt payment of the Series HH Refunded Bonds Refunding Amount.

(2) Under no circumstances shall any reinvestment be made under this Section if such reinvestment, alone or in combination with any other investment or reinvestment, violates the applicable provisions of Section 148 of the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations thereunder.

(3) The Trustee shall make no such reinvestment under this Section unless Platte River first obtains and furnishes to the Trustee a written opinion of nationally recognized bond counsel to the effect that such reinvestment, as described in the opinion, complies with clause (2) of this Section.

Section 13. Substitution. Permitted Investment Securities may be substituted for any Permitted Investment Securities listed in Verification Report, subject in any case to sufficiency demonstrations in a certified public accountant’s report, and subject to a favorable written opinion from nationally recognized bond counsel designated by Platte River as to the legality of any such substitution and its permissibility under the General Power Bond Resolution and its effect, if any, on the exemption from federal income taxation of the interest on the Series JJ Bonds, and in any event in such a manner so as not to increase the price which Platte River pays for the initial acquisition of Permitted Investment Securities for the 2016 Escrow Account; provided further that the Permitted Investment Securities to be substituted mature prior to the date of payment of the Series HH Refunded Bonds Refunding Amount and do not cause the Series HH Refunded Bonds to be

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diminished in rating from any rating previously accorded by Standard & Poor’s Ratings Services, Fitch Ratings or Moody’s Investors Service. Any temporary advancement of moneys by Platte River to the 2016 Escrow Account to pay the Series HH Refunded Bonds Refunding Amount because of a failure to receive promptly the principal of and interest on Permitted Investment Securities at their fixed maturity dates, or otherwise, may be repaid to Platte River upon the receipt by the Trustee of such principal and interest payments on such Permitted Investment Securities.

Section 14. Amendments. The provisions of this Agreement cannot be amended, waived or modified except in writing executed by the parties hereto. Amendments to this Agreement are only permitted to correct ambiguities or to sever a clause deemed to be illegal. No such amendment, waiver or modification shall become effective unless and until the Trustee and Platte River receive an opinion of nationally recognized bond counsel acceptable to the Trustee to the effect that such amendment, waiver or modification is not prejudicial to the owners of the Series HH Refunded Bonds, is permitted by the General Power Bond Resolution, and does not adversely affect the federal income tax status of the interest on the Series JJ Bonds.

Section 15. Limitation on Liability.

A. The duties and obligations of the Trustee shall be determined solely by the express provisions of this Agreement, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement. The liability of the Trustee for the payment of the Series HH Refunded Bonds Refunding Amount shall be limited to the application of the Initial Securities (including the interest thereon), Permitted Investment Securities (including the interest thereon), cash and other property in the 2016 Escrow Account.

B. The Trustee shall not be liable or responsible for any loss resulting from any investment or reinvestment made pursuant to this Agreement and made in compliance with the provisions hereof.

C. The Trustee shall not be personally liable for any act which it may do or omit to do hereunder while acting with reasonable care, except for duties expressly imposed upon the Trustee hereunder or as otherwise expressly provided herein.

D. The Trustee shall neither be under any obligation to inquire into or be in any way responsible for the performance or nonperformance by Platte River of any of its obligations, nor shall it be responsible in any manner for the recitals or statements contained in this Agreement, in any certificate, in the Resolution, in the Series HH Refunded Bonds, in the Series JJ Bonds or in any proceedings taken in connection therewith, such recitals and statements being made solely by Platte River.

E. Nothing in this Agreement creates any obligation or liabilities on the part of the Trustee to anyone other than Platte River and the owners of the Series HH Refunded Bonds.

Section 16. Time of Essence. Time shall be of the essence in the performance of the obligations from time to time imposed upon the Trustee by this Agreement.

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Section 17. Successors.

A. Whenever in this Agreement Platte River or the Trustee is named or is referred to, such provision shall be deemed to include any successor of Platte River or the Trustee, respectively, immediate or intermediate, whether so expressed or not.

B. All of the stipulations, obligations and agreements by or on behalf of and other provisions for the benefit of Platte River or the Trustee contained herein (i) shall bind and inure to the benefit of any such successor, and (ii) shall bind and shall inure to the benefit of any officer, board, authority, agent or instrumentality to whom or to which there shall be transferred by or in accordance with law any right, power or duty of Platte River or the Trustee, respectively, or of its successor, the possession of which is necessary or appropriate in order to comply with any such stipulations, obligations, agreements or other provisions of this Agreement.

Section 18. Severability. If any section, subsection, clause or provision of this Agreement shall for any reason be held invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Agreement.

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IN WITNESS WHEREOF, Platte River has caused this Agreement to be signed in its name by the Chairman of its Board of Directors and to be attested to by the Assistant Secretary of such Board with the seal thereof hereunto affixed; and the Trustee has caused this Agreement to be signed in its corporate name by one of its authorized officers, all as of the date first above written.

PLATTE RIVER POWER AUTHORITY By:

Chairman (SEAL) Attest: Assistant Secretary

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee By:

Authorized Officer

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EXHIBIT 1

ACCOUNTANT’S VERIFICATION REPORT

Ex. 1-1

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EXHIBIT 2

FORM OF REDEMPTION NOTICE

PLATTE RIVER POWER AUTHORITY

NOTICE OF REDEMPTION OF POWER REVENUE BONDS, SERIES HH

Maturing June 1 Principal Amount CUSIP No.

727818 727818 727818 727818 727818 727818

Notice is hereby given to the holders of the above outstanding Power Revenue Bonds, Series

HH (the “Series HH Refunded Bonds”) of Platte River Power Authority (“Platte River”), that such Series HH Refunded Bonds have been called for redemption prior to maturity on June 1, 2019 in accordance with their terms at a redemption price equal to the principal amount thereof (the “Redemption Price”), together with accrued interest thereon to June 1, 2019. The source of the funds to be used to pay such Redemption Price and accrued interest is the principal of and interest on investment securities deposited with Wells Fargo Bank, National Association, as Trustee (the “Trustee”), together with moneys, if any, theretofore deposited with such Trustee.

Such moneys and investment securities have been deposited in an account (the “Escrow Account”) held by the Trustee, and are derived in part from the proceeds of a refunding bond issue of Platte River. The Trustee is required to apply all moneys in the Escrow Account to the payment of the interest due on the Series HH Refunded Bond prior to June 1, 2019 and to the payment of the Redemption Price of such Series HH Refunded Bonds on June 1, 2019 together with accrued interest to June 1, 2019. From and after June 1, 2019 interest on such Series HH Refunded Bonds shall cease to accrue.

Holders of the Series HH Refunded Bonds will receive payment of the Redemption Price to which they are entitled upon presentation and surrender thereof at the office of Wells Fargo Bank, National Association, in Denver, Colorado.

Dated this _____ day of ______, 2019.

PLATTE RIVER POWER AUTHORITY By: WELLS FARGO BANK, NATIONAL

ASSOCIATION, as Trustee

Ex. 2-1

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EXHIBIT 3

FORM OF DEFEASANCE NOTICE

PLATTE RIVER POWER AUTHORITY

NOTICE TO HOLDERS OF POWER REVENUE BONDS, SERIES HH

Maturing June 1 Principal Amount CUSIP No.

727818 727818 727818 727818 727818 727818

Notice is hereby given to the holders of the above outstanding Power Revenue Bonds, Series

HH (the “Series HH Refunded Bonds”) of Platte River Power Authority (“Platte River”), that there has been deposited with Wells Fargo Bank, National Association, as Trustee, investment securities the principal of and the interest on which when due will provide moneys which, together with the moneys, if any, deposited with the Trustee at the same time, shall be sufficient and available to pay when due the redemption price of the above Series HH Refunded Bonds on June 1, 2019 and the interest to become due on such Series HH Refunded Bonds prior to and on June 1, 2019, and that such Series HH Refunded Bonds are deemed to be paid in accordance with Section 11.01(b) of the General Power Bond Resolution of Platte River adopted on February 26, 1987.

Dated this _____ day of April, 2016.

PLATTE RIVER POWER AUTHORITY By: WELLS FARGO BANK, NATIONAL

ASSOCIATION, as Trustee

Ex. 3-1

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DOCUMENT LOCATOR PAGE

002598.065 Platte River/2016 Series JJ Bonds – Escrow Agreement.v3 C:\NRPortbl\PUBFIN\DVOGEL\1955484_3.doc Created on: 1/18/2016 7:50 AM Last Saved on: 3/23/2016 10:11:00 AM Printed on: 3/23/2016 10:11 AM In order to locate this document quickly, please keep this page with the attached document. Thank you. WARNING: You may need to delete the tag footer from this document.

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SUMMARY NOTICE OF BOND SALE

PLATTE RIVER POWER AUTHORITY

POWER REVENUE BONDS

SERIES JJ - $__________∗

Bids for the above issue of bonds will be received electronically via Ipreo/Parity:

Sale Date: Tuesday, April 12, 2016

Time: 8:30 a.m. Colorado local time

Bonds Dated: Date of Issuance

Maturity: June 1 of years 2017 - 2036

Legal Opinion: Sherman & Howard L.L.C., Denver, Colorado

For copies of the Official Notice of Sale and Preliminary Official Statement of Platte River, please contact the Financial Advisor of Platte River, Public Financial Management, Inc. Eric A. Brown, 4350 North Fairfax Drive, Suite 580, Arlington, Virginia 22203, or the Treasurer/Chief Financial & Risk Officer of Platte River, 2000 East Horsetooth Road, Fort Collins, Colorado 80525.

/s/ David D. Smalley Treasurer/Chief Financial & Risk Officer

Platte River Power Authority

∗ Subject to change.

PUBFIN/1958916.3

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OFFICIAL NOTICE OF SALE

PLATTE RIVER POWER AUTHORITY

POWER REVENUE BONDS

SERIES JJ

PUBLIC NOTICE IS HEREBY GIVEN that the Board of Directors (the “Board”) of

Platte River Power Authority (“Platte River”) will on April 12, 2016 at the hour of 8:30 a.m.,

Colorado local time, receive competitive bids for the purchase of the Series JJ Bonds more

particularly described below by means of the Ipreo/Parity electronic bidding system

(“PARITY”). No other method of submitting bids will be accepted. The use of PARITY shall

be at the bidder’s risk and expense, and neither Platte River, its financial advisor nor its bond

counsel shall have any liability with respect thereto. Electronic bids via PARITY must be

submitted in accordance with PARITY’s Rules of Participation, as well as the provisions of this

Official Notice of Sale. To the extent that provisions of this Official Notice of Sale conflict with

PARITY’s Rules of Participation or any instruction or directions set forth by PARITY, the

provisions of this Official Notice of Sale shall control.

ATTACHED AS EXHIBIT A IS A TABLE CONTAINING A SUMMARY OF THE

BIDDING PARAMETERS.

THE RECEIPT FOR BIDS, CURRENTLY SCHEDULED FOR TUESDAY, APRIL 12,

2016, AT 8:30 A.M. COLORADO LOCAL TIME, MAY BE CANCELLED OR POSTPONED

OR THE PRINCIPAL AMOUNT AND AMORTIZATION OF THE SERIES JJ BONDS MAY

BE CHANGED OR ANY OTHER PROVISION OF THIS OFFICIAL NOTICE OF SALE

MAY BE AMENDED BY PLATTE RIVER UPON NO LESS THAN EIGHTEEN (18) HOURS

PRIOR NOTICE COMMUNICATED THROUGH THOMSON MUNICIPAL MARKET

MONITOR. IF SUCH A POSTPONEMENT, CHANGE OR AMENDMENT OCCURS, BIDS

WILL BE RECEIVED IN ACCORDANCE WITH THIS OFFICIAL NOTICE OF SALE, AS

MODIFIED BY SUCH NOTICE.

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ISSUE: The Bonds to be sold are the “Platte River Power Authority Power Revenue

Bonds, Series JJ” (the “Series JJ Bonds”) in the aggregate principal amount of $___________∗.

The Series JJ Bonds will be dated the date of their delivery and will be issued by means of a

book entry system with no physical distribution of bond certificates to the public. See “BOOK

ENTRY, TRANSFER AND EXCHANGE.”

PURPOSE OF ISSUE: The proceeds of the Series JJ Bonds will be used by Platte River

(i) to finance the costs of certain transmission and power generation improvements to its existing

electric power and energy system (the “System”) and (ii) if certain debt service savings

thresholds are met, to refund certain outstanding power revenue bonds of Platte River.

MATURITIES: The Series JJ Bonds will mature on June 1 in the years and in the

amounts of principal as designated in the Initial Maturity Schedule set forth below.

∗ Subject to change.

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INITIAL MATURITY SCHEDULE

Series JJ Bonds

Maturity (June 1)

Principal Amount*

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038

___________________________________________ (NOTE: Platte River reserves the right to modify the initial maturity schedule shown above (the “Initial Maturity Schedule”). See the next paragraph below and “ADJUSTMENT OF MATURITIES AND PRINCIPAL AMOUNT AFTER DETERMINATION OF BEST BID” below).

Platte River reserves the right to change the above maturity schedule by announcing any

such change not later than eighteen (18) hours prior to the date and time established for the

receipt of bids, through Thomson Municipal Market Monitor. If such a change is announced,

then the changes, when incorporated into the above maturity schedule, shall become part of a

revised maturity schedule (the maturity schedule shown above, after taking into account any such

changes thereto, is referred to herein as the “Maturity Schedule”). The amounts of the Series JJ

Bonds maturing in each year may be changed from those listed in the Maturity Schedule as

described in “ADJUSTMENT OF MATURITIES AND PRINCIPAL AMOUNT AFTER

DETERMINATION OF BEST BID” below.

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ADJUSTMENT OF MATURITIES AND PRINCIPAL AMOUNT AFTER

DETERMINATION OF BEST BID: The aggregate principal amount and the principal amount

of each maturity of the Series JJ Bonds set forth in the Maturity Schedule are subject to

adjustment by Platte River, after the determination of the best bid. Any such changes to be made

will be communicated to the successful bidder for the Series JJ Bonds as soon as practicable,

which Platte River expects to occur within four hours of the time of award of the Series JJ

Bonds. Any such changes to be made will not reduce or increase the aggregate principal amount

of the Series JJ Bonds by more than ten percent (10%) from the aggregate principal amount

shown in the Maturity Schedule. The dollar amount bid by the successful bidder will be adjusted

to reflect any adjustments in the final aggregate principal amount of the Series JJ Bonds. Such

adjusted bid price will reflect changes in the dollar amount of the underwriters’ discount and

original issue premium, if any, but will not change the selling compensation per $1,000 of par

amount of the Series JJ Bonds from the selling compensation that would have been received

based on the purchase price in the winning bid. The interest rates specified by the successful

bidder for all maturities of the Series JJ Bonds will not change. The successful bidder may not

withdraw its bid as a result of any changes made within these limits.

REDEMPTION PRIOR TO MATURITY: A. Optional Redemption: The Series JJ

Bonds maturing on or before June 1, 2026 are not subject to optional redemption before their

maturity. The Series JJ Bonds maturing on and after June 1, 2027 shall be subject to redemption

prior to maturity, at the option of Platte River, on June 1, 2026 or any date thereafter in whole or

in part at a redemption price equal to 100% of the principal amount thereof plus accrued interest

thereon to the redemption date.

B. Mandatory Sinking Fund Redemption: A bidder has the option to specify that

Series JJ Bonds be included in as many term Bonds as the bidder desires. Amounts included in a

single term Bond must consist of two or more consecutive maturities, must bear the same rate of

interest and must include the entire principal amount for any maturity included in the term Bond

(i.e., the principal amount maturing in any year may not be divided between a serial maturity and

a mandatory sinking fund redemption). Any such term Bond will be subject to mandatory

sinking fund redemption in installments in the same amounts and on the same dates as the Series

JJ Bonds would have matured if they were not included in a term Bond or Bonds. Series JJ

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Bonds redeemed pursuant to the mandatory sinking fund redemption provisions will be

redeemed at a redemption price equal to 100% of the principal amount of the Series JJ Bonds to

be redeemed plus accrued interest to the redemption date in the manner and as otherwise

described in the Preliminary Official Statement relating to the Series JJ Bonds dated April [__],

2016 (the “Preliminary Official Statement”) under “Description of Series JJ Bonds - Mandatory

Sinking Fund Redemption.”

INTEREST RATES AND LIMITATIONS: Interest shall be payable on June 1 and

December 1 of each year, commencing on December 1, 2016. One interest rate only shall be

specified for any maturity of the Series JJ Bonds. Supplemental interest coupons will not be

permitted. The rate must be stated in a multiple of 1/8th or 1/20th of 1% per annum. A zero rate

of interest may not be named. A rate of interest for any maturity of the Series JJ Bonds may not

exceed five percent (5.00%) per annum. The rate of interest for the Series JJ Bonds maturing in

the years 2030 through and including 2036 must be equal to five percent (5.00%) per annum.

The True Interest Cost (as defined in “BASIS OF AWARD” below) on the Series JJ Bonds may

not exceed 4.50%.

LIMITATIONS ON DISCOUNT AND PREMIUM: It is permissible to bid a premium

above the par amount of the Series JJ Bonds; provided that the aggregate bid price shall not be

more than one hundred and twenty-two percent (122%) nor less than one hundred and ten

percent (110%) of the aggregate par amount of the Series JJ Bonds from the amounts shown in

the Maturity Schedule (such determination to be made after the application of any underwriting

discount).

UNDERTAKINGS OF THE SUCCESSFUL BIDDER: Within two hours of the time of

bid opening specified herein, the successful bidder for the Series JJ Bonds must notify Platte

River and Platte River’s financial advisor, Public Financial Management, Inc. (the “Financial

Advisor”), of the initial price and yield to the public (not including bond houses and brokers or

similar persons or organizations acting in the capacity as underwriters or wholesalers) at which a

substantial amount of each maturity of the Series JJ Bonds have been sold. Such initial price and

yield must be confirmed on the date of delivery of and payment for the Series JJ Bonds by

written certificate substantially in the form attached hereto as Exhibit A, with only such changes

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as are satisfactory to Platte River’s bond counsel. The successful bidder for the Series JJ Bonds

must also certify to Platte River in writing prior to delivery of the Series JJ Bonds that the Series

JJ Bonds were sold as fixed interest rate Series JJ Bonds as described in the Preliminary Official

Statement.

BOOK ENTRY, TRANSFER AND EXCHANGE: The Series JJ Bonds will be issued as

fully registered book entry bonds in the denomination of $5,000 or any integral multiple thereof.

The Series JJ Bonds will be issued in registered form and bond certificates for each maturity will

be issued to The Depository Trust Company, New York, New York (“DTC”), registered in the

name of its nominee, Cede & Co., and immobilized in its custody, with transfers of ownership

effected on the records of DTC and its participants pursuant to rules and procedures adopted by

DTC and its participants. Transfer of principal and interest payments to participants of DTC will

be the responsibility of DTC. Transfer of principal and interest payments to the beneficial

owners by participants of DTC will be the responsibility of such participants and other nominees

of beneficial owners. Neither Platte River nor Wells Fargo Bank, National Association, the

Trustee for the Series JJ Bonds (the “Trustee”), will be responsible or liable for payments by

DTC to its participants or by DTC participants to beneficial owners or for maintaining,

supervising or reviewing the records maintained by DTC, its participants or persons acting

through such participants.

PLACE OF PAYMENT: The principal of any Series JJ Bond will be payable at the

Trustee to the registered owner thereof (i.e., Cede & Co.) as shown on the registration records for

the Series JJ Bonds kept by the Trustee, upon maturity or redemption thereof and upon

presentation and surrender thereof. Payment of interest on any Series JJ Bond shall be made to

the registered owner thereof (i.e., Cede & Co.) by check mailed by the Trustee (or by such other

means as may be mutually agreed to by the Trustee and any registered owner), on each interest

payment date, at its address as it appears on the registration records for the Series JJ Bonds kept

by the Trustee at the close of business on the fifteenth day of the calendar month in which such

interest payment date occurs.

SECURITY: The Series JJ Bonds will be secured as described in the Preliminary

Official Statement under “Security for Series JJ Bonds.”

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RATINGS: The Series JJ Bonds have obtained ratings as described in the Preliminary

Official Statement under “Ratings.” The rating reports can be provided upon request to the

Financial Advisor at 4350 North Fairfax Drive, Suite 580, Arlington, Virginia, (703) 741-0175;

Attention: Eric Brown, Senior Managing Consultant.

Such ratings, including any related outlook with respect to potential changes in such

ratings, reflect the views of the respective rating agencies and an explanation of the significance

of such ratings may be obtained only from the rating agencies. There is no assurance that such

ratings will be in effect for any given period of time or that they will not be revised downward or

withdrawn entirely by the rating agencies if, in the judgment of the rating agencies,

circumstances so warrant. Any such downward revision or withdrawal may have an adverse

effect upon the market price of the Series JJ Bonds.

ADDITIONAL BONDS: Additional securities on a parity with the Series JJ Bonds may

be issued as described in Appendix B to the Preliminary Official Statement under “Additional

Parity Power Revenue Bonds Prior to Effective Date,” “Additional Parity Power Revenue Bonds

On and After the Effective Date” and “Refunding Power Revenue Bonds.”

BID PROPOSAL: Any bidder is required to submit an unconditional bid for the

purchase of all of the Series JJ Bonds specifying the lowest rate of interest and the premium, if

any (subject to the limitations specified in “LIMITATIONS ON DISCOUNT AND PREMIUM”

above), of the aggregate principal amount of the Series JJ Bonds at which the bidder will

purchase all of the Series JJ Bonds.

All bids must be submitted electronically via PARITY in accordance with PARITY’s

Rules of Participation in addition to the requirements of this Official Notice of Sale. No other

provider of bidding services and no other means of delivery (i.e, telephone, fax or physical

delivery) will be accepted. To bid, bidders must first register with PARITY. To the extent

PARITY’s Rules of Participation or any instruction or directions set forth by PARITY conflict

with this Official Notice of Sale, the terms of this Official Notice of Sale shall control.

Bids for the Series JJ Bonds must be electronically submitted via PARITY no later than

8:30 a.m., Colorado local time, on April 12, 2016, and no bids will be received after that time

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unless the bid date is changed as communicated through Thomson Municipal Market Monitor.

Once the bids are communicated electronically via PARITY, each bid shall constitute an

irrevocable offer to purchase the Series JJ Bonds on the terms therein provided and shall be

binding upon the bidder. For all purposes of the PARITY electronic bidding process, the time as

maintained on PARITY shall constitute the official time.

By bidding for the Series JJ Bonds, each bidder represents and warrants to Platte River

that such bidder’s bid for the purchase of the Series JJ Bonds is submitted for and on behalf of

such bidder by an officer or agent who is duly authorized to bind such bidder to a legal, valid and

enforceable contract for the purchase of the Series JJ Bonds. Each bidder shall be solely

responsible for making necessary arrangements to access PARITY for purposes of submitting its

bid in a timely manner and in compliance with the requirements of this Official Notice of Sale.

Neither Platte River, the Financial Advisor, Platte River’s bond counsel, nor PARITY shall have

any duty or obligation to provide or assure such access to any bidder, and neither Platte River,

the Financial Advisor, Platte River’s bond counsel, nor PARITY shall be responsible for proper

operation of, or have any liability for, any delays or interruptions of, or any damages caused by,

the use of PARITY. Platte River is using PARITY as a communication mechanism, and not as

Platte River’s agent, to conduct the electronic bidding for the Series JJ Bonds.

CONSENT TO JURISDICTION: By submitting a bid, the bidder consents to the

exclusive jurisdiction of any court of the State of Colorado located in the City of Fort Collins or

the City and County of Denver or the United States District Court for the State of Colorado for

the purpose of any suit, action or other proceeding arising as a result of the submittal of the bid,

and the bidder irrevocably agrees that all claims in respect to any such suit, action or proceeding

may be heard and determined by such court. The bidder further agrees that service of process in

any such action commenced in such State or Federal court shall be effective on such bidder by

deposit of the same as registered mail addressed to the bidder at the address set forth in the bid.

GOOD FAITH DEPOSIT: A good faith deposit in the amount of $1,500,000 is required

to be made by the apparent winning bidder after the bids have been received.

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The apparent winning bidder for the Series JJ Bonds will be required to wire not later

than 12:00 noon, Colorado local time, on April 12, 2016 the good faith deposit to the following

wire transfer address:

Bank Name: Wells Fargo Bank, N.A.

ABA Number: 121000248

Account Number: 0000840245

Account Name: Platte River Power General Fund

Memo: FFC: Account #1140017308

The Financial Advisor will contact the apparent winning bidder and request the apparent winning

bidder to wire such good faith deposit and the apparent winning bidder shall provide the Federal

wire reference number of such good faith deposit to the Financial Advisor by 12:00 noon,

Colorado local time, on April 12, 2016.

The Series JJ Bonds will not be officially awarded to a bidder until such time as the

bidder has provided a Federal wire reference number for the good faith deposit to the Financial

Advisor.

No interest on the good faith deposit will accrue to any bidder. The good faith deposit of

the winning bidder for the Series JJ Bonds will be applied to the purchase price of the Series JJ

Bonds. In the event the winning bidder for the Series JJ Bonds fails to honor its accepted bid,

the good faith deposit plus any interest accrued on the good faith deposit will be retained by

Platte River. Any investment income earned on the good faith deposit will not be credited to the

successful bidder on the purchase price of the Series JJ Bonds, but will be paid to the successful

bidder in the event Platte River is unable to deliver the Series JJ Bonds as provided under

“MANNER AND TIME OF DELIVERY.”

SALE RESERVATIONS: Platte River reserves the right (1) to reject any and all bids for

the Series JJ Bonds, (2) to reoffer the Series JJ Bonds for public or negotiated sale, and (3) to

waive any irregularity or informality in any bid.

BASIS OF AWARD: The Series JJ Bonds, subject to the reservations and limitations set

forth herein, will be sold to the responsible bidder making the best bid therefor, which bid will be

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determined by computing the True Interest Cost on the Series JJ Bonds (i.e., using an actuarial or

TIC method) for each bid received and an award will be made to the responsible bidder

submitting the bid which results in the lowest True Interest Cost on the Series JJ Bonds. “True

Interest Cost” on the Series JJ Bonds as used herein means that yield which if used to compute

the present worth as of April 26, 2016 of all payments of principal and interest to be made on the

Series JJ Bonds from April 26, 2016 to their respective maturity dates (or any mandatory sinking

fund redemption dates) using the interest rates specified in the bid and the principal amounts

shown in the Maturity Schedule produces an amount equal to the principal amount of the Series

JJ Bonds plus the premium, if any, bid. Such calculation shall be based on a 360 day year

consisting of twelve 30-day months and a semiannual compounding interval. Such calculation

will be made by using the Maturity Schedule for the Series JJ Bonds and not any adjustments

thereto as referred to in “ADJUSTMENT OF MATURITIES AND PRINCIPAL AMOUNT

AFTER DETERMINATION OF BEST BID.” If there are two (2) or more equal bids for the

Series JJ Bonds and such equal bids are the best bids received, Platte River will determine which

bid will be accepted at its sole discretion.

TIME OF AWARD: Bids will be received at the time hereinabove specified. Platte

River intends to take action upon the determination of the best bid on the date of sale, awarding

the Series JJ Bonds or rejecting all bids for the Series JJ Bonds. In any event, the Series JJ

Bonds will be awarded or all bids for the Series JJ Bonds will be rejected not later 5:00 p.m.,

Colorado local time, on the date of the bids. Bidders may not withdraw their bids prior to 5:00

p.m., Colorado local time, on the date of the bids.

MANNER AND TIME OF DELIVERY: The good faith deposit of the best bidder will

be credited to the purchaser at the time of delivery of the Series JJ Bonds (without accruing

interest). If the successful bidder for the Series JJ Bonds fails or neglects to complete the

purchase of the Series JJ Bonds on the date on which the Series JJ Bonds are made ready and are

tendered for delivery, the amount of its good faith deposit will be forfeited (as liquidated

damages for non-compliance with the bid) to Platte River, except as hereinafter provided. In that

event Platte River may reoffer the Series JJ Bonds for public or negotiated sale. The purchaser

will not be required to accept delivery of any of the Series JJ Bonds if they are not tendered for

delivery within thirty days from the date herein stated for opening bids; and if the Series JJ

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Bonds are not so tendered within said period of time, the good faith deposit will be returned to

the purchaser upon its request, including any interest earned by Platte River on the good faith

deposit. Platte River contemplates effecting delivery of the Series JJ Bonds to the purchaser

thereof on or about April 26, 2016. The purchaser of the Series JJ Bonds will be given at least

72 hours’ notice of the time fixed by Platte River for tendering the Series JJ Bonds for delivery.

PAYMENT AT AND PLACE OF DELIVERY: The successful bidder will be required

to accept delivery of, and to make payment of the balance due for, the Series JJ Bonds at DTC in

New York, New York. Payment of the balance of the purchase price for the Series JJ Bonds due

at delivery must be made by 8:00 a.m., Colorado local time, on the date of delivery of the Series

JJ Bonds (the “Date of Delivery”) in Federal Reserve Funds or other funds acceptable to Platte

River for immediate and unconditional credit to Platte River at a bank or banks designated by

Platte River, so that Series JJ Bond proceeds may be so deposited or invested, or both deposited

and invested, as Platte River may determine, simultaneously with the delivery of the Series JJ

Bonds. The balance of the purchase price, including, without limitation, any premium, must be

paid in such funds and not by any cancellation or waiver of interest, and not by any other

concession as a substitution for such funds.

CUSIP NUMBERS: The successful bidder shall timely obtain CUSIP identification

numbers and pay CUSIP Service Bureau charges for assignment of the numbers. The successful

bidder shall advise Platte River within two (2) business days after notice of award of the

CUSIP identification numbers for the Series JJ Bonds. The successful bidder shall also

advise the underwriting department of DTC, not less than four (4) business days prior to the Date

of Delivery, of the interest rates borne by the Series JJ Bonds, the CUSIP identification numbers

and the Date of Delivery. Any delay, error or omission with respect to the CUSIP numbers shall

not constitute a cause for failure or refusal by the successful bidder to accept delivery of, and pay

for, the Series JJ Bonds in accordance with the terms of this Official Notice of Sale.

CONTINUING DISCLOSURE UNDERTAKING: Pursuant to the Rule 15c2-12 of the

Securities and Exchange Commission (the “Rule”), Platte River will undertake in a continuing

disclosure certificate with respect to the Series JJ Bonds to provide certain ongoing disclosure,

including annual operating data and financial information, audited financial statements and

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notices of the occurrence of certain material events. A copy of the form of the certificate is set

forth in Appendix E of the Official Statement.

OFFICIAL STATEMENT: Platte River has prepared the Preliminary Official Statement

which is deemed by Platte River to be final as of its date for purposes of allowing bidders to

comply with the Rule, except for the omission of certain information as permitted by the Rule.

The Preliminary Official Statement is subject to revision, amendment and completion in a Final

Official Statement, as defined below.

Platte River will prepare a Final Official Statement, dated as of the date of award of the

Series JJ Bonds to the winning bidder, as soon as practicable after the date of award to the

winning bidder. This will constitute the “Final Official Statement” relating to the Series JJ

Bonds. Platte River authorizes the winning bidder to distribute the Final Official Statement in

connection with the offering of the Series JJ Bonds. Platte River will provide to the winning

bidder of the Series JJ Bonds an electronic copy and up to 100 printed copies of the Final

Official Statement (as requested by the winning bidder) on or before seven business days

following the date of the award to the winning bidder. The winning bidder may obtain additional

printed copies of the Final Official Statement at its expense. The printed Final Official

Statements will be delivered to the winning bidder at the offices of the Financial Advisor at the

address listed below or, at a winning bidder’s direction and expense, the printed Final Official

Statements will be forwarded to such winning bidder by mail or another delivery service

mutually agreed to between such winning bidder and the Financial Advisor.

For a period beginning on the date of the Final Official Statement and ending twenty-five

days following the date the winning bidder shall no longer hold for sale any of the Series JJ

Bonds, if any event concerning the affairs, properties or financial condition of Platte River shall

occur as a result of which it is necessary to supplement the Final Official Statement in order to

make the statements therein, in light of the circumstances existing at such time, not misleading,

at the request of such winning bidder, Platte River shall forthwith notify such winning bidder of

any such event of which the General Manager of Platte River has actual knowledge and shall

cooperate fully in preparation and furnishing of any supplement to the Final Official Statement

necessary, in the reasonable opinion of Platte River and such winning bidder, so that the

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statements therein as so supplemented will not be misleading in the light of the circumstances

existing at such time.

TRANSCRIPT AND LEGAL OPINION: The validity and enforceability of the Series JJ

Bonds will be approved by Sherman & Howard L.L.C., Denver, Colorado. The purchaser will

receive a certified transcript of legal proceedings, which will include, among other documents:

A. A certificate executed by officials of Platte River, including the General Counsel

of Platte River, stating that there is no litigation pending affecting the validity of the Series JJ

Bonds as of the date of their delivery;

B. A certificate executed by the Chairman of the Board of Directors and by the

General Manager of Platte River or other authorized officials of Platte River stating that, to the

best of their knowledge, the Final Official Statement (other than the information in the Final

Official Statement relating to DTC, the book-entry system, and included in “Appendix

F―Economic and Demographic Information” to the Official Statement, as to which no belief

will be expressed) as of its date did not contain any untrue statement of a material fact or omit to

state any material fact necessary to make the statements made in the Final Official Statement, in

the light of the circumstances under which they were made, not misleading, and that, to the best

of their knowledge, since the date of the Final Official Statement no event has occurred which

would cause the Final Official Statement as of the date of the delivery of the Series JJ Bonds to

contain any untrue statement of a material fact or to omit to state any material fact necessary to

make the statements made in the Final Official Statement, in the light of the circumstances under

which they were made, not misleading (provided that, if between the date of the public sale of

the Series JJ Bonds and the date of delivery of the Series JJ Bonds, any event should occur or be

discovered which would cause the Final Official Statement to contain an untrue statement of a

material fact or to omit to state a material fact necessary to make the statements therein, in the

light of the circumstances under which they were made, not misleading, Platte River shall notify

the purchaser thereof, and if in the opinion of Platte River or the purchaser such event requires

the preparation and publication of a supplement or amendment to the Final Official Statement,

Platte River, at its sole expense, will supplement or amend the Final Official Statement in a form

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and in a manner approved by the purchaser and by Sherman & Howard L.L.C., disclosure

counsel to Platte River);

C. A letter from Sherman & Howard L.L.C., disclosure counsel to Platte River,

addressed to Platte River, together with a reliance letter addressed to the purchaser of the Series

JJ Bonds, to the effect that such firm does not assume responsibility for or pass on the accuracy,

completeness and fairness of statements made in the Final Official Statement, but that during the

course of the participation by such firm in the preparation of the Final Official Statement no

information came to the attention of the attorneys in such firm to lead such firm to believe that

the Final Official Statement (except for any financial, statistical, demographic, or economic data

or statements of trends, forecasts, numbers, charts, tables, graphs, estimates, projections,

assumptions or expressions of opinion, Appendices A, C and F and any information concerning

DTC and its procedures contained in the Final Official Statement or its appendices, as to which

such firm will make no statement) as of its date either contained an untrue statement of any

material fact or omitted to state a material fact necessary to make the statements made, in the

light of the circumstances under which they were made, not misleading; and

D. The opinions of Sherman & Howard L.L.C. as to the validity and enforceability

of, and the tax exempt status of interest on, the Series JJ Bonds and certain other matters, as

further described in the Preliminary Official Statement under “Tax Status” and “Legal Matters.”

INFORMATION: This Official Notice of Sale, the Preliminary Official Statement and

other information concerning Platte River and the Series JJ Bonds may be obtained from Mr.

David R. Smalley, Treasurer/Chief Financial & Risk Officer, 2000 East Horsetooth Road, Fort

Collins, Colorado 80525 (970-229-5256) (fax 970-229-5223) or from Platte River’s Financial

Advisor, Eric A. Brown, Public Financial Management, Inc., 4350 North Fairfax Drive, Suite

580, Arlington, Virginia 22203 (703-741-0175) (fax 703-516-0283). Copies of this Official

Notice of Sale, the Preliminary Official Statement, the General Power Bond Resolution and the

Eleventh Supplemental Power Bond Resolution authorizing the issuance of the Series JJ Bonds

are also available online at www.munios.com.

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EXHIBIT A

SUMMARY BIDDING PARAMETERS TABLE1

INTEREST PRICING

Dated Date: Date of Delivery

Max. Aggregate Bid Price: 122% Anticipated Date of Delivery: April 26, 2016

Min. Aggregate Bid Price: 110%

Interest Payment Dates: June 1 and December 1

First Interest Payment Date: December 1, 2016

Max. Reoffering Price (each maturity): No Limit

Coupon Multiples: 1/8 or 1/20 of 1%

Min. Reoffering Price (each maturity): No Limit Minimum Coupon per Maturity:

2018 – 2029: No Limit 2030-2036: 5.00%

Maximum True Interest Cost: 4.50%

Maximum Coupon per Maturity: 5.00%

Maximum Difference Between Coupons: No Limit

Zero Coupon: Not permitted

PRINCIPAL

PROCEDURAL Optional Redemption: Callable on June 1, 2026

and thereafter at par. Sale Date and Time: April 12, 2016;

8:30 a.m. Colorado Time (MT)

Post-bid aggregate Principal adjustment (higher/lower):

Up to 10%, without prior consent

Bid Submission: Electronic bids through PARITY only

Term Bonds: Any two or more consecutive maturities may be designated as Term Bonds

All or None? Yes

Good Faith Deposit: $1,500,000; As more fully described on Page 8 “GOOD FAITH DEPOSIT”

Bid Award Method: Lowest True Interest Cost

Bid Confirmation: Email confirmation

Awarding of Bid: On the Sale Date by Platte River

1 Certain of the bidding parameters or any other provision of this Official Notice of Sale may be amended by Platte River upon no less than eighteen (18) hours prior notice and communicated through Thomson Municipal Market Monitor. If such a change or amendment occurs, bids will be received in accordance with this Official Notice of Sale, as modified by such notice.

A-1

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EXHIBIT B

[NAME OF PURCHASER]

CERTIFICATE OF PURCHASER

IT IS HEREBY CERTIFIED by the undersigned, a _____________________________

of ________________________ (the “Purchaser”), that:

1. The initial offering prices or yields of the Platte River Power Authority Power Revenue Bonds, Series JJ in the aggregate principal amount of $__________ (the “Series JJ Bonds”) to the public (not including bond houses and brokers or similar persons or organizations acting in the capacity as underwriters or wholesalers) at which prices or yields a substantial amount of each maturity (i.e., at least 10% in aggregate principal amount of each maturity) of the Series JJ Bonds were sold is shown on the inside cover page of the Official Statement dated _______ __, 2016 relating to the Series JJ Bonds (the “Official Statement”). The foregoing sentence is based on facts and our expectations as of the sale date of the Series JJ Bonds and not on actual facts after the sale date.

2. The Series JJ Bonds were sold by the Purchaser as fixed interest rate bonds as described in the Official Statement.

WITNESS my hand this _______ __, 2016.

Title:

B-1

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PRELIMINARY OFFICIAL STATEMENT DATED APRIL 5, 2016

This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be

sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this

Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities

in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws

of any such jurisdiction.

NEW ISSUE Ratings: (See “RATINGS”): S&P: “___” BOOK-ENTRY ONLY Fitch: “___”

In the opinion of Sherman & Howard L.L.C., Bond Counsel, assuming continuous compliance with certain covenants described herein, interest on the Series JJ Bonds is excluded from gross income for federal income tax purposes pursuant to Section 103 of the Internal Revenue Code of 1986, as amended to the date of delivery of the Series JJ Bonds (the “Tax Code”), interest on the Series JJ Bonds is excluded from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code except that such interest is required to be included in calculating the “adjusted current earnings” adjustment applicable to corporations for purposes of computing the alternative minimum taxable income of corporations, and interest on the Series JJ Bonds is excluded from Colorado taxable income and Colorado alternative minimum taxable income under Colorado income tax laws in effect on the date of delivery of the Series JJ Bonds as described herein.

$156,710,000* PLATTE RIVER POWER AUTHORITY

COLORADO POWER REVENUE BONDS, SERIES JJ

Dated: Delivery Date Due: June 1, as shown below

The Series JJ Bonds will be issued as fully registered bonds, initially registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (DTC), securities depository for the Series JJ Bonds. Purchases of the Series JJ Bonds are to be made in book-entry form only. Purchasers will not receive certificates representing their beneficial ownership interest in the Series JJ Bonds. See “THE SERIES JJ BONDS – Book-Entry Only System.” The Series JJ Bonds will be available to ultimate purchasers (Beneficial Owners) in denominations of $5,000 or any integral multiple thereof. Principal and semiannual interest (June 1 and December 1, commencing December 1, 2016) on the Series JJ Bonds will be payable to DTC by Wells Fargo Bank, National Association, Denver, Colorado, as Trustee.

The maturity schedule for the Series JJ Bonds appears on the inside cover page of this Official Statement.

The Series JJ Bonds will be subject to redemption prior to maturity at the option of the Authority as described in “DESCRIPTION OF SERIES JJ BONDS – Redemption Provisions.” At the option of the winning bidder, certain of the Series JJ Bonds also may be subject to mandatory sinking fund redemption.

The proceeds of the Series JJ Bonds will be used to: (i) refund certain outstanding Authority bonds as more particularly described herein; (ii) finance certain capital improvements for the Authority’s electric power and energy system (the “System”), and (iii) pay the cost of issuing the Series JJ Bonds. See “SOURCES AND USES OF FUNDS.”

The Series JJ Bonds are not an obligation of the State of Colorado or any political subdivision thereof, other than the Authority. The Authority has no taxing power. The Series JJ Bonds are limited obligations of the Authority payable solely from the revenues of the System and other funds pledged under the Bond Resolution, subject to the prior payment from revenues of maintenance and operation costs of the System and the accrual of reserves therefor, as further described herein.

This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision.

Electronic proposals for the purchase of the Series JJ Bonds will be received by the Authority through i-DEAL LLC’s Parity/BidComp Competitive Bidding System (“PARITY®”) on April 12, 2016 at 8:30 a.m., Mountain Standard Time, or on such other date or time as may be determined by the Authority, with notice provided through PARITY®, all as provided in the Official Notice of Bond Sale relating to the Series JJ Bonds, attached as Appendix G.

The Series JJ Bonds are offered when, as and if issued and accepted by the initial purchaser, subject to the delivery of an approving opinion by Sherman & Howard L.L.C., Denver, Colorado, as Bond Counsel. Sherman & Howard L.L.C. has also acted as special counsel to the Authority in connection with this Official Statement. It is expected that delivery of the Series JJ Bonds will be made on or about April 26, 2016 through the facilities of DTC.

This Official Statement is dated April ___, 2016

* Preliminary, subject to change. PUBFIN/1961227.5

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$156,710,000* PLATTE RIVER POWER AUTHORITY

COLORADO POWER REVENUE BONDS, SERIES JJ

MATURITY SCHEDULE (CUSIP Six-Digit issuer number: 727818)

Maturity (June 1)

Principal Amount*

Interest

Rate

Price or

Yield

CUSIP© Issue No.

Maturity (June 1)

Principal Amount*

Interest

Rate

Price or

Yield

CUSIP© Issue No.

2017 0 2027 $14,280,000 2018 $2,155,000 2028 14,705,000 2019 2,195,000 2029 15,135,000 2020 10,550,000 2030 2,970,000 2021 10,910,000 2031 3,125,000 2022 11,350,000 2032 3,285,000 2023 11,865,000 2033 3,450,000 2024 12,455,000 2034 3,630,000 2025 13,080,000 2035 3,815,000 2026 13,745,000 2036 4,010,000

* Preliminary, subject to change. Copyright 2016, American Bankers Association. CUSIP data is provided by Standard & Poor’s, CUSIP Services

Bureau, a division of The McGraw-Hill Companies, Inc.

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PLATTE RIVER POWER AUTHORITY 2000 East Horsetooth Road

Fort Collins, Colorado 80525-5721 (970) 226-4000

Member Municipalities

ESTES PARK FORT COLLINS LONGMONT LOVELAND Board of Directors

Tom Roiniotis, Chairman...................................................................................... Longmont Reuben Bergsten, Vice Chairman .........................................................................Estes Park Cecil Gutierrez, Secretary ..........................................................................Mayor, Loveland Steve Adams .......................................................................................................... Loveland Dennis Coombs ........................................................................................ Mayor, Longmont Gerry Horak ....................................................................................................... Fort Collins Bill Pinkham ............................................................................................ Mayor, Estes Park Wade Troxell ........................................................................................ Mayor, Fort Collins

Management

Jacqueline A. Sargent........................................ General Manager/ Chief Executive Officer Jason E. Frisbie ............................................................................... Chief Operating Officer Peter D. Hoelscher ........................... Chief External Affairs & Customer Relations Officer Karin L. Hollohan .................................................... Chief Administrative Services Officer Deborah R. Schaneman ................................................................Chief Compliance Officer David D. Smalley ............................................... Chief Financial & Risk Officer, Treasurer Joseph B. Wilson, Esq. ...............................................................................General Counsel

Bond and Special Counsel

Sherman & Howard L.L.C. Denver, Colorado

Financial Advisor

Public Financial Management, Inc. Arlington, Virginia

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USE OF INFORMATION IN THIS OFFICIAL STATEMENT

This Official Statement, which includes the cover page, the inside cover page and the appendices, does not constitute an offer to sell or the solicitation of an offer to buy any of the Series JJ Bonds in any jurisdiction in which it is unlawful to make such offer, solicitation, or sale. No dealer, salesperson, or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement in connection with the offering of the Series JJ Bonds, and if given or made, such information or representations must not be relied upon as having been authorized by the Authority. The Authority maintains an internet website; however, the information presented there is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Series JJ Bonds.

The information set forth in this Official Statement has been obtained from the Authority and from the other sources referenced throughout this Official Statement, which the Authority believes to be reliable. No guarantee is made by the Authority, however, as to the accuracy or completeness of information provided from sources other than the Authority. This Official Statement contains, in part, estimates and matters of opinion that are not intended as statements of fact, and no representation or warranty is made as to the correctness of such estimates and opinions, or that they will be realized.

The information, estimates, and expressions of opinion contained in this Official Statement are subject to change without notice, and neither the delivery of this Official Statement nor any sale of the Series JJ Bonds shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority, or in the information, estimates, or opinions set forth herein, since the date of this Official Statement.

This Official Statement has been prepared only in connection with the original offering of the Series JJ Bonds, and not in connection with any subsequent sale or transfer of the Series JJ Bonds, and may not be reproduced or used in whole or in part for any other purpose.

The Series JJ Bonds have not been registered with the Securities and Exchange Commission due to certain exemptions contained in the Securities Act of 1933, as amended. The Series JJ Bonds have not been recommended by any federal or state securities commission or regulatory authority, and the foregoing authorities have neither reviewed nor confirmed the accuracy of this document.

THE PRICES AT WHICH THE SERIES JJ BONDS ARE OFFERED TO THE PUBLIC BY THE INITIAL PURCHASER (AND THE YIELDS RESULTING THEREFROM) MAY VARY FROM THE INITIAL PUBLIC OFFERING PRICES OR YIELDS APPEARING ON THE INSIDE COVER PAGE HEREOF. IN ADDITION, THE INITIAL PURCHASER MAY ALLOW CONCESSIONS OR DISCOUNTS FROM SUCH INITIAL PUBLIC OFFERING PRICES TO DEALERS AND OTHERS. IN ORDER TO FACILITATE DISTRIBUTION OF THE SERIES JJ BONDS, THE INITIAL PURCHASER MAY ENGAGE IN TRANSACTIONS INTENDED TO STABILIZE THE PRICE OF THE SERIES JJ BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

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TABLE OF CONTENTS Page Page

INTRODUCTION ..................................................... 1 General .......................................................................... 1 The Authority ................................................................ 1 The Municipalities ......................................................... 1 Security for the Series JJ Bonds .................................... 2 Lien Position ................................................................. 2 Purpose of the Series JJ Bonds ...................................... 3 Tax Status of Interest on the Series JJ Bonds ................ 3 Forward Looking Statements......................................... 3 Additional Information .................................................. 3

SOURCES AND USES OF FUNDS ......................... 4 Improvement Projects .................................................... 4 Refunding Project .......................................................... 5 Verification of Mathematical Computations ................. 6

DESCRIPTION OF SERIES JJ BONDS .................. 6 General .......................................................................... 6 Optional Redemption .................................................... 6 Mandatory Sinking Fund Redemption ........................... 6 Springing Modifications to the Bond Resolution .......... 7 Tax Covenants ............................................................... 7 Book-Entry Only System .............................................. 7

SECURITY FOR SERIES JJ BONDS ...................... 8 Pledge Effected by the Bond Resolution ....................... 8 Rate Covenants .............................................................. 9 Electric Power Contracts with the Municipalities.......... 9

OUTSTANDING OBLIGATIONS ......................... 11 POWER BOND SERVICE REQUIREMENTS ...... 12 THE AUTHORITY ................................................. 12

Brief History ................................................................ 12 Service Area ................................................................ 13 Organization, Management and Employees ................ 13 Pension Plans............................................................... 15 Insurance Coverage ..................................................... 17 Operating Results ........................................................ 17 Management’s Discussion of Operating Results ......... 19 Strategic Financial Plan ............................................... 20 Cash Reserves and Liquidity ....................................... 20 Debt Service Coverage ................................................ 21 Power Requirements .................................................... 22 Power Resources ......................................................... 22 Future Capital Projects ................................................ 24 Rate Regulation ........................................................... 25 Wholesale Rate History ............................................... 26 Regional Coordination................................................. 26

RAWHIDE ENERGY STATION ........................... 27 Fuel Supply ................................................................. 28 Water Supply ............................................................... 29 Solar Development at Rawhide ................................... 30

CRAIG UNITS 1 AND 2 ........................................ 30 Ownership and Operation of the Yampa Project ......... 30 Craig Units 1 and 2 Fuel Supply ................................. 32 Litigation Challenging Mining Permits ....................... 33 Federal Leasing Moratorium ....................................... 33 Yampa Project Water Supply ...................................... 34

GREENHOUSE GAS REGULATION ................... 34

SUPPLY CONTRACTS WITH WESTERN AREA POWER ADMINISTRATION ............................... 34

Background ................................................................ 34 RENEWABLE ENERGY SOURCES .................... 35 TRANSMISSION FACILITIES ............................. 36 MUNICIPAL ELECTRIC SYSTEMS SUPPLIED BY THE AUTHORITY ................................................ 36

General ....................................................................... 36 Electric System Properties .......................................... 36 Rates and Comparative Power Costs .......................... 37 Municipal Electric Systems ........................................ 39 Largest Customers Served by the Municipalities ........ 39 Historical Operating Results ....................................... 39

ADDITIONAL REGULATORY AND CLIMATE FACTORS AFFECTING THE AUTHORITY AND THE ELECTRIC UTILITY INDUSTRY ............... 41

General ....................................................................... 41 Expanded FERC Jurisdiction ...................................... 41 Renewable Portfolio Standards ................................... 42 Environmental Regulations ........................................ 43 Effects of Drought and Low-Water Conditions .......... 44

LITIGATION.......................................................... 44 CONTINUING DISCLOSURE .............................. 44 LEGAL MATTERS ................................................ 45 TAX MATTERS ..................................................... 45

Federal Tax Matters .................................................... 45 INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ................................................... 47 FINANCIAL ADVISOR ........................................ 47 RATINGS ............................................................... 47 PUBLIC SALE ....................................................... 48 OFFICIAL STATEMENT CERTIFICATION ....... 48 MISCELLANEOUS ............................................... 48 APPENDIX A PLATTE RIVER POWER

AUTHORITY FINANCIAL STATEMENTS ............................ A-1

APPENDIX B SUMMARY OF CERTAIN PROVISIONS OF THE BOND RESOLUTION ............................. B-1

APPENDIX C BOOK-ENTRY ONLY SYSTEM ...................................... C-1

APPENDIX D FORM OF BOND COUNSEL OPINION ..................................... D-1

APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE ... E-1

APPENDIX F ECONOMIC AND DEMOGRAPHIC INFORMATION ........................... F-1

APPENDIX G OFFICIAL NOTICE OF BOND SALE ............................................ G-1

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INDEX OF TABLES

NOTE: Tables marked with an (*) indicate Annual Financial Information to be updated pursuant to SEC Rule 15c2-12, as amended. See Appendix E – Form of Continuing Disclosure Certificate.

Sources and Uses of Funds ............................................................................................................. 4 Refunded Bonds .............................................................................................................................. 5 *Power Bond Debt Service Requirements .................................................................................... 12 Annual Required Contributions – Actuarial Assumptions ........................................................... 16 Authority’s Plan Contributions ..................................................................................................... 16 Net Pension Liability .................................................................................................................... 17 *Comparative Statements of Revenues, Expenses and Charges in Net Position ......................... 18 *Debt Service Coverage ............................................................................................................... 21 *Power Resources and Loads ....................................................................................................... 23 *Authority’s Wholesale Rates ...................................................................................................... 26 *Rawhide Unit 1 Capacity Factors and Equivalent Availability .................................................. 28 *Craig Units Capacity Factors and Equivalent Availability ......................................................... 30 *Comparison of Estimated Monthly Electric Charges ................................................................. 38 *Customer Classification .............................................................................................................. 39 *Historical Operating Results of the Electric Systems of the Municipalities ............................... 40

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OFFICIAL STATEMENT

$156,710,000* PLATTE RIVER POWER AUTHORITY POWER REVENUE BONDS, SERIES JJ

INTRODUCTION

General

This Official Statement, including the cover page, the inside cover page and the appendices, is furnished by the Platte River Power Authority (the “Authority”) to provide information about the Authority and its $156,710,000* Power Revenue Bonds, Series JJ (the “Series JJ Bonds”). The Series JJ Bonds are being issued pursuant to the General Power Bond Resolution adopted February 26, 1987 by the Board of Directors of the Authority (the “Board”), as supplemented and amended to date and by the Eleventh Supplemental Bond Resolution adopted March 31, 2016 (the “Eleventh Supplemental Resolution”). The General Power Bond Resolution, as so supplemented, is referred to herein as the “Bond Resolution.” Capitalized terms used herein that are otherwise not defined have the meanings ascribed to them in Appendix B – Summary of Certain Provisions of the Bond Resolution.

This Introduction is only a brief description of certain matters set out in this Official Statement and is subject in all respects to more complete information contained in this Official Statement. Investors should make a full review of this Official Statement, which includes the cover page and attached Appendices, as well as of the documents summarized and described in this Official Statement, before making a decision to purchase any of the Series JJ Bonds.

The Authority

The Authority was formed as a joint action power authority in 1975 pursuant to a contract entered into by the municipalities of Estes Park, Fort Collins, Longmont and Loveland (the “Municipalities”). The Authority’s mission is to effect the development of electric energy resources and the production and transmission of electric energy in whole or in part for the benefit of the inhabitants of the Municipalities. The Authority is a generation and transmission utility operating in the wholesale market, and does not serve retail customers. The electric utility retail distribution systems of the Municipalities are the main beneficiaries of the Authority’s electric operations. The Authority’s electric power and energy system (the “System”) sells surplus electricity not needed by the Municipalities to other electric utilities in the region and provides transmission service.

The Municipalities

The Municipalities are located along the northern Front Range of Colorado. Each Municipality owns an electric distribution utility that serves residents and businesses within the Municipality’s limits. Some of the Municipalities have service areas outside municipal limits. In 2014, the estimated populations of the Municipalities were: Fort Collins 154,570, Longmont

* Preliminary, subject to change.

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90,732, Loveland 72,983 and Estes Park 6,197. Fort Collins, Longmont, and Loveland have diverse economies, whereas the Estes Park economy is based primarily on tourism. The Municipalities serve large loads in the brewing and beverage, information and computer technology, food processing, warehousing, and product distribution industries as well as educational and medical institutions.

Security for the Series JJ Bonds

The Series JJ Bonds are secured by a pledge of the Authority’s “Net Revenues.” Net Revenues are essentially equal to all revenues derived by the Authority attributable to its ownership and operation of the System (the “Revenues”) less maintenance and operation costs of the System (the “Maintenance and Operation Costs”). Revenues include amounts received by the Authority under electric service contracts or any other contracts for the sale of power or other services from the System. In addition to expenses for salaries and wages, materials and supplies and administrative and general expenses, Maintenance and Operation Costs include costs of fuel, purchased power and transmissions service. As described under “SECURITY FOR SERIES JJ BONDS – Rate Covenants,” Net Revenues can be increased or decreased by amounts paid into or withdrawn from a Rate Stabilization Reserve Account. “Net Revenues,” “Revenues,” “Maintenance and Operation Costs” and the “Rate Stabilization Reserve Account” are more fully described in Appendix B – Summary of Certain Provisions of the Bond Resolution.

The Municipalities have each agreed to buy essentially all of their electric requirements from the Authority through 2050. The Authority’s contracts with the Municipalities authorize the Authority to set the rates it charges the Municipalities’ utilities at levels that are sufficient to pay the Authority’s cash operating expenses and its bonds and any surplus “coverage” required in its bond covenants. The Municipalities are obligated to make payments to the Authority only from their electric utility revenues; the Municipalities’ taxing powers and non-utility revenues are not pledged or available to pay debt service on the Series JJ Bonds. The Authority makes sales to other utilities of surplus electric power and energy as well as transmission service, but the power supply contracts with the Municipalities are intended (and written) to provide sufficient Net Revenues through 2050 to meet the Authority’s obligations, i.e., for a longer period than the term of the Series JJ Bonds.

Lien Position

Upon issuance of the Series JJ Bonds, the Authority will have $243,985,000* in aggregate principal of outstanding power revenue bonds (including the Series JJ Bonds) that are secured by the same “Net Revenues” pledge as that securing the Series JJ Bonds. These bonds are known as “Power Revenue Bonds,” and the Series JJ Bonds’ claim on the Authority’s Net Revenues will rank equally with all other Power Revenue Bonds issued before or after the Series JJ Bonds. Thus, the Series JJ Bonds are on parity with all other Power Revenue Bonds. The Authority has promised not to issue any bonds that would have a claim on its Net Revenues prior to that of Power Revenue Bonds. In this sense, the Authority’s Power Revenue Bonds, including the Series JJ Bonds, are considered to have a first (but not an exclusive) lien on Net Revenues. See Appendix B – Summary of Certain Provisions of the Bond Resolution.

* Preliminary, subject to change.

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Purpose of the Series JJ Bonds

Net proceeds of the Series JJ Bonds are to be used (a) to advance refund a portion of the Authority’s Power Revenue Bonds, Series HH, maturing on June 1, 2020 to 2029 (the “Refunded Bonds”) on their redemption date of June 1, 2019 (the “Refunding Project”); (b) to finance a number of transmission capital improvements to the System, including 230kV circuit breakers and transformers, a new substation, and improvements to related facilities (the “Improvement Projects”); (c) to finance a number of generation capital improvements to the System including a distributed control system replacement, dust collection system upgrades, general plant purchases, and improvements to related facilities; and (d) to pay certain costs of issuing the Series JJ Bonds. See “SOURCES AND USES OF FUNDS.”

The specific principal amount, if any, of each maturity of the Refunded Bonds that will be refunded will be determined by the Authority on the day of pricing of the Series JJ Bonds. The issuance of the Series JJ Bonds and the refunding of the Refunded Bonds is subject to market conditions, and the Authority will only issue the Series JJ Bonds to refund any of the Refunded Bonds if such issuance and refunding result in acceptable debt service savings to the Authority.

Tax Status of Interest on the Series JJ Bonds

In the opinion of Sherman & Howard L.L.C., Bond Counsel, assuming continuous compliance with certain covenants described herein, interest on the Series JJ Bonds is excluded from gross income for federal income tax purposes pursuant to Section 103 of the Internal Revenue Code of 1986, as amended to the date of delivery of the Series JJ Bonds (the “Tax Code”), interest on the Series JJ Bonds is excluded from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code except that such interest is required to be included in calculating the “adjusted current earnings” adjustment applicable to corporations for purposes of computing the alternative minimum taxable income of corporations, and interest on the Series JJ Bonds is excluded from Colorado taxable income and Colorado alternative minimum taxable income under Colorado income tax laws in effect on the date of delivery of the Series JJ Bonds as described herein.

Forward Looking Statements

This Official Statement contains statements which, to the extent they are not recitations of historical fact, constitute “forward-looking statements.” In this respect the words “estimate,” “project,” “anticipate,” “expect,” “intend,” “believe” and similar expressions are intended to identify forward-looking statements. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Additional Information

This Official Statement contains information that the Authority considers current as of its date. The Authority will sign a Continuing Disclosure Certificate on the issuance date of the

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Series JJ Bonds agreeing to update certain information in this Official Statement after its date, as described under “CONTINUING DISCLOSURE.” This Official Statement contains summaries of the terms of the Series JJ Bonds, the Bond Resolution and certain contracts and other arrangements entered into by the Authority and relating to the System, which by definition are not complete. Copies of these complete documents may be requested from:

David D. Smalley, Chief Financial & Risk Officer Platte River Power Authority 2000 East Horsetooth Road

Fort Collins, Colorado 80525-5721 Telephone number: 970-226-4000

SOURCES AND USES OF FUNDS

The sources and uses of funds related to the issuance of the Series JJ Bonds are set forth in the following table.

Sources and Uses of Funds

Sources of Funds: Principal amount of Series JJ Bonds $156,710,000* Premium Transfers from existing bond fund ____________ Total Sources of Funds

Uses of Funds: Refunding Project Improvement Projects Cost of issuance (including Underwriters’ discount) ____________ Total Uses of Funds

Improvement Projects

Proceeds from the Series JJ Bonds will be used to finance a number of transmission and production capital improvements to the System including (a) transmission projects consisting of (i) the engineering, procurement, and installation of a 115/230kV autotransformer and associated facilities for the Boyd Substation, (ii) the engineering, design, and construction of a new substation to be known as the Foothills Substation to serve the City of Loveland, Colorado, (iii) the procurement and installation of a generation availability transformer at the Rawhide Substation, (iv) the engineering, design, and construction of a six bay 230kV breaker-and-a-half and a new autotransformer for the LaPorte Substation, (v) the procurement and installation of a new 230/34.5kV interconnection transformer and associated facilities to support the new Rawhide Flats Solar Project, and (vi) miscellaneous transmission projects, including numerous breaker replacements throughout the system, and (b) generation projects at the Rawhide Generating Station consisting of (i) the procurement and installation of replacement air heater

* Preliminary, subject to change.

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baskets, (ii) the procurement, construction and installation of a new pneumatic conveying coal dust collection system, (iii) the procurement and installation of replacements to the existing dust collection system in the Rawhide coal conveyor transfer building and the crusher building, (iv) the procurement and installation of replacements to the existing generator rotor and blower, and the on-site rewind of the existing generator stator at Rawhide Unit 1, (v) the procurement and installation of replacement HVMCC switchgear facilities, (vi) the procurement and installation of replacement programmable logic controllers at Rawhide Unit 1, (vii) the procurement and installation of an approximately 500,000 gallon water tank and associated valves for raw water storage at the Rawhide Generating Station, and (viii) miscellaneous generation projects, including several large coal handling equipment purchases.

Refunding Project

The Authority is undertaking the Refunding Project in order to lower interest costs and effect other economics. See “INTRODUCTION – Purpose.”

The following table details the maturity dates, principal amounts and payment or redemption dates of the Series HH Bonds to be refunded or defeased with the proceeds of the Series JJ Bonds and other available funds.

Refunded Bonds*

CUSIP (Base No. 727818)

Maturity Date

(June 1)

Outstanding Principal Amount*

Principal Amount to be

Refunded*

Optional Redemption

Date

Redemption

Price FZ4 06/01/2020 $8,385,000 $8,385,000 06/01/2019 100% GA8 06/01/2021 8,800,000 8,800,000 06/01/2019 100% GB6 06/01/2022 9,240,000 9,240,000 06/01/2019 100% GC4 06/01/2023 9,705,000 9,705,000 06/01/2019 100% GD2 06/01/2024 10,190,000 10,190,000 06/01/2019 100% GE0 06/01/2025 10,700,000 10,700,000 06/01/2019 100% GF7 06/01/2026 11,235,000 11,235,000 06/01/2019 100% GG5 06/01/2027 11,795,000 11,795,000 06/01/2019 100% GH3 06/01/2028 12,385,000 12,385,000 06/01/2019 100% GJ9 06/01/2029 13,005,000 13,005,000 06/01/2019 100%

To accomplish the Refunding Project, the Authority will deposit a portion of the Series JJ

Bond proceeds, together with other available Authority funds, with the Escrow Agent pursuant to an escrow agreement dated as of the date of delivery of the Series JJ Bonds. The amounts deposited with the Escrow Agent will be deposited into the escrow account created under the Bond Resolution and will be held in cash or invested in Federal Securities maturing at such times and in such amounts as required to provide funds sufficient to pay the interest on the Refunded Bonds through June 1, 2019 and principal on the Refunded Bonds to their redemption date on June 1, 2019.

* Preliminary, subject to change.

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Verification of Mathematical Computations

Causey Demgen & Moore P.C. (“Causey”), a firm of independent public accountants, will deliver to the Authority, on or before the settlement date of the Series JJ, its verification report indicating that it has verified, in accordance with standards established by the American Institute of Certified Public Accountants, the mathematical accuracy of the mathematical computations of the adequacy of the cash and the maturing principal of and interest on the Federal Securities, to pay, when due, the maturing principal of and interest on the Refunded Bonds.

The verification performed by Causey will be solely based upon data, information and documents provided to Causey by the Authority and its representatives. Causey has restricted its procedures to recalculating the computations provided by the Authority and its representatives and has not evaluated or examined the assumptions or information used in the computations.

DESCRIPTION OF SERIES JJ BONDS

General

The Series JJ Bonds will be issued in the principal amount of $156,710,000*. The Series JJ Bonds are to be issued in denominations of $5,000 or integral multiples thereof through an electronic book-entry system run by Depository Trust Company (“DTC”). The Series JJ Bonds will be issued as fully registered bonds without coupons and will initially be registered in the name of “Cede & Co.,” as nominee for DTC, New York, New York as securities depository for the Series JJ Bonds. (See Appendix C.) The Series JJ Bonds will be dated and bear interest from the date of delivery, at the rates per annum set forth on the cover page hereof, payable semiannually on June 1 and December 1, commencing December 1, 2016, and will mature on the dates and in the principal amounts set forth on the cover page hereof. Wells Fargo Bank, N.A., will act as trustee and paying agent for the Series JJ Bonds under the Bond Resolution.

Optional Redemption

The Series JJ Bonds maturing on and after June 1, 2027, are subject to redemption at the option of the Authority at any time on or after June 1, 2026, as a whole or in part, at a redemption price equal to the principal amount thereof, together with accrued interest to the redemption date. If less than all Series JJ Bonds are to be optionally redeemed on any date, the maturities to be so redeemed may be selected by the Authority in its discretion.

Mandatory Sinking Fund Redemption

At the option of the winning bidder, certain of the Series JJ Bonds may be subject to mandatory sinking fund redemption.

* Preliminary, subject to change.

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Springing Modifications to the Bond Resolution

The Authority intends to modify certain of the provisions contained in the supplemental bond resolutions authorizing the issuance of all of its outstanding additional parity bonds. The Modifications (collectively, the “Modifications”) will also be reflected in the Bond Resolution and will not be effective until the Effective Date, which is defined as the earlier of the date on which (a) none of the Authority’s Power Revenue Bonds, Series GG (the “Series GG Bonds”), the Authority’s Power Revenue Bonds, Series HH (the “Series HH Bonds”) or the Authority’s Power Revenue Bonds, Series II (the “Series II Bonds”) are outstanding, or (b) the holders of not less than 60% in aggregate principal amount of the sum of the Series GG Bonds, the Series HH Bonds, the Series II Bonds, the Series JJ Bonds and any other series of bonds issued under the Bond Resolution then outstanding, as well as any other entities whose consent is required, have consented. The purchasers of the Series JJ Bonds will be deemed to have consented to the Modifications by purchasing the Series JJ Bonds. It is projected that the sale of the Series JJ Bonds, in combination with the refunding of the Refunded Bonds, will cause the 60% requirement to be satisfied and the Modifications to become effective.

The Modifications relate to the substitution of written certificates of the Authority for certificates currently required to be provided by the independent engineer as more particularly described in Appendix B – Summary of Certain Provisions of the Bond Resolution.

Tax Covenants

In the Bond Resolution, the Authority covenants for the benefit of the owners of the Series JJ Bonds that it will not take any action or omit to take any action with respect to the Series JJ Bonds, the proceeds thereof, any other funds of the Authority or any project refinanced with the proceeds of the Series JJ Bonds if such action or omission (i) would cause the interest on the Series JJ Bonds to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Tax Code, or (ii) would cause interest on the Series JJ Bonds to lose its exclusion from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code, except to the extent such interest is required to be included in the adjusted current earnings adjustment applicable to corporations under Section 56 of the Tax Code in calculating corporate alternative minimum taxable income. The foregoing covenants shall remain in full force and effect notwithstanding the payment in full or defeasance of the Series JJ Bonds until the date on which all obligations of the Authority in fulfilling the above-described covenants under the Tax Code have been met.

Book-Entry Only System

The Series JJ Bonds will be available in book-entry form only. DTC will act as the initial securities depository for the Series JJ Bonds. The ownership of one fully registered Series JJ Bond for each maturity in each series of the Series JJ Bonds as set forth on the inside cover page of this Official Statement, each in the aggregate principal amount of such maturity, will be registered in the name of Cede & Co., as nominee of DTC. See Appendix C – Book-Entry Only System.

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SO LONG AS CEDE & CO., AS NOMINEE OF DTC, IS THE REGISTERED OWNER OF THE SERIES JJ BONDS, REFERENCES IN THIS OFFICIAL STATEMENT TO THE REGISTERED OWNERS OF THE SERIES JJ BONDS WILL MEAN CEDE & CO. AND WILL NOT MEAN THE BENEFICIAL OWNERS.

None of the Authority, the trustee or the paying agent will have any responsibility or obligation to DTC’s Participants or Indirect Participants (defined in Appendix C), or the persons for whom they act as nominees, with respect to the payments to or the providing of notice for the DTC Participants, the Indirect Participants or the beneficial owners of the Series JJ Bonds as further described in Appendix C to this Official Statement.

SECURITY FOR SERIES JJ BONDS

Pledge Effected by the Bond Resolution

The Series JJ Bonds, together with all other Power Revenue Bonds previously or hereafter issued and outstanding under the Bond Resolution, are payable from and are secured by a pledge of (i) Revenues (as defined in Appendix B) derived by the Authority from the ownership and operation of the System, subject to prior payment from such Revenues of Maintenance and Operation Costs, including accrual of reserves therefore and for a fuel acquisition reserve, and (ii) certain funds held under the Bond Resolution. See Appendix B – Funds Established and Allocation of Revenues. As described at greater length in Appendix B, Maintenance and Operation Costs are defined in the Bond Resolution to include all actual maintenance and operation costs of the System, insofar as such charges are made in conformity with generally accepted accounting principles. To the extent consistent with those principles (as now or hereafter in effect), payments by the Authority under water, power or other purchase contracts (including payments under a take-or-pay contract due whether or not deliveries are actually made) may constitute Maintenance and Operation Costs, payable prior to bond service on the Power Revenue Bonds. See “OUTSTANDING OBLIGATIONS.” The flow of funds under the Bond Resolution is described in Appendix B under “Funds Established and Allocation of Revenue.” The Authority derives most of its Revenues from the sale of electric power to the Municipalities.

THE SERIES JJ BONDS ARE NOT AN INDEBTEDNESS OF ANY MUNICIPALITY, THE STATE OF COLORADO OR ANY OTHER POLITICAL SUBDIVISION THEREOF, AND NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF COLORADO OR ANY MUNICIPALITY IS PLEDGED FOR THE PAYMENT OF THE SERIES JJ BONDS. THE AUTHORITY HAS NO TAXING POWER. THE SERIES JJ BONDS ARE SPECIAL OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY FROM NET REVENUES OF THE SYSTEM AND CERTAIN FUNDS PLEDGED UNDER THE BOND RESOLUTION, ON A PARITY WITH ALL OTHER POWER REVENUE BONDS HERETOFORE OR HEREAFTER ISSUED AND OUTSTANDING UNDER THE BOND RESOLUTION AS DESCRIBED ABOVE.

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Rate Covenants

The Authority covenants in the Bond Resolution that it will, while Power Revenue Bonds remain outstanding, establish, fix, prescribe and collect rates and charges for the sale and use of electric power and energy or related services produced, transmitted, distributed or furnished by the System which, together with other income, are reasonably expected to yield Revenues for the forthcoming 12-month period at least equal to all Maintenance and Operation Costs of the System and 1.10 times the sum of Adjusted Aggregate Bond Service (as such term is defined in Appendix B) for such period, but excluding any principal installment which the Authority intends to pay from sources other than Revenues.

The Authority has established a Rate Stabilization Reserve Account within the General Fund under the Bond Resolution. Transfers into the Rate Stabilization Reserve Account have the effect of reducing Net Revenues (as defined in Appendix B) under the Bond Resolution in the year of transfer, while transfers from that account into the Revenue Fund established under the Bond Resolution are included in the calculation of Net Revenues when so transferred. By means of such transfers to and from the Rate Stabilization Reserve Account, the Authority retains the flexibility to set aside Revenues surplus to its Bond Resolution requirements in any period, to be available in future periods to offset the amount of current Revenues required to be obtained from the Municipalities or other power purchasers to meet the rate covenant and other revenue requirements under the Bond Resolution. As of December 31, 2015, there was approximately $20.2 million on deposit in the Rate Stabilization Reserve Account. The Authority does not currently have plans to draw moneys from the Rate Stabilization Reserve Account, though no guarantees can be made that it will not in the future.

The Bond Resolution requires the Authority to review and revise, if necessary, electric rates at least once every calendar year and promptly after any material change in the circumstances which were contemplated at the time of the most recent rate review. Such rates and charges are required, in any event, to produce moneys sufficient to enable the Authority to comply with all its covenants under the Bond Resolution. See “THE AUTHORITY – Wholesale Rate History.”

Electric Power Contracts with the Municipalities

The Authority originally entered into Contracts for the Supply of Electric Power and Energy (collectively, the “Electric Power Contracts”) with each of the four Municipalities on September 5, 1974. In December 1974, a Declaratory Judgment was entered by the Larimer County District Court that concluded that the Electric Power Contracts had been duly executed and delivered by each of the Municipalities and constituted valid and legally binding obligations of each of the Municipalities in accordance with their terms. The Electric Power Contracts are amended and extended at routine intervals, most recently in September 2010, and now extend through December 2050 and thereafter until terminated by a party following not less than six (6) months’ notice. The Authority did not consider it necessary to seek declaratory judgments with respect to the contract extensions.

The Electric Power Contracts are identical in all significant respects. Under each Electric Power Contract, the Authority agrees to sell and deliver to the contracting Municipality, and the

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Municipality agrees to take and pay for all electric power and energy that the Municipality requires for the operation of its municipal electric system to the extent that the Authority has such power and energy available, with three exceptions: 1) each Municipality retains the right to continue to generate power and energy to the extent of the capacity of its generating facilities in service on September 5, 1974; 2) each Municipality may own and operate new generation resources with a total rated capacity no greater than 1,000 kW or one percent of the peak load of that Municipality, whichever is greater; and 3) each Municipality may purchase from net metered customers.

Under the first exception listed above, Longmont, Loveland and Estes Park each operated small hydropower units. The Estes Park unit was destroyed in a flood in 1982 and was not rebuilt. Until recently, Longmont and Loveland continued to operate hydropower facilities; the total combined capacity of these units was 1.4 MW. The Loveland facility was destroyed during a flood event in September, 2013. Loveland is in the process of receiving funds from the Federal Emergency Management Agency (“FEMA”) as reimbursement for municipal facilities destroyed in the flood and is planning to replace the damaged hydropower unit, which was rated at 900 kW, with a solar facility with an estimated rated capacity of 3.0 MW. The capacity of the solar facility is roughly equivalent to the combined capacity of the destroyed hydropower unit and one percent of the Loveland municipal peak load. The parties intend to enter a power purchase agreement whereby the Authority purchases the output of the remaining 0.5 MW. The Longmont hydro facility was forced off-line by the flood event and experienced some damage, but is expected to return to production at full capacity.

The wholesale rate for electric service provided under the Electric Power Contracts to the Municipalities is established by the Board. The Electric Power Contracts provide that the Board shall review the rates, at intervals not less frequently than once each calendar year, and shall, if necessary, revise the rates such that they will produce revenues that shall be sufficient, but only sufficient, with the revenues of the Authority from all other sources to:

(1) meet the cost of operation and maintenance (including, without limitation, replacements, insurance, taxes and administrative and general overhead expense) of the electric generating plants, transmission system and related facilities of the Authority;

(2) meet the cost of any power and energy purchased for resale under the Electric Power Contracts by the Authority and the cost of transmission service;

(3) make payments of principal and interest on all indebtedness and revenue bonds of the Authority and provide an earnings margin adequate to enable the Authority to obtain revenue bond financing on favorable terms; and

(4) provide for the establishment and maintenance of reasonable reserves.

Each Electric Power Contract provides that the obligation of the Municipality to pay the Authority for all electric power and energy furnished to the Municipality is a special obligation of the Municipality payable solely from revenues to be received from the sale of electric power and energy to electric utility customers during the term of such Electric Power Contract. The

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special obligation is not a lien, charge, or liability against the Municipality or against its property or funds other than revenues to be received from the sale of electric power and energy to the Municipality’s electric utility customers during such term. Each Municipality agrees to maintain rates for electric power and energy furnished to its electric utility customers that will, after payment of all costs of operation and maintenance, return to such Municipality sufficient revenue to meet its obligations to the Authority under its Electric Power Contract.

The Authority bills each Municipality monthly, with payment due within 15 days after billing. Service may be discontinued for nonpayment beyond 30 days of billing and written notice from the Authority. No party may be considered to be in default in respect of any of its obligations under the Electric Power Contracts if prevented from performing such obligations by uncontrollable forces.

OUTSTANDING OBLIGATIONS

Upon issuance of the Series JJ Bonds, the Authority will have outstanding an aggregate principal amount of $243,985,000* Power Revenue Bonds (including the Series JJ Bonds), under its Bond Resolution.

In addition to its outstanding Power Revenue Bonds, the Authority has approximately $3.2 million in outstanding principal capitalized lease obligations which are being amortized through 2017 for water supply to the Rawhide Energy Station. The Authority treats payments on such obligations as Maintenance and Operation Costs payable out of Revenues of the System prior to debt service on the Power Revenue Bonds. See Note 8 to the Authority’s audited financial statements included as Appendix A.

* Preliminary, subject to change.

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POWER BOND SERVICE REQUIREMENTS

The following table shows the bond service requirements for the Outstanding Power Revenue Bonds and of the Series JJ Bonds. Bond service payment amounts are for the years in which they accrue, not for the years in which they are paid.

Power Bond Debt Service Requirements

Year Ended Dec. 31

Bond Service on Outstanding

Power Revenue Bonds(1)(2)

Series JJ Bonds(3)

Total Power Bond Service Requirements Principal Interest

Refunded Debt Service

2016 $29,560,540 -- 2017 25,346,477 $1,099,583 2018 17,600,863 1,905,417 2019 15,528,138 1,949,167 2020 15,524,788 2,010,833 2021 15,523,750 2,089,583 2022 15,524,283 2,183,333 2023 15,523,921 2,289,167 2024 15,526,525 2,405,000 2025 15,527,000 2,530,833 2026 15,525,796 2,643,333 2027 15,525,796 2,734,583 2028 15,525,521 2,819,583 2029 7,561,292 2,922,083 2030 1,869,979 3,060,417 2031 1,869,750 3,218,333 2032 2,722,813 3,381,250 2033 3,330,958 3,555,000 2034 3,332,500 3,737,917 2035 3,331,417 3,928,750 2036 3,332,083 1,670,835 2037 1,389,063 --

_________________________ (1) Includes the principal and interest payment due on the Series HH Bonds. Up to $105.44 million principal

amount of the Series HH Bonds may be refunded by the Series JJ Bonds. (2) Includes principal, interest and mandatory sinking fund payments with respect to the Parity Bonds, excluding

the Series JJ Bonds. (3) Preliminary, subject to change.

THE AUTHORITY

Brief History

The Authority supplies electric energy at wholesale to the Municipalities. The Authority’s predecessor was initially established by the Municipalities in January 1966 as a nonprofit corporation and began revenue-producing operations in July 1973. Revenue-producing operations were initially limited to purchasing energy from the U.S. Bureau of Reclamation and reselling it to the Municipalities.

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In 1975, legislation was adopted by the Colorado General Assembly allowing any combination of cities and towns that own and operate electric systems to establish by contract a separate governmental entity, known as a “power authority,” to effect the development of electric energy in whole or in part for the benefit of their inhabitants. The Authority was established as a power authority and a separate governmental entity and political subdivision of the State of Colorado on June 17, 1975, through the execution of an “Organic Contract” by the Municipalities. Under the Organic Contract, the Authority became the successor to the nonprofit corporation, entitled to all rights and privileges and subject to all obligations and liabilities of such corporation. In 2010, the Organic Contract’s term was extended through December 31, 2050, and thereafter until terminated by any Municipality following not less than six months written notice to the other Municipalities of its intention to terminate.

Service Area

The area served by the Authority and the Municipalities is situated just east of the Front Range of the Colorado Rocky Mountains and north of Denver. This region was historically devoted to agriculture, ranching, education, and tourism. Over the last three decades, substantial economic development has resulted from an influx of industries attracted by the natural beauty and skilled work force found in the region. Included among the industries new to the region are brewing and beverage, information and computer technology, medical technology, food processing, and warehousing and product distribution.

Organization, Management and Employees

The Authority is governed by an eight member Board. The Board includes the mayor (or a member of the governing body designated by the mayor) of each Municipality. The other four members are appointed to four-year staggered terms by the governing bodies of each of the Municipalities and are selected for judgment, experience, and expertise which make them particularly qualified to serve as a director of an electric utility. The present members of the Board are shown in the table on the following page.

Director

Board Position

Representing

Title

Current Term Expires

Tom Roiniotis Chairman Longmont GM, Power & Comm. December 2018 Reuben Bergsten Vice Chairman Estes Park Utilities Director December 2019 Cecil Gutierrez Secretary Loveland Mayor November 2017 Steve Adams Director Loveland Director, Water & Power December 2017 Dennis Coombs Director Longmont Mayor November 2017 Gerry Horak Director Fort Collins Mayor Pro Tem December 2016 Bill Pinkham Director Estes Park Mayor April 2016(1) Wade Troxell Director Fort Collins Mayor April 2017

(1) Mr. Pinkham’s term limit as Mayor of Estes Park expires in April 2016. His successor will be elected in an

April 2016 election.

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The Authority operates under the direction of a General Manager/CEO who serves at the pleasure of the Board. The Authority’s senior management has substantial experience, with an average of over 25 years of service in the utility industry, including:

Jacqueline A. Sargent

Jacqueline A. Sargent joined the Authority as General Manager/CEO in 2012. Ms. Sargent brings over 27 years of experience in the energy industry including electric and gas utility operations, power generation, energy marketing, rates and regulatory affairs, strategic planning, acquisitions and mergers, and project development. Prior to joining the Authority, Ms. Sargent was the Senior Vice President of Power Supply and Market Operations for Austin Energy located in Austin, Texas. Ms. Sargent started her career with Black Hills Corporation; a diversified energy company located in Rapid City, SD where Ms. Sargent advanced to the position of Vice President of Power Supply and Renewables Integration in a career spanning over 22 years. Ms. Sargent holds a Bachelor of Science degree in electrical engineering and a Master of Science degree in technology management, both from the South Dakota School of Mines and Technology. Ms. Sargent is also a licensed professional engineer.

Jason E. Frisbie

Jason E. Frisbie joined the Authority in 1982. Mr. Frisbie has served in multiple roles since joining the Authority, including Bulk Material Operator, Site Maintenance Supervisor, Bulk Material Supervisor, Air Quality/Water Supervisor, Plant Maintenance Manager, Division Manager-Power Production (since 1999), and Chief Operating Officer (since 2011). Mr. Frisbie holds a B.S. in Industrial Technology, Colorado State University, and an MBA from University of Phoenix.

Peter D. Hoelscher

Peter D. Hoelscher joined the Authority in 2015 as Director of Communications and Marketing and was named Chief External Affairs and Customer Relations Officer in 2016. Mr. Hoelscher has more than 25 years’ experience in corporate communication, public affairs, executive coaching, and organizational development. Immediately prior to joining the Authority, Mr. Hoelscher was Manager of Communications at Southwest Power Pool, a Regional Transmission Organization based in Little Rock, Arkansas. Mr. Hoelscher holds a B.A. in journalism/public information from the University of Arkansas at Little Rock and is a graduate of the Defense Information School.

Karin L. Hollohan

Karin L. Hollohan joined the Authority in 2011 as Human Resources Manager, and became the Corporate Services Director in 2013. In 2016 Ms. Hollohan became the Chief Administrative Services Officer. Prior to joining the Authority, Ms. Hollohan was employed for seventeen years by Colorado Springs Utilities, in addition to positions with Pima County Government and Arizona Electric Power Cooperative. Ms. Hollohan holds a B.A. in Organizational Management, University of Phoenix, along with multiple certifications in Human Resources, public process, and labor relations.

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Deborah R. Schaneman

Deborah R. Schaneman joined the Authority in 2000 as Staff Accountant, and served as Staff Accountant, Senior Accountant, Power System Operator, Reliability Compliance Officer, Environmental Services and Compliance Director in 2013, before becoming Chief Compliance Officer in 2016. Ms. Schaneman was employed by manufacturing, environmental, and consulting firms prior to joining the Authority. Ms. Schaneman holds a B.S. in Business Administration/Accounting from the University of Northern Colorado and is a NERC Certified Reliability System Operator.

David D. Smalley

David D. Smalley, CPA, joined the Authority in 1993 and served in various roles, including Staff Accountant, Investment and Financial Analysis Officer, Financial Planning and Treasury Manager before being named Chief Financial Officer in 2006 and then Chief Financial and Risk Officer in 2013. Prior to joining the Authority, Mr. Smalley worked for a CPA firm auditing federal and non-profit agencies. Mr. Smalley holds a B.S. in Accounting from San Diego State University, and is a member of the American Institute of Certified Public Accountants.

Joseph B. Wilson

Joseph B. Wilson joined the Authority in 2005 and has served as General Counsel since 2007. Prior to joining the Authority, Mr. Wilson served as Regulatory Counsel for Colorado Springs Utilities and as General Counsel for the Colorado Association of Municipal Utilities. Mr. Wilson received a law degree from the University of Denver and has been a member of the Colorado bar since 1985.

Pension Plans

The Authority’s regular employees hired prior to September 1, 2010, are covered by the Platte River Power Authority Defined Benefit Plan (the “Plan”), a single-employer, defined benefit pension plan administered by the Authority. The Plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to Plan members and beneficiaries. Benefit provisions of the Plan are determined and authorized by the Board.

The Plan’s funding policy is intended to fund current service costs as they accrue, plus an additional funding charge if the market value of the assets is less than 100% of the actuarial present value of accumulated plan benefits.

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The annual required contributions are determined using a frozen-initial-liability method. Actuarial assumptions included:

Annual Required Contributions – Actuarial Assumptions

Valuation as of: 01/01/2014 01/01/2015 01/01/2016 Investment Rate of Return 8.0% 8.0% 7.5%

Projected Salary Increase 2.6% (2014), 4.5% (2015+)

3.0% (2015), 4.5% (2016+) 3.0%

Mortality Table RP-2000 RP-2000 RP-2014, with

modified MP-2014 projection scale

Cost of living assumptions are based on the U.S. Consumer Price Index. Effective

January 1, 2016, for participants in pay status prior to January 1, 1992, a 2.25% cost-of-living adjustment per annum is assumed. For all other participants, a 1.5% per annum cost of living is assumed.

Information prepared by the Authority’s actuaries for financial reporting appears below. This information was prepared for financial reporting purposes only and it may not be suitable for use in any other context, and the Authority’s actuaries accept no responsibility for such use.

Five-year trend information for the Authority’s contributions to the Plan is as follows:

Authority’s Plan Contributions (Dollars in Thousands)

2011 2012 2013 2014 2015 Actuarially Determined Contribution $4,390 $3,561 $4,544 $3,905 $3,302

Authority Contribution $4,390 $3,561 $4,544 $3,905 $3,302

Deficiency (Excess) $0 $0 $0 $0 $0

Covered Employee Payroll $18,728 $18,766 $18,614 $17,951 $17,305

Contributions as % of Payroll 23% 19% 24% 22% 19%

Source: The Authority’s Defined Benefit Plan Financial Statements and Actuarial Valuation Reports.

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The components of the net pension liability of the Authority are shown below:

Net Pension Liability (Dollars in Thousands)

2014 2015 2016(1) Total Pension Liability $93,937 $98,124 $109,985 Plan Fiduciary Net Position 87,155 91,431 89,477 Net Pension Liability $ 6,782 $ 6,693 $ 20,626 Plan Fiduciary Net Position as a % of the Total Pension Liability 92.8% 93.2% 81.3%

(1) Net pension liability increased in 2016 due to changes in Plan assumptions and Plan return performance. Source: The Authority’s Defined Benefit Plan Actuarial Valuation Reports.

Employees hired on or after September 1, 2010, are only eligible to participate in a defined contribution money purchase pension plan created in accordance with Internal Revenue Code Section 401(a). Contributions made by the Authority are not taxed until they are withdrawn. Employee contributions are made into a 457 plan with pre-tax dollars, and the earnings on employer and employee contributions are not taxed until withdrawn. For the years ended December 31, 2014 and 2015, contributions to the 401(a) plan by the Authority were $237,000 and $459,000, respectively.

Insurance Coverage

The Authority maintains a number of different types of insurance including auto liability, commercial crime, directors and officers liability, fiduciary liability, excess liability, medical professional, property, employee health, and workers’ compensation. The aggregate property casualty limits are $150 million. The Authority self-insures the first one million dollars of general liability exposure with an excess liability policy of $35 million. The Authority carries directors and officers liability insurance of $10 million.

Operating Results

The table on the following page is a summary of historical operating results for the Authority for the fiscal years ended December 31, 2011-2015, which was derived from the audited financial statements of the Authority for such fiscal years.

The Authority’s audited financial statements as of and for the years ended December 31, 2014 and December 31, 2015, together with the related report of BKD, LLP independent certified public accountants, are included as Appendix A and should be referred to for a complete presentation of the recent operating results of the Authority. See “INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.”

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Comparative Statements of Revenues, Expenses and Charges in Net Position (Dollars in Thousands)

Audited 2011 2012 2013 2014 2015

Operating Revenue:

Sales to Municipalities(1) $150,474 $159,675 $169,311 $169,773 $175,998 Sales for Resale & Other 30,969 22,960 25,627 30,094 23,435

Total Operating Revenues 181,443 182,635 194,938 199,867 199,433

Operating Expenses:

Purchased Power(2) 27,979 22,262 23,760 26,904 32,548

Fuel(3) 43,025 44,417 52,592 49,975 46,446

Operations & Maintenance(4) 47,976 49,420 52,521 55,337 62,854 Administrative and General 11,330 11,316 12,287 14,395 15,906 Depreciation 30,974 33,503 33,355 28,374 26,987

Total Operating Expenses 161,284 160,918 174,515 174,985 184,741 Operating Income 20,159 21,717 20,423 24,882 14,692

Nonoperating Revenues (Expenses): Interest Income 946 737 570 641 745 Other Income 351 822 (505) 1,368 900 Interest Expense (13,815) (12,092) (11,155) (10,421) ( 9,438) Allowance for Funds Used During Construction 4,115 381 83 97 - Net Increase (Decrease) in Fair Value of Investments (347) (161) (128) 39

(112)

Total Nonoperating Revenues (Expenses) (8,750) (10,313) (11,135) (8,276) (7,905)

Income before Contributions 11,409 11,404 9,288 16,606 6,787

Contributions of Assets to Municipalities(5) (155) (155) (155) (155) (155)

Change in Net Position 11,254 11,249 9,133 16,451 6,632 Net Position at Beginning of Year(6) 446,821 458,075 469,324 478,457 492,031

Net Position at End of Year $458,075 $469,324 $478,457 $494,908 $498,663 (1) Sales to the Municipalities for 2011, 2012, 2013, 2014, and 2015 include a 6.1%, 6.1%, 5.1%, 2.0%, and 4.5%

rate increase, respectively. (2) Includes Western Area Power Administration (“Western”) allocation, wind purchases, and other purchases for

outage assistance, resale, to meet load and minimum reserve requirements. (3) Fuel costs include coal and transportation costs for Rawhide Unit 1 and Craig Units 1 and 2, and natural gas and

transportation costs for Rawhide combustion turbines A, B, C, D, and F. (4) Includes operations and maintenance expenses for Rawhide Unit 1, Craig Units 1 and 2, Rawhide combustion

turbines A, B, C, D and F, wind generation, the transmission system, and Windy Gap Project (including related debt service) and System operations expenses.

(5) Reflects a return of capital in the amount of $155,000 which is amortized over the life of the fiber optic network, 20 years to 2018.

(6) Net position at beginning of year for 2015 is adjusted due to implementing a change in accounting principle. Source: The Authority’s Audited Financial Statements.

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Management’s Discussion of Operating Results

The Authority’s audited financial statements including management’s discussion and analysis for the calendar years ended December 31, 2014 and 2015 are included in Appendix A.

Operating Revenue Trends

Operating Revenues in 2015 decreased $0.4 million from 2014.

Municipal sales revenue increased $6.2 million over 2014 as the result of a 2.5% increase in wholesale rates and an increase in municipal energy deliveries of 1.5%. Billing demand decreased 0.4% from 2014.

Surplus sales revenue (Sales for Resale & Other) decreased $6.7 million in 2015 compared to 2014 resulting from lower contract and short-term sales. Contract sales decreased $0.9 million as the contract ended mid-year 2015. Short-term sales decreased $5.8 million with a lower average selling price and less energy sold. The surplus market conditions were unfavorable in 2015 as a result of low natural gas prices and mild weather. The Authority increased the Municipal rate by 4.5% for 2016 in part to offset the reduction in surplus sales revenue. Wheeling revenues were relatively flat from 2014.

Operating Expense Trends

Operating Expenses in 2015 increased $9.8 million over 2014.

Purchase Power costs for 2015 increased $5.6 million compared to 2014. Wind purchased power contracts were in place for a full year in 2015 resulting in $4.8 million more in expense. Market purchases were $5.6 million higher for the Rawhide Unit 1 and Craig Unit 2 scheduled maintenance outages and to meet loads during peak periods but were offset by the $5.0 million replacement power outage accrual. Purchased reserves also increased $0.7 million due to reserves required for the additional wind on the Authority’s system. The increase in costs was partially offset by $0.3 million received from Tri-State Generation and Transmission, Inc. (Tri-State) under the forced outage exchange agreement. See “THE AUTHORITY – Regional Coordination.”

Fuel expense decreased $3.5 million from 2014. The majority of the decrease relates to fuel for the Craig Units and Rawhide Unit 1, $2.9 million and $1.5 million, respectively. The Craig Units’ generation was 11.7% less than 2014 as Craig Unit 2 had a six-week scheduled maintenance outage. In addition, Craig Units were held back due to the unfavorable surplus sales market. Rawhide Unit 1’s generation was 10.8% less than 2014 mainly due to a six-week scheduled maintenance outage. Natural gas for the combustion turbines increased $0.9 million to meet load requirements and sales.

Operations and Maintenance expenses were $7.5 million more than 2015. Rawhide Unit 1 had a six-week scheduled maintenance outage creating the majority of the increase over 2014. The outage was one of the most extensive outages performed since 2005. Major activities included a complete inspection of the turbine and generator, extensive inspections of the boiler, burners, and air heater system to address areas of concern identified in the 2014 minor scheduled

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maintenance outage. Craig Unit 2 also performed a six-week scheduled maintenance outage during 2015. This outage was necessary for the construction of the SCR project that is scheduled to go commercial in the spring of 2017. The overall outage expenses were offset by amounts previously accrued. The increase in 2015 is also partially due to an increase of $2.3 million in wheeling expenses, which were required for the transmission of additional wind purchases.

Administration and General expenses increased $1.5 million over 2014 mainly due to increased personnel expenses, demand side management program funding, professional services, and facilities planning and maintenance.

Depreciation expense decreased $1.4 million from 2014 as the original Rawhide Energy Station and Craig Station assets reached the end of their depreciable lives.

Strategic Financial Plan

The Authority’s Strategic Financial Plan (SFP) provides direction to create long-term financial stability. The priorities of the SFP are to generate adequate cash flows, maintain access to low cost capital, provide stable and competitive wholesale rates, and effectively manage risk. The key financial policies and goals contained in the SFP are listed below:

• Generate minimum debt service coverage of 1.5 times • Generate minimum net come equal to $6 million • Target minimum 200 unrestricted days’ cash on hand • Maintain $20 million in the rate stabilization fund • Target debt to capitalization ratio less than 50 percent

The Board reviews the policies, goals and financial projections at least annually. Under

Colorado law, the Board has the exclusive authority to establish electric rates. The power supply agreements with the Municipalities require the Board to review rates at least once each calendar year. The Board reviewed and approved the SFP in December 2015.

Cash Reserves and Liquidity

The Authority maintains cash reserves for a number of reasons, including operating cash requirements, construction cash requirements, dealing with the impacts of wholesale market conditions, gas and electric market volatility, and to allow the Authority the flexibility to increase rates on a scheduled basis. As previously noted, the Authority approved the SFP, which establishes guidelines for maintaining a target of unrestricted reserves sized at a minimum of 200 days’ cash, including at least $20 million in the Rate Stabilization Fund. The Authority has maintained those minimum levels of cash reserves, as specified in the policy, for the past five years.

As of December 31, 2015, the required level of unrestricted cash reserves under the adopted policy was approximately $86 million, representing 200 days’ of operating cash on hand. As of December 31, 2015, the Authority’s unrestricted cash reserves were $88.6 million. In anticipation of future debt financings, the Authority has purposefully reduced the unrestricted reserves during 2015 to its current level, but expects the unrestricted reserves to increase over the next few years. The unrestricted cash reserves include a $20 million portion of those funds

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within the Rate Stabilization account. In addition to unrestricted operating cash reserves, the Authority currently maintains a variety of other restricted cash reserves (excluding bond proceeds) totaling approximately $22 million as of December 31, 2015. Within its restricted reserves, the Authority maintains a Reserve and Contingency fund in the amount of $11.7 million. The Reserve and Contingency fund can be used for limited purposes relating to significant, unanticipated events. Additionally, a portion of the Series JJ proceeds will be used to reimburse previous capital expenditure by the Authority and will further increase the Authority’s unrestricted operating cash balances.

Debt Service Coverage

The following table shows debt service coverage as calculated by the Authority with respect to the years indicated.

Debt Service Coverage (Dollars in Thousands)

Audited 2011 2012 2013 2014 2015 Net Revenues

Operating Revenues $181,443 $182,635 $194,938 $199,867 $199,433 Operating Expenses, Excluding Depreciation 130,310 127,415 141,160 146,611 157,754

Net Operating Revenues 51,133 55,220 53,778 53,256 41,679 Plus Interest and Other Income(1) 1,210 1,404 1,889 2,013 1,672 Net Revenues before Rate Stabilization 52,343 56,624 55,667 55,269 43,351

Rate Stabilization: Deposits (Withdrawals) 0 0 0 0 0

Total Net Revenues $52,343 $56,624 $55,667 $55,269 $43,351

Bond Service: Power Revenue Bonds $33,117 $33,294 $32,777 $32,385 $28,637 Allowance for Funds Used During Construction (4,115) (381) (83) (97) -

Net Revenue Bond Service $29,002 $32,913 $32,694 $32,288 $28,637

Coverage: Total Power Revenue Bonds(2) 1.80 1.72 1.70 1.71 1.51 (1) Excludes unrealized gains and losses on investments. (2) Total Net Revenues divided by Net Revenue Bond Service. Source: The Authority’s Audited Financial Statements.

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Power Requirements

The Authority furnishes virtually all of the power supply requirements of the Municipalities under long-term contracts. Through 2015, the Municipalities’ energy requirements have increased over the last ten years as follows: Estes Park 3%, Fort Collins 6%, Longmont 1%, and Loveland 19%. Overall, Municipal energy requirements of the Municipalities increased 7%.

The System’s coincident peak was set in 2012 at 653 MW. Through 2015, the Municipalities’ peak demand has increased over the last ten years as follows: Estes Park 7%, Fort Collins 0%, Longmont -1%, and Loveland 18%. Overall peak demand for the Municipalities increased 3%.

Power Resources

The Authority’s power resources include generation from coal, natural gas, wind, allocations of federal hydropower from Western, and a forced outage exchange agreement. The Authority meets the projected power and energy requirements of the Municipalities through six resources:

(1) Rawhide Unit 1, which is a coal-fired electric generating facility and has a net max rating of 280 MW. Unit 1 is located at the Rawhide Energy Station in northeastern Larimer County, Colorado, which commenced commercial operation in March 1984 and is wholly owned and operated by the Authority. See “RAWHIDE ENERGY STATION”;

(2) output from the Authority’s 18% undivided ownership interest (154 MW net capability share) in the Yampa Project coal-fired Craig Units 1 and 2 (855 MW combined net capability) near Craig, Colorado, that were placed in commercial operation in 1980 and 1979, respectively, and are owned jointly with four other regional utilities as tenants in common. See “YAMPA PROJECT”;

(3) natural gas combustion turbines (Rawhide Units A, B, C, D and F) located at the Rawhide Energy Station, with a net capability of 388 MW. The combustion turbines are used to meet peak load demands, to provide reserves during outages of the coal-fired units, to make short-term surplus sales, and assure reliability to the Municipalities. See “RAWHIDE ENERGY STATION”;

(4) renewable energy from wind generation power purchase agreements totaling 78 MW: purchases of 6 MW from the Medicine Bow Wind Project located near Medicine Bow, Wyoming under a contract through 2033; purchases of 12 MW of capacity from Silver Sage Windpower Project located west of Cheyenne, Wyoming under a 20 year contract through 2029; and purchases of 60 MW of capacity from Spring Canyon Expansion Wind Energy Center in northeastern Colorado under a contract expiring in 2040. Wind generation output is intermittent and therefore considered to provide a reduced amount of firm capacity. See “RENEWABLE ENERGY SOURCES”;

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(5) power and energy received from Western pursuant to two Contracts for Electric Service and Transmission Service. See “SUPPLY CONTRACTS WITH WESTERN AREA POWER ADMINISTRATION”; and

(6) forced outage exchange agreement with Tri-State whereby in the event either Rawhide Unit 1 or Tri-State’s Craig Unit 3 is out of service the other utility will provide up to 100 megawatts of generation on a short-term basis. See “THE AUTHORITY – Regional Coordination.”

Power Resources and Loads

2015 Summer Capacity

(MW)(1) Winter Capacity

(MW)(1) Annual Energy

(GWh)(1) Resources: Rawhide Unit 1(2) 280 280 1,933 Craig 1 and 2(2) 154 154 956 Rawhide Peaking Units 388 388 57 Western CRSP(3) 60 85 502 Western LAP(3) 30 32 110 Wind(4) 10 10 273 Other Purchases & Misc.(5) - - 235

Total Resources 922 949 4,066 Loads: Municipal Load(6) 639 487 3,201 Firm Sales(7) 65 65 - Short Term Sales(8) - - 713 Reserves(9) 2 2 - Losses, Station Service & Misc.(10) 8 6 152

Total Loads 714 560 4,066 (1) Summer Season = June through August; Winter Season = September through May; Annual = calendar year. (2) Yampa Project entitlement is 18% of 855 MW in Craig Units 1 and 2 or 154 MW. (3) Based on monthly scheduled quantities contained in the Western contracts for CRSP and LAP power with

maximum allocations available in July and December. (4) The Authority receives energy from three wind generation facilities. Wind generation provides a reduced

amount of reliable capacity from the wind unit rating at time of System peak. (5) Includes all non-capacity energy purchases. (6) Capacity includes interruptible demand, distribution losses and demand side management savings. Values are

the System coincident peak seasonal demand. Annual Energy includes transmission losses and off-line station load at Craig and Rawhide during outages.

(7) In 2015, the Authority provided 65 MW of firm capacity to Municipal Energy Agency of Nebraska. This contract ended after June 2015.

(8) The Authority sells energy in the short term market, Short Term Sales include a contract sale that provides up to 11 MW of unit contingent power to Twin Eagle through the expiration date of the sales contract of December 31, 2016.

(9) The Authority obtains necessary reserves from Xcel Energy or self provides, if available. (10) Losses are the difference between what is generated and imported into the Authority’s boundary area to serve

the Authority’s load, and what is delivered on the low side of the transformer. Annual Energy includes transmission losses and off-line station load at Craig and Rawhide during outages.

Source: Internal reports of the Authority.

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Future Capital Projects

The Authority budgeted approximately $42.0 million in capital expenditures for 2016, which is approximately $4.2 million more than the amount budgeted for 2015. The funds are to be used for general capital improvements to the System. The Authority’s current five year capital plan, 2016 through 2020, projects expenditures totaling approximately $225 million.

The expenditures in the five year capital plan are based on current financial projections and are anticipated to be funded with $95 million in cash generated from operations and $130 million in new debt financings, including the Series JJ Bonds.

One of the major projects included in the five-year capital plan is the Authority’s participation in the Windy Gap Firming Project. At present, the water necessary to support generation operations at Rawhide is provided from the Windy Gap Project. Because of the project’s junior water rights, Windy Gap water cannot be diverted in years of low runoff. Conversely, during some wet periods storage space in Lake Granby is not available for Windy Gap water. Windy Gap water has not been diverted in ten out of the past thirty years because of either a lack of available storage space in Lake Granby or Windy Gap water rights were not in priority during dry years. The firming project would provide greater physical assurance of water availability for the Rawhide Energy Station. See “RAWHIDE ENERGY STATION – Water Supply.”

The Windy Gap Firming Project will develop a storage reservoir on the east side of the Continental Divide to store up to 90,000 acre-feet of Windy Gap water for future release to support the Authority’s operations. Chimney Hollow Reservoir would change the project’s reliable annual yield from zero acre-feet of water to about 30,000 acre-feet, improving the reliability of water deliveries to participating water providers and, ultimately, the water users they serve. The Authority is one of thirteen participants in the project, which includes municipalities and water districts along the front range of Colorado. The Authority is participating in the funding of the environmental studies, permitting, and design work of the Windy Gap Firming Project, and has preliminarily indicated an interest in 12,000 acre-feet of firming storage capacity in the proposed reservoir, which equates to approximately 13% of the total storage capacity.

On December 19, 2014, the U.S. Bureau of Reclamation (Reclamation), Northern Colorado Water Conservancy District and its Municipal Subdistrict signed a new Windy Gap carriage contract, which was an important step forward for the project. Simultaneously, Reclamation issued a Record of Decision for the Windy Gap Firming Project. The design phase will commence in early 2016. The Municipal Subdistrict of the Northern Colorado Water Conservancy District, manager of the Windy Gap Firming Project, currently estimates the cost of the project at approximately $4,635 per acre-foot of storage, for a total estimated cost of $55.8 million to the Authority. Project costs may be financed by the Authority in a future bond issue.

The five-year capital plan also includes cost estimates for environmental upgrades at the Craig station. During 2011 the Colorado Air Quality Control Division formally requested that the Environmental Protection Agency (“EPA”) approve the State Implementation Plan (“SIP”) for Regional Haze. The SIP as approved by the EPA required emission controls on Craig Unit 2

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in the form of Selective Catalytic Reduction (“SCR”) for the removal of Nitrogen Oxides (“NOx”). The SCR is scheduled to be installed by December 31, 2017. The EPA approval of the SIP was challenged in litigation, which resulted in an order to install SCR on Unit 1 by August 31, 2021. Final cost estimates will need to be determined during the 2016/2017 budget cycle.

Rate Regulation

The enabling statute under which the Authority was formed, C.R.S. § 29-1-204, vests legislative authority with the Board, including authority to establish rates for the services provided by the Authority. In 1975, the Public Utilities Commission of the State of Colorado (“PUC”), through Decision No. 87291, affirmed that the rates the Authority charges to the Municipalities are not subject to PUC review.

Similarly, the rates charged by the Municipalities to customers inside municipal boundaries are not subject to PUC review pursuant to Article XXV of the Colorado Constitution.

The PUC has limited regulatory jurisdiction over the rates charged by municipalities to customers outside municipal boundaries. The Municipalities serve relatively few customers outside their boundaries. To date, the rates charged to those customers are the same as those for customers inside the Municipalities’ boundaries.

The rates charged by the Authority to the Municipalities are not subject to review by the Federal Energy Regulatory Commission (“FERC”).

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Wholesale Rate History

The Board may adjust its wholesale electric rates to the Municipalities at any time with a majority vote of the Board. The following table provides the Authority’s basic wholesale rates to the Municipalities since 2005.

Authority’s Wholesale Rates

Effective Date

Demand Rate ($/kW-mo)

Energy Rate (Mills/kWh)

January 2005 11.71 16.50 January 2008 12.05 17.00 January 2009 12.48 17.70 January 2010 12.53 20.20 January 2011 12.42 23.10

Winter 2012

Summer 2012

Winter 2013 Summer 2013

Winter 2014

Summer 2014

Winter 2015 Summer 2015

Winter 2016

Summer 2016

7.53 10.05

7.57 10.84

7.57 10.84

7.57 10.84

7.91 11.33

33.40 35.13

35.58 36.65

36.51 38.06

37.83 39.43

39.54 41.21

Beginning in 2012, the Authority implemented seasonal rate charges with a summer seasonal rate for June through August and a winter seasonal rate for January through May and September through December.

Regional Coordination

Load Control Area

The Authority operates a boundary metered system internal to the Xcel Energy Balancing Authority footprint. In this arrangement, the Authority balances its load and resources on an hourly basis, and pays Xcel Energy for balancing authority ancillary services provided. These services include scheduling and dispatch, regulation, energy imbalance, and operating reserves. The Authority pays for the services through Xcel Energy’s transmission tariff.

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Forced Outage Assistance

The Authority currently has a signed a Forced Outage Assistance Agreement with Tri-State. The agreement provides that the Authority will receive 100 MW per hour of energy in the event of a forced outage of Rawhide Unit 1. The outage assistance is for 24 hours per day, and can last up to seven days if the repair of Rawhide Unit 1 were to last that long. Most forced outages last two to four days. The Authority has an identical 100 MW per hour delivery obligation to Tri-State in the event Tri-State’s Craig Unit 3 experiences a forced outage. The assistance power provided by the parties is netted with a payment obligation triggered only if the balance in an account – after netting – exceeds a threshold of either 73,000 MWh or $12,000,000.

Western Electricity Coordinating Council

The Authority is a full member of the Western Electricity Coordinating Council (“WECC”). WECC is the Regional Entity responsible for coordinating and promoting bulk electric system reliability in the Western Interconnection. In addition, WECC provides an environment for coordinating the operating and planning activities of its members. WECC is one of the eight Regional Entities that have Delegation Agreements with the North American Electric Reliability Corporation (“NERC”) to monitor and enforce reliability standards. The Authority’s staff actively participates in various committees, subcommittees and workgroups of the WECC.

The Authority is a class two member of PEAK reliability. PEAK is the designated reliability entity within WECC providing the wide view of the western interconnect with the overall mission of assuring reliable electric operations. The Authority also subscribes to the PEAK Real Time Contingency analysis tool.

Western Systems Power Pool

The Authority is a member of the Western Systems Power Pool (“WSPP”). The primary function of WSPP is to facilitate the sale of surplus capacity and energy within the Western Interconnection. WSPP developed a standard contract to define business procedures for short-term sales between signatory members of the organization, and this standard agreement governs many of the short-term power purchase and sales agreements entered into by the Authority.

RAWHIDE ENERGY STATION

The Rawhide Energy Station consists of: (i) Rawhide Unit 1, a 280 MW (net capability) coal-fired generating facility, cooling reservoir and coal-handling facilities; (ii) Rawhide Units A, B, C, D, and F, five natural gas combustion turbines and related natural gas transmission and processing facilities; and (iii) related electric transmission facilities. The site is large enough to accommodate further generation facilities. The Rawhide site is located about 20 miles north of Fort Collins. Rawhide Unit 1 commenced commercial operation March 31, 1984. Rawhide Units A, B, C, and D began commercial operations in 2002 and 2003. Rawhide Unit F began commercial operation in 2008.

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The station is connected to the System by two double-circuit 230 kV transmission lines. The following table presents historical capacity factors and equivalent availability factors for Rawhide Unit 1 for the period 2011-2015:

Rawhide Unit 1 Capacity Factors and Equivalent Availability

Year Capacity factor Equivalent Availability

2011 93.4 98.6 2012* 86.2 90.2 2013 96.1 98.5

2014* 88.4 97.0 2015* 78.8 84.7 *Capacity and availability factors impacted by planned maintenance outages.

Rawhide Units A, B, C, and D are General Electric Model EA natural gas combustion

turbine generating units, which have a combined year-round capacity rating of 260 MW. Rawhide Unit F is a General Electric Model 7FA natural gas combustion turbine with a capacity rating of 128 MW.

The Authority operates Rawhide Unit 1 (coal) and Rawhide Units A, B, C, D, and F (natural gas) under Federal Title V operating permits administered by the State of Colorado pursuant to 5 CCR 1001-5 Part C. The Authority is in compliance with all Title V operating permit requirements.

Fuel Supply

To secure a fuel source for Rawhide Unit 1, the Authority signed a coal supply agreement with the Antelope Coal Company (now Kennecott Coal Sales LLC or “Kennecott”) in 1978, which has been replaced by several subsequent agreements. In early 2007, the Authority negotiated a long-term contract starting in 2008 with Kennecott that provides supply assurance through 2017. The contract requires Kennecott to deliver up to 1.3 million tons of coal per year (enough to operate Rawhide Unit 1 at a 100% plant factor) from its Antelope Mine located in northeastern Wyoming, and is subject to annual tonnage nominations made by the Authority.

The coal price was fixed during the initial years of the agreement, but for years 2013 through 2017, the coal price defaults to a market index unless the Authority chooses to utilize price lock provisions outlined in the contract. A new coal contract with Kennecott was executed in November 2015, with a term beginning in 2018 and will secure all of Rawhide’s coal needs through 2022. The new contract has similar terms and conditions to the current contract. Both the current and future contracts guarantee 100% of the coal requirements for Rawhide Unit 1.

The Antelope Mine is 242 miles northeast of the Rawhide Energy Station. Deliveries by rail are made routinely to the Rawhide Energy Station by Burlington Northern. The Authority owns 99 rail cars, which are used to transport the coal. A long-term transportation agreement with Burlington Northern establishes a base rate per ton, which is subject to annual adjustment in accordance with specified indices and a fuel adjustment charge.

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On January 15, 2016, a moratorium was imposed on new coal leases on federal lands to allow for a comprehensive review of the program. The moratorium is effective immediately, and is anticipated to remain in effect at least through 2016. The moratorium does not apply to coal reserves already under federal lease. The Authority staff reached out to the owner of the Antelope Mine and was assured that this moratorium will not have an impact on coal supplies for either the near or intermediate future.

The Authority obtains natural gas for Units A, B, C, D, and F through spot market purchases. The pipeline that supplies these units is owned and operated by the Authority and is connected to a regional hub that provides access to multiple gas suppliers. At this time, natural gas needs are projected to be minimal due to slow load growth, market energy prices, and the addition of renewable energy resources.

The Authority has adopted an Energy Risk Management Policy (“ERMP”), which governs the Authority’s forward hedging program. The primary goal of the forward hedging program is to stabilize fuel and energy costs to enhance the probability of meeting Strategic Financial Plan goals. The ERMP provides for the use of futures contracts, option contracts, over-the counter instruments, insurance contracts, or physical forward contracts for hedging purposes. Also specified in the ERMP are the management of the hedging program, counterparty credit rating requirements, transaction volume and time limits, and the prohibition of speculative transactions.

Water Supply

Rawhide Unit 1 utilizes water for both cooling and process purposes. The source of cooling water for Rawhide Unit 1 is treated wastewater effluent, recycled from the City of Fort Collins. Under a three-party agreement among the Authority, Fort Collins, and a local irrigation company, a minimum of 4,200 acre-feet of treated effluent is made available to the Authority for cooling purposes each year. In exchange for the effluent, 4,200 acre-feet of water is delivered from the Windy Gap Project/Colorado-Big Thompson System to the City of Fort Collins. Rawhide Unit 1 also uses approximately 550 acre-feet of process water each year; this water is delivered directly from the Windy Gap Project and is used for boiler makeup water, site service water, fire water, and drinking water. The Windy Gap Project, completed in 1986, was designed to bring a projected average of 48,000 acre-feet of total project water each year from the Colorado River basin to northeastern Colorado through the existing Colorado-Big Thompson System. The Authority is entitled to an allocation of one-third of the available water from the Windy Gap Project. The water can be pumped from the Colorado River basin when the Windy Gap water decrees are in priority. The Windy Gap flow right decrees are typically in priority beginning in April and ending in July, however due to the seniority of other appropriation decrees on the Colorado River the Windy Gap decrees may not be in priority during some years. When Windy Gap Project water is not available, an alternate water supply must be secured and is subject to the lease market. See discussion at “THE AUTHORITY – Future Capital Projects” regarding Windy Gap Firming Project.

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Solar Development at Rawhide

On July 29 2015, the Authority executed a power purchase agreement with Bison Solar LLC for the development of a 30 MW solar photovoltaic power plant located at the Rawhide Energy Station. PSEG Solar Source, New Jersey is designing and constructing the 180 acre project. The project will connect to newly constructed interconnection facilities owned by the Authority. Commercial operation of the facility is planned for October of 2016. Under such agreement, the Authority is to purchase the output of the project at a fixed price per MWh over the twenty-five year term of the agreement. Based upon estimated generation output of the project, the Authority will spend approximately $3.2 million annually for the solar energy. After ten (10) years, the Authority has the option to purchase the solar facility.

CRAIG UNITS 1 AND 2

Craig Unit 1 is rated at 427 MW and Unit 2 is rated at 428 MW net capacity, of which the Authority’s share is 154 MW (total from both units). Craig Units 1 and 2 are part of the Yampa Project, which also includes a water storage reservoir and related transmission facilities. Located on the Yampa River in northwestern Colorado, the Craig Units 1 and 2 are four miles southwest of the town of Craig, Colorado. The following table presents historical capacity factors and equivalent availability factors for Craig Units 1 and 2 for the period 2011-2015.

Craig Units Capacity Factors and Equivalent Availability

Capacity Factor Equivalent Availability Year Unit 1 Unit 2 Unit 1 Unit 2 2011 67.2* 77.0 81.1* 93.2 2012 79.8 74.5 96.5 93.2 2013 59.9 70.7* 67.8 80.9* 2014 71.9 88.3 78.2 95.9 2015 74.6 67.3* 93.3 83.9*

*Capacity and availability factors impacted by planned maintenance outages. Ownership and Operation of the Yampa Project

Background

The Yampa Project was constructed in the late 1970s. Currently, the Authority, Xcel Energy, Salt River Project Agricultural Improvement and Power District (“Salt River”), Tri-State, and PacifiCorp (collectively, the “Yampa Participants”) own the Yampa Project as tenants-in-common. The Yampa Project is operated pursuant to a participation agreement (the “Participation Agreement”) among the Yampa Participants, which names Tri-State as the Yampa Project’s operating agent, responsible for Yampa Project management and administration and the performance of all operation, maintenance, and repair work.

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Participation Agreement

The Participation Agreement provides for the joint ownership of Craig Units 1 and 2 at the Yampa Project, together with related water rights by the Yampa Participants as tenants in common, as shown in the following table.

The Authority Salt River Tri-State PacifiCorp Xcel Energy Craig Units 1 and 2 18.0% 29.0% 24.0% 19.3% 9.7%

Participation shares in and capacity entitlement to transmission facilities included as part of the Yampa Project vary by line and substation. Under the Participation Agreement, each Yampa Participant is entitled to schedule energy from Craig Units 1 and 2 up to the amount of its percentage share of the available operating capacity of the units. The primary contract path for the delivery of Craig output to the Authority is over the Craig/Ault transmission line, which is owned by Western and for which the Authority’s transmission operations has rights for 190 MW of delivery capacity.

Tri-State, as the operating agent, is responsible for the daily management, administration, operation, and maintenance of the Yampa Project. The Participation Agreement also provides for three committees made up of Yampa Participant representatives: (1) a Coordinating Committee responsible for liaison among Yampa Participants and overall supervision of the Yampa Participant committees; (2) an Engineering and Operating Committee responsible for providing liaison among Yampa Participants and the operating agent, approving budgets, and reviewing and approving procedures and practices of the operating agent; and (3) an Audit Committee responsible for accounting, audit and financial matters relating to the Yampa Project. Any action or determination of a committee must be by “double majority” (i.e., on a one-utility-one-vote basis, as well as a majority-of-percentage-ownership basis), unless otherwise provided. Unresolved matters are to be submitted to the Coordinating Committee or to arbitration.

All costs of operation and maintenance of the Yampa Project, other than fuel costs, are shared on a pro rata ownership basis, and Yampa Participants are obligated to advance funds to the operating agent as required to make payments of operating and maintenance costs when due. Basic fuel costs are allocated on the basis of the energy generation scheduled by each Yampa Participant from its share of capacity. Each Yampa Participant makes individual commitments to supplement fuel on a “take-or-pay” basis and may be billed separately or through Tri-State (as the participant elects). All capital improvements are included in the annual capital expenditures budget and upon approval of the budget by the Engineering and Operating Committee; each Yampa Participant is obligated for its percentage share of the capital costs contained in the budget. The Engineering and Operating Committee may authorize capital improvements not included in the annual budget up to the sum of $500,000 per single improvement. The Engineering and Operating Committee works closely with the Tri-State staff in developing capital and operation and maintenance budgets that ensures future plant reliability through the life of the project. Current projections estimate the life of the facility to be 60 years from the initial date of commercial operation.

In the event of a default, or alleged default, by any Yampa Participant of any obligation, including the obligation to make payments when due, the non-defaulting Yampa Participants are

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required to remedy such default, either by advancing the necessary funds or commencing to render the necessary performance, or a combination thereof. Each non-defaulting Yampa Participant agrees to contribute to such remedy in the ratio, which its ownership share bears to the total of all ownership shares of the non-defaulting Yampa Participants. The defaulting Yampa Participant, upon notice by a non-defaulting Yampa Participant of a default or alleged default under such Agreement, is required to remedy such default or alleged default, together with interest thereon. If the defaulting Yampa Participant disputes the default, it is required to pay the disputed payment or perform the disputed obligation but may do so under protest, in which event the matter in dispute is to be submitted to arbitration and if so submitted the arbitration decision will be binding upon the parties to the extent permitted by Colorado law. No Yampa Participant will be considered in default of its obligations under the Participation Agreement, except obligations to pay costs and expenses, when a failure of performance is due to certain specified uncontrollable forces. If a default continues for three months or longer, the non-defaulting Yampa Participants may suspend the right of the defaulting Yampa Participant to receive all or any part of its generating capacity.

Each Yampa Participant may mortgage or create a security interest in all or part of such Yampa Participant’s interest in the Yampa Project without the consent of the other Yampa Participants. If any Yampa Participant should desire to transfer its interests or any part thereof, each remaining Yampa Participant has the right of first refusal to purchase such interest. If more than one of the Yampa Participants desires to purchase such interest, unless otherwise agreed, it shall be transferred in the ratio that the participation share of each Yampa Participant desiring to purchase bears to the total participation shares of such Yampa Participants.

The term of the Participation Agreement extends until both the Craig Units 1 and 2 are retired from service. Upon termination of the Participation Agreement, the facilities comprising the Yampa Project are to be disposed of in a manner to be mutually agreed upon by the Yampa Participants.

The Authority is actively seeking to diversify its resource portfolio and limit its reliance on coal-fired resources. Based on the recommendations of staff, in July, 2015 the Board instructed the Authority’s management to develop an exit strategy to divest ownership in Craig Unit 1. While such exit strategy is still in the process of being determined, the Authority does not believe that any likely strategy will have a materially negative effect over the next fifteen years on either Net Revenues or the operation of the System based upon the Authority’s remaining resource portfolio and its rate structure.

Craig Units 1 and 2 Fuel Supply

Trapper Mine

In December 1997, Williams Fork, Inc., and Trapper Colorado (both of which were wholly owned by the Yampa Participants) were merged to form Trapper Mining, Inc., a cooperative corporation. This corporation owns the Trapper Mine, adjacent to Craig Units 1 and 2 of the Yampa Project, which is the principal source of coal for those units. The Authority’s ownership share of Trapper Mining, Inc. is 19.93%.

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The Trapper Mine has historically provided the bulk of the coal requirements through contract and spot coal deliveries for Craig Units 1 and 2 of the Yampa Project.

On October 8, 2006, Trapper Mine experienced a significant landslide that covered a large portion of the active coal reserves. After extensive evaluation it was determined that the majority of these reserves could be mined with a different mining technique. While the cost to mine these reserves has increased compared to the previous plan, the equipment can be utilized to mine other reserves on the property that were previously thought to be cost prohibitive. With the addition of the extended reserves, a new mine plan has been developed that is estimated to increase the life of the mine through the year 2020. As a result, a contract extension was entered into in 2010. The extension provides up to 2.5 million tons per year through 2020.

Colowyo Mine

The Authority and the other Yampa Participants are also parties to agreements for supplemental coal from the Colowyo Coal Company (“Colowyo”). The Colowyo mine is located 20 miles from the Yampa Project and is owned by Tri-State. In 1992, Colowyo and the Yampa Participants amended the coal sales agreement. Under this amended agreement, Colowyo must deliver specified amounts of coal to each Yampa Participant each year from 1992 through 2017. The price of such coal is subject to adjustment based on inflation, the thermal content of delivered coal, certain costs of production and certain market indices of the price of coal in Colorado. The Yampa Participants are currently negotiating with Colowyo and other regional suppliers to provide additional tonnage to meet the future Yampa Project fuel requirements.

Litigation Challenging Mining Permits

In February, 2013, WildEarth Guardians, environmental advocacy group, filed suit in federal court challenging a number of mining permits issued by the Department of the Interior for federal lands in western states. Both the Colowyo and Trapper Mines were involved in the challenge. The Authority was not a named defendant. A ruling was issued in May, 2015, that found in favor of WildEarth Guardians resulting in the need for a new environmental assessment (“EA”) to support the challenged permits. Mining continued at both mines during the EA process. The EA for the Colowyo mine was completed in 2015 and will be completed at the Trapper Mine by the end of April, 2016. An appeal of the district court ruling is pending.

Federal Leasing Moratorium

On January 15, 2016, a moratorium was imposed on new coal leases on federal lands to allow for a comprehensive review of the program. The moratorium is effective immediately, and is anticipated to remain in effect at least through 2016. The moratorium does not apply to coal reserves already under federal lease. Representatives of both the Trapper and Colowyo Mines have assured the Authority that this moratorium will not have an impact on coal supplies for either the near or intermediate future.

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Yampa Project Water Supply

Water for plant operations is supplied from the Yampa River, which is just north of the plant site. The Yampa Project Participants own the necessary water rights as tenants in common. A closed cycle cooling system is used to minimize the amount of water required for plant processes. Additional water is stored in Elkhead Creek Reservoir to ensure adequate supplies in times of emergency or drought.

GREENHOUSE GAS REGULATION

One of the most significant issues facing the electric utility industry in general and the Authority in particular is the regulation of greenhouse gas emissions. The Authority is heavily reliant on base load coal-fired generation resources, of which it has 434 MW of capacity. During 2015, approximately 63% of the energy the Authority provided to the Municipalities was generated by coal units. Other utilities in the region also use large amounts of coal in their resource mixes due to the proximity of coal deposits and the extended history of coal as a generation fuel source in this area.

Over the last several years, the Authority has been actively involved in a strategy to diversify its generation resources through the divestiture of its ownership in Craig Unit 1 and the addition of new wind and solar generation. On August 3, 2015, the EPA published both the Clean Power Plan (“CPP”) addressing greenhouse gas emissions from existing electric generating plants and standards for new, modified and reconstructed power plants. The CPP is designed to reduce CO2 emissions from the power sector by 32% on average nationwide by 2030. The Rawhide and Craig units are regulated by the CPP.

Although subject to legal challenge and currently stayed, if ultimately upheld, the CPP will result in significant changes to the resource portfolio and operations of the Authority. The Authority is actively engaged in the stakeholder process commenced by the Colorado Department of Public Health and Environment (“CDPHE”) that will result in a State Plan for Colorado, and will remain engaged if the stakeholder process continues to move forward in the face of the stay. Although the recent stay from the Supreme Court has added another layer of uncertainty to this process, Authority staff has been modeling the potential rate impacts of CPP compliance under different compliance scenarios. While there are still many unknowns, based on rate analysis conducted in 2015, the range of rate increases between 2016 and 2035 is between 2.5% annually, assuming no CPP compliance requirements, and 5.2%. The high end of rate projection is based on 50% CO2 reduction and allowance purchases for all carbon-based energy. The Authority will continue to analyze and update rate impacts due to CPP compliance as new information is obtained and it is possible that the rate impacts may increase or decrease.

SUPPLY CONTRACTS WITH WESTERN AREA POWER ADMINISTRATION

Background

The Authority’s long term power contracts with Western provide for federal hydroelectric power to be supplied from two sources: (1) the Colorado River Storage Project (“CRSP”), and (2) the Loveland Area Projects (“LAP”). A new LAP contract was signed in 2015 extending the contract through September 2054. The CRSP contract continues through

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September 2024 but currently some discussions are on-going to extend this contract by up to an additional 40 years. During 2015, Western resources provided approximately 19% of the annual energy that the Authority supplies to the Municipalities. CRSP accounts for 82% of the Western deliveries; LAP accounts for the balance.

Other changes to hydro system operations could occur during the next several years that may reduce the capacity/energy provided by the federal hydro resource contracts and increase the pricing. For example, Western resources are subject to future reductions to create a resource pool for new customers. These allocation withdrawals occur at established intervals and will continue in the post-2025 agreements with both the CRSP and LAP. The post-2024 LAP contract provides for the possibility of a one-percent (1%) reduction in future LAP power allocations in 2024, 2034 and 2044. These potential periodic allocation adjustments create a resource pool for new customers. Western has provided notice of the possibility of a similar two-percent (2%) reduction in CRSP resources in the post-2024 CRSP agreements. Environmental issues associated with the operation of the Glen Canyon Dam on the Colorado River may lead to restrictions in deliveries from Western. Currently an environmental assessment of water releases is underway, referred to as the Long-Term Experimental and Management Plan (“LTEMP”). The draft LTEMP environmental impact statement was released for comment and a record of decision is expected as early as April, 2016.

RENEWABLE ENERGY SOURCES

Historically, the Authority has serviced the Municipalities with reliable, low-cost base-load coal resources and natural gas-fired peaking resources owned by the Authority. In addition, the Authority has long-term contracts to receive significant hydro-based power. This supply has evolved in recent times to become more diverse with the addition of wind and solar resources.

The Authority purchases wind energy from three sources: First, Medicine Bow Wind Project, a 6 MW wind project owned by Medicine Bow Wind, LLC, located near the town of Medicine Bow, Wyoming, is forecasted to provide approximately 17,000 MWh per year through 2033. Second, the Silver Sage Windpower Project, which is owned and operated by Silver Sage Windpower, a subsidiary of Duke Energy Corporation, is located west of Cheyenne, Wyoming and is forecasted to provide 37,000 MWh per year through 2029. Finally, the Spring Canyon Expansion Wind Energy Center, located in northeastern Colorado, is projected to provide about 240,000 MWh per year and is owned and operated by NRG Energy. This contract runs through 2040. These purchases are made under long-term contracts and all of this renewable energy is provided to the Municipalities. Wind generation output is intermittent and therefore considered to provide a reduced amount of firm capacity.

In order to meet the requirements of the Municipalities, the Authority also purchases Renewable Energy Certificates (“RECs”) from wind generation facilities in the region. Currently, the Authority purchases 50,000 MWh per year of unbundled RECs from EDF Energy under a contract through 2024.

In 2014, the Board authorized the acquisition of solar energy from a facility to be built at the Rawhide Energy Station. The Authority anticipates that by the end of 2016 the Rawhide Solar Flats project will be online. This project will be owned and operated by Bison Solar LLC,

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a subsidiary of PSEG Solar Source, and is anticipated to have a nameplate capacity of 30 MW (ac basis) and provide over 60,000 MWh per year. This contract runs through 2041.

Distributed solar generation is also growing within the Municipalities. The utilities have sponsored community solar projects and other programs that purchase energy from commercial solar projects totaling 3,760 kW with other projects in development. In addition, there are an estimated 600 customer-sited residential and commercial solar projects that are net-metered, with a total capacity estimated at 3,920 kW.

The Authority anticipates continued growth in its renewable energy supply, energy efficiency and demand-side management programs. Current renewable energy supplies to the Municipalities already exceed the Municipalities’ requirements under the Colorado Renewable Energy Standard. Future resource planning efforts are expected to be able to leverage the Authority’s current supply with additional renewable resource options that will strengthen the Authority through diversification of generation type including distributed generation within the system.

TRANSMISSION FACILITIES

The Authority owns and operates approximately 63 circuit miles of 115 kV lines and 195 circuit miles of 230 kV transmission lines. Electric service is provided through 26 substations, which are either wholly owned by the Authority, or jointly owned with the Municipalities. In addition, the Authority participates with neighboring utilities in the ownership of approximately 366 circuit miles of 345 kV transmission lines, nearly 145 circuit miles of 230 kV transmission lines, and related substation facilities.

MUNICIPAL ELECTRIC SYSTEMS SUPPLIED BY THE AUTHORITY

General

The electric distribution systems supplied by the Authority were established by their respective municipalities in the first half of the 20th century: Longmont in 1911, Loveland in 1925, Fort Collins in 1935, and Estes Park in 1945. Each Municipality has the authority to generate, distribute and sell electric power within its municipal limits and in adjacent service areas, if any, which have been certificated to it by the PUC. A 1991 Colorado Supreme Court decision allows municipalities to compete for customers in recently annexed territory, as an alternative to condemnation and mandatory payment to the previous supplier. See also “ADDITIONAL REGULATORY AND CLIMATE FACTORS AFFECTING THE AUTHORITY AND THE ELECTRIC UTILITY INDUSTRY.”

Electric System Properties

Each of the Municipalities independently owns and operates its own electric system and distributes electric power and energy at retail to residential, commercial and industrial customers and for municipal and public use within its service area. The electric system properties are operated and maintained by the electric departments of each Municipality consistent with normal utility practices, including financial records maintained substantially in accordance with the Uniform System of Accounts as prescribed by the FERC.

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Pursuant to the Electric Power Contracts, the Municipalities have assigned the Authority the responsibility of operating and maintaining their 115 kV facilities, and the planning, construction, ownership, operation, and maintenance of all future transmission facilities needed to supply power and energy to each Municipality, as well as for interconnections with other utilities in the region.

Estes Park

The Estes Park municipal electric system purchases all of its power requirements from the Authority. During the calendar year 2015, Estes Park purchased 129,633,723 kWh, an increase of 0.2% over the same period in 2014. An annual peak demand of 25,799 kW occurred in December 2015.

Fort Collins

The Fort Collins municipal electric system purchases essentially all of its energy requirements from the Authority and is its largest municipal customer. During calendar year 2015, Fort Collins purchased 1,516,550,194 kWh, an increase of 2.8% over the same period in 2014. An annual peak demand of 292,093 kW occurred in July 2015.

Longmont

The Longmont municipal system purchases essentially all of its power requirements from the Authority. During calendar year 2015, Longmont purchased 801,097,572 kWh, an increase of 0.7% over the same period in 2014. An annual peak demand of 170,209 kW occurred in August 2015. Longmont owns and operates a 500 kW hydroelectric plant.

Loveland

The City of Loveland municipal electric system purchases nearly all of its electric power requirements from the Authority. In 2015, total purchases from the Authority were 753,919,656 kWh, a decrease of 0.1% compared to the same period in 2014. An annual peak demand of 160,904 kW occurred in July 2015. Loveland’s electric utility owned and operated a 900 kW hydroelectric plant, which was destroyed during the September, 2013 floods. As discussed previously, a solar facility with a capacity of approximately 3.0 MW will be constructed to replace the destroyed hydropower unit. The capacity of the solar facility is sufficient to both replace the lost hydropower capacity and expand municipal owned generation to an amount of one percent of peak load allowed as an exception to the all-requirements obligation in the Power Supply Agreement. The parties intend to enter a power purchase agreement whereby the Authority purchases the output of the remaining 0.5 MW.

Rates and Comparative Power Costs

Rates charged by the Municipalities are generally lower than those of neighboring utilities. The Municipalities’ average residential rates are about 11% to 27% lower than the averaged rates of neighboring utilities, while large commercial rates are 15% to 26% lower.

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Comparison of Estimated Monthly Electric Charges(1)

As of January 2016

(1) Exclusive of state and local sales taxes. The Municipalities are exempt from sales taxes in the State of

Colorado. KWh amounts represent average usage per customer in service category. (2) There are no customers classified as industrial in Estes Park. (3) Fort Collins, Loveland, and Xcel Energy have seasonal electric retail rates. Rates depicted for the “summer”

are taken from the July 2015 CAMU survey summary. Source: Colorado Association of Municipal Utilities.

Residential (700 kWh)

Small Commercial (2,000 kWh,

10 kW)

Large Commercial (45,000 kWh,

130 kW)

Industrial (1,900,000 kWh,

3,000 kW) Municipalities Estes Park $77 $206 $3,511 $ -- (2) Fort Collins (summer)(3) 71 199 4,040 126,701 Fort Collins (winter)(3) 66 173 3,586 117,567 Longmont 63 172 3,542 116,360 Loveland (summer)(3) 70 202 4,003 135,530 Loveland (winter)(3) 65 198 3,718 128,064 Neighboring Utilities Xcel Energy (summer)(3) 82 237 4,353 127,699 Xcel Energy (winter)(3) 73 183 3,993 110,439 Poudre Valley R.E.A. 89 216 5,260 153,782 United Power 92 246 4,810 157,911 Avg. Neighboring Utility 86 224 4,748 143,587

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Municipal Electric Systems Supplied by the Authority – Classification of Customers Supplied by the Municipalities

The Municipalities serve residential and commercial, as well as, several large industrial customers. The combined retail energy sales to the principal customer classes of the Municipalities for 2015 are shown in the following table.

Customer Classification Year ended December 31, 2015

Customer Classification MWh % of Energy

Sold Residential 1,093,146 35.3% Small Commercial 405,178 13.1% Large Commercial 929,491 30.0% Industrial(1) 657,584 21.2% Other 12,573 0.4% Total 3,097,972 100.0%

(1) For purposes of this report, commercial and industrial customers are defined by each Municipality’s own

standards. Source: Unaudited data compiled from reports of the Municipalities.

Largest Customers Served by the Municipalities

The ten largest customers served by the Municipalities during 2015 represented approximately 20% of total aggregate annual energy sales of all Municipalities for the 12 calendar months of 2015. No single customer accounted for more than 4.2% of total aggregate annual energy sales of all Municipalities for the 12 calendar months of 2014.

Historical Operating Results of the Electric Systems of the Municipalities

The table on the following page shows historical operating results for the electric systems of the Municipalities, as compiled by the Authority.

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Historical Operating Results of the Electric Systems of the Municipalities(1)

(For the Years Ended December 31)

(Dollars in Thousands) 2010 2011 2012 2013 2014 Estes Park Operating Revenues $12,164,539 $12,633,404 $12,992,626 $13,985,164 $15,024,773 Operating Expenses 10,096,837 10,636,059 11,176,881 11,830,312 12,161,450 Operating Income 2,067,702 1,997,345 1,815,745 2,154,852 2,863,323 Non-Operating Revenues (Expenses) (143,842) (173,849) (293,370) 88,060 97,258 Net Position Before Contributions & Transfers 1,923,860 1,823,496 1,522,375 2,242,912 2,960,581 Capital Contributions & Transfers (1,007,750) (1,039,550) (588,062) (1,309,962) (1,332,853) Change in Net Position $916,110 $783,946 $934,313 $932,950 $1,627,728 Total Net Position $17,816,928 $18,600,874 $19,535,187 $20,362,972(2) $21,990,700 Light and Power Revenue Bonds Outstanding $5,505,000 $5,270,000 $5,025,000 $4,770,000 $4,510,000

Fort Collins Operating Revenues $93,165,407 $99,656,563 $108,634,479 $114,757,689 $114,114,704 Operating Expenses 98,739,277 103,606,031 108,403,008 117,009,318 115,537,653 Operating Income (5,573,870) (3,949,468) 231,471 (2,251,629) (1,422,949) Non-Operating Revenues (Expenses) 5,037,657 7,369,378 7,462,585 1,067,971 1,871,198 Net Position Before Contributions & Transfers (536,213) 3,419,910 7,694,056 (1,183,658) 448,249 Capital Contributions & Transfers 1,756,039 1,936,753 3,414,650 12,911,011 9,590,547 Change in Net Position $1,219,826 $5,356,663 $11,108,706 $11,727,353 $10,038,796 Ending Net Position $161,387,298 $166,743,961 $177,687,691(2) $189,415,044 $199,453,840 Light and Power Revenue Bonds Outstanding $16,085,000 $14,670,000 $13,215,000 $11,725,000 $10,205,000 Longmont Operating Revenues $49,440,782 $53,838,044 $57,182,388 $60,870,571 $63,773,864 Operating Expenses 51,545,941 55,941,603 57,660,556 60,244,781 62,507,619 Operating Income (2,105,159) (2,103,559) (478,168) 625,790 1,266,245 Non-Operating Revenues (Expenses) 1,446,724 3,614,417 573,740 134,072 517,170 Net Position Before Contributions & Transfers (658,435) 1,510,858 95,572 759,862 1,783,415 Capital Contributions & Transfers 447,840 546,788 441,220 2,435,792 1,646,578 Change in Net Position ($210,595) $2,057,646 $536,792 $3,195,654 $3,429,993 Ending Net Position $171,156,383 $173,214,029 $53,210,787(2) $56,406,441 $59,836,434 Electric Revenue Bonds Outstanding - - - - - Loveland Operating Revenues $43,883,091 $47,374,718 $50,842,437 $53,050,161 $53,950,905 Operating Expenses 42,895,642 45,197,485 47,438,659 53,828,288 56,745,573 Operating Income 987,449 2,177,233 3,403,778 (778,127) (2,794,668) Non-Operating Revenues (Expenses) 223,439 721,177 284,638 593,738 33,894 Net Position Before Contributions & Transfers 1,210,888 2,898,410 3,688,416 (184,389) (2,760,774) Capital Contributions & Transfers 2,412,097 2,525,485 739,261 5,139,853 5,837,109 Change in Net Position $3,622,985 $5,423,895 $4,427,677 $4,955,464 $3,076,335 Total Net Position $117,209,545 $122,633,440 $127,061,117 $132,016,581 $135,092,916 Power Revenue Bonds Outstanding - - - - -

(1) Format changed in 2012 to reflect statement of revenues, expenses and changes in fund net position of the

Municipalities. (2) Restated beginning net assets: Fort Collins in 2012 to $166,578,985, Longmont in 2012 to $52,673,995, Estes

Park in 2013 to $19,430,022. Source: Audited CAFRs of the Municipalities.

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ADDITIONAL REGULATORY AND CLIMATE FACTORS AFFECTING THE AUTHORITY AND THE ELECTRIC UTILITY INDUSTRY

General

The operations and financial performance of the electric utility industry is affected by a number of factors. These factors include (a) sudden swings in the price of energy purchased or sold in the wholesale market, (b) changing environmental, safety, licensing, regulatory and legislative requirements, (c) conservation, increased energy efficiency and demand-side management measures that affect the timing and use of electric energy, (d) changes in national energy policy, (e) competition resulting from mergers, acquisitions, and “strategic alliances” of competitors, (f) changes to market structure and existing service territory protections, (g) increased customer-owned distributed generation, (h) new federal reliability mandates, (i) new federal physical and cyber security mandates, and (j) uncertain availability of capital.

The factors described in more detail below may apply more specifically to the Authority.

Expanded FERC Jurisdiction

Through a number of rulemakings beginning in the mid-1990s, the FERC has mandated open access transmission service, functional unbundling of reliability and merchant services, standardized transmission planning and created broad reliability and security (physical and cyber) mandates implemented through the NERC and regional reliability councils.

Some of these FERC initiatives apply to political subdivisions of state government; entities that previously were beyond the jurisdiction of FERC. For example, the electric reliability standards adopted by FERC apply to both the Authority and the Municipalities. FERC regulations require each owner, operator, and user of the bulk power system to register with NERC and to comply with approved reliability standards. NERC has delegated responsibility to eight regional reliability entities for identifying the organizations to be registered in the NERC Compliance Registry. The Authority is registered as a Transmission Operator, Planning Coordinator, Transmission Planner, Transmission Service Provider, Transmission Owner, Resource Planner, Generation Owner, and Generation Operator with the NERC in the WECC region. Registration for these functions subjects the Authority to monitoring and enforcement of compliance with all the applicable requirements for the FERC approved reliability standards. The Authority is legally responsible for any sanctions, penalties, and mitigation plans that are assessed due to noncompliance. Compliance audits are conducted by WECC on-site every three years. No findings of noncompliance were made during the 2015 WECC audit and the Authority has no outstanding self-reports that will result in a financial penalty.

On January 21, 2016, FERC issued an order approving revised Critical Infrastructure Protection (CIP) Standards modified by NERC in response to FERC’s earlier directives. The approved CIP Standards provided for new cyber security controls and require that a greater number of utility systems be protected. Due to the complexity of the changes, NERC has been facilitating utility compliance planning through its comprehensive CIP Transition Program. The Authority is on track and expects to be fully transitioned and compliant with the new versions of

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the CIP Standards which become enforceable on April 1, 2016 and July 1, 2016. The Authority is required to submit a Self-Certification stating its compliance status with the WECC.

Unlike the reliability and physical/cyber security regulations, the FERC-initiated market reforms do not directly apply to the Authority. Nevertheless, the Authority has chosen to implement some of the FERC policy initiatives required of jurisdictional utilities. For example, the Authority has provided open access transmission service since 1998 and conducts transmission planning in conformance with FERC Order No. 890 and is an active participant in the Colorado Consolidated Planning Group. The Authority is also actively engaged in a number of regional market initiatives. For example, the Authority along with Public Service Company of Colorado and Black Hills Energy developed an intra-hour economic dispatch agreement, referred to as the Joint Dispatch Agreement (JDA). The JDA was approved by FERC during February 2016 and is planned for implementation in 2016. The Authority is also active in the planning efforts to create a regional transmission tariff. To date the Authority has chosen not to functionally unbundle its merchant and reliability functions, however functional unbundling may be a logical outgrowth of participation in these regional efforts.

The Authority believes it is well positioned in case the jurisdiction of FERC expands further, but such expansion would create new costs and regulatory exposures.

Renewable Portfolio Standards

Colorado adopted a renewable portfolio standard (“RPS”) in 2004 (later replaced with a renewable energy standard (“RES”)). The RES does not apply directly to the Authority, but does apply to municipal electric utilities serving 40,000 or more customers. Presently, Fort Collins is the only Municipality subject to the RES. Longmont and Loveland may meet the customer threshold in the next several years. The RES requires that ten percent (10%) of the retail energy sold by covered municipal utilities be from qualified renewable sources, as that term is defined in the RES, by 2020 (with some variation for municipal utilities that meet the 40,000 customer threshold subsequent to 2004). The Authority added 60 MW of wind capacity during 2014 – 2015 and a new 30 MW solar resource is expected to come on line in 2016. At present, the Authority has sufficient resources to meet the RES obligations of the Municipalities.

It is possible that the Colorado RES may be modified – it has been subject to multiple legislative changes and rulemakings since 2004 – or that a federal RES may be adopted. If this occurs the Authority will have the advantages of a history of wind generation operation and proximity to good wind resources, however the Authority may face operational issues associated with integration of large amounts of intermittent resources. This may require an increased utilization of natural gas for generation, which will have a cost impact. Increased transmission and ancillary services support may also be needed for new wind or other qualified renewable sources, adding to the cost. Transmission costs associated with regional wind resources is a motivating factor for the Authority’s participation in the above-described regional transmission tariff effort.

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Environmental Regulations

Federal, state and local environmental standards and regulations applicable to electric generation and transmission impacts continue to evolve. Efforts to comply with future environmental standards may be expensive and could result in reduced operating levels of coal-fired generating plants. The Authority has adopted a proactive Environmental Policy and operates its facilities pursuant to an Environmental Management System used to manage compliance requirements in order to ensure optimum environmental performance. As technology improves and opportunities arise, the Authority evaluates and implements voluntary improvements in its operations that balance environmental benefits and other factors including cost.

The Authority works with internal and external stakeholders in the rulemaking process with an intent to ensure that regulations are cost-effective and subject to effective and efficient implementation.

On April 17, 2015 the EPA published new regulations affecting coal combustion residuals (“CCR”). The regulations became effective October 17, 2015. In response to the CCR Rule, the CDPHE is planning to update their solid waste regulations and incorporate the new EPA requirements. The Authority is participating in the related rulemaking stakeholder process to communicate the need for achievable standards with clear expectations. In preparation for these new requirements, the Authority has expanded the existing groundwater monitoring plan, inspections, and is posting compliance information to its website. If results from expanded groundwater monitoring are unfavorable, upgrades may be required.

On June 29, 2015 the EPA published a final rule formalizing the definition of Waters of the United States (“WOTUS”). The purpose of this rule is to clarify the scope of waters protected under the Clean Water Act in light of several Supreme Court decisions that have affected its interpretation over time. The result of this rule appears to be a significant expansion of permitting requirements for activities that may not have required permits previously. No effects are currently expected by the Authority to routine operations although there is a potential for expanded regulatory requirements for future construction activities located in the vicinity of any newly protected water features. Cooling reservoirs constructed on dry land, like Hamilton Reservoir at Rawhide, are specifically exempted from the WOTUS definition. The Authority’s staff will continue to monitor this new regulation as it is implemented.

On October 1, 2015, the EPA announced revisions for ground-level ozone. The standard changed from 75 parts per billion (ppb) to 70 ppb. The change has no immediate effect on the Authority’s current operations, but may have future implications including more difficult and complicated permit requirements including the need for offsets for increased emissions. If the new standard cannot be achieved through existing regulations and planned reductions, additional state rulemakings is possible, requiring reduction mandates or new controls for existing units potentially including Rawhide Unit 1.

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Effects of Drought and Low-Water Conditions

Though moisture levels have recovered in the region over the last few years, a lack of precipitation in Colorado and the West could affect the Authority in three principal ways. First, it could affect the availability of water for cooling operations at Rawhide Unit 1. As discussed under “THE AUTHORITY – Future Capital Projects,” participation in the Windy Gap Firming Project could minimize this risk. Second, drought conditions during the 2000 through 2005 time period affected the production of hydroelectric facilities of the federal government, and increased the price of Western’s power and energy, forcing the Authority to either utilize its own generation resources or to make purchases in the wholesale power market. Recently the drought conditions have eased, but production has not yet improved. The Authority anticipates it will take several more years of favorable water conditions before hydroelectric production improves. Finally, sustained drought conditions could limit economic and population growth in Colorado, including the Municipalities’ service territories, limiting load growth.

LITIGATION

There is no litigation pending in any court (either state or federal) or, to the knowledge of counsel to the Authority, threatened against the Authority in any way questioning or affecting the validity of the Power Revenue Bonds. From time to time, the Authority is involved in litigating condemnation, personnel claims, contract claims and other miscellaneous actions arising in the ordinary course of its electric utility operations; however, the Authority does not anticipate that the outcomes of any such pending actions will, in the aggregate, materially adversely affect the results of its operations.

CONTINUING DISCLOSURE

The Authority will execute a continuing disclosure certificate (the “Continuing Disclosure Certificate”) at the time of the closing for the Series JJ Bonds. The Continuing Disclosure Certificate will be executed for the benefit of the Beneficial Owners of the Series JJ Bonds. The Continuing Disclosure Certificate will provide that so long as the Series JJ Bonds remain outstanding, the Authority will annually provide certain financial information and operating data relating to the Authority, the System and the Municipalities (the “Annual Report”) and will provide notice of certain material events to the Municipal Securities Rulemaking Board (“MSRB”) through its Electronic Municipal Market Access System (the “EMMA System”) or any successor method designated by the MSRB, in compliance with the Continuing Disclosure Certificate. The form of the Disclosure Certificate is attached to this Official Statement as Appendix E.

The failure by the Authority to observe or perform any of its obligations under the Continuing Disclosure Certificate will not be deemed an “event of default” under the Bond Resolution. If the Authority fails to comply with any provision of the Continuing Disclosure Certificate, any Bondholder or Beneficial Owner of the Outstanding Series JJ Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Authority to comply with its obligations under the Continuing Disclosure Certificate. However, the Continuing Disclosure Certificate provides that no Bondholder or Beneficial Owner will have the right to challenge the content or the adequacy

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of the information contained in any Annual Report or any Material Event Notice by judicial proceedings unless the Bondholders or Beneficial Owners representing at least 25 percent in aggregate principal amount of all Series JJ Bonds join in such proceedings.

During the past five years, the Authority has generally complied with its obligations under previous continuing disclosure agreements pursuant to Rule 15c2-12 promulgated under the Securities Exchange Act of 1934. However, due to delays in availability of the Municipalities’ audited financial reports, the Authority submitted the audited financial reports for fiscal year 2014 after the June 30 deadline set forth in such agreements.

LEGAL MATTERS

Legal matters incidental to the authorization and issuance of the Series JJ Bonds are subject to the approving opinion of Sherman & Howard L.L.C., Denver, Colorado, as Bond Counsel. Sherman & Howard L.L.C., Denver, Colorado, also has been engaged to advise the Authority as special counsel in connection with the preparation of this Official Statement and the sale of the Series JJ Bonds to the purchasers.

TAX MATTERS

Federal Tax Matters

In the opinion of Bond Counsel, assuming continuous compliance with certain covenants described below, interest on the Series JJ Bonds is excluded from gross income under federal income tax laws pursuant to Section 103 Tax Code, and interest on the Series JJ Bonds is excluded from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code except that such interest is required to be included in calculating the “adjusted current earnings” adjustment applicable to corporations for purposes of computing the alternative minimum taxable income of corporations as described below.

The Tax Code imposes several requirements which must be met with respect to the Series JJ Bonds in order for the interest thereon to be excluded from gross income and alternative minimum taxable income (except to the extent of the aforementioned adjustments applicable to corporations). Certain of these requirements must be met on a continuous basis throughout the term of the Series JJ Bonds. These requirements include: (a) limitations as to the use of proceeds of the Series JJ Bonds; (b) limitations on the extent to which proceeds of the Series JJ Bonds may be invested in higher yielding investments; and (c) a provision, subject to certain limited exceptions, that requires all investment earnings on the proceeds of the Series JJ Bonds above the yield on the Series JJ Bonds to be paid to the United States Treasury. The Authority will covenant and represent in the Bond Resolution that it will take all steps to comply with the requirements of the Tax Code to the extent necessary to maintain the exclusion of interest on the Series JJ Bonds from gross income and alternative minimum taxable income (except to the extent of the aforementioned adjustment applicable to corporations) under such federal income tax laws. Bond Counsel’s opinion as to the exclusion of interest on the Series JJ Bonds from gross income and alternative minimum taxable income (to the extent described above) is rendered in reliance on these covenants, and assumes continuous compliance therewith. The failure or inability of the Authority to comply with these requirements could cause the interest on

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the Series JJ Bonds to be included in gross income, alternative minimum taxable income or both from the date of issuance. Bond Counsel’s opinion also is rendered in reliance upon certifications of the Authority and other certifications furnished to Bond Counsel. Bond Counsel has not undertaken to verify such certifications by independent investigation.

Section 55 of the Tax Code contains a 20% alternative minimum tax on the alternative minimum taxable income of corporations. Under the Tax Code, 75% of the excess of a corporation’s “adjusted current earnings” over the corporation’s alternative minimum taxable income (determined without regard to this adjustment and the alternative minimum tax net operating loss deduction) is included in the corporation’s alternative minimum taxable income for purposes of the alternative minimum tax applicable to the corporation. “Adjusted current earnings” includes interest on the Series JJ Bonds.

With respect to the Series JJ Bonds that are sold in the initial offering at a discount (the “2016 Discount Bonds”), the difference between the stated redemption price of the 2016 Discount Bonds at maturity and the initial offering price of the 2016 Discount Bonds to the public (as defined in Section 1273 of the Tax Code) will be treated as “original issue discount” for federal income tax purposes and will be used in determining the basis of the 2016 Discount Bonds for the purpose of determining the amount of gain or loss on such 2016 Discount Bonds on the sale or other disposition thereof. At the election of the owner of a 2016 Bond, exercised in the manner provided in the Tax Code and regulations and other official pronouncements thereunder, such de minimis original issue discount may be treated as regular “original issue discount,” a portion of which is included as interest income in the gross income of the 2016 Discount Bond owner annually as provide in the Tax Code. Owners who desire to make such an election or who make such an election, and owners who do not purchase the 2016 Discount Bonds in the initial offering or who purchase the Series JJ Bonds in the initial offering at a price different from the initial offering price of the 2016 Discount Bonds to the public, should consult their own tax advisors about the tax consequences thereof.

The Tax Code contains numerous provisions which may affect an investor’s decision to purchase the Series JJ Bonds. Owners of the Series JJ Bonds should be aware that the ownership of tax-exempt obligations by particular persons and entities, including, without limitation, financial institutions, insurance companies, recipients of Social Security or Railroad Retirement benefits, taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, foreign corporations doing business in the United States and certain “subchapter S” corporations may result in adverse federal tax consequences. Certain of the Series JJ Bonds may be sold at a premium, representing a difference between the original offering price of those Series JJ Bonds and the principal amount thereof payable at maturity. Under certain circumstances, an initial owner of such bonds (if any) may realize a taxable gain upon their disposition, even though such bonds are sold or redeemed for an amount equal to the owner’s acquisition cost. Bond Counsel’s opinion relates only to the exclusion of interest on the Series JJ Bonds from gross income and alternative minimum taxable income as described above and will state that no opinion is expressed regarding other federal tax consequences arising from the receipt or accrual of interest on or ownership of the Series JJ Bonds. Owners of the Series JJ Bonds should consult their own tax advisors as to the applicability of these consequences.

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The opinions expressed by Bond Counsel are based upon existing law as of the delivery date of the Series JJ Bonds. No opinion is expressed as of any subsequent date nor is any opinion expressed with respect to any pending or proposed legislation. Amendments to the federal tax laws may be pending now or could be proposed in the future which, if enacted into law, could adversely affect the value of the Series JJ Bonds, the exclusion of interest on the Series JJ Bonds from gross income or alternative minimum taxable income or both from the date of issuance of the Series JJ Bonds or any other date, or which could result in other adverse federal tax consequences. Bond owners are advised to consult with their own tax advisors with respect to such matters.

The Internal Revenue Service (the “Service”) has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. No assurances can be given as to whether or not the Service will commence an audit of the Series JJ Bonds. If an audit is commenced, the market value of the Series JJ Bonds may be adversely affected. Under current audit procedures, the Service will treat the Authority as the taxpayer and the Owners may have no right to participate in such procedures. The Authority has covenanted in the Bond Ordinances not to take any action that would cause the interest on the Series JJ Bonds to lose its exclusion from gross income for federal income tax purposes or lose its exclusion from alternative minimum taxable income except to the extent described above for the owners thereof for federal income tax purposes. None of the Authority, the initial purchaser of the Bonds, Financial Advisor or Bond Counsel is responsible for paying or reimbursing any Registered Owner or Beneficial Owner for any audit or litigation costs relating to the Series JJ Bonds.

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The financial statements of the Authority as of and for the years ended December 31, 2015 and December 31, 2014, included in Appendix A to this Official Statement, have been audited by BKD, LLP, independent certified public accountants, as stated in their report appearing herein.

FINANCIAL ADVISOR

Public Financial Management Inc. (the “Financial Advisor”) has assisted the Authority with various matters relating to the planning, structuring and delivery of the Series JJ Bonds. The Financial Advisor is a financial advisory firm and is not engaged in the business of underwriting or distributing municipal securities or other public securities. The Financial Advisor assumes no responsibility for the accuracy, completeness or fairness of this Official Statement. The Financial Advisor will receive compensation from the Authority contingent upon the sale and delivery of the Series JJ Bonds.

RATINGS

The Series JJ Bonds have been assigned the ratings specified on the cover page hereof by Standard and Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. (“S&P”) and Fitch Ratings, Inc. (“Fitch”), respectively. Such ratings reflect only the views of the

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respective rating agencies, and do not constitute a recommendation to buy, sell or hold securities. Explanations of the significance of such ratings may be obtained from the rating agencies. The ratings are subject to revision or withdrawal at any time by the respective rating agency and there is no assurance that the ratings will continue for any period of time or that they will not be revised or withdrawn. The Board has undertaken no responsibility either to bring to the attention of the holders of the Series JJ Bonds any proposed revision or withdrawal of the ratings of the Series JJ Bonds or to oppose any such proposed revision or withdrawal. Any downward revision or withdrawal of such ratings could have an adverse effect on the market price of the Series JJ Bonds.

PUBLIC SALE

The Authority expects to sell the Series JJ Bonds at public sale on April 12, 2016. See Appendix F – Official Notice of Sale.

OFFICIAL STATEMENT CERTIFICATION

The undersigned official hereby confirms and certifies that the execution and delivery of this Official Statement and its use in connection with the offering and sale of the Series JJ Bonds has been duly authorized by the City Council.

MISCELLANEOUS

The references in this Official Statement (including the appendices hereto) to the Bond Resolution, statutes, resolutions, contracts, and other documents are brief outlines or partial excerpts of certain provisions of the documents. These outlines or excerpts do not purport to be complete, and reference is made to the documents, copies of which are available at the offices of the Authority, for full and complete statements of their provisions. All estimates used in this Official Statement are intended only as estimates and not as representations.

The execution and delivery of this Official Statement has been duly authorized by the Board.

PLATTE RIVER POWER AUTHORITY By

General Manager/ CEO By

Chairman, Board of Directors

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APPENDIX A

PLATTE RIVER POWER AUTHORITY FINANCIAL STATEMENTS

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APPENDIX B

SUMMARY OF CERTAIN PROVISIONS OF THE BOND RESOLUTION

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APPENDIX C

BOOK-ENTRY ONLY SYSTEM

DTC will act as securities depository for the Series JJ Bonds. The Series JJ Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for each maturity of each series of the Series JJ Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of Series JJ Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series JJ Bonds on DTC’s records. The ownership interest of each actual purchaser of each 2016 Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series JJ Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series JJ Bonds, except in the event that use of the book-entry system for the Series JJ Bonds is discontinued.

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To facilitate subsequent transfers, all Series JJ Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Series JJ Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series JJ Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Series JJ Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series JJ Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series JJ Bonds, such as redemptions, tenders, defaults, and proposed amendments to the 2016 Bond documents. For example, Beneficial Owners of Series JJ Bonds may wish to ascertain that the nominee holding the Series JJ Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Series JJ Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. However, see “THE SERIES JJ BONDS – Redemption Provisions – Pro Rata Selection of Series JJ Bonds.”

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series JJ Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Series JJ Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal, interest and redemption proceeds on the Series JJ Bonds will be made to Cede& Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Authority or the Paying Agent on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Paying Agent or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, interest or redemption proceeds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Paying Agent, disbursement of such payments to Direct Participants will be the

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responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Series JJ Bonds at any time by giving reasonable notice to the Authority or the Registrar and Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, 2016 Bond certificates are required to be printed and delivered.

The Authority may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, 2016 Bond certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Authority believes to be reliable, but the Authority takes no responsibility for the accuracy thereof.

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APPENDIX D

FORM OF BOND COUNSEL OPINION

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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE

WHEREAS, Platte River Power Authority (“Platte River”) heretofore has authorized the issuance of Platte River’s $________ Power Revenue Bonds, Series JJ (the “Series JJ Bonds”) pursuant to the General Power Bond Resolution adopted by Platte River on February 26, 1987, as supplemented (the “Bond Resolution”), including as supplemented by a resolution adopted by Platte River on March 31, 2016 entitled “Eleventh Supplemental Power Bond Resolution” relating to the Series JJ Bonds; and

WHEREAS, by Resolution adopted by Plate River on March 31, 2016, Platte River has

found and determined that it is necessary, in connection with the authorization and sale of the Series JJ Bonds, and in order to assist the Participating Underwriters (hereinafter defined) in complying with the Rule (hereinafter defined), that Platte River agree to provide certain continuing disclosure information with respect to itself, the System (as defined in the Bond Resolution), the Colorado municipalities of Estes Park, Fort Collins, Longmont and Loveland (collectively, the “Municipalities”) and the Series JJ Bonds; and

WHEREAS, the execution and delivery of this Continuing Disclosure Certificate has

been authorized by Platte River; NOW, THEREFORE, Platte River hereby agrees as follows:

SECTION 1. Definitions.

In addition to the definitions set forth in the Bond Resolution, which apply to any

capitalized term used in this Disclosure Certificate, unless otherwise defined in this Disclosure Certificate, the following capitalized terms shall have the following meanings:

“Annual Report” shall mean any Annual Report provided by Platte River pursuant to, and

as described in, Sections 3 and 4 of this Disclosure Certificate. “Audited Financial Statements” shall mean:

(a) in the case of Platte River, Platte River’s audited financial statements for its most

recent fiscal year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time (or such other accounting principles as may be applicable to Platte River in the future pursuant to applicable law); and

(b) in the case of each of the Municipalities, the audited financial statements for the electric systems of each such Municipality for its most recent fiscal year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time (or such other accounting principles as may be applicable to such Municipality in the future pursuant to applicable law).

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“Beneficial Owner” shall mean any person who (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series JJ Bonds (including persons holding Series JJ Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series JJ Bonds for federal income tax purposes.

“Disclosure Certificate” shall mean this certificate, as the same may be amended or

supplemented from time to time in accordance with the provisions hereof. “Dissemination Agent” shall mean Platte River, or any successor Dissemination Agent

designated in writing by Platte River and which has filed with Platte River a written acceptance of such designation.

“Final Official Statement” shall mean the Official Statement of Platte River, dated

April __, 2016, relating to the Series JJ Bonds, as amended or supplemented. “Listed Events” shall mean any of the events listed in Section 5 of this Disclosure

Certificate. “MSIR” shall mean any other municipal securities information repository other than the

MSRB as may be required by law or applicable legislation, from time to time, to receive continuing disclosure documents for purposes of the Rule.

“MSRB” shall mean the Municipal Securities Rulemaking Board established in

accordance with the provisions of Section 15B(b)(1) of the Securities and Exchange Act of 1934. “Owners of the Series JJ Bonds” shall mean the registered owners, including the

Beneficial Owners, of the Series JJ Bonds. “Participating Underwriter” shall mean any of the original underwriters of the Series JJ

Bonds required to comply with the Rule in connection with the offering of the Series JJ Bonds. “Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange

Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time, together with all interpretive guidance or other official interpretations or explanations thereof that are promulgated by the SEC.

“SEC” shall mean the United States Securities and Exchange Commission. “State” shall mean the State of Colorado.

SECTION 2. Purpose of this Disclosure Certificate; Obligated Persons; Disclosure

Certificate to Constitute Contract. (a) This Disclosure Certificate is executed and delivered on behalf of Platte River for

the benefit of Bondholders and Beneficial Owners of the Series JJ Bonds and in order to assist the Participating Underwriters in complying with the Rule.

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(b) Platte River and the Municipalities each are hereby determined to be “obligated persons” within the meaning of the Rule (and are the only “obligated persons” within the meaning of the Rule for whom financial information or operating data is presented in the Final Official Statement).

(c) In consideration of the purchase and acceptance of any and all of the Series JJ

Bonds by those who shall hold the same or shall own beneficial ownership interests therein from time to time, this Disclosure Certificate shall be deemed to be and shall constitute a contract between Platte River and the Bondholders and Beneficial Owners from time to time of the Series JJ Bonds; and the covenants and agreements herein set forth to be performed on behalf of Platte River shall be for the benefit of the Bondholders and Beneficial Owners of any and all of the Series JJ Bonds.

SECTION 3. Provision of Annual Reports.

(a) Platte River hereby covenants and agrees that it shall, or shall cause the

Dissemination Agent to, not later than nine months following the end of Platte River’s fiscal year (currently, by each September 30; each such date being referred to herein as a “Final Submission Date”), commencing September 30, 2016, provide to each MSIR in an electronic format as prescribed by the MSRB, an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than fifteen (15) business days prior to said date, Platte River shall provide the Annual Report to the Dissemination Agent. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross- reference other information as provided in Section 4 of this Disclosure Certificate; provided that any Audited Financial Statements may be submitted when available separately from the balance of the Annual Report and later than the Final Submission Date if they are not available by that date. If audited financial statements for the preceding fiscal year are not available for Platte River or the Municipalities when the Annual Report is required to be submitted, Platte River will use its best efforts to include in the Annual Report unaudited financial statements for the preceding fiscal year for the entity whose audited financial statements are unavailable, and Platte River shall provide the omitted audited financial statements as soon as practicable after the audited financial statements become available. If the fiscal year for Platte River or any of the Municipalities changes, Platte River shall give notice of such change in the same manner as for a Listed Event under Section 5.

(b) If Platte River or the Dissemination Agent (if any), as the case may be, has not

furnished an Annual Report to each MSIR by a Final Submission Date, Platte River or the Dissemination Agent, as applicable, shall send a notice to each MSIR a timely manner, on or prior to the Final Submission Date.

(c) The Dissemination Agent shall:

(i) determine each year prior to the date for providing the Annual Report the name and address of each MSIR; and (if the Dissemination Agent is other than Platte River)

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(ii) file a report with Platte River certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and listing all the MSIRs to which it was provided.

SECTION 4. Content of Annual Reports. Platte River’s Annual Report shall contain or incorporate by reference the following:

(a) If available at the time of such filing, quantitative information for the preceding

fiscal year of the type presented in Platte River’s Final Official Statement relating to the Series JJ Bonds, including:

(1) The Audited Financial Statements. If any Audited Financial

Statements are not available by the Final Submission Date, the Annual Report shall contain unaudited financial statements for Platte River and/or such of the Municipalities for which Audited Financial Statements are not available, as applicable, in a format similar to the audited financial statements most recently prepared for such person(s), and such Audited Financial Statements shall be filed in the same manner as the Annual Report when and if they become available.

(2) Updated versions of the financial information and operating data as indicated in the “INDEX OF TABLES” on page __ of the Official Statement.

(3) Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of Platte River or related public entities, which have been submitted to the MSRB and each of the MSIRs or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. Platte River shall clearly identify each such other document so incorporated by reference.

(4) Notwithstanding the foregoing, insofar as the Final Official Statement contains (i) Audited Financial Statements of Platte River as of December 31, 2015 and for the year then ended and (ii) updated versions of the financial information and operating data required pursuant to paragraph 2 above for the year ended December 31, 2015, the Annual Report for the Fiscal Year ended December 31, 2015 need contain only (x) Audited Financial Statements of the Municipalities as of December 31, 2015 and for the year then ended and (y) updated versions of the financial information and operating data for the Municipalities required pursuant to paragraph 2 above for the year ended December 31, 2015.

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SECTION 5. Reporting of Listed Events. Platte River shall give notice, in a timely manner not in excess of ten business days after the occurrence of the event, to each MSIR in the appropriate format required by law or applicable regulation, notice of the occurrence of any of the following events with respect to the Series JJ Bonds:

(i) principal and interest payment delinquencies; (ii) non-payment related defaults, if material; (iii) unscheduled draws on debt service reserves reflecting financial

difficulties; (iv) unscheduled draws on credit enhancements reflecting financial

difficulties; (v) substitution of credit facility providers, or their failure to perform; (vi) adverse tax opinions, the issuance by the Internal Revenue Service of

proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Series JJ Bonds, or other material events affecting the tax status of the Series JJ Bonds;

(vii) modifications to rights of holders of the Series JJ Bonds, if material; (viii) Bond calls, if material, and tender offers; (ix) defeasances; (x) release, substitution or sale of any property securing repayment of the

Series JJ Bonds, if material; (xi) rating changes; (xii) bankruptcy, insolvency, receivership, or similar event of Platte River or

the Municipalities;

(xiii) consummation of a merger, consolidation, or acquisition involving Platte River or the Municipalities, or sale of all or substantially all of the assets of Platte River or the Municipalities, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and

(xiv) appointment of a successor or additional trustee or the change of name of

a trustee, if material.

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With regard to the reportable event described in subsection (xii) above, the event is

considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for Platte River or the Municipalities in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of Platte River or the Municipalities, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of Platte River or the Municipalities.

SECTION 6. EMMA.

Platte River agrees to make filings required of Platte River with the Electronic Municipal Market Access System (“EMMA”), as required by the Rule and the MSRB.

SECTION 7. Termination of Reporting Obligation. Platte River’s obligations under this Disclosure Certificate shall terminate upon the legal

defeasance in accordance with the terms of the Power Bond Resolution and the Series JJ Bonds, prior redemption or payment in full of all of the Series JJ Bonds.

SECTION 8. Dissemination Agent. Platte River may, from time to time, appoint or engage a Dissemination Agent to assist it

in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent.

SECTION 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, Platte River may

amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if such amendment or waiver is permitted by the Rule, as evidenced by an opinion of counsel expert in federal securities law, which may also include bond counsel to Platte River, to the effect that such amendment or waiver would not cause the Disclosure Certificate to violate the Rule. The first Annual Report filed after enactment of any amendment to or waiver of this Disclosure Certificate shall explain, in narrative form, the reasons for the amendment or waiver and the impact of the change in the type of information being provided in the Annual Report.

If the amendment pertains to the accounting principles to be followed in preparing

financial statements, the Annual Report for the year in which the change is made shall include a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles

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and the impact of the change in the accounting principles on the presentation of the financial information in order to evaluate the ability of Platte River to meet its obligations. To the extent reasonably feasible, the comparison shall also be quantitative. A notice of the change in the accounting principles shall be sent to each MSIR.

SECTION 10. Default. In the event of a failure of Platte River to comply with any provision of this Disclosure

Certificate, any Owners of the Series JJ Bonds may seek a court order for specific performance by Platte River of its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Power Bond Resolution or constitute a default with respect to the Series JJ Bonds, and the sole remedy under this Disclosure Certificate in the event of any failure of Platte River to comply with this Disclosure Certificate shall be an action for specific performance of Platte River’s obligations hereunder and not for money damages in any amount.

SECTION 11. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent Platte River from

disseminating, or require Platte River to disseminate, any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If Platte River chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, Platte River shall have no obligations under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

SECTION 12. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this

Disclosure Certificate. Platte River agrees, to the extent permitted by law, to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of Platte River under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Series JJ Bonds.

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SECTION 13. Beneficiaries.

This Disclosure Certificate shall inure solely to the benefit of the Dissemination Agent, and Owners from time to time of the Series JJ Bonds, and shall create no rights in any other person or entity. Date: April __, 2016.

Platte River Power Authority By ____________________________________

General Manager/CEO

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APPENDIX F

ECONOMIC AND DEMOGRAPHIC INFORMATION

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APPENDIX G

OFFICIAL NOTICE OF BOND SALE

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Memorandum Date: March 23, 2016

To: Board of Directors

From: Jackie A. Sargent, General Manager/CEO Karin Hollohan, Chief Administrative Services Officer

Subject: Headquarters Campus

As a result of last year’s evaluation of the current condition of Platte River’s Headquarters campus, associated future building options, and ongoing Board discussions, staff recommends moving forward with building a new Headquarters campus on a greenfield site.

Staff has identified a limited number of parcels within the City of Fort Collins that appear to meet our needs and seem to be competitively priced, based on initial conversations with a local commercial real estate broker. Key criteria include ease of access, close proximity to I-25, and the ability to easily and economically tie into Platte River’s fiber network.

You may recall that the 2016 budget included funding for the design and engineering for this project, but did not include any funding for the land purchase. In the course of identifying available parcels it has become clear that few suitable parcels remain and that most of these are being actively marketed. An immediate purchase of property is prudent. If approved by the Board, once a land purchase has been completed and the exact cost is known, staff will come back to the Board with a request for a transfer from the contingency reserve. Staff will also bring to the Board a reimbursement resolution relating to this purchase.

The attached resolution authorizes the General Manager/CEO to enter into a land purchase agreement, provided the purchase price of a suitable property does not exceed $5,000,000, for the purpose of building a new headquarters campus facility to meet Platte River’s needs well into the future.

Attachment

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RESOLUTION NO. __-16

WHEREAS, Platte River Power Authority initially purchased its headquarters site in

1974; and

WHEREAS, due to various physical shortcomings associated with the present site and

its structures, staff investigated the possibility of rebuilding the structures on the present site as

well as the purchase of a new headquarters location; and

WHEREAS, the purchase of a new headquarters location and the construction of new

headquarters facilities is the most cost-effective option; and

WHEREAS, a limited number of suitable location have been identified, all of which are

being actively marketed; and

WHEREAS, based on the listing prices for the identified properties a suitable site can be

purchased for an amount of five million dollars ($5,000,000) or less.

NOW, THERERFORE, BE IT RESOLVED by the Board of Directors of Platte River

Power Authority that the Board approves of the purchase of property suitable for a new

headquarters facility at a price not to exceed five million dollars ($5,000,000), and the General

Manager/CEO is authorized to take the steps necessary to effect the purchase of said property

within the limits specified.

AS WITNESS, I have executed my name as Assistant Secretary and have affixed the corporate seal of the Platte River Power Authority this day of , 2016.

Assistant Secretary

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Memorandum Date: March 23, 2016

To: Board of Directors

From: Jackie A. Sargent, General Manager/CEO Deb Schaneman, Chief Compliance Officer

Subject: 2015 BKD Audit Report

At the Board meeting, Rob MaCoy, Jodie Cates, and Anna Thigpen from BKD will present the results of their audit of the 2015 financial statements and answer any questions you may have. A motion regarding acceptance of the audit will be required at the March meeting. BKD will also present a fee proposal for both a three-year and five-year contract extension. The current contract with BKD will expire after completion of the 2015 Defined Benefit Plan audit this spring. Staff will seek Board direction in April with regards to BKD’s proposal for a contract extension or, alternatively, to conduct a formal request for proposals. No decision is required at the March meeting. Attached is a copy of the 2015 Audit Report, BKD Post-Audit Letter, and BKD Fee Proposal. Attachments

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Please see printed report provided.

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March 17, 2016

Board of Directors Platte River Power Authority 2000 East Horsetooth Road Fort Collins, CO 80525 DEAR BOARD OF DIRECTORS:

Platte River Power Authority (the Authority) has provided your customers with reliable, low-cost electric services for more than four decades. By acting as good stewards of the environment for the benefit of the current and future residents of your communities you demonstrate a commitment to promoting a high standard of living for those you serve. You recognize staying compliant with evolving regulations and demonstrating fiscal responsibility is essential to sustaining the confidence of your customers. Continuing to work with a proactive CPA and advisory firm that can offer strategic recommendations gained from extensive experience with your industry can help you keep informed on the issues that affect you. With our accessible advisors and dedication to meeting our clients’ unique needs, we believe BKD, LLP is still that firm.

With the complex scope of work the Authority takes on, we understand your need to make informed business decisions that focus on your bottom line. BKD professionals have a wide range of experience, including providing audit services to those similar in size to the Authority. Our attentive professionals work with utility clients year round and can continue to identify tailored solutions to help you address the challenges you may face. We look forward to continuing to share best practices and recommendations to help the Authority increase your financial strength and be confident in the value of your investment.

The Authority is an important client, and we place great value on extending our working relationship, while maintaining our independence. We believe we have responded to your request with a proposal that will allow our experienced professionals to continue providing timely, efficient and objective services. To discuss any questions you may have regarding this proposal, you may reach me at 303.861.4545 or by email at [email protected].

Sincerely, Jodie L. Cates, CPA Managing Director

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SERVICE DESCRIPTIONS

FINANCIAL STATEMENT AUDIT

BKD’s audit approach focuses on areas of higher risk—the unique characteristics of the Authority’s operating environment, the design effectiveness of your internal controls and your financial statement amounts and disclosures. The objective is to express an opinion on the conformity of your financial statements, in all material respects, with accounting principles generally accepted in the United States of America.

BKD is well prepared to meet the Authority’s specific needs, as our audit tools, resources and infrastructure are designed to efficiently manage and disseminate our industry knowledge. We can ramp up quickly on industry-specific trends and issues because, from associate level to partner, we are exposed to your industry’s issues day in and day out, rather than just periodically. Any audit we perform involves a high level of engagement executive involvement, and BKD team members assigned to the Authority’s audit will have a deep understanding of and technical training in the utility industry.

EMPLOYEE BENEFIT PLAN AUDIT

Employee benefit plans require specialized accounting, financial reporting and tax services and are subject to other legal requirements. BKD has the knowledge to help keep your plans sound.

BKD’s employee benefit plan audit approach focuses on the likelihood of a material audit misstatement within the Authority’s plan. We direct our attention to areas of higher risk, the unique characteristics of the operating environment, the design effectiveness of your internal controls and the plan’s financial statement amounts and disclosures.

YOUR INVESTMENT

BKD knows our clients do not like fee surprises. Neither do we. Our goal is to be candid and timely, and we want to answer your questions about fees upfront. We determine our fees by evaluating a number of variables: the complexity of the work, the project’s scope, the time we will spend and the level of professional staff needed.

PROPOSED FEES

Platte River Power Authority

For the Year Ending December 31 2016 2017 2018 2019 2020Three-Year Option Financial Statement Audit $69,500 $72,300 $75,200 Employee Benefit Plan $19,000 $19,800 $20,600 Total $88,500 $92,100 $95,800 Five-Year Option Financial Statement Audit $69,500 $70,900 $72,300 $73,750 $75,200 Employee Benefit Plan $19,000 $19,400 $20,200 $21,000 $21,850Total $88,500 $90,300 $92,500 $94,750 $97,050

In addition, you will be billed travel costs and an administrative fee of 4 percent to cover items such as copies, postage and other delivery charges, supplies, technology-related costs, such as computer processing, software licensing, research and library databases, and similar expense items. Our fees may increase if our duties or responsibilities change because of new rules, regulations and accounting or auditing standards. We will consult with you should this happen.

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YOUR BKD ENGAGEMENT TEAM

The most critical factor in providing you with high-quality service is choosing your engagement team. We take team selection seriously and have the appropriate team of advisors to meet your needs.

Jodie L. Cates, CPA Managing Director Engagement Role: Engagement Executive

Jodie has more than 20 years of governmental accounting and auditing experience, including four years with a local government. She is a member of BKD National Government Group, dedicating the majority of her time to the governmental practice.

Her background in auditing includes experience with utilities, school districts, various state agencies, cities and counties and tax-exempt organizations. She has significant experience with OMB Circular A-133 compliance and controls and is very familiar with the requirements of the

Governmental Accounting Standards Board and Government Finance Officers Association (GFOA) Certification Program for Comprehensive Annual Financial Reports.

Jodie has conducted presentations for the Colorado GFOA and internal and external BKD seminars and has served on various BKD governmental committees and internal inspection teams.

She is a member of the American Institute of CPAs, Colorado Society of CPAs and Colorado GFOA. Jodie is active in her community, serving as treasurer for various organizations over the past several years.

She is a 1991 graduate of Oklahoma State University, Stillwater, with a B.S. degree in business administration.

Anna L. Thigpen, CPA Senior Manager Engagement Role: Audit Senior Manager

Anna has more than seven years of public accounting experience. As a member of BKD National Governmental Group, she provides audit services to a wide variety of governmental clients, including municipalities, school districts, utilities, library districts and state departments.

In addition to verifying the accuracy and completeness of clients’ financial statements, she helps clients navigate compliance with federal guidelines for OMB Circular A-133 requirements, including FEMA. As a senior manager, Anna will be responsible for overseeing engagement

planning, risk assessment, audit program development and review of the engagement phases. She also serves on the BKD Colorado’s Engagement Council.

Anna is a member of the American Institute of CPAs, Colorado Society of CPAs and Colorado Government Finance Officers Association (CGFOA). Anna has conducted presentations on various accounting topics at BKD’s governmental seminars and CGFOA and has served on the BKD Colorado Foundation Committee.

She is a 2007 graduate of The University of Northern Colorado, Greeley, with a B.S. degree in business with an emphasis in accounting.

Steven A. Shanks, CPA Director Engagement Role: Employee Benefit Plan Audit Director

Steven has more than 25 years of experience providing audit and consulting services to a wide variety of clients, including governmental entities, not-for-profit organizations and employee benefit plan sponsors.

He manages the Colorado offices’ employee benefit plan audit practice, which entails coordinating and reviewing audits of benefit plan financial statements and providing consulting services relating to compliance with the United States Department of Labor (DOL) requirements

and IRS regulations. Steven’s experience includes defined benefit plans, defined contribution plans, health and welfare plans, The Employee Retirement Income Security Act of 1974, 11-K audits and full- and limited-scope audits.

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Steven also has extensive experience with audits of state and local public pension plans, including cost sharing multiple employer public pension plans and agency multiple employer public pension plans.

Besides employee benefit plans, he has experience managing audits for multiple local government investment pools in four different states.

Steven is a member of the American Institute of CPAs, Colorado Society of CPAs and the Western Pension & Benefits Council Denver Chapter.

He is a graduate of Stephen F. Austin State University, Nacogdoches, Texas, with a B.B.A. degree in business administration.

Amy S. Trujillo, CPA Senior Associate II Engagement Role: Employee Benefit Plan Audit In-Charge

Amy has more than five years of experience in public accounting.

She supervises employee benefit plan financial statement audits and provides consulting services relating to compliance with the U.S. Department of Labor (DOL) requirements and IRS regulations. Her experience includes defined benefit plans, defined contribution plans, and governmental plans.

She is a member of the American Institute of CPAs and Colorado Society of CPAs.

Amy has a B.S. degree in accounting from Metropolitan State University of Denver, Colorado.

WHY CHOOSE BKD

BKD DELIVERS VALUE

It is important to monitor expenditures and receive exceptional value for your investments. However, informed consumers understand value is about more than just price. Value from a professional CPA and advisory firm is about the quality of the work and the merit of the advice. Expect BKD’s work to be accurate and insightful. We stand behind it. Our Public Company Accounting Oversight Board and American Institute of CPAs peer reviews demonstrate the firm’s record of excellence.

As evidenced by our inclusion in INSIDE Public Accounting’s Best of the Best Firms list for the last five years, we also offer long-term consistency, exceptional performance and a national network of support and resources. BKD is large enough to help the Authority address a variety of financial issues. At the same time, we pride ourselves on hard work and low overhead, which keep our fees competitive. With our reputation, size, service and experience, you can consider us a good value.

PUBLIC POWER & UTILITY INDUSTRY EXPERTISE

BKD provides audit, financial reporting, tax and consulting services to approximately 250 utility clients nationwide, including joint action agencies, public power organizations and rural electric cooperatives. Firmwide, our advisors can offer their expertise to help you remain current on issues affecting public power and utilities while also helping you navigate challenges presented by increased environmental legislation and Federal Energy Regulatory Commission and Rural Utilities Services rulemaking guidance.

Because we work with a variety of energy clients, including municipal utilities, cooperatives, generation and transmission organizations, Independent System Operators (ISO) and Regional Transmission Organizations, our team is armed with the knowledge necessary to offer practical solutions that can help you increase efficiencies and identify areas that may require attention within your organization.

We believe our understanding of the dynamics and governance of utility entities, along with our involvement with the American Public Power Association (APPA), can bring added value to the Authority.

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EMPLOYEE BENEFIT PLAN EXPERTISE

BKD has actively audited retirement plans since the issuance of the Employee Retirement Income Security Act of 1974 audit requirements in the 1970s. Our dedicated team of professionals audits approximately 1,500 employee benefit plans, including approximately 30 11-K filers.

We are familiar with a wide range of plan sizes and complexities, which can bring additional value as we guide the Authority through your employee benefit plan audit. The number of participants for the plans we audit ranges from 100 to more than 326,000, and the aggregate plan asset size of our clients is up to approximately $14 billion. Furthermore, the United States Department of Labor informed us BKD is a leading provider of employee benefit plan audits.

PARTNER ROTATION TO RECEIVE A FRESH LOOK

Auditor independence and objectivity are critical elements to a successful audit. Changing individual auditors can be beneficial in providing a fresh look at your financial statements. BKD appreciates the value of a new perspective and, because of our depth of resources, can accommodate partner rotations if such requests are made by our clients.

To accommodate the Authority’s request, Managing Director Jodie Cates will transition into the role of Engagement Executive. Partner Rob MaCoy will remain a member of your engagement team; however, he will transition into the role of Independent Reviewer. That way, you can receive a fresh perspective while still maintaining your working relationship with advisors who are familiar with your operations and understand the challenges you face. We believe audit quality is maintained in long-term working relationships, and you can be confident independence will not be compromised.

BKDCONNECT

BKDconnect is an innovative client portal designed to help address the challenges financial engagements present and conveniently connect you with BKD advisors. Prior to the start of your engagement, BKD will post our questionnaires and other related documents on a BKDconnect website, specifically prepared for the Authority, where requests can be reviewed and completed.

BKDconnect can make it easier to:

View and manage information about your engagement or project

Share documents and files with your BKD advisors and project teams

Organize documents and files for retrieval

Assign tasks to your team and receive requests for information from BKD

Track the progress of tasks toward completion

Access our award-winning, industry-specific articles, webinars, videos and more

BKDconnect can help improve communication, save time, limit disruptions and keep you connected with BKD advisors.

THOUGHT LEADERSHIP

BKD advisors are serious about reinforcing and strengthening their positions as thought leaders in the industries they serve. To help keep you informed about emerging issues in your industry, as well as changes in regulations and accounting and tax methods, we provide BKD Thoughtware® webinars, seminars and articles. Many of these are eligible for continuing professional education credit. Recent topics include:

DOL Communicates Importance of Audit Quality

GASB’s Proposed Implementation Guidance, Pension Amendments & Cost-Benefit Analysis of OPEB Standards

GASB Statement No. 72 – Fair Value Measurement and Application

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UNMATCHED CLIENT SERVICE

You want trusted advisors who will deliver exceptional client service, focus on your needs and take the time to address your unique challenges. BKD understands. We take our commitment so seriously, we penned five standards of unmatched client service and supporting guidelines in The BKD Experience: Unmatched Client Service, a book that articulates the firm’s philosophy and sets expectations for serving clients. Those five standards are Integrity First, True Expertise, Professional Demeanor, Responsive Reliability and Principled Innovation.

Our acceptance of this engagement is subject to completion of our normal client acceptance procedures. Upon acceptance, the actual terms of our engagement will be documented in a separate letter to be signed by you and us. All information contained within this proposal is proprietary and confidential. The information provided in this proposal is intended for informational purposes only and may not be copied, used or modified, in whole or in part, without BKD’s prior written approval. All information in this proposal is as of May 31, 2015, unless otherwise noted.

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Memorandum Date: March 23, 2016

To: Board of Directors

From: Joseph B. Wilson

Subject: Platte River Legal and Governmental Affairs Report – March 2016 Board Meeting The following legal issues and governmental/legislative matters were addressed during the reporting period; bold-faced type is used to highlight recent or significant developments. LEGAL ISSUES: CURRENT OR THREATENED LITIGATION Longmont Excavation Damage — The Zayo Group damaged the 115 kV Terry St. – Fordham underground transmission structure. Sturgeon Electric Company was the contractor for installation and Rapid Wire LLC was the excavation subcontractor. These parties were notified immediately. Repairs were completed and the line was placed in service on April 7, 2014. Two itemized accountings of costs were sent to Zayo Group in a total amount of $728,088.33 with payment due May 15. Platte River filed a complaint against Zayo on May 27, 2014, initiating litigation. Initially Zayo joined Sturgeon and Rapid Wire as third-party defendants, and more recently joined Safe Sites, a contractor for Rapid Wire that assisted in developing the boring plan resulting in the damage. Platte River is in the process of developing expert witness reports in support of its litigation position. The discovery process is ongoing. Depositions are underway and the parties have agreed upon a mediator. Mediation will be scheduled during April. A trial date has been assigned for July 2016. Water Rights Diligence Application — As owners of conditional water rights (in this case, water rights associated with the Reuse Plan), Platte River and Fort Collins are required by statute to file an application for finding of reasonable diligence every six years. Although most of the water rights associated with the Reuse Plan have been made absolute in prior filings, some rights remain conditional. On May 27, 2015, Platte River and the City of Fort Collins filed an application in Water Court, Division One. The application seeks only to continue the water rights as conditional, and does not request any portion of the water rights to be made absolute. In accordance with Colorado law, notice of the application was published in the Water Court Resume and The Coloradoan. Five parties timely filed statements of opposition to the application: Northern Colorado Water Conservancy District City of Greeley Water Supply and Storage Company Larimer & Weld Irrigation Company Cache la Poudre Water Users Association North Poudre Irrigation Co. (“NPIC”) filed a motion to intervene in the case after the deadline for filing

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statements of opposition had passed. Platte River consented to the motion because it is likely the motion would be granted by the water referee even if we objected, and NPIC’s concerns with the application appear to be narrow. An initial telephone status conference between Platte River’s water counsel, counsel for opposers, and the Water Referee was held on September 1, 2015. Platte River provided a draft ruling to legal counsel for opposers on September 25, 2015. By order of the water court referee, opposers had until November 30, 2015 to provide comments on the draft ruling. All opposers, except Water Supply and Storage Co., submitted comments on the proposed decree. The comments received can generally be classified into two categories. The first question the need and operation of the remaining conditional exchanges. The second relate to certain opposers request to remove mention of their structures in the propose decree. It is primarily the ditch company opposers making this request, in particular The Larimer & Weld Irrigation Company (“LWIC”). Retained counsel and counsel for Fort Collins have exchanged written correspondence in an effort to address LWIC’s concerns. No settlement has been reached yet and the applicants will continue to negotiate with LWIC counsel. A second telephone status conference was held on December 17, 2015 between the applicants and the opposers before the water referee. The referee set a deadline of March 31, 2016 for the applicants to respond to opposers’ comments. Since the December status conference, Platte River and City of Fort Collins water staff have met and discussed strategy moving forward. Due to various accounting and operational changes, the City has decided to abandon the conditional exchanges involving structures generally located upstream of the Rawhide Pipeline. This abandonment will not limit the City’s ability to perform under the reuse agreement. At this time, Platte River has decided to continue pursuing a finding of reasonable diligence in the pending case on the conditional exchanges located along the Rawhide Pipeline. Platte River staff will, prior to the next diligence filing deadline, meet with the various ditch companies to explore how such exchanges can potentially offer operational flexibility to both Platte River and the ditch companies. On August 31, 2015, the Division Engineer submitted its Summary of Consultation report to the Water Referee and all parties as required under the uniform local rules for water court. The Division Engineer presented three issues for the Referee’s consideration, two of which are routinely included in Consultation reports. The third requires a showing that Platte River has steadily applied work towards perfecting the water rights. Platte River’s evidence should satisfy this standard. Platte River will respond to the Summary of Consultation prior to the entry of decree in this case. The application will likely be on the Water Referee’s Docket until at least July 31, 2016, and possibly longer. During this time, Platte River and Fort Collins will make initial disclosures regarding the application to the Water Court and opposing parties in an effort to explore settlement. All prior reasonable diligence filings have been settled. If no settlement is reached before the Water Referee, the application will be re-referred to the Water Judge and the matter will be set for trial at that time. ONGOING AND CURRENT MATTERS OF SIGNIFICANCE Environmental Protection Agency Clean Power Plan — On February 9 the Supreme Court stayed the Clean Power Plan rule pending full judicial review. It is unlikely that such review will be complete until 2017 or possibly 2018. This creates significant uncertainty about future compliance planning efforts. Governor Hickenlooper announced that the state planning process will continue during the stay, but opponents have threatened both legislative and judicial action to implement the stay. Discussion

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of legislative actions is contained below in the Governmental Affairs section of this report. Commodity Futures Trading Commission (“CFTC”) Proposed Rule — The CFTC has announced a proposed rule eliminating the requirement that entities that are not Swap Dealers or Major Swap Participants file an annual Form TO disclosing otherwise unreported trade options. Currently, Platte River undertakes an annual review of transactions necessary to assess potential reporting obligations. Platte River filed a Form TO for 2014 reporting transactions that could be considered trade options. This relief will eliminate the time consuming annual review of transactions necessary to assess potential reporting obligations. The proposed rule was adopted by the CFTC on March 16, 2016. Consequently, Platte River will no longer be required to file a Form TO reporting transactions that could be considered trade options. Operations at Glen Canyon Dam — The Bureau of Reclamation and National Park Service are jointly preparing an Environmental Impact Statement (“EIS”) to evaluate operations at Glen Canyon Dam over the next twenty (20) years. In this instance the EIS process is referred to as the Long-Term Experimental and Management Plan, or LTEMP. Glen Canyon is the largest hydropower facility in the family of the Colorado River Storage Project (“CRSP”) hydropower units, which also includes the Aspinall Units on the Gunnison River and Flaming Gorge on the Green River. The outcome of the LTEMP process is important to Platte River because the selected alternative could reduce operational flexibility and reduce available hydropower for purchase. The EIS addresses a number of factors related to releases from Glen Canyon and flow levels down river through Grand Canyon National Park, including hydropower, endangered fish recovery, recreation, and sediment transport. In accordance with the National Environmental Policy Act, Reclamation and the Park Service have developed seven alternatives that are being evaluated in the EIS. The alternatives range from a “No Action” alternative to implementation of “steady flows.” Reclamation and the Park Service publicly released the LTEMP EIS on January 7, 2016. Reclamation and the Park Service have chosen “Alternative D”, also known as the “hybrid approach”, as their preferred alternative. The hybrid approach provides greater hydropower benefits than other alternatives. For example, the monthly release pattern under the hybrid approach would be proportional to the contract rate of delivery for hydropower, except that releases in August and September would be higher and the daily range would be increased (greater ramp up and ramp down rates compared to the steady flow alternative). However, operational issues exist with the hybrid approach, especially in relation to the lack of correlation of hydro generation with load curves. There is a 90-day comment period on the draft. The co-lead agencies must consider and respond to these comments prior to publishing the final decision. Several electric utilities have, or are considering requesting an extension of time to review the LTEMP EIS, a document that is over 1,000 pages in length. Platte River submitted such a request to allow staff time to fully review the proposed action and the potential effects to our operations. Along with several other Senators from Western states, Senator Cory Gardner sent a letter to Interior Secretary Jewell also requesting a 60-day extension. Interior has not yet responded to this request. On March 18 the co-leads announced a 30 day extension. Staff continues to work with our utility colleagues through the Colorado River Energy Distributors Association (“CREDA”) to analyze the hydropower impact of the LTEMP. CREDA is preparing extensive comments, and will focus on the issues of an artificial limit placed on intraday flow

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fluctuations, low flow experiments over the summer months, and high flow experiments during the fall and spring. Each of these will reduce federal hydropower production and limit customer operational flexibility. GOVERNMENTAL AFFAIRS: Colorado General Assembly — The 2016 session of the General Assembly commenced on January 13, 2016. The split in control of the legislative houses in combination with the upcoming election has laid the groundwork for an unproductive session. The session is more than half over. Deadlines for bill introduction have passed although some bills with “late bill” status continue to trickle in. As of March 17 there have been 360 bills introduced in the House and 161 bills in the Senate. There are now four bills that pertain either directly to Clean Power Plan implementation or to climate-related emission mandates. Three Senate bills address the Clean Power Plan, all of which are sponsored by Senator Cooke. S.B. 16-046 seeks to modify the process for state implementation of the Clean Power Plan by mandating Public Utilities Commission involvement and requiring plan approval from both houses of the General Assembly through joint resolution. This bill also contains a provision that would stay any state implementation efforts during the pendency of any stay of the Clean Power Plan imposed by the courts. The profile of this bill increased with the stay granted by the Supreme Court on February 9. S.B. 16-046 seeks to protect utility customers from rate increases associated with the Clean Power Plan by creating a state fund to directly reimburse utilities from monies appropriated by the legislature. Neither of these bills were scheduled for committee consideration during the appropriate period for such consideration and are unlikely to move this late in the session. On March 16, Senator Cooke filed S.B. 16-157. This bill has late bill status. It is similar to S.B. 16-046 but takes a more narrow approach imposing a legislative stay on Clean Power Plan activities within Colorado during the pendency of the stay imposed by the Supreme Court. All three of these bills are messages intended to promote legislative dialogue on the EPA Clean Power Plan, and if adopted by the Senate will probably die quickly in the House. House Bill 016-1004 would require the inclusion of measurable greenhouse gas reduction goals in future iterations of the state climate action plan. Representative Arndt is a co-sponsor. Like S.B. 16-046, the profile of H.B. 16-1004 was heightened due to the Clean Power Plan stay. This bill has passed out of the House, but has not been scheduled for committee hearing in the Senate and is not expected to survive such hearing. Legislators are turning attention to the budget process, which may be particularly difficult this year given the politics and revenue projections. Efforts are underway by Republicans to strip money from the Colorado Department of Public Health and Environment budget as a means to prevent future CPP planning activities. Given the split control of the houses, this issue may wind up before the Joint Budget Committee during the final throes of the budget process. Another bill with a local sponsor was S.B. 016-037, sponsored by Senator Kefalas. This bill sought to modify the Colorado Open Records Act to require political subdivisions to provide records stored in an electronic format in a “native” electronic format when so requested. Concerns were raised about the continued integrity of records provided electronically as well as

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on the implementation costs. The bill was killed in committee, but the concept is likely to be resurrected in future sessions. United States Congress — The energy bill remains stalled in the Senate due to the large number of filed amendments and complications involving the Flint, Michigan water crisis. Because 2016 is an election year there is a shorter calendar for “policy” bills, and commentators suggest that if the bill doesn’t pass by April the window will have closed. The Senate calendar is crowded with other matters, but the sponsors are still trying to push the bill. The Senate version differs significantly from the House version and a conference committee would likely need to reconcile the conflicting provisions, which further dims chances of passage.

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February 2016 Operating Report 1

February 2016 Operating Report EXECUTIVE SUMMARY

Municipal demand was below budget while energy came in close to budget for February. Baseload

generation was significantly below budget for the month and year to date as a result of lower overall

market energy needs in response to ongoing soft market pricing as well as Rawhide unit outages.

Rawhide Unit 1 was off-line in February for three days to complete the screen removal project from the

2015 major fall outage. The unit also tripped off-line twice as a result of a switch failure and a control

system issue. Wind generation outperformed budget in February due to above normal wind production

throughout the West. The soft market continues to adversely affect surplus sales volume and pricing.

For the month, gas prices continued to be well below normal and as much as 50% below projections.

February dispatch costs were above budget primarily due to lower than budgeted baseload generation

out of Rawhide Unit 1 and the Craig Station.

Category February Variance YTD Variance

Municipal Demand (MW) (4.3%) (5.2%)

Municipal Energy (MWh) (0.9%) (0.8%)

Baseload Generation (MWh) (31.8%) (26.2%)

Wind Generation (MWh) 36.1% 20.2%

Surplus Sales Volume (MWh) (64.9%) (57.0%)

Surplus Sales Price ($/MWh (17.1%) (13.6%)

Dispatch Cost ($/MWh) (13.7%) (6.3%)

Variance Key: Favorable: >2% | Near budget: +/- 2% | Unfavorable: <-2%

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February 2016 Operating Report 2

OPERATIONAL OVERVIEW

Safety. There were no lost time accidents in the month of February.

2016 Goal February Actual YTD Total

0 0 0

System Disturbances. There was no loss of interconnected utility or city load in the month of February.

2016 Goal February Actual YTD Total

0 0 0

Peak Day Obligation. Peak demand for the month was 466 megawatts, which occurred on February 3, 2016, at 19:00 hours and was 21 megawatts below budget. Platte River’s total obligations at the time of the peak were 531 megawatts. During the time of peak total obligation was higher due to Rawhide coming on-line and not yet self-providing station service load.

Municipal Obligation

466

Total Obligation

531 Forecast Demand

487

0

50

100

150

200

250

300

350

400

450

500

550

600

650

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

MW

Hour

Peak Day Obligation: February 3, 2016

Hydro Wind Rawhide Craig CTs Purchases

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February 2016 Operating Report 3

POWER GENERATION

Rawhide Performance. The planned outage on Rawhide Unit 1 for screen removal was not budgeted in 2016 (it was originally scheduled/budgeted in 2015), thus affecting the overall ability of Rawhide to meet budget targets. In addition, the unit encountered two unplanned outages; once due to a switch failure and once due to a control system issue. These events, in addition to tuning and testing after the major fall outage, have reduced equivalent availability and capacity factors for the month and year.

Rawhide emissions levels were below compliance limits for the month of February:

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

February YTD

Rawhide Equivalent Availability

Budget Actual

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

February YTD

Rawhide Net Capacity Factor

Budget Actual

0.00

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.10

February YTD

SO2 (lbs/MBtu)

Limit Actual

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

February YTD

NOx (lbs/MBtu)

Limit Actual

0.000

0.002

0.004

0.006

0.008

0.010

0.012

0.014

February YTD

Hg (lbs/GWh)

Limit Actual

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February 2016 Operating Report 4

Craig Station Performance. Craig units ran well in February resulting in above budget equivalent availability factor. Net capacity factor was significantly below budget due to the continued soft market and holding spinning reserves on Craig.

Peaking. CT F was run in February during the outage on Rawhide Unit 1. Natural gas burns were not budgeted for February; however, pricing continues to be favorable.

* 2016 annual budgeted natural gas pricing is $3.33

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

February YTD

Craig Equivalent Availability

Budget Actual

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

February YTD

Craig Net Capacity Factor

Budget Actual

0

200

400

600

800

1,000

1,200

1,400

1,600

0

50

100

150

200

250

300

350

400

450

500

February YTD

MWhs CT Generation

Budget Actual

$-

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

February YTD

$/MBtu Natural Gas Pricing*

Budget Actual

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February 2016 Operating Report 5

Renewable Supply. Hydro allocations were received as budgeted. Wind generation was above budget due to higher than expected wind output.

SALES AND PURCHASES

Surplus Sales. Surplus sales volume and pricing were significantly below budget due to the ongoing depressed regional market caused by excess capacity within the western interconnect and historically low natural gas pricing.

0

20

40

60

80

100

120

140

February YTD

MWh (000's) Hydro Generation

Budget Actual

0

10

20

30

40

50

60

70

80

February YTD

MWh (000's) Wind Generation

Budget Actual

0

50

100

150

200

250

February YTD

MWh (000's) Sales Volume

Budget Actual

$0

$5

$10

$15

$20

$25

$30

February YTD

$/MWh Average Sales Price

Budget Actual

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February 2016 Operating Report 6

Purchases. The majority of February purchases were due to the Rawhide screen outage and two minor unit issues, but some simply took advantage of favorable market pricing. Energy purchases were not budgeted for February; however, market pricing was at times below unit operating costs and was utilized to serve Municipal load.

DISPATCH COST

Dispatch Cost. February dispatch costs were above budget due to scheduled and unplanned outages at Rawhide and reduced capacity factor operations at the Craig Station. Purchase pricing continues to be favorable due to the soft energy market. Wind exceeded budgeted generation, resulting in below budget wind expenses.

0

5,000

10,000

15,000

20,000

25,000

30,000

February YTD

MWhs Energy Purchases

Budget Actual

$0

$5

$10

$15

$20

$25

February YTD

$/MWh Average Purchase Price

Budget Actual

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

Rawhide Craig LAP CRSP Purchases Wind CTs

$/M

Wh

February Dispatch Cost by Resource

Budget Actual Blended Actual

Blended Budget: $28.90 | Blended Actual: $32.85

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February 2016 Operating Report 7

Year to date dispatch costs are above budget due to scheduled and unplanned outages at Rawhide as well as below budget generation at the Craig Station. Favorable purchase pricing and lower than budgeted wind expenses are helping to offset a portion of the above budget dispatch costs for baseload resources.

POWER DELIVERY

Major System Operations Projects Benefitting the Municipalities:

Location Estimated

Finish Date Percent

Complete Description

Loveland 01/2016 92% Crossroads city transformer addition

Fort Collins 05/2016 87% Laporte substation 230kv expansion

Fort Collins 05/2016 83% Laporte substation 115kv adaptations and refurbishments

Estes Park 07/2016 90% Fiber loop replacement

Rawhide 08/2016 45% Rawhide solar project

Loveland 08/2017 2% Foothills Substation

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

Rawhide Craig LAP CRSP Purchases Wind CTs

$/M

Wh

YTD Dispatch Cost by Resource

Budget Actual Blended Actual

Blended Budget: $28.85 | Blended Actual: $30.66

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February 2016 Operating Report 8

EVENTS OF SIGNIFICANCE

Power Production:

The Rawhide Unit 1 planned outage for the removal of the protective screens from the main steam valves was completed on February 3. This outage is considered to be an extension of the planned maintenance outage from 2015. It was discovered that the turbine seal oil regulator needed to be readjusted during the outage, which added about 48 hours to the outage schedule.

Rawhide Unit 1 tripped off-line two times in February due to a switch failure and a control system issue, and tripped briefly during runback testing.

Power Delivery:

On February 18, 2016, the FERC approved the Joint Dispatch Agreement, backdated to be effective January 1, 2016. This Joint Dispatch Agreement includes Platte River, Public Service Company of Colorado, and Black Hills Energy.

During February Platte River was able to self supply 17 megawatts of spinning reserves. This resulted in a monthly net savings of nearly $95,000.

Rawhide Solar, Laporte T2, and Crossroads T2 transformers were delivered to their respective substations.

Rawhide Solar Laporte T2 Crossroads T2

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PLATTE RIVER POWER AUTHORITY – Financial Highlights Year-to-Date February 2016

Platte River reported unfavorable results year to date. A net loss of $0.1 million was reported and was below budget $0.9 million due to below-budget revenues, partially offset by below-budget operating expenses. While municipal loads have been below budget, revenues were lower primarily due to the surplus sales market conditions. Details are described below.

Results for the end of the year vary due to municipal load variations, market conditions, and operation and maintenance expenses. At this point, it is estimated that year-end net income would be approximately $8.9 million but could vary between $5.8 and $13.4 million depending on the magnitude of these factors.

Below is a summary of key financial variances year to date:

Below-Budget Operating Expenses: Overall operating expenses were 11.1% below budget mainly due to the items listed below.

o Purchased power expenses were above budget due to supplemental purchases, which were required during the screen outage at Rawhide and the maintenance issues experienced by the Craig Units. Wind generation was also above budget. These above-budget expenses were partially offset by below-budget purchased reserves as additional reserves were held on the generating units rather than held by Xcel Energy. Also, the purchase of renewable energy certificates was delayed.

o Fuel expenses were below budget as a result of below-budget generation and lower coal prices. A soft surplus sales market, the screen outage at Rawhide, and maintenance issues of the Craig Units impacted generation. Favorable coal prices for Rawhide Unit 1 and the Craig Units also contributed to lower fuel expenses. Natural gas is also below budget due to over estimating costs for required testing of the combustion turbines.

o Operations and maintenance expenses were below budget mainly due to the lower operations and maintenance expenses for Rawhide, including chemical purchases and rail car parts.

o Administrative and general expenses were below budget mainly due to demand side management expenses as a result of the unpredictability of the completion of customers’ energy efficiency projects. Consulting work and computer expenses were also delayed.

Below-Budget Capital Additions: Capital additions were below budget $2.1 million mainly due to scheduling changes. At this time, projects are estimated to be at budget at the end of the year.

Below-Budget Surplus Sales Revenues: As a result of lower generation due to a soft surplus sales market, the screen outage at Rawhide, and maintenance issues of the Craig units, surplus sales revenues were $3.2 million below budget. While prices have been below budget, the volume of sales had the largest impact on surplus sales revenues, representing $2.9 million of the $3.2 million variance.

Key Financial Results Annual($ Millions) Budget Actual Budget Actual Budget

Net Income/(Loss) 0.5$ (0.6)$ (1.1)$ (220.0%) 0.8$ (0.1)$ (0.9)$ (112.5%) 10.7$

Debt Coverage 1.59x 1.11x (.48x) (30.2%) 1.56x 1.32x (.24x) (15.4%) 1.53x0 0%

Total Revenues 17.2$ 14.9$ (2.3)$ (13.4%) 35.6$ 31.5$ (4.1)$ (11.5%) 217.5$

Municipal Sales Revenue 14.3 13.7 (0.6) (4.2%) 29.4 28.5 (0.9) (3.1%) 185.6

Surplus Sales and Other Revenue 2.9 1.2 (1.7) (58.6%) 6.2 3.0 (3.2) (51.6%) 31.9

Total Operating Expenses 13.7$ 12.5$ 1.2$ 8.8% 28.8$ 25.6$ 3.2$ 11.1% 169.9$

Purchased Power 3.0 3.4 (0.4) (13.3%) 6.1 6.7 (0.6) (9.8%) 34.3

Fuel Expense 4.5 3.1 1.4 31.1% 9.5 6.8 2.7 28.4% 55.0

Operations and Maintenance 4.6 4.6 0.0 0.0% 10.0 9.5 0.5 5.0% 61.7

Administrative and General 1.6 1.4 0.2 12.5% 3.2 2.6 0.6 18.8% 18.9

Capital Additions 3.7$ 3.1$ 0.6$ 16.2% 6.4$ 4.3$ 2.1$ 32.8% 46.5$

February Favorable(Unfavorable)

Year to Date Favorable(Unfavorable)

>2% Favorable | 2% to -2% At or Near Budget | <-2% Unfavorable

Page 1 of 10

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PLATTE RIVER POWER AUTHORITY

February 2016Non-GAAP Budgetary Basis (In Thousands)

FavorableBudget Actual (Unfavorable)

REVENUES

ELECTRIC OPERATING REVENUESMunicipal sales 14,272$ 13,683$ (589)$

Short-term surplus sales and wheeling 2,805 1,061 (1,744)

Total operating revenues 17,077 14,744 (2,333)

OTHER REVENUESInterest income(1)

67 61 (6)

Other income 26 66 40

Total other revenues 93 127 34

Total Revenues 17,170$ 14,871$ (2,299)$

EXPENDITURES

OPERATING EXPENSESPurchased power 3,003$ 3,365$ (362)$

Fuel expense 4,453 3,063 1,390

Production expenses 3,682 3,783 (101)

Transmission expenses 972 925 47

Administrative and general 1,620 1,360 260

Total operating expenses 13,730 12,496 1,234

DEBT EXPENSEInterest expense 779 779 -

Principal 1,385 1,385 -

Total debt expense 2,164 2,164 -

CAPITAL ADDITIONSProduction 1,384 2,730 (1,346)

Transmission 2,027 260 1,767

General 314 106 208

Total capital additions 3,725 3,096 629

Total Expenditures 19,619$ 17,756$ 1,863$

Revenues Less Expenditures (2,449)$ (2,885)$ (436)$

(1) Excludes unrealized investment gains and losses.

SCHEDULE OF REVENUES AND EXPENDITURES, BUDGET TO ACTUAL

Month of February

Page 2 of 10

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PLATTE RIVER POWER AUTHORITYSCHEDULE OF REVENUES AND EXPENDITURES, BUDGET TO ACTUALFebruary 2016 - YEAR TO DATENon-GAAP Budgetary Basis (In Thousands)

Favorable AnnualBudget Actual (Unfavorable) Budget

REVENUES

ELECTRIC OPERATING REVENUESMunicipal sales 29,400$ 28,546$ (854)$ 185,598$

Short-term surplus sales and wheeling 5,830 2,596 (3,234) 30,200

Total operating revenues 35,230 31,142 (4,088) 215,798

OTHER REVENUESInterest income(1)

131 118 (13) 1,027

Other income 201 251 50 654

Total other revenues 332 369 37 1,681

Total Revenues 35,562$ 31,511$ (4,051)$ 217,479$

EXPENDITURES

OPERATING EXPENSESPurchased power 6,139$ 6,655$ (516)$ 34,263$

Fuel expense 9,509 6,809 2,700 54,987

Production expenses 7,540 7,201 339 48,018

Transmission expenses 2,405 2,324 81 13,736

Administrative and general 3,217 2,631 586 18,910

Total operating expenses 28,810 25,620 3,190 169,914

DEBT EXPENSEInterest expense 1,559 1,559 - 10,534

Principal 2,769 2,769 - 20,719

Allowance for funds used during construction - - - (263)

Total debt expense 4,328 4,328 - 30,990

CAPITAL ADDITIONSProduction 3,364 3,332 32 25,613

Transmission 2,655 719 1,936 15,330

General 439 279 160 5,512

Total capital additions 6,458 4,330 2,128 46,455

Total Expenditure Budget 39,596$ 34,278$ 5,318$ 247,359$

Contingency Reserved to Board - - - 20,000

Total Expenditures 39,596$ 34,278$ 5,318$ 267,359$

Revenues Less Expenditures (4,034)$ (2,767)$ 1,267$ (49,880)$

(1) Excludes unrealized investment gains and losses.

February Year to Date

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PLATTE RIVER POWER AUTHORITYSTATEMENTS OF NET POSITIONUnaudited (In Thousands)

2016 2015ASSETS

Utility Plant, at original costLand and land rights 14,515$ 14,515$ Plant and equipment in service 1,276,971 1,272,315 Less: Accumulated depreciation and amortization (764,427) (738,074)

527,059 548,756 Construction work in progress 47,204 19,181

Total utility plant 574,263 567,937

Special Funds and InvestmentsRestricted funds and investments 26,581 30,855 Dedicated funds and investments 49,455 69,820

Total special funds and investments 76,036 100,675

Current AssetsCash and cash equivalents 18,429 25,725 Other temporary investments 15,777 21,579 Accounts receivable - municipalities 13,741 13,822 Accounts receivable - other 4,798 5,653 Fuel inventory, at last-in, first-out cost 15,037 8,621 Materials and supplies inventory, at average cost 12,661 12,319 Prepayments and other assets 2,509 2,112

Total current assets 82,952 89,831

Non-Current AssetsRegulatory assets 2,340 2,952 Other long-term assets 1,109 1,325

Total non-current assets 3,449 4,277

Total assets 736,700 762,720

DEFERRED OUTFLOWS OF RESOURCESDeferred loss on debt refundings 929 1,762

Pension deferrals 5,141 -

Total deferred outflows of resources 6,070 1,762

LIABILITIES

Non-Current LiabilitiesLong-term debt, net 183,371 201,339 Capitalized lease obligation 3,228 6,292 Net pension liability 6,693 - Other liabilities and credits 9,638 9,328

Total non-current liabilities 202,930 216,959

Current LiabilitiesCurrent maturities of long-term debt 16,615 21,980 Current portion of capitalized lease obligation 3,063 2,775 Accounts payable 15,530 13,000 Accrued interest 2,338 2,599 Accrued liabilities and other 1,514 1,309

Total current liabilities 39,060 41,663

Total liabilities 241,990 258,622

DEFERRED INFLOWS OF RESOURCESRegulatory liabilities and credits 1,617 10,131 Pension deferrals 613 -

Total deferred inflows of resources 2,230 10,131

NET POSITIONNet investment in capital assets 366,211 338,407 Restricted for debt related purposes 24,243 28,256 Unrestricted 108,096 129,066

Total net position 498,550$ 495,729$

February 29

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PLATTE RIVER POWER AUTHORITYSTATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONUnaudited (In Thousands)

Twelve Months EndedMonth of February 29February 2016 2015

OPERATING REVENUESSales to municipalities 13,683$ 176,573$ 169,978$ Sales for resale and other 1,061 20,794 28,522

Total operating revenues 14,744 197,367 198,500

OPERATING EXPENSESPurchased power 3,365 33,105 28,265 Fuel 3,063 45,147 48,955 Operations and maintenance 4,680 62,571 56,446 Administrative and general 1,371 16,028 14,973 Depreciation 2,263 27,021 27,455

Total operating expenses 14,742 183,872 176,094

Operating income 2 13,495 22,406

NONOPERATING REVENUES AND EXPENSESInterest income 60 754 659 Other income 66 916 1,081 Interest expense (779) (9,613) (10,631) Allowance for funds used during construction - - 71 Amortization of bond financing costs 31 353 364 Net (decrease)/increase in fair value of investments (6) (52) 38

Total nonoperating revenues and expenses (628) (7,642) (8,418)

INCOME BEFORE CONTRIBUTIONS (626) 5,853 13,988

Contribution of assets to municipalities - (155) (155)

CHANGE IN NET POSITION (626) 5,698 13,833

NET POSITION AT BEGINNING OF PERIOD 499,176 495,729 481,896 Adjustment for change in accounting principle - (2,877) -

NET POSITION AT BEGINNING OF PERIOD, ADJUSTED 499,176 492,852 481,896

NET POSITION AT END OF PERIOD 498,550$ 498,550$ 495,729$

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PLATTE RIVER POWER AUTHORITYSTATEMENTS OF CASH FLOWSUnaudited (In Thousands)

Twelve Months EndedMonth of February 29February 2016 2015

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 17,969$ 198,377$ 199,548$ Payments for operating goods and services (11,498) (143,497) (107,161) Payments for employee services (2,871) (32,603) (30,126)

Net cash provided by operating activities 3,600 22,277 62,261

CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIES

Additions to electric utility plant (392) (30,797) (16,859) Payments from accounts payable incurred for electric utility plant additions (1,327) 1,093 (314) Principal payments on long-term debt - (21,980) (21,060) Interest payments on long-term debt - (9,874) (10,866)

Net cash used in capital and related financing activities (1,719) (61,558) (49,099)

CASH FLOWS FROM INVESTING ACTIVITIESPurchases and sales of temporary and restricted investments, net (1,678) 30,373 (7,892) Interest and other income, including realized gains and losses 122 1,612 1,663

Net cash (used in)/provided by investing activities (1,556) 31,985 (6,229)

INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 325 (7,296) 6,933

BALANCE AT BEGINNING OF PERIOD IN CASHAND CASH EQUIVALENTS 18,104 25,725 18,792

BALANCE AT END OF PERIOD IN CASHAND CASH EQUIVALENTS 18,429$ 18,429$ 25,725$

RECONCILIATION OF NET OPERATING INCOME TONET CASH PROVIDED BY OPERATING ACTIVITIES

Operating income 2$ 13,495$ 22,406$ Adjustments to reconcile net operating income

to net cash provided by operating activities:

Depreciation 2,263 27,021 27,455 Changes in assets and liabilities which provided/(used) cash:

Accounts receivable 3,240 936 1,306

Fuel and materials and supplies inventories (714) (6,759) 324

Prepayments and other assets 446 262 896

Deferred outflows of resources - (5,141) -

Accounts payable (1,685) (1,267) 5,752

Net pension liability - 3,817 -

Other liabilities (246) (2,186) (2,174) Deferred inflows of resources 294 (7,901) 6,296

Net cash provided by operating activities 3,600$ 22,277$ 62,261$

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PLATTE RIVER POWER AUTHORITYSCHEDULE OF NET REVENUES FOR DEBT SERVICEUnaudited (In Thousands)

Twelve Months EndedMonth of February 29February 2016 2015

NET REVENUES

Operating revenues 14,744$ 197,367$ 198,500$

Operations and maintenance expenses,excluding depreciation and amortization 12,479 156,851 148,639

Net operating revenues 2,265 40,516 49,861

Plus interest income on bond accountsand other income 127 1,686 1,747

Net revenues before rate stabilization 2,392 42,202 51,608

Rate stabilization Deposits - - - Withdrawals - - -

TOTAL NET REVENUES 2,392$ 42,202$ 51,608$

BOND SERVICE

Power revenue bonds 2,164$ 27,569$ 32,381$ Allowance for funds used during construction - - (71)

NET REVENUE BOND SERVICE 2,164$ 27,569$ 32,310$

COVERAGE

Power revenue bond coverage ratio 1.11 1.53 1.60

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Platte River Power AuthorityOperating Expense Variances Exceeding $100,000 - February 2016

DescriptionFavorable

(Unfavorable)CoalCoal was below budget due to generation and price at Craig and Rawhide. Generation wasbelow budget as the Craig Units were held back due to the surplus sales market. Rawhide Unit1's generation was below budget mainly due to the screen outage. The coal prices were alsobelow budget. Trapper Mine coal prices will be below budget for the remainder of the year as theprice was revised to reflect recent estimates for operations of the mine for 2016. Rawhide Unit1's coal price was below budget as a result of favorable market and transportation prices. 1,437,204$

Contracted ServicesContracted services were below budget mainly due to timing and delays of energy efficiencyprojects, security projects, and software maintenance and support, partially offset by above-budget expenses for the Rawhide Unit 1 screen outage. 168,001$

Professional ServicesProfessional services were below budget due to delays in Rawhide engineering services,consulting services for the load forecast, debt management, and modeling efforts, as well as thefinal invoice for the financial audit. 136,402$

Purchased PowerPurchased power was above budget due to supplemental purchases and wind generation.Purchases were required during the Rawhide Unit 1 screen outage. Partially offsetting the above-budget variance were below-budget purchased reserves as a result of holding additional reserveson the generating units and delays in purchasing renewable energy certificates. (362,270)$

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PLATTE RIVER POWER AUTHORITYPLATTE RIVER POWER AUTHORITYPLATTE RIVER POWER AUTHORITYPLATTE RIVER POWER AUTHORITYMONTHLY STATISTICSMONTHLY STATISTICSMONTHLY STATISTICSMONTHLY STATISTICSFebruary 2016February 2016February 2016February 2016

Favorable Favorable

Budget ActualActualActualActual (Unfavorable) Budget ActualActualActualActual (Unfavorable)

Resources (MWh)Resources (MWh)Resources (MWh)Resources (MWh)Net Generation

Rawhide 183,729 137,387137,387137,387137,387 (46,342) 1,983,807 1,895,4031,895,4031,895,4031,895,403 (88,404)

Craig 89,187 48,74948,74948,74948,749 (40,438) 1,091,934 895,333895,333895,333895,333 (196,601)

Peaking Units - 468468468468 468 18,576 58,44558,44558,44558,445 39,869

Wind 27,182 36,985 9,803 296,342 285,883 (10,459)

Solar - ---- - - ---- -

Purchases

Western LAP 8,029 8,0298,0298,0298,029 - 109,536 109,536109,536109,536109,536 -

Western CRSP 46,858 46,85846,85846,85846,858 - 502,467 502,467502,467502,467502,467 -

Other Purchases - 16,92716,92716,92716,927 16,927 140,126 259,022259,022259,022259,022 118,896

Forced Outage Exchange - 1,4001,4001,4001,400 1,400 - 3,9003,9003,9003,900 3,900

Interchange Received - (772)(772)(772)(772) (772) - (5,130)(5,130)(5,130)(5,130) (5,130)

Total Receipts 354,985 296,031296,031296,031296,031 (58,954) 4,142,788 4,004,8594,004,8594,004,8594,004,859 (137,929)

Deliveries (MWh)Deliveries (MWh)Deliveries (MWh)Deliveries (MWh)Municipal Sales

Estes Park 11,698 11,34111,34111,34111,341 (357) 130,913 130,541130,541130,541130,541 (372)

Fort Collins 119,922 120,537120,537120,537120,537 615 1,507,906 1,527,0091,527,0091,527,0091,527,009 19,103

Longmont 63,701 61,89961,89961,89961,899 (1,802) 817,807 803,750803,750803,750803,750 (14,057)

Loveland 58,256 57,48057,48057,48057,480 (776) 750,276 748,910748,910748,910748,910 (1,366)

Total Municipal Sales 253,577 251,257251,257251,257251,257 (2,320) 3,206,902 3,210,2103,210,2103,210,2103,210,210 3,308

Surplus Sales

Firm Contract Sales - ---- - - ---- -

Short-Term Surplus Sales 96,083 33,69333,69333,69333,693 (62,390) 879,234 637,493637,493637,493637,493 (241,741)

Total Surplus Sales 96,083 33,69333,69333,69333,693 (62,390) 879,234 637,493637,493637,493637,493 (241,741)

Forced Outage Exchange - 1,6001,6001,6001,600 1,600 - 64,40064,40064,40064,400 64,400

Losses and Other 5,325 9,4819,4819,4819,481 4,156 56,652 92,75692,75692,75692,756 36,104

Total Deliveries 354,985 296,031296,031296,031296,031 (58,954) 4,142,788 4,004,8594,004,8594,004,8594,004,859 (137,929)

Favorable Favorable

Budget ActualActualActualActual (Unfavorable) Budget ActualActualActualActual (Unfavorable)

Coincidental Demand (kW)Coincidental Demand (kW)Coincidental Demand (kW)Coincidental Demand (kW)Estes Park 22,719 22,14722,14722,14722,147 (572) 217,038 217,452217,452217,452217,452 414

Fort Collins 232,634 221,609221,609221,609221,609 (11,025) 2,845,303 2,818,0162,818,0162,818,0162,818,016 (27,287)

Longmont 122,189 114,861114,861114,861114,861 (7,328) 1,593,831 1,543,2381,543,2381,543,2381,543,238 (50,593)

Loveland 109,825 107,738107,738107,738107,738 (2,087) 1,460,586 1,437,1341,437,1341,437,1341,437,134 (23,452)

Total Coincidental Demand 487,367 466,355466,355466,355466,355 (21,012) 6,116,758 6,015,8406,015,8406,015,8406,015,840 (100,918)

Non-Coincidental Demand (kW)Non-Coincidental Demand (kW)Non-Coincidental Demand (kW)Non-Coincidental Demand (kW)Estes Park 22,35722,35722,35722,357 239,811239,811239,811239,811

Fort Collins 223,751223,751223,751223,751 2,823,3082,823,3082,823,3082,823,308

Longmont 115,142115,142115,142115,142 1,557,2541,557,2541,557,2541,557,254

Loveland 107,738107,738107,738107,738 1,441,0151,441,0151,441,0151,441,015

FebruaryFebruaryFebruaryFebruary 12 Months Rolling12 Months Rolling12 Months Rolling12 Months Rolling

FebruaryFebruaryFebruaryFebruary 12 Months Rolling12 Months Rolling12 Months Rolling12 Months Rolling

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Platte River Power AuthorityFebruary 2016 - Payments of $50,000 or More

Vendor Description Payment AmountOperations and Maintenance Payments

Non-Recurring O&M PaymentsTEI Construction Services Inc RH outage - boiler $250,000Mitsubishi Electric Power Products Inc Dead tank circuit breakers 192,400 Non-Recurring O&M Payments Total $442,400

Regular Recurring O&M PaymentsCloud Peak Energy Resources LLC Coal delivery $1,588,096Trapper Mining Inc Coal delivery 1,248,940BNSF Railway Company Coal delivery 822,512Colowyo Coal Company Coal delivery 320,890Spring Canyon Energy II LLC Spring Canyon wind energy 723,004Duke Energy Retail Sales LLC Silver Sage wind energy 237,642Medicine Bow Wind LLC Medicine Bow wind energy 70,175Tri-State G & T Yampa O&M 1,707,743Western Area Pwr Adm-DOE Purchased power (December 2015 CRSP and LAP) 2,031,560Cargill Power Markets LLC Purchased power 73,700Graymont Western US Inc Lime 57,671Albemarle Corporation SDA PAC for mercury removal 58,812Xcel Energy Ancillary services 316,849Wells Fargo Pension contribution 243,000Western States Power Corporation Project E 174,600City of Fort Collins Fiber payment (4th quarter) 100,922Zlight USA Energy efficiency, DSM 50,000First Bankcard Center Platte River's credit card payment 71,859American International Companies Property insurance premium (annual) 507,882 Regular Recurring O&M Payments Total $10,405,857 Total O&M Payments $10,848,257

Capital PaymentsSPX Transformer Solutions Inc Solar transformer $379,686American Civil Constructors Fiber optic conduit & vault installation 131,044Addison Construction Co Substation construction 79,135Graybar Estes Park fiber relocation 60,359 Total Capital Payments $650,224

GRAND TOTAL: PAYMENTS OF $50,000 OR MORE $11,498,481

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March 2016 Management Report

CORPORATE SERVICES Safety. Platte River recently participated in a utility-specific survey of the Large Public Power Council members to compare recent recordable incident rates for safety. We are pleased to share with you that while we always have room for improvement, our results do compare favorably with other comparable utilities.

2014 2015 2016 (As of 3/5/16) Recordable Incident Rate 3.5 2.19 2.37 Lost Time Case Rate 0.5 0.44 0 DART (Days away restricted) 1.0 0.87 0

Platte River is also partnering with CSU and their student interns who attend their Occupational and Environmental Health Symposium class. Student teams of five to six trainees are formed for this class. Each team, with oversight from a faculty member, is tasked with performing an occupational health protection and promotion assessment for a community partner. This exercise provides the trainees real experience in working on a diverse team addressing actual health, safety, and wellness issues. The teams visit the community partner site anywhere between one and three times. The final product for the community partner is a report with recommendations on how to improve safety, health, and wellness at the facility.

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Physical Security. On February 26, at approximately 2:00 a.m., and again on March 12, at approximately 3:00 a.m., automobiles traveling at high rates of speed left the roadway and hit the Dixon Creek substation. Luckily neither incident resulted in significant injury, but both led to extensive damage to the substation wall. We are already moving forward to procure the additional supplies needed to repair the wall, but also believe that additional actions must be taken to prevent or minimize future incidents. We plan to work with the City of Fort Collins, through their regular process, to request enhanced signage at the end of Drake and may seek to build an additional barrier on the property perimeter to prevent vehicles from reaching the substation wall. These additional steps are essential for safety and security reasons.

Human Resources. Platte River’s health care plan costs for 2015 resulted in a 95.4% loss ratio, or $175,000 under budget. Medical claims on a “per employee/per month” basis did increase 1.9% from the previous year. However, the plan also experienced two very large health care claims, with $945,000 in accrued reimbursements from the stop loss insurance carrier. Staff also recently completed an updated workforce analysis. The graphs on the next page compare the number of employees to their years of service for both 2015 and 2016.

Platte River Power Authority 2 March 2016 Management Report

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Years Of Service (YOS)

YOS 1/2015 1/2016

<5 53 (25%) 77 (33%)

5 - <10 58 (27%) 49 (21%)

10 - <15 45 (21%) 45 (19%)

>15 58 (27%) 62 (27%)

TOTAL 214 233

January 2015

January 2016

ENVIRONMENTAL SERVICES & COMPLIANCE EPA Clean Power Plan. Implementation of the Federal Clean Power Plan was stayed by the Supreme Court on February 9, 2016, while legal challenges are addressed. Platte River staff is monitoring this change and continues to analyze the rule in order to remain prepared in case all or part of it is upheld. The Colorado Department of Public Health and Environment (CDPHE) has announced they do not intend to continue development of a detailed State plan at this time. However, the CDPHE emphasized that they intend to prepare for compliance with a focus on building understanding of possible carbon reduction approaches and their potential impacts to the state. Significant uncertainty surrounds this topic; however, Platte River staff will continue to be engaged in the process at all levels, including participating in stakeholder meetings, assessing impact of various factors through modeling, and commenting on issues as appropriate. Coal Combustion Residuals (CCR) Rule Implementation. Platte River is moving forward with compliance activities under the new EPA CCR Rule which became effective October 19, 2015. Additional monitoring wells have recently been installed in the vicinity of the Rawhide CCR landfill and the bottom ash transfer ponds in order to assess and monitor the hydrogeological conditions in the vicinity of these features. Initial collected data will be used to develop an updated groundwater monitoring plan and will help determine if any modifications will be required to the bottom ash ponds. The State of Colorado intends to update existing state regulations related to landfills and impoundments, including adoption of the requirements of the EPA CCR rule. Environmental Services staff is working closely with CDPHE and other utilities in a stakeholder process to help develop these changes and ensure Platte River interests are considered and impacts minimized.

Platte River Power Authority 3 March 2016 Management Report

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NERC Critical Infrastructure Protection Standards. On February 25, FERC issued Order 822 granting an extension to the deadline to comply with the CIP Version 5 suite of standards. The new enforcement date is July 1, 2016. The order was granted to align the enforcement dates for version 5 and version 6 of the new CIP standards. This allows entities three additional months to become compliant. Platte River is still on track to be fully compliant by the original April 1, 2016, deadline. FINANCE Windy Gap Firming Project—Debt Financing. Platte River, along with other Windy Gap Firming participants, is assisting Northern Colorado Water Conservancy District in the selection of a municipal advisor. The municipal advisor will analyze various financing methods, including a pooled financing option, to determine a preferred financing method. Insurance Renewals. The directors and officers (D&O) liability policy renewed with Zurich American Insurance Company for the policy period of March 17, 2016, to March 17, 2017. The D&O liability policy has a $100,000 per occurrence deductible and a combined aggregate limit of liability of $11 million. The commercial crime policy renewed with Travelers for the policy period of March 17, 2016, to March 17, 2017. The commercial crime policy has a $25,000 per occurrence deductible and an aggregate of $2 million. The fiduciary liability insurance policy renewed with Travelers for the policy period of March 17, 2016, to March 17, 2017. The fiduciary liability policy has no deductible and has an aggregate of $5 million. Official Load Forecast Update. Currently staff is internally developing an update to the official load forecast. Additionally, a consultant, Utility Financial Solutions, is reviewing Platte River’s forecast methodology and developing a second set of load projections. Early indications from the internal finding and the consultant’s preliminary outputs show little to no energy growth over the next several years, which is a continuing trend of Platte River’s load forecasts of recent years. Staff anticipates the Official Load Forecast to be completed in April. Rate Forecast Update. Staff has been working to update rate projections as new Clean Power Plan information develops. Projections from last fall indicated annual rate increases ranging from 2.5% (no CPP) to 5.2%. The high-end rate projections were based on allowance purchases, or a tax for all CO2 based energy. Recently, an alternative scenario was developed with current market assumptions and allowance purchases for generation above mass-based limits. Following 4.5% increases in 2016 and 2017 which were previously discussed, this scenario indicated annual rate increases of approximately 3.5% between 2018 and 2030. There are still many unknown variables regarding the Clean Power Plan and staff will analyze various scenarios as information becomes available. Staff is also preparing for discussions in May with the Utility Directors to provide estimates for the 2017 rate increase. CUSTOMER SERVICE and COMMUNICATIONS & MARKETING

Media. On the social media front, Facebook posts generated an 18% increase in “Likes” from January to February, with the post providing an update on Rawhide Flats Solar generating the highest level of engagement. We are working with a vendor to establish automated media monitoring report to ensure a timely and complete reporting of media mentions across all channels.

Platte River Power Authority 4 March 2016 Management Report

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Marketing. Work continues on the 2015 Annual Report, with most content final. We are taking an approach that will make the report more engaging for readers. The report will be presented to the Board for acceptance at the April meeting. Also, the project to revamp prpa.org is now underway. Community. Platte River sponsored a table at the Fort Collins Chamber of Commerce annual awards banquet and the Project Self-Sufficiency Achievement Luncheon. Staff also attended the Boulder County Business Hall of Fame reception in Longmont. Tours were given to Leadership Loveland; BNSF; and the Loveland, Fort Collins and Windsor Sustainability Groups. Efficiency WorksTM. We are finalizing our media buys for the remainder of 2016, including radio, print, outdoor and digital, and looking at options to update and improve the creative aspects of our advertising. Energy Efficiency (EE) Programs. Year-to-date in 2016 a total of $524,000 has been spent on common efficiency programs, resulting in 1,460 MWh of new energy savings and 370 kW of new summer peak demand reduction. By year’s end, total efficiency program spending is estimated to be at budget, $6.1 million, with $3.3 million from Platte River and $2.8 million from the Municipalities. The following table summarizes services provided during 2015 and year-to-date 2016, as well as projected results for 2016.

Customer Segment

Service provided 2016 Results YTD

2016 Results projected

by year end* Commercial & Industrial

Efficiency assessments 0 390 Efficiency project rebates 35 800 Energy savings (MWh) 360 17,000

Residential Efficiency assessments 0 800 Discounted efficient lighting products 0 200,000

Energy savings (MWh) 0 3,000 Totals Energy savings (MWh) 360 20,000

* Projected results are based on available budgets and estimates of customer participation.

Customer participation in programs has exceeded our expectations this year and our commitment of rebate funding is running ahead of plans. If this pace of participation continues, it threatens to exhaust available Platte River and Municipality funding before the end of the year. Platte River and Municipal staffs will work together to look at options to tailor program spending to keep within available budgets or to consider increases to Municipality funding for efficiency programs. Demand Side Management (DSM) Program Management Software Update. Work continues on implementation of the DSM Program Management Software by Platte River staff, Municipal staff, and Nexant (project consultant and vendor). The new system is now expected to be implemented May 2016. This software will enable customers and their contractors to apply for rebates and check on rebate status via the internet. In addition, it will improve administrative efficiency and accuracy of rebate application review, processing, reporting, and information sharing among Platte River and Municipal staffs. A Software as a Service (SaaS) agreement provides terms and conditions for Platte River and Municipal staffs’ use of the software. Platte River has executed this agreement and the Municipalities are reviewing. Efficiency Works Neighborhoods Pilot Support. There is no material change since last month. Platte River staff is supporting implementation of Fort Collins’s Efficiency Works Neighborhoods Pilot program. This program is being funded primarily by Fort Collins and an APPA DEED grant in an effort

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to offer streamlined efficiency projects for residential customers. It is based on the Efficiency Works Homes program, which is a Common efficiency program funded by the four Municipalities, offering residential efficiency assessments and technical advising by CLEAResult (under contract with Platte River). The Neighborhoods pilot simplifies completion of energy efficiency projects by providing customers with a set of recommended efficiency improvements as well as a list of pre-selected residential efficiency service providers who have agreed to focus on implementing these improvements. On-bill financing options are also provided by Fort Collins. Fort Collins is also working to add rooftop solar as an option within the program. Platte River and Fort Collins staffs are in discussions to consider how this could be implemented within the existing program framework. Demand Response (DR) Pilot Program. Phase I of the DR Pilot Program requires delivery by Comverge of view-only access into the Fort Collins IntelliSOURCE demand response management system. Fort Collins has executed an amendment to its service agreement with Comverge as well as a sublicense agreement with Platte River to allow this view-only access. Platte River’s Power System Operators have received introductory training on Demand Response and instruction on Phase I of the pilot. Due to technical delays with the forecasting/measurement and verification processes, which use AMI and device data, the agreed-upon software access is now expected to be available in early third quarter of 2016. In tandem with this first portion of the pilot, a work plan has been developed to implement the SCADA updates necessary to support incorporation of Longmont’s voltage reduction (VR) system. Phase II of the pilot, which includes control of selected DR/VR resources by Platte River Operations staff, is now expected in the first quarter of 2017. Platte River and Municipal staff are presently developing an operating procedure for the pilot and will work with Comverge to update the software sublicense for Phase II. Medicine Bow Wind Project Potential Sale. There is no material change since the February meeting. Commonwealth Bay, the current owner of the Medicine Bow Wind Project, notified staff that they are in preliminary discussions with two separate potential buyers of the Project. (Commonwealth has requested that the names of the buyers not be disclosed publicly at this stage of discussions.) Platte River staff held a conference call with one of the buyers to discuss the site’s history, the current structure of the power purchase agreement, and the Project’s recent performance. No definite timeline for the pending sale was discussed. Combined Heat and Power (CHP) Feasibility Study. Technical and financial kick-off meetings, as well as initial mechanical and electrical sub-team meetings, have been held. Comparisons will be made for three alternatives: (1) continue to maintain the existing heating plant, (2) build a new, efficient heating plant, and (3) build a hybrid heat and power plant. The design firm gathered historical and projected loads and is reviewing natural gas and power distribution availability to help determine sizing of the plant. Issues under evaluation include sizing based on historical and projected loads, sizing based on best-fit for the equipment manufactured, connections to electrical and natural-gas utilities, impacts to NOx permitting, and economic expenditures. Financing through a PPA is being modeled as a means for analysis; however, that is not the definitive direction. CSU states that the decision to move forward will be based on a cost and benefit analysis. A core team of one representative from CSU, Fort Collins Utilities, Platte River, and the consultant will meet monthly. A monthly project status report will be sent to all stakeholders and team participants. The final report is expected to be received in summer, 2016. OPERATIONS Windy Gap Firming Project Update. Progress continues to be made on the firming project. On the permitting side, review of the draft 401 Certification (state water quality certification under the federal

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Clean Water Act section 401) is going well, and the final 401 Certification is still expected to be granted by the CDPHE by the end of March. The next step of the permitting process following the 401 Certification is the U.S. Army Corps of Engineers’ Section 404 Permit (Federal Clean Water navigable waters/wetlands permit), which focuses on mitigation efforts. It is anticipated the Corps of Engineers will grant the 404 Permit later in 2016. With respect to project financing, a sub-committee was formed earlier this year to hire a Municipal Advisor to investigate the various financing options available for this project. Platte River is participating on the committee. The committee is moving forward with the bid process and is currently reviewing bid evaluations from qualified firms. The next phase of the project is the engineering design phase. With the execution of the Fifth Interim Agreement in February, this phase can now get underway. The Request for Proposals from engineering firms has been published, and the bids from qualified firms are due by the end of March. Design is scheduled to continue for approximately two years, and construction is planned to begin in 2018. The firming project is estimated to be complete and ready to begin filling by the spring of 2021. Rawhide Water Supply Update. There is no material change since the February Management Report, but for reference purposes the information is included again for March. With the lack of Windy Gap water, Platte River is continuing to operate in an alternate water supply mode. In this situation, leased C-BT water is being used as collateral for in-lieu Windy Gap water to meet the critical process water needs. For the cooling water needs, Windy Gap Short operations are in place (special arrangement with the City of Fort Collins for the Reuse Plan and MOU requirements). Resources are sufficient to supply the process water and cooling water needs through at least May of 2016. Thus far, the impacts of Windy Gap Short operations to Platte River have been minimized due to free river conditions (utilizing junior Poudre River water rights) and storage of some effluent in Fossil Creek Reservoir, which can be pumped at a later time to the Rawhide cooling reservoir. Staff will continue to monitor the water conditions and rental water market, with the hopes of either utilizing pumped Windy Gap water if that later becomes available, or leasing additional C-BT water later this spring. The next opportunity to pump Windy Gap water will be the spring of 2016, although pumping will be dependent upon the C-BT system conditions at that time. Strategic Plan (SP). Platte River has kicked off its 2017-27 Strategic Plan process and will again focus on three main subjects: SWOT, initiatives, and goals. Early in last year’s cycle, Platte River staff was invited to participate in the development of the SWOT table. To continue the momentum of engaging employees in the SP development process, the Communications Department has proposed using staff focus groups this year to provide input on goals. This event will likely take place in late spring 2016. The SP’s review cycle with the Board will start in September this year instead of October. Resource Planning. Although the United States Supreme Court granted a stay of EPA's 111(d) Clean Power Plan on February 9, Platte River is keeping its focus on the potential future impacts of this rule. Strategic Planning and Environmental Services have been collaborating on an analysis of the potential impacts from 111(d), and are jointly developing a modeling structure that can determine impacts for all generation owners in Colorado. Pace Global is assisting in the development of a Colorado-wide model that can be used for future analysis. This model is being developed in Aurora—the same software program used by Platte River. Other major activities for Strategic Planning include preparations for the 2017 budget cycle, support for upcoming bond issuance, and development of Platte River’s 2017 Integrated Resource Plan (IRP). Platte River provides IRPs to Western Area Power Administration on a five-year cycle. The prior IRP was submitted for 2012. Three main functions are underway for Platte River’s 2017 IRP: closure of the

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community outreach process begun in 2014, completion of a “Generation Technology Review,” and updates of the system planning analyses provided at the Board Work Session in 2015. These efforts will culminate in a final IRP report to be reviewed and approved by the Board. RESOLUTIONS & POLICY REVIEW Platte River Water Discussion. Discussions on the water policy project will begin in April as we transition from the development and finalization of a reference document to strategic discussions and Board decisions that will set the stage for future water policy. The goal is to have a Board-approved Water Policy and Resolution by the fall of 2016. This Water Policy will be used to guide future Platte River water decisions. Enclosed in your Board packet is the latest draft of the Platte River Water Resources Reference Document, with an associated cover memo. Staff would like to provide the Board and their water staffs an opportunity to review this draft and provide input if desired. After this review, the document will be finalized and then updated on an annual basis. The Water Resources Reference Document is intended to be a historical reference document that will give a background of Platte River’s water needs, resources and operations, and will aid in discussions starting in April. Discussions will revolve around philosophical principals and decision points. Staff will suggest some potential approaches to this process. Some portions of upcoming discussions may fall within the parameters of matters subject to an executive session. Time is of the essence for these discussions as some of the key decision points are nearing milestones, such as the Windy Gap Firming Project. GENERAL & FOLLOW UP ITEMS Rawhide Flats Solar Update. Juwi started construction in February with overall civil work expected to be complete in March. Pile driving is complete in one out of the four areas and well underway in the second area. Modules deliveries are expected to start in the second half of March. Platte River’s interconnection transformer was delivered to the site in early March and the rest of Platte River’s equipment procurement is on schedule. Platte River personnel continue to coordinate with juwi on site safety and security as well as the design of the planned interconnection.

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Memorandum Date: March 23, 2016

To: Board of Directors

From: Jackie A. Sargent, General Manager/CEO Paul Davis, Customer Services Manager Joel Danforth, Customer Services Program Manager

Subject: Community Solar Program Update

Staff provided an update on Community Solar during the February Board meeting. Since that time, planning activities have continued.

A meeting was held with Municipal staffs to discuss a variety of topics. The status and intent of the project charter was discussed. The charter is intended to capture the business need/justification, scope, and success criteria for the design phase of the project to ensure Platte River and the Municipalities agree on these items before allocating more significant resources to the effort. In addition, the group discussed concepts that could be included in a Demand-Side Management and Distributed Energy Resources Intergovernmental Agreement (IGA). The IGA would provide a framework for a Community Solar project as well as other distributed energy resource collaborations, much as the existing IGA for Demand Side Management Program Partnership has supported increasing collaboration in the area of energy efficiency. A draft IGA is currently being reviewed by Platte River’s legal counsel and will be circulated to Municipal staffs in the coming weeks, with a goal of bringing a final version to the Board to consider for approval in either April or May, before sending it to city councils and town boards for consideration.

Platte River staff is finalizing a draft request for proposal (RFP) for a Community Solar project and program. This draft will also be circulated for Municipal staffs’ review and input before being issued.

Platte River staff also continues to meet to evaluate the value that solar energy and capacity provides at the generation and transmission system level. Platte River staff anticipates also discussing with Municipal staffs the potential costs and value that solar brings to the distribution system of the community that hosts the pilot Community Solar project. The wholesale value, distribution costs and value, and Community Solar project/program costs determined from the RFP will be considered together to determine the potential cost effectiveness of a Community Solar program from the perspectives of Platte River, the Municipalities, and customers (including those who participate in the program and those who do not).

Another update will be provided in the April Board meeting packet and depending upon progress made on the IGA, a presentation on the IGA may be provided.

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Memorandum Date: March 23, 2016

To: Board of Directors

From: Jackie A. Sargent, General Manager/CEO Heather Banks, Fuels and Water Manager

Subject: Water Resources Reference Document

As part of the March Board packet, staff is pleased to provide you with a current draft of the Water Resources Reference Document. As you may recall, this document was initiated in 2012 and has gone through several revisions. In 2014 staff met with all the owner municipalities and Northern Colorado Water Conservancy District to seek feedback and validate accuracy. That feedback was incorporated and the last draft was provided to the Board in February 2015. At that time, the decision was made to put the water discussions and reference document review on hold in order to focus efforts on Strategic Planning. Staff is now prepared to resume water discussions, and the first step in that process will be to finalize this reference document.

The Water Resources Reference Document is intended to be a historical reference and operational document which gives a background and overview of Platte River’s water needs, resources and operations. It will be an important tool for new Board member orientations, and will also be useful as a reference during upcoming water discussions.

The current draft of the document has been updated to include data through the 2015 water year. Staff will update this document on an annual basis to incorporate data from the previous year. The plan is to provide the Board and their water staffs with an opportunity to review this draft and provide additional input if desired. After this review, the document will be finalized and then updated on an annual basis. The goal is to finalize the document at the April Board meeting, and then be able to transition to strategic water-related discussions over the course of 2016.

Staff welcomes feedback and would be happy to answer any initial questions at the March Board meeting.

Attachment

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1

PLATTE RIVER POWER AUTHORITY

Platte River Water Resources

Reference Document

March 31, 2016

A white paper outlining Platte River’s water supply, background, activity, agreements and

operational historical performance.

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Platte River Water Resources Reference Document

Table of Contents

I. Background and History 1. Why Platte River Needs Water ...................................................................................... 1 2. Water Supply Sources ..................................................................................................... 1 3. Water Agreements and Decrees ..................................................................................... 3 4. Current Annual Water Use ............................................................................................. 7 5. Water Costs—Capital and Operating ........................................................................... 8

II. Current Activity - The Windy Gap Firming Project 1. The Critical Nature of Water Supply to Generation Operations and Windy Gap

Project Performance ......................................................................................................... 9 2. History and Status of Windy Gap Firming Project ................................................... 13 3. Determination of Firming Storage Requirements ..................................................... 14 4. Next Steps for the Firming Project ............................................................................... 16 5. Firming Project Schedule .............................................................................................. 16 6. Firming Project Costs .................................................................................................... 16 7. Operation of the Firming Reservoir ............................................................................ 16

III. Current Water Policy 1. Water Policy Background ............................................................................................. 18

a. Securing and protecting water for Platte River operational needs b. Planning for Platte River’s future water supply needs c. Leveraging the value for water resources through leasing

IV. Going Forward

V. Appendix A—Maps 1. Northern Water: Colorado-Big Thompson Project 2. Northern Water: Water Collection and Distribution Systems 3. Northern Water: West Slope Collection System 4. Northern Water: East Slope Distribution System 5. Platte River Water System Reference Map (Water Interests) 6. Windy Gap Firming Project: Chimney Hollow Reservoir

Appendix B—Reference Materials 1. Platte River Water Agreement and Water Decree List 2. Rawhide Energy Station: Water Supply and Use Diagram 3. Water Consumption for various types of generation resources 4. Windy Gap Firming Project - Model Analysis (Heather Thompson Study)

Appendix C—Resolutions

1. Resolution No. 7-94 2. Resolution No. 13-12

Appendix D—Glossary

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Platte River Water Resources Reference Document

Section I. Background and History

1. Why Platte River Needs Water: The Rawhide Energy Station (Rawhide) includes Rawhide Unit 1, a coal-fired unit which uses steam to generate power. The process of this electric generation requires a supply of water for various purposes. First, the steam must be cooled to a liquid after exiting the turbine. The condenser uses “cooling water” from the Hamilton Reservoir at Rawhide for this purpose. The reservoir is 500 surface acres, has a capacity of 16,000 acre-feet1, and loses an average of three million gallons of water per day (approximately nine acre-feet/day) to evaporation into the atmosphere. On average based on the past ten years, 3,193 acre-feet of water is needed annually to replenish the water lost to evaporation (can range from 2,300 to 4,500 acre-feet of water annually). The evaporation rate of a cooling reservoir is slightly higher than just natural evaporation due to the increased temperature of a cooling reservoir. The annual average temperature of Hamilton Reservoir is 70 degrees. The water stored in the Hamilton Reservoir is treated reusable effluent pumped from the City of Fort Collins Drake Water Reclamation Facility via a 24-inch pipeline to Rawhide.

When Platte River Power Authority was first contemplating resource plans in the 1970’s, the Rawhide Energy Project Environmental Impact Analysis (EIA) was completed in 1978, and contemplated various types of cooling systems, including a cooling pond, wet cooling towers, wet/dry cooling towers and dry cooling. Based on the water requirements and the total cost for each option at a designed total capacity of 750MW (three coal units), the decision was made to cool Rawhide Unit 1 with the cooling pond (now refered to as a cooling reservoir).

In addition to the water used for cooling, water is needed for purposes to which treated reusable effluent is unsuited (boiler water makeup, site service water, fire water and drinking water). This water is called process water and is pumped to Rawhide in a separate 10-inch pipeline directly from Horsetooth Reservoir in an amount of approximately 500 to 600 acre-feet per year. In the past, this amount had varied up to 950 acre-feet per year, but conservation efforts and equipment upgrades have reduced the amount of process water pumped to Rawhide.

Water conservation is a key element of plant operations. All of the water that is used on-site is recycled as much as possible and used in other plant processes. The entire Rawhide site is a zero discharge facility - the effluent and other plant water is used to extinction. The water that can be used at Rawhide needs to be fully consumable and reusable water, which is a very specific type of water.

2. Water Supply Sources:

Platte River is a participant in the Windy Gap Project, which delivers water from the west slope of Colorado to the Front Range. Platte River owns a contract allocation of 160 units of the Windy Gap Project (out of a total of 480 units). A unit is equivalent to 100 acre-feet during years of full Windy Gap Project production. Platte River acquired its allocation of Windy Gap water from three of its constituent Municipalities in 1974. These

1 An acre-foot is the volume of water that would cover one acre of land to a depth of one foot.

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allocations included 40 units from the Town of Estes Park, 80 units from the City of Fort Collins and 40 units from the City of Loveland.

The Windy Gap Project consists of a diversion dam on the Colorado River, a 445 acre-foot reservoir, a pumping plant, and a six-mile pipeline to Lake Granby. Windy Gap water is pumped to Lake Granby during high flow months (typically April-July). The water is stored in Lake Granby until needed, and is delivered across the Continental Divide through the Adams Tunnel under a carriage contract with the United States Bureau of Reclamation (Reclamaion) for delivery through the Colorado-Big Thompson (C-BT) Project’s facilities, including Carter Lake and Horsetooth Reservoir. Northern Colorado Water Conservancy District (Northern Water) and Reclamation jointly operate and maintain the C-BT Project (maps shown in Appendix A). Northern Water’s Municipal Subdistrict (Municipal Subdistrict) is a separate conservancy district, which was formed by several municipalities to build and operate the Windy Gap Project. A map of the Windy Gap Project is provided below.

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Platte River’s 160 units can produce up to 16,000 acre-feet of Windy Gap water annually, during years of full project production. However the actual yield is generally far less than that and can range anywhere from zero acre-feet per unit up to 100 acre-feet per unit. Windy Gap water is provided as a “contract allotment” from the Municipal Subdistrict. This means Platte River does not own Windy Gap water rights but has a contractual right to require the Municipal Subdistrict to deliver Windy Gap water to the extent it is available.

A benefit to Municipal Subdistrict allottees is that allotment contract holders are granted total consumptive use of their Windy Gap water. Allottees can use and reuse Windy Gap water because it is imported water not native to the South Platte Basin. After first use within Subdistrict boundaries, participants may use, lease, transfer or sell the reuse or successive use rights for use within or outside Subdistrict boundaries. This type of fuly consumable water is needed at Rawhide due to the nature of being a zero discharge facility. Typically, Platte River places an annual Windy Gap order of 5,100 acre-feet, of which 4,200 acre-feet is provided to the City of Fort Collins in exchange for reusable effluent, which is pumped to Rawhide for cooling purposes. The remaining 900 acre-feet meets Rawhide’s process water needs, augmentation needs, and Windy Gap Project shrink.

In addition, Platte River holds two junior water rights on the Cache La Poudre River which, when in priority, allow Platte River to pump Poudre River water credits to Rawhide in its 24-inch pipeline. Below are the specifics of the rights.

Flow Rate (cubic feet per second, cfs) 2

Flow Rate Conversion to acre-feet (AF)/day

Date of Adjudication

1.60 cfs ~ 3.17 AF December 31, 1982

15.19 cfs ~ 30.08 AF December 1, 1977

Because these rights are junior (recent) in priority, the water is not available every year and cannot be counted on as a firm, reliable supply. During the past ten years, the Poudre River decrees have yielded anywhere between 0 and 2,800 acre-feet of water per year, or an average of 966 acre-feet per year.

3. Water Agreements and Decrees:

In addition to the contract allotments to Windy Gap water, Platte River is party to other agreements and decrees that are instrumental to the exchange, receipt and storage of the water used for cooling. There are four main agreements that are fundamental to Platte River’s water operations.

Reuse Agreement When construction of Rawhide was first being contemplated, it was known that the generation station would require water for cooling and other purposes. Platte River recognized the fact that the Front Range of Colorado is an arid region, and so from day one, the objective was to use water in a responsible and sustainable way. In 1978, an innovative agreement was developed, in which fully consumable and reusable water is

2 One cfs equals 1.98 acre-feet/day.

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first used by the City of Fort Collins, and the return flows (reusable effluent) are pumped to Hamilton Reservoir at the plant and used for cooling purposes. The purpose of this arrangement is so that Rawhide’s use of the water would have no detrimental effect upon any existing water user, or upon existing water supplies. The use of this effluent was incorporated into the original plant design. The Agreement for the Reuse of Water for Energy Generation (Reuse Agreement) is a three way agreement between the City of Fort Collins (Fort Collins), Water Supply and Storage Company (WSSC) and Platte River. The agreement and associated Decree (W-9322-78) is based on a series of exchanges that use “new foreign water”3 supplied by Fort Collins and WSSC to produce 4,200 acre-feet of reusable effluent for Platte River’s use each year. Under this arrangement, WSSC commits an estimated 4,581 acre-feet of its new foreign water and Fort Collins commits an estimated 3,055 acre-feet of its new foreign water to create a supply of new foreign water of up to 7,636 acre-feet annually for the plan. The new foreign water is used by Fort Collins to generate reusable effluent return flows of 4,200 acre-feet that are provided to Platte River. To compensate Fort Collins and WSSC for this reusable effluent, Platte River transfers a total of 4,200 acre-feet of Windy Gap water to Fort Collins, and in turn Fort Collins transfers 1,890 acre-feet of C-BT water from the Fort Collins C-BT account to WSSC. Included in WSSC’s compensation is a 25 percent “processing charge” assessed on WSSC by Fort Collins for processing the water contributed by WSSC. In addition, there is an obligation to preserve the historic regimen of the Poudre River by assuring a continuation of water flows equal to historic return flows. As described in Decree W-9322-78, one method to meet this obligation is to release 550 acre-feet annually to the Poudre River. This obligation is split between Fort Collins (467 acre-feet) and Platte River (83 acre-feet). In addition to the 4,200 acre-feet of effluent provided from the Reuse Agreement, Platte River is also entitled to the return flows from the Windy Gap water supplied to Fort Collins. The estimated return flows from the use of the Windy Gap water are approximately 2,310 acre-feet, or an average of 55 percent. Consequently the water available to Platte River under the Reuse Agreement (prior to the MOU as described below) includes 4,200 acre-feet of reusable effluent plus approximately 2,310 acre-feet of Windy Gap return flows, for a total of 6,510 acre-feet. Memorandum of Understanding When Anheuser-Busch, Inc. (now Anheuser-Busch InBev or AB InBev) located to Fort Collins, it needed approximately 4,200 acre-feet of fully consumable water annually – coincidentally the same amount of water provided in the Reuse Agreement. Platte River and Fort Collins entered into a Memorandum of Understanding (MOU) with AB InBev in 1988. The MOU allows Fort Collins to designate up to 4,200 acre-feet of the Windy Gap water owed to Fort Collins under the Reuse Agreement for use by the AB InBev brewery. AB InBev employs a land application to process brewery waste and therefore does not send as much wastewater to Fort Collins’ Drake Water Reclamation Facility as would an average Fort Collins’ customer. This means that when the Windy Gap water is designated to support AB InBev’s treated water use, less effluent is produced for Platte River. Under the MOU, Platte River agrees to accept less Windy Gap effluent

3 New Foreign Water is water introduced into the Cache La Poudre Basin from the Colorado and Michigan River Basins and whose return flows historically have not been used by others, as defined in the agreement.

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(approximately 800 acre-feet instead of the approximately 2,310 acre-feet of effluent expected under the Reuse Agreement). In return, AB InBev pays Platte River’s annual variable operating costs on 4,200 acre-feet of Windy Gap water, and accepts certain responsibilities in the event that Windy Gap water is in short supply. AB InBev also has the option of providing a substitute supply of reusable water instead of Windy Gap effluent. When AB InBev uses all of the 4,200 acre-feet of Windy Gap water, the net result is that Platte River receives reusable water available under the Reuse Agreement and MOU in an amount of approximately 4,200 acre-feet plus 800 acre-feet of return flows from AB InBev annually. When AB InBev does not use the full 4,200 acre-feet of Windy Gap water, AB InBev can proportionally reduce their 800 acre-foot return flow obligation. The remaining Windy Gap water not used by AB InBev is used by other Fort Collins’ customers and Platte River receives the generated return flows. Independent of the amount of Windy Gap actually used by AB InBev under normal reuse operations, AB InBev is still responsible for paying the operating costs on the full 4,200 acre-feet of Windy Gap water. In most years, the total amount of reusable effluent available to Platte River is approximately 5,431 acre-feet per year as shown in the table below. This is sufficient to meet all of Platte River’s cooling water needs for Rawhide at this time with some reserve water available for future generation or other uses. North Poudre Storage Agreement Platte River has an agreement with the North Poudre Irrigation Company (North Poudre) that allows Platte River to utilize North Poudre’s Fossil Creek Reservoir Inlet Ditch and temporarily store the reusable effluent in Fossil Creek Reservoir. This agreement, which expires in 2024, makes use of exchanges and is necessary to avoid loss of the treated effluent if it cannot be pumped to Rawhide at the same rate the effluent is delivered by Fort Collins at the Drake Water Reclamation Facility. This agreement allows Platte River to store and withdrawal treated effluent from Fossil Creek Reservoir. Upon expiration of this agreement, Platte River would no longer be able to store and withdrawal treated effluent from Fossil Creek Reservoir (without a contract extension), but would have the perpetual right to use the Fossil Creek Inlet Ditch. The water held by Platte River in Fossil Creek Reservoir is subject to loss when the reservoir spills, which typically happens on an annual basis. To avoid uncompensated loss of this water, the Board has authorized lease of unpumped reusable effluent beginning in 1994. When Platte River leases water from Fossil Creek Reservoir, a percentage of the proceeds are shared with North Poudre.

Average Annual Reusable Effluent Water Available To Platte River

Reusable Effluent Water Sources Annual

Quantity (AF)

Comments

Reuse Agreement Exchange 4,200 Contractual quantity

MOU: Windy Gap return flows 1,231 Estimate

Total reusable effluent water available 5,431 Estimate

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Soldier Canyon Outlet Agreement Platte River has an agreement with Fort Collins for a portion of the capacity of the Soldier Canyon Outlet from Horsetooth Reservoir. This agreement was entered into in 1981 for three cfs of capacity for the purpose of pumping process water from Horsetooth Reservoir to Rawhide via the 10-inch pipeline. The agreement allows Platte River to connect to and operate a tap from the existing Fort Collins raw water delivery system at a point on the system below where the system connects to the Soldier Canyon Outlet from Horsetooth Reservoir. From that point, the water is pumped via Platte River’s 10-inch pipeline from the tap to Rawhide. Other Water Related Agreements: There are two additional water agreements currently of significance to Platte River.

Larimer County Agreement – Strang Gravel Pit Augmentation

The Larimer County agreement was entered into in 1993, and allows the County to receive up to 100 acre-feet annually of reusable effluent provided by Platte River (under the MOU) for augmentation of the County’s Strang Gravel Pit. The County notifies Platte River each year of the actual quantity of water needed for the augmentation requirement. While the request from the County in the agreement is for 100 acre-feet, the actual augmentation needs have typically been less than 12 acre-feet per year. Carter Lake Outlet Agreement The Carter Lake Outlet Agreement is part of the Southern Water Supply Project and is an allotment contract executed in 1994 that provides Platte River with a delivery capacity of up to ten cfs4 from the Carter Lake outlet. In 2001, there was an additional allotment contract of eight cfs of capacity, bringing the total capacity allotment to 18 cfs5. This delivery capacity is not in use at this time, but could be of value for either delivering water to a future generation resource on the southern end of Platte River’s system, or for leased Windy Gap water to be delivered out of Carter Lake in the future.

Water Decrees There are also number of water rights and decrees that are instrumental in the exchange, delivery and storage of water for Platte River. There are two key decrees to point out. The Reuse Decree authorizes the exchanges necessary for the Reuse Agrement and the Hamilton Reservoir Storage Decree allows the storage and operation of the 16,000 acre-foot cooling reservoir at the Rawhide Energy Station. The 24-inch pipeline that supplies water to Hamilton Reservoir has several associated exchange decrees to provide flexibility in pumping water through the pipeline. A complete list of agreements, rights and decrees is shown in Appendix B-1.

4 The capacity of ten cfs would equate to 19.8 acre-feet/day.

5 The capacity of 18 cfs would equate to 35.7 acre-feet/day.

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4. Current Annual Water Use: Cooling Water: Platte River currently uses an annual average of approximately 3,193 acre-feet of reusable effluent for cooling purposes; however, cooling water use at Rawhide can vary from 2,300 to 4,500 acre-feet annually depending on weather and operating conditions. Once the effluent is pumped to Rawhide, it is further treated in a phosphorus removal facility at the plant prior to entering the cooling reservoir.

Augmentation Water: An additional 209 acre-feet of reusable effluent is provided annually to Fort Collins and the Cache La Poudre River in order to meet augmentation requirements related to the Reuse Agreement, Rawhide Energy Station property (Rawhide Creek), Platte River’s headquarters property (headquarters well), and the Larimer County Augmentation Agreement.

Process Water: Platte River also pumps approximately 520 acre-feet of Windy Gap water directly from Horsetooth Reservoir to Rawhide via the 10-inch pipeline from the Soldier Canyon Outlet. This water is used for process water at the plant (boiler water, site service water, fire water and drinking water). The treatment system for this water is considered a Non-Transient, Non-Community Public Water Supply and is regulated by Colorado Department of Public Health and Environment (CDPHE) under PWSID CO0235668. It is operated by certified Class A and B water treatment and Class 1 distribution system operators.

A diagram showing the general arrangement for Rawhide water supply and use is shown in Appendix B-2.

Platte River’s Water Use

Platte River Water Use Annual

Quantity (AF)

Type of Water

Comments

Rawhide cooling water: 24-inch pipeline

3,193 Reusable Effluent

Estimate based on a 10-year average

Augmentation requirements

Reuse Agreement (83AF)

Rawhide Creek (100AF)

HQ Well (~26AF)

Larimer County Agreement (~12AF)

209 Reusable Effluent

Varies up to 309 AF, based on the 10-year average amount needed for HQ well and the Larimer County Agreement

Rawhide process water: 10-inch pipeline

520 Windy Gap 10-year average is 520 AF (process water only)

Total Use 3,922 Annual average

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5. Water Costs—Capital and Operating:

The following table is a summary of Platte River’s annual average water costs. These figures do not include pumping costs through the 24-inch and 10-inch pipelines to Rawhide, or the costs to treat water at Rawhide. The amounts shown are Platte River’s typical costs excluding the amounts allocated and charged to AB InBev.

Platte River Net Water Costs *

Capital Costs Estimated

Annual Amount Comments

Windy Gap Project Debt Service

$3,300,000 Debt service ends in 2017

Operating Costs

Windy Gap Pumping Cost

$21,000 Pumping of up to 600 AF annually if Windy Gap Project pumps (approx $35/AF).

Windy Gap Carriage Costs

$55,800

Carriage costs for use of C-BT system to convey up to 600 AF of Windy Gap water annually (approx $93/AF) to Horsetooth Reservoir.

Windy Gap Assessment Costs (Operations and

Maintenance Expenses) $448,400

Annual assessment of 11,800 AF** of Platte River’s 16,000 AF allocation. This price is currently set at $38/AF of Windy Gap water allocation whether it is pumped or not.

Windy Gap Fixed Costs

$28,175 Annual Reclamation fixed costs

Total Operating Costs $553,375 Approximate

Total Costs $3,853,375 Approximate

* Platte River’s net costs are shown, excluding the charges covered by AB InBev through the MOU.

** Of the total 16,000 acre-feet, Platte River pays the O&M expenses for 11,800 acre-feet, and AB InBev pays for 4,200 acre-feet.

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Section II. Current Activity—Windy Gap Firming Project

1. The Critical Nature of Water Supply to Generation Operations and Windy Gap Project Performance: Platte River requires a minimum of 4,200 acre-feet of Windy Gap water per year in order to complete the water exchange activities contemplated under the Reuse Agreement and MOU. Absent Windy Gap water to exchange, Platte River will not receive reusable treated effluent from Fort Collins. There is also a need for approximately 600 acre-feet of Windy Gap water each year for direct pumping to Rawhide for service and process water. Both of these sources of water are critical to the reliable operation of Rawhide. An additional complication is that both the cooling water and the process water need to be fully consumable and reusable water.

Because Windy Gap water is the only significant water source held by Platte River, it is essential that this water be available every year. Although Platte River has always depended heavily on Windy Gap deliveries, during the early years of operation the volumes delivered to the other project participants were relatively small. Platte River’s annual Windy Gap water order of approximately 5,100 acre-feet was the largest order for many of those early years. As the Windy Gap Project began to be more fully utilized, delivery issues emerged. These issues arise not only from the junior nature of the Windy Gap water rights, but also from limitations inherent in the C-BT Project through which Windy Gap water is stored and delivered.

There are two primary reasons that Windy Gap Project participants have not been able to rely on Windy Gap water deliveries. In dry years the Windy Gap water decrees are not in priority, and thus the Windy Gap Project will not pump. Because of the project’s junior water rights, Windy Gap water cannot be diverted in years of low runoff. Counter intuitively, the Windy Gap Project also presents issues during wet years. There have been several years when the Windy Gap Project could have pumped, but didn’t because there was no place to store the pumped water. Currently, Lake Granby is the only storage available for Windy Gap Project water. Water conveyed and stored for the C-BT Project has priority over water conveyed and stored for the Windy Gap Project. Thus in wet years, when the C-BT system is full, there is no conveyance or storage capacity for Windy Gap Project water. This prevents the Windy Gap Project from storing water in some wet years for use in subsequent dry years. This situation of lack of storage space duing wet periods has occurred numerous times over the years, and as recent as 2015. In addition, if Lake Granby spills due to wet year inflows and there is Windy Gap Project water in storage, it is the first to spill. This happened several times in the late 1990s, in 2011, and most recently in 2014 when approximately 11,500 acre-feet of stored Windy Gap water spilled becuase the C-BT system filled and overflowed.

Because the Windy Gap Project is unable to provide reliable yields in both wet and dry years, the current firm yield is zero. Firm yield is typically defined as the amount of water that can be delivered on a reliable basis in all years and is typically determined by yield in dry years. Specific to the Windy Gap Project, lack of availalable storage space in wet years also affects yield.

To address the issue of sporadic deliveries, a protocol entitled “Criteria for Integrated Operations of the Colorado-Big Thompson and Windy Gap Projects” (Integrated

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Operations), was developed in 1991. Through Integrated Operations, C-BT Project water may be delivered to Windy Gap Participants in-lieu of Windy Gap water. Replacement of C-BT Project water attributable to such in-lieu deliveries is required from Windy Gap water pumped in subsequent periods. Windy Gap Project Participants who request in-lieu deliveries may be required to incur additional expenses or make other water available, if needed, to assure that C-BT Project beneficiaries are not injured as the result of such in-lieu deliveries.

In extremely dry years even Integrated Operations may not allow the use of in-lieu Windy Gap water. This occurred in 2002-2003 when the C-BT system did not have sufficient unallocated reserve water in storage to support the in-lieu program. During that period Platte River had to look elsewhere for water and obtained a lease for reusable water from a Front Range municipality. This water was used for the critical process water needs and enabled Rawhide Unit 1 to continue operations. Fortunately, a large snowfall in March 2003 provided enough water to enable the Windy Gap Project to pump and Windy Gap water became available. Had this snow event not occurred, it is uncertain how water would have been obtained for Rawhide operations.

The 2012-2013 water year was similar to the extreme dry year of 2002-2003 with no Windy Gap water available in the C-BT system, but Platte River was able to obtain water under the in-lieu process. Leased C-BT water was used as collateral to provide Windy Gap water for the critical process water. Had the reserves in the C-BT system been depleted, or if C-BT water was not available on the rental market, Integrated Operations would not have been an option. In both periods of 2012-2013 and 2015-2016, Platte River and the City of Fort Collins were able to work out a special arrangement during these water-short periods to provide water for the MOU and cooling water, which was very beneficial to Platte River. The 2012-2013 drought period would have been much more costly to Platte River had this agreement not been in place and had the Windy Gap Project not pumped in the late spring of 2013. This enabled Platte River to revert back to normal operations halfway through the year. Acquiring reusable water through the rental market can be uncertain, unreliable and very expensive at times. Although rental water is easier to acquire in wet years, the availability and pricing is subject to market volatility. Rental water is usually obtained from the owner Municipalities; however, if water is not available from the Municipalities, then Platte River will approach others for leasing C-BT water.

The following table provides the amount of C-BT water that was used in-lieu of Windy Gap water from 2012 through the first half of the 2016 water year.

Water Leased From Others 2012-2016

Water Year Total C-BT Collateral Water Provided (AF)

2012 3,518

2013* 1,970

2014 1,071

2015 1,162

2016 (YTD) * 280 *Water short years which also included a special arrangement with Fort Collins for

the Reuse Agreement.

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Over the years, the Windy Gap water supply has proven to be less reliable than initially anticipated. Weather conditions such as severe drought or extreme snowpack limit Windy Gap water availability. There have been numerous occasions, even as recent as the 2015 and 2016 water year, when Platte River was operating in a water short situation (special arrangement with Fort Collins), which severely limits the ability to produce the water necessary for Rawhide operations. Although Rawhide has never been curtailed due to a lack of water supply, continued dependence on weather events to secure Platte River’s water supply is not a reliable long-term strategy.

In the original Windy Gap Project Environmental Impact Statement (EIS), the Windy Gap Project was estimated to yield 48,000 acre-feet per year. Because each unit of Windy Gap water is entitled to 1/480th of the annual yield fo the project, a unit was expected to produce a yield of up to 100 acre-feet per year. The actual Windy Gap yield between 1985 and 2015 averaged approximately 12,000 acre-feet per year (vs. 48,000 acre-feet per year), which is an average annual yield to the Project Participants of about 25 acre-feet per year for each unit, or 25% of the projected yield of 100 acre-feet per year. However, this actual average yield is somewhat limited due to demand of the participants being less than available supply in some years. Because of this, and as stated in the EIS for the Windy Gap Firming Project, a study was conducted to see what the average yield of the Windy Gap Project would have been if Windy Gap unit holders used all available Windy Gap water. In this scenario it was calculated that the average long-term yield (using hydrology form 1950 to 1996) would have been about 55 to 60 acre-feet per unit. But it is important to note as stated above, the firm yield of the project is still considered to be zero.

The chart on the following page shows the historical Windy Gap Project performance and the associated impacts of both wet and dry years as discussed above.

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2. History and Status of Windy Gap Firming: The Windy Gap Project was completed in 1985, and as noted above, deliverability issues led to the adoption of the Integrated Operations protocols six years later. Participants recognized that Integrated Operations could provide relief under certain conditions, but would be ineffective during periods of extreme weather. Discussions of a firming project began during the mid-1990s. At this time Platte River commissioned a study of water supply alternatives. This study was completed in 1999, and confirmed that participation in the Windy Gap Firming Project (Firming Project) was the most effective means to further secure Platte River’s water supply. The Firming Project is simply a new reservoir into which Windy Gap water would be pumped in wet years and stored for use in dry years when the Windy Gap Project does not pump. Such a storage arrangement would significantly improve operational reliability and reduce water cost volatility. Due to the critical nature of a water supply for Rawhide, a firm yield of water is essential for reliable operations. A firm yield is defined as the maximum quantity of water that can be guaranteed with some specified degree of confidence during a specific critical period. In July 2000, Platte River signed an interim agreement with Northern Water to continue its participation in studies of the Firming Project. In 2003, a total of 13 Windy Gap water participants began the federal permitting process for the Firming Project. A report was produced that compared 170 potential firming options. In 2005, Reclamation, the lead agency for the project, published the Purpose, Need and Alternatives report. As part of the National Environmental Policy Act (NEPA) process, Northern Water engaged in a collaborative negotiation with west slope entities to develop mitigation and enhancement measures that would offset the environmental impacts of the Firming Project. In 2008, a draft Environmental Impact Statement (EIS) was issued by Reclamation. This report outlined the purpose and need of the project, environmental impacts and proposed mitigation measures. The mitigation and added enhancement measures were reviewed by the Colorado Wildlife Commission and Colorado Water Conservation Board and were unanimously accepted in the summer of 2011. Following this, in November 2011, Reclamation published the Final EIS. Since that time, a 1041 permit was filed with Grand County. This 1041 permit was approved by Grand County on November 20, 2012. The Northern Water Board and Municipal Subdistrict Board accepted the permit in principal on November 26, 2012. This permit includes an Intergovernmental Agreement (IGA) that ensures enhancements agreed to during the EIS process will be implemented. The IGA will ultimately be signed by the West Slope parties and the Municipal Subdistrict. Negotiations on the Carriage Contract, which is an agreement between Northern Water and Reclamation that outlines the terms and conditions for Windy Gap water to be transported through the C-BT system and stored in Chimney Hollow Reservoir, began in late 2013. On December 19, 2014, officials from Northern Water, Northern Water’s Municipal Subdistrict and Reclamation signed a new Carriage Contract. The new Carriage Contract will apply to all Windy Gap water, including the proposed firming project water, and the term of the contract has been extended to 2054 (it was previously set to expire in 2025). This adds a level of certainty to the entire project for years to come.

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The Record of Decision (ROD) for the Windy Gap Firming Project was also received from Reclamation on December 19, 2014. The ROD identifies and confirms Chimney Hollow Reservoir as the firming project’s preferred alternative. The RODwas the final approval needed for the NEPA process. The signing of the ROD and the new Carriage Contract have been major milestones for the Firming Project. Efforts have been continuing to complete the permitting phase. Northern Water submitted the application for the 401 water quality certification to the State Water Quality Control Division in late 2015, and the final 401 Certification (certification that the project will comply with applicable water quality standards) is anticipated to be awarded in mid-2016. Upon receipt of the 401 Certification, it will be forwarded to the U.S. Army Corps of Engineers for their review and consideration of the issuance of a Section 404 wetlands permit. Final design and construction of the Chimney Hollow Reservoir can begin once the 404 permit has been issued.

3. Determination of Firming Storage Requirements: The Municipal Subdistrict conducted studies in conjunction with Boyle Engineering based on each participant’s Windy Gap Project allocation, projected Windy Gap water use and the historical hydrology of the C-BT system and Windy Gap Project supply over the past 46 years. In addition, Platte River contracted Heather Thompson, P.E., Senior Water Resource Engineer with Ecological Resource Consultants, Inc., to determine Platte River’s specific firming level. This study revealed that 13,000 acre-feet of firming storage would provide the necessary ratio of storage to demand to enable Platte River to obtain the annual requirement of Windy Gap water in a reliable manner every year. After further internal evaluation, Platte River staff recommended a reduction in Firming Project participation. On April 16, 2008, Platte River staff recommended to the Board of Directors that the Firming Project storage level be reduced to 12,000 acre-feet. This level of firming provides a balanced approach to meeting operational needs and still positioning Platte River to fulfill contractual obligations at reduced costs. The Board of Directors accepted this recommendation and Platte River’s share of the firming storage level was reduced to its present level of 12,000 acre-feet (which will provide a firm supply of approximately one third that amount). In August 2014, Heather Thompson was contracted to conduct some additional modeling analysis to evaluate various levels of demand and Windy Gap storage for Platte River. Four different levels of storage were evaluated, ranging from 13,000 acre-feet up to 16,000 acre-feet (the data for 12,000 had previously been modeled). For each level of storage, four levels of Windy Gap ownership were evaluated including 100, 120, 140 and 160 units. Additionally, a separate analysis was conducted outside of the Windy Gap Firming Project Model to determine the demand that could be met under a synthetic two-year and three-year drought assuming that no Windy Gap is pumped for two and three years in a row, respectively. Probability plotting was used to estimate the frequency of these synthetic droughts. The highlights of the model analysis are shown below. The summary is based on ownership of 160 units, and shows the amount of water that would be firmed in different scenarios. In addition, the frequency of the drought interval is listed for both the two-year and three-year scenarios without any Windy Gap pumping. The numbers provided on those categories show how much

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water would be firm each year for the two or three year duration. For example, at a storage level of 12,000 acre-feet, if the project experienced three years with no pumping, the amount of water that would be considered firmed, would be 3,050 acre-feet in years one through three. If you used more water than that in the first year, then there would be less available in future years. Based on the results below, at any storage level, Platte River could tolerate a 1-in-57 year drought event comfortably, and could manage with modified water operations in 1-in-250 year drought event (which would be three consecutive years of no Windy Gap pumping). A modified water operation may include either pumping less effluent to Hamilton Reservoir (using more of the effluent stored in Hamilton, thus allowing the level to drop), or leasing additional effluent. Both cases would require a special arrangement/reduction in the Reuse Agreement. The complete model analysis summary memo and entire table (which shows all the scenarios of firmed water at various storage levels and various ownership units) is provided in Appendix B-5.

Windy Gap Firming Project Model Analysis (based on 160 units)*

Firming Project Storage

(AF)

Annual Firmed Windy Gap (AF) **

Historic Hydrology: 1 in 50 years

Annual Firmed Windy Gap (AF) with two

years of no pumping Occurrence Interval:

1 in 57 years

Annual Firmed Windy Gap (AF) with three years of no pumping Occurrence Interval:

1 in 250 years

12,000 4,730 4,265 3,050

13,000 5,085 4,625 3,310

14,000 5,430 4,980 3,560

15,000 5,815 5,340 3,820

16,000 6,195 5,695 4,075

* All scenarios include a 5% Reintroduction Shrink, which is defined as the reduction in Windy Gap water delivered from Chimney Hollow Reservoir (the intended firming reservoir) when this water is “reintroduced” back into the C-BT system from Chimney Hollow for delivery to Platte River via Horsetooth Reservoir.

** If there are temperature mitigation measures required in a particular year, then the firm yield of this column would be reduced by approximately 200-250 acre-feet/year.

The Windy Gap water currently being held for future generation is not considered as part of the Firming Project at this time. Further evaluation on the pros and cons of firming the reserve water being held for future generation resources will need to be conducted. The need for firming will depend on the location and type of resource that is selected. In addition, other factors to consider when determining the firming level include the value of firmed water. Chimney Hollow Reservoir would change the Windy Gap project’s reliable annual total yield from zero acre feet of water to about 30,000 acre feet, thus, improving the reliability of water deliveries to participating entities. There is a significant value to a firm and reliable water supply –whether it is for immediate needs or future needs. Platte River staff will evaluate this firming level again prior to the final design phase and construction of the project.

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4. Next Steps for the Firming Project: The next steps in the project prior to final project design and construction will be obtaining the remaining certifications and permits such as:

U.S. Army Corps of Engineers’ Section 404 Permit (Federal Clean Water navigable waters/wetlands permit)

Colorado Department of Public Health and Environment (CDPHE) 401 certification (state water quality certification under the federal Clean Water Act section 401)

These federal and state documents are anticipated to be complete in 2016. The IGA between Northern Water and several west slope governmental entities is also nearly complete. This agreement was created to deal with local issues, including mitigation under the EIS and additional enhancements. An additional item to complete includes amending the Windy Gap water rights to incorporate a variety of agreements and permits with other entities associated with the Firming Project.

5. Firming Project Schedule: Upon completion of the steps noted above, the design phase will become the primary focus and is anticipated to begin in mid-2016. Design is planned for approximately two years, with construction to follow. The Firming Project is estimated to be complete and ready to begin filling by the spring of 2021.

6. Firming Project Costs: Early estimates of the Firming Project reservoir were based on size and not a specific location. In 2006, the first preliminary estimates were approximately $221 million for the reservoir. Once the EIS process had identified Chimney Hollow as the candidate firming reservoir location, the costs were further refined to $275 million. Currently, including mitigation and enhancements to date, and upated construction cost estimates, the total project cost is now estimated at $399 million. With a total planned capacity of 87,000 - 90,000 acre-feet of storage, this cost equates to approximately $4,600 per acre foot of storage space. Of this total, Platte River’s current obligation for 12,000 acre-feet of storage is approximately $55 million. Each increment of 1,000 acre-feet of additional storage capacity would cost approximately $4.6 million. In essesence, participants choose what size of “bucket” that they need. The greater the storage capacity (i.e. bucket), the more firm water will be yielded. It is anticipated that this storage capacity cost may increase as additional mitigation and enhancement initiatives are finalized, the final design gets completed, and the construction phase commences.

7. Operation of the Firming Reservoir:

Prior to construction of Chimney Hollow, a set of operating guidelines will be developed. At the present time, it is anticipated that Chimney Hollow will fill and discharge water via gravity flow. The operating guidelines will cover routine operation, scheduling water in and out of Chimney Hollow and evaporation/seepage loss calculation methodology. A general map of the proposed Chimney Reservoir appears on the next page, with a more detailed map shown in Appendix A-6.

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Proposed Chimney Hollow Location

Northern Colorado Water Conservancy District http://www.northernwater.org/WaterProjects/CBTWindyGapMaps.aspx

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Section III. Current Water Policy

1. Water Policy Background: Despite the critical importance of water to Platte River operations, a formal water policy has never been established. Prior Board guidance has been in the form of direction on topical issues, such as the adoption of resolutions regarding the lease of water or Windy Gap units and periodic approval of continued participation in the Firming Project. In general, three important principles are evident from Board action. These principles include: (a) securing and protecting a water supply sufficient for Platte River current operational needs, (b) planning for Platte River’s future water supply needs while contemplating the future needs of the Municipalities, and (c) leveraging value for water resources through leasing unpumped reusable effluent water and leasing Windy Gap units.

a. Securing and Protecting Water for Platte River operational needs. As described in Section I.4 (page 5) of this document, Platte River uses approximately 3,193 acre-feet of reusable effluent per year for cooling purposes, approximately 209 acre-feet of reusable effluent per year for augmentation purposes, and approximately 520 acre-feet of direct Windy Gap water per year for process water. The current water supply adequately meets these operational needs when water and weather conditions are normal. In years with extreme wet or drought conditions, the water supply needs have been met through either the leverage achieved from the Windy Gap units (Platte River’s pro-rata allocation is higher based on contract allotment ownership level), or alternative arrangements and sources. The Firming Project will provide additional supply security.

b. Planning for Platte River’s future water supply needs. The primary consideration for determining the future at Platte River would be the water requirments associated with future generation resources and what the resources plans forecast for an overall generation porfolio. Water for Future Generation. When Rawhide Unit 1 was initially constructed, there were projections for a second and third unit at Rawhide. Based on engineering studies at that time, it was determined that each additional unit (Units 2 & 3) would require 2,030 acre-feet of water each per year for cooling and process water, for a total additional requirement of 4,060 acre-feet6. Water requirements for future generation are dependent upon location and type of resource. More specific research on future resource water requirements will be conducted, but the identified reserve of approximately 4,060 acre-feet should be more than adequate to meet the needs for any future resource that Platte River would consider. In particular, combined cycle units require considerably less water than traditional coal-fired units. General reference data for water consumption for combined cycle power plants, as well as other types of generation is located in Appendix B-3.

6 Black & Veatch estimates were highlighted in a memorandum to the Board of Directors dated June 7, 1983.

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c. Leveraging the value of water resources through leasing. It has been the practice of Platte River to maximize the value of water resources through leasing activities within limits defined by the Board. In 1994, the Platte River Board of Directors adopted resolutions addressing the lease of Windy Gap units, Resolution No. 7-94 (Appendix C-1), and the lease of unpumped effluent, Resolution No. 8-94. Resolution No. 8-94 was modified twice and has been superseded by Resolution No. 13-12 (Appendix C-2).

Unpumped reusable effluent water: The most frequent type of water lease Platte River enters into is for unpumped reusable effluent generated under the Reuse Agreement and MOU. The amount of reusable effluent can vary, but averages approximately 2,029 acre-feet annually based upon a typical supply of 5,431 acre-feet and a typical use of 3,402 acre-feet (effluent pumped to Rawhide plus augmentation requirements). Platte River does not deliberately accumulate unpumped water, but there is inevitably some water accumulated each year that either can’t be pumped or doesn’t need to be pumped (with the exception of water short years). Variations in unpumped reusable effluent occur based on availability of water under the Reuse Agreement, the amount of return flows from Fort Collins and AB InBev, and the amount of water needed at Rawhide to maintain the level in the reservoir. Under current water policy, the unpumped effluent is stored in Fossil Creek Reservoir, and can be stored to pump at a later time, or a certain portion of that reusable effluent is available for lease. Current policy does not restrict the uses of water by the leasing entity. Historically reusable effluent has only had a few markets with modest value (agriculture and industrial augmentation). However, in the recent past, this water gained value for use by the oil and gas industry. Platte River may continue to receive requests for the lease of reusable effluent for oil and gas well development. To date, four transactions for this purpose have been approved by the Board of Directors. Each transaction has

Unpumped Reusable Effluent *

Water Supply and Use—Reusable Effluent

Annual Quantity

Available (AF)

Annual Quantity Used (AF)

Total (AF)

Supply

Reuse Agreement 4,200

Windy Gap Return Flows 1,231

Total Supply 5,431

Use

Pump to Rawhide 3,193

Augmentations 209

Total Use 3,402

Unpumped Reusable Effluent (annual) 2,029

*Note—this table reflects normal water use and availability

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a number of factors that must be considered. These factors include considerations for the availability and type of water being leased, the term of the lease, the current market pricing, the specific use of the leased water and whether or not such water is included in a substitute water supply plan. From a regulatory standpoint, both Windy Gap water and Windy Gap return flow water can be used for oil and gas well development. However, Windy Gap first use water must be accounted for under specific procedures developed and required by Northern Water and furthermore can only be used by a lessee within the combined boundaries of Northern Water and the Municipal Subdistrict of Northern Water. The use of Windy Gap return flows (i.e. second use Windy Gap water) for oil and gas well development purposes is not constrained in its place of use to the boundaries of Northern Water or its Municipal Subdistrict, although the Board of Directors has placed restrictions requiring use of such leased water to entities within Colorado Water Division 1. Resolution No. 13-12 (Leasing of unpumped reusable effluent)

Resolution 13-12 allows Platte River to:

Lease for a term up to one year, any unused water which Platte River may receive through the Reuse Agreement or MOU with first lease priority to the Municipalities of Estes Park, Fort Collins, Longmont and Loveland and second to other entities within Colorado Water Division 1.

Resolution 13-12 provides a practical and efficient method for Platte River to lease unpumped reusable effluent. The leasing of unpumped reusable effluent under this resolution has provided a means for the responsible dispersal of this valuable resource. Platte River currently leases reusable effluent in accordance with Resolution No. 13-12 to several entities within Colorado Water Division 1 (South Platte River basin, Republican River basin, and Laramie River basin). This division essential represents the northeast quadrant of the state. The following map shows all of the water divisions in the State of Colorado, with Division 1 highlighted in green for reference.

Colorado Division of Water Resources

http://water.state.co.us/DWRIPub/DWR%20Maps/ColoradoRiverBasins.pdf

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Since 1997, Platte River has leased almost 9,000 acre-feet of unpumped reusable effluent. Due to the extreme drought conditions in early 2013, Platte River temporarily ceased leasing reusable effluent to others but did trade reusable effluent for C-BT water that was used to produce in-lieu Windy Gap water to be pumped to Rawhide for process water. Leasing unpumped effluent has resumed, and lease opportunities are actively pursued when there is the availability of unpumped effluent. The following table provides a history of the recent leases and the associated revenues. One note of significance is the period of time when there was a high demand in the region for reusable water for use by the oil and gas industry (2012-2014). In 2012, Platte River was approached by an oil and gas water provider and was presented with a good opportunity in the leasing market. With approval by the Board of Directors, Platte River successfully entered into four leases of unpumped reusable effluent water for oil and gas development. The revenues from leasing unpumped effluent for all markets are itemized in the following table and chart.

Reusable Effluent Water Leases – All Markets

Windy Gap Year

Acre Foot (AF)

Price/AF Revenues Comments Total

Annual (AF)

Total Annual

Revenues

1997 9 $30 $270 9 $270

2001 2,000 $15 $30,000 2,000 $30,000

2006 1,400 $30 $ 42,000 1,400 $42,000

2007 1,000 $47 $ 47,000 1,000 $47,000

2009 1,538 $81 $123,852 1,538 $123,852

2010 163 $119 $19,376 163 $19,376

2011 167 $119 $19,825 167 $19,825

2012 121 $251 $30,198

1,621 $341,598 2012 840 $300 $252,000 Oil & Gas

2012 660 $90 $59,400 Ag/Oil & Gas Partnership

2013 97 $252 $24,362 297 $176,762

2013 200 $762 $152,400 Oil & Gas

2014 61 $300 $18,300 768 $478,620

2014 570 $762 $434,340 Oil & Gas

2015 67 $300 $20,100 67 $20,100

2016 (YTD)

0 n/a $0

0 $0

Totals 9,030 $1,299,403

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Lease of Windy Gap units: The second and less frequent type of lease is the lease of Windy Gap units. This type of lease involves first-use Windy Gap water that would not otherwise be used for Platte River’s current operational needs. The amount of water that each unit produces varies from year to year depending on conditions. It could range anywhere from zero acre-feet up to the full yield of 100 acre-feet per unit. Operationally the Windy Gap units are useful to Platte River from a leverage perspective. Without the Firmig Project, the firm yield of Windy Gap water is considered to be zero. However, because Platte River owns 160 units of Windy Gap (out of a project total of 480 units), it is entitled to one third of all Windy Gap water available annually up to the amount of the Platte River order. In years when Windy Gap water is in short supply, this “leverage” helps Platte River meet its annual order. Despite the benefits of leverage, there is a cost associated with ownership of the Windy Gap units. Until needed for future use, efforts made to lease these units could help to offset the capital costs of the units and future water related capital costs. Depending on the number of units leased, there is some loss of leverage, so that needs to be carefully factored in when making decisions regarding leasing Windy Gap units.

$0

$100,000

$200,000

$300,000

$400,000

$500,000

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2001 2006 2007 2009 2010 2011 2012 2013 2014 2015

Revenues Acre-Feet (AF)

Reusable Effluent Water Leases

Acre-Feet (AF) Revenues

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Resolution No. 7-94 (Leasing of Windy Gap units)

Resolution 7-94 recognizes that Platte River currently utilizes up to 51 units of Windy Gap on an annual basis but has ownership of 160 units. This resolution describes that some units may not be required for immediate use by Platte River, and directs the following:

All 160 Windy Gap units shall be retained for Platte River’s use.

Any units not being used by Platte River may be offered for lease to the Municipalities of Estes Park, Fort Collins and Loveland, and then to the City of Longmont for their use.

After first right of refusal by the four Municipalities, Windy Gap units may be leased to other entities within the boundaries of the Northern Colorado Water Conservancy District and Subdistrict.

Any Windy Gap units held by Estes Park, Longmont or Loveland may be included in leases to other entities (included in the transaction at their option).

The Platte River Board of Directors shall approve any lease of Windy Gap units.

In 2012, Platte River leased ten Windy Gap Units to a Front Range municipality. The lease is for a three-year term. There is an option of two, one-year extensions, pending approval by the Platte River Board of Directors. To date, a one-year extension has been executed.

Section IV. Going Forward.

Despite the critical nature of water to the operations and success of Platte River, over the past 40 years water issues have been handled as situations have come up rather than through a comprehensive analysis and Board-approved policy. At present a number of factors including but not limited to: the increasing use of the Windy Gap resource, continued stress on Colorado water resources, the ongoing planning for the Firming Project, leasing market opportunities, the internal strategic planning process and the review of future resource options all suggest that the time may be appropriate to adopt an overarching water policy and resolution that attempts to integrate the various elements of Platte River water activities.

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Appendix A

Maps

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A-1

Northern Colorado Water Conservancy District http://www.northernwater.org/WaterProjects/CBTWindyGapMaps.aspx

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A-2

Northern Colorado Water Conservancy District http://www.northernwater.org/WaterProjects/CBTWindyGapMaps.aspx

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A-3

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A-3

Northern Colorado Water Conservancy District http://www.northernwater.org/WaterProjects/CBTWindyGapMaps.aspx

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A-4

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A-4

Northern Colorado Water Conservancy District http://www.northernwater.org/WaterProjects/CBTWindyGapMaps.aspx

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A-4

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A-5

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A-6

Northern Colorado Water Conservancy

Districthttp://www.northernwater.org/docs/WindyGapFirming/ChimHollOperatMap.pdf

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Appendix B

Reference Materials

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Platte River Power Authority Water Agreements

B-1 (1)

Agreement Parties Description Starting Date Ending Date

Reuse Agreement Platte River City of Fort Collins Water Supply and Storage Company

Agreement is based on a series of exchanges in which Platte River supplies 4,200 AF of Windy Gap water in exchange for 4,200 AF of effluent (produced by the City of Fort Collins from new foreign water source), plus return flows of the Windy Gap water.

August 1978 In effect as long as water is required for electric generation (either at Rawhide or another location that return flows can be delivered to by Fort Collins).

Memorandum of Understanding (MOU)

Platte River City of Fort Collins Anheuser-Busch (AB InBev)

AB InBev can use up to 4,200 AF of the Windy Gap water supplied to Fort Collins from Platte River. Platte River will receive the return flows from that use, and will be compensated by AB InBev for the variable operation and maintenance costs.

April 1988 In effect as long as the AB InBev Fort Collins brewery and Rawhide Energy Station are operative.

North Poudre Storage Agreement

Platte River North Poudre Irrigation Company

Allows Platte River to temporarily store reusable effluent in Fossil Creek Reservoir. There has been one amendment to this agreement to facilitate leases, and specify accounting of Platte River’s water balance in the event of a reservoir spill.

November, 1979

1st Amendment: September, 2009

December 31, 2024

Soldier Canyon Outlet Capacity

Platte River City of Fort Collins

Provides Platte River with a 3 cfs tap from the Fort Collins raw water delivery system below the Soldier Canyon outlet from Horsetooth Reservoir.

February, 1981 Perpetual so long as water is needed for power generation or related purpose.

Larimer County Augmentation Agreement

Platte River Larimer County

Larimer County receives up to 100 AF of reusable effluent from the MOU annually for augmentation of the County’s Strang Gravel pit.

October, 1993 Perpetual so long as Platte River’s Rawhide Energy Station and the Strang Pit operate.

Carter Lake Outlet Agreement

Platte River Northern Water

Provides Platte River with the delivery capacity of up to 10 cfs from Carter Lake outlet.

August, 1993 Perpetual

Allotment Contract for Additional Carter Lake Outlet Capacity

Platte River, Northern Water

Provides Platte River with an additional 8 cfs capacity from Carter Lake outlet for a total of 18 cfs.

September, 2001

Fort Collins Windy Gap Assignment Agreement

Platte River City of Fort Collins

Assigns Fort Collins 1/6 share of Windy Gap to Platte River

July, 1974 Perpetual

Estes Park Windy Gap Assignment Agreement

Platte River Town of Estes Park

Assigns half of Estes Park 1/6 share of Windy Gap to Platte River

1974 Perpetual

Loveland Windy Gap Assignment Agreement

Platte River City of Loveland

Assigns half of Loveland’s 1/6 share of Windy Gap to Platte River

July, 1974 Perpetual

Warren Lake Platte River Warren Lake Reservoir Co.

Fractional Share as Headquarters Well Back up

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Platte River Power Authority Water Rights/Decrees, Conditional Exchanges are in Teal.

B-1 (2)

Decree Description of Water Rights Uses

Date of Appropriation

Volume/Flow Rate Outcome of Water

Court Case Absolute?

W-9322-78

Reuse Component

"All domestic, municipal, irrigation, and industrial purposes associated

with the operation of a power plant and the development and

maintenance of lands surrounding the power plan" & "fully consumable" See Page 9

Dec-77

FC/WSSC - 7636 (average) af of NFW

PRPA - 4200 af of effluent

Approved Absolute

Rawhide Pipeline

15.19 cfs Conditional Yes(82CW318)

Rawhide Reservoir

13,600 af Conditional Yes (83CW126;

87CW078)

Exhanges *Number coorellates with number from

pages 30-31 of decree

for use in the reuse plan (which Court calls an "augmentation plan")

-1

Long Draw to Joe Wright

Conditional Yes (83CW126)

Joe Wright to Long Draw

Conditional Yes (83CW126)

-2

Long Draw to Horsetooth Reservoir

Conditional Yes (83CW126)

Joe Wright to Horsetooth Reservoir

Conditional Yes (83CW126)

Horsetooth to Long Draw

Conditional Yes (83CW126)

Horsetooth to Joe Wright

Conditional Yes (83CW126)

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B-1 (3)

Decree Description of Water Rights Uses

Date of Appropriation

Volume/Flow Rate Outcome of

Water Court Case Absolute?

-3

Joe Wright and:

North Poudre Munroe Canal

Conditional Yes (83CW126)

Main Canal of North Poudre

50 cfs Conditional Yes (03CW324)

Larimer and Weld Canal Conditional

Larimer County Canal

50 cfs Conditional Yes (03CW324)

Lake Canal Conditional

Greeley No. 2 Canal Conditional

Timnath Reservoir Conditional

Long Draw and:

North Poudre Munroe Canal

Conditional Yes (83CW126)

Main Canal of North Poudre

50 cfs Conditional Yes (03CW324)

Larimer and Weld Canal Conditional

Larimer County Canal Conditional

Lake Canal Conditional

Greeley No. 2 Canal Conditional

Timnath Reservoir Conditional

Horsetooth and:

North Poudre Munroe Canal Conditional

Main Canal of North Poudre Conditional

Larimer and Weld Canal Conditional

Larimer County Canal Conditional

Lake Canal Conditional

Greeley No. 2 Canal Conditional

Timnath Reservoir Conditional

-4

All structures above and Rockwell Reservoir Conditional

-5

All structures above and Milton Seaman Conditional

All structures above and Barnes Meadow Conditional

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B-1 (4)

Decree Description of Water Rights Uses

Date of Appropriation

Volume/Flow Rate Outcome of

Water Court Case Absolute?

-6

Rawhide Pipeline and Fossil Creek Reservoir

Conditional Yes (83CW126)

Rawhide Pipeline and North Poudre No. 5 Conditional

Rawide Pipeline and North Poudre No. 6 Conditional

Fossil Creek Reservoir to Rawhide Pipeline

Conditional Yes (83CW126)

North Poudre No. 5 to Rawhide Pipeline Conditional

North Poudre No. 6 to Rawhide Pipeline Conditional

Fossil Creek Reservoir to North Poudre No. 5

25 cfs Conditional Yes (03CW324)

Fossil Creek Reservoir to North Poudre No. 6

25 cfs Conditional Yes (03CW324)

North Poudre No. 5 to Fossil Creek Reservoir

25 cfs Conditional Yes (03CW324)

North Poudre No. 6 to Fossil Creek Reservoir

25 cfs Conditional Yes (03CW324)

-7

Intake of Rawhide Pipeline to:

Lake Canal Conditional

Larimer and Weld Canal Conditional

Timnath Reservoir Inlet Conditional

Larimer County Canal Conditional

North Poudre Canal Conditional

North Poudre No. 6 to:

Lake Canal Conditional

Larimer and Weld Canal Conditional

Timnath Reservoir Inlet Conditional

Larimer County Canal Conditional

North Poudre Canal Conditional

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B-1 (5)

Decree Description of Water Rights Uses

Date of Appropriation

Volume/Flow Rate

Outcome of Water Court

Case Absolute?

79CW158

Rawhide Reservoir, First Enlargement

Same as W-9322-78 31-Jan-79 4200 af

(enlarge from 13,600 af to 17,800)

Conditional Yes (89CW144, 1,498 abandoned)

82CW318 Rawhide Pipeline

Cooling water and sluice water, stockwater, irrigation, and dust

suppression 31-Dec-77 15.19 (Absolute) Absolute Yes

82CW319

Rawhide Pipeline Englargement

22-Jun-82 1.6

Absolute (decree unclear, but

application claims absolute)

Yes

83CW126

Long Draw Reservoir Enlargment storage for domestic, municipal,

irrigation, and industrial 31-Aug-65 6,600 af Absolute 6,600 af Absolute Yes (89CW144)

Rawhide Reservoir (under original W-9322-78 Decree

Same as W-9322-78 31-Dec-77 4,436 Absolute

9,164 Conditional 4,436 Absolute

9,164 Conditional Yes (83CW126; 87CW078)

Exhanges *Number coorellates with number

from pages 30-31 of decree

-1

Long Draw to Joe Wright

Absolute Yes

Joe Wright to Long Draw

Absolute Yes

-2

Long Draw to Horsetooth Reservoir

Absolute Yes

Joe Wright to Horsetooth Reservoir

Absolute Yes

Horsetooth to Long Draw

Absolute Yes

Horsetooth to Joe Wright

Absolute Yes

-3

Long Draw to North Poudre Munroe Canal

Absolute Yes

Joe Wright and North Poudre Munroe Canal

Absolute Yes

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B-1 (6)

Decree Description of Water Rights Uses

Date of Appropriation

Volume/Flow Rate Outcome of Water

Court Case Absolute?

-6

Rawhide Pipeline and Fossil Creek Reservoir

Absolute Yes

Fossil Creek Reservoir and Rawhide Pipeline

Absolute Yes

85CW219

Rawhide Reservoir, First Enlargment

2,798 af conditional 1,498 abandoned

Yes (89CW144, 1,498 abandoned)

87CW078

Rawhide Reservoir (under W-9322-78)

9,164 af Absolute Yes

All remaining conditional exchanges

Conditional - Finding of Diligence

89CW144 Rawhide Reservoir, First

Enlargment 2,708 Absolute Yes

95CW116 All remaining conditional

exchanges Conditional - Finding

of Diligence

03CW324 Certain Exchanges

-2

Joe Wright and:

Main Canal of North Poudre

50 cfs Absolute Yes

Larimer County Canal

50 cfs Absolute Yes

Long Draw and:

Main Canal of North Poudre

50 cfs Absolute Yes

-6

Fossil Creek Reservoir to North Poudre No. 5

25 cfs Absolute Yes

Fossil Creek Reservoir to North Poudre No. 6

25 cfs Absolute Yes

North Poudre No. 5 to Fossil Creek Reservoir

25 cfs Absolute Yes

North Poudre No. 6 to Fossil Creek Reservoir

25 cfs Absolute Yes

All other conditional exchanges

Conditional-Finding of Diligence

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B-2

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B-3

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B-3-ii B-3-iii

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B-4 (1)

Date: September 23, 2014

To: Bill Emslie

From: Heather Thompson, P.E.

Re: WGFP Model Analyses for Platte River Power Authority

The following memorandum summarizes additional Windy Gap Firming Project (WGFP) Model analyses to

evaluate various levels of demand and Windy Gap storage for Platte River Power Authority (Platte

River). Four different levels of storage in the proposed Chimney Hollow Reservoir were analyzed for

Platte River including 13,000 acre‐feet (AF), 14,000 AF, 15,000 AF, and 16,000 AF. For each level of

storage, four levels of Windy Gap ownership (e.g. the number of Windy Gap units owned by Platte River)

were evaluated including 100, 120, 140 and 160 units. The WGFP Model was used to estimate the

demand that could be met without any shortages throughout the model study period for each

combination of storage and Windy Gap ownership. The WGFP Model was simulated for ownership levels of

100 and 160 units and storage amounts of 14,000 AF and 16,000 AF. For all other combinations of

storage and Windy Gap ownership, the demand that could be met was interpolated. The WGFP Model

scenario that was used is Chimney Hollow Reservoir with prepositioning under future conditions, which

includes reasonably foreseeable future actions. The following sections describe the assumptions

included in the WGFP Model.

WGFP Model Assumptions

A detailed description of WGFP Model parameters and assumptions is provided in the Windy Gap

Firming Project Modeling Report (Boyle 2003) and the Addendum to the WGFP Modeling Report (Boyle

2006). The WGFP Model was relied on to provide hydrologic data and information on firm yield for

alternatives analyzed in the WGFP EIS. The model operates on a monthly time step for a study period

that extends from 1950 through 1996. The study period contains a mixture of dry, wet, average years,

reflective of the range of historical conditions. The model study period is suitable for estimating effects

associated with the EIS alternatives because it includes a broad range of hydrologic conditions and

sequences of years that include dry years followed by wet years. While the study period does not

include the drought years of 2002 and 2003, it does include dry years such 1954, 1971, and 1981. Key

model assumptions in the model that are pertinent to the analyses conducted for Platte River are

described below.

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B-4 (2)

1. Platte River Demand

Platte River’s annual demand was distributed monthly based on Windy Gap delivery data for the last

three years from 2009 through 2011 and information provided by Beth Molenaar with the City of Fort

Collins. This data was relied on for modeling completed previously for Platte River and the demand

distribution was not updated with more recent data for this effort. It was assumed that 10% of Platte

River’s annual demand would be delivered each month from March through September and 6% of Platte

River’s annual demand would be delivered each month during the remaining five months.

2. Platte River’s Windy Gap Unit Ownership

Platte River currently owns 160 units of the Windy Gap Project, which entitles Platte River to one‐third

of the Windy Gap water supply. Platte River requested that ERC analyze four different levels of Windy

Gap ownership including 160 units, 140 units, 120 units and 100 units. The minimum ownership level

evaluated was 100 units. For ownership levels less than 160 units, it was assumed that the units not

used by Platte River were used by an entity that is not participating in the WGFP. Therefore, the Windy

Gap supply associated with those units was allocated and used by an entity other than Platte River. For

each level of storage and ownership, ERC determined the demand that could be met without any

shortages throughout the model study period.

3. Prepositioning

The WGFP scenario that was evaluated includes prepositioning since that was considered most likely

based on Reclamation’s position on the ability to operate in that manner. However, there is currently no

certainty that prepositioning will continue for the life of the WGFP since that depends on how the

method is approved and implemented, whether through Water Court, an agreement with Reclamation,

or another contract. With prepositioning, Windy Gap water is not physically delivered through Adams

Tunnel. Instead, C‐BT water is delivered into Chimney Hollow Reservoir primarily during the fall and

winter to occupy storage space that is not occupied by Windy Gap water. This creates space for Windy

Gap water in Granby Reservoir. When Windy Gap water is delivered into Granby Reservoir, the C‐BT

water in Chimney Hollow Reservoir is exchanged for a like amount of Windy Gap water in Granby

Reservoir.

4. Diversion Shrink

Windy Gap Project water is diverted from the Colorado River just downstream of the confluence of the

Colorado and Fraser Rivers at Windy Gap Reservoir. Upon introduction into the C‐BT system, Windy Gap

diversions are subject to a 10% “diversion shrink” per the existing Carriage Contract between the

Municipal Subdistrict and Reclamation, with the shrink amount credited to the C‐BT Project. The WGFP

Model includes the 10% diversion shrink for all scenarios evaluated. The 10% diversion shrink is similar

to another proposal that is currently being considered as part of on‐going contract negotiations, which

includes 5% diversion shrink upon introduction of Windy Gap water into the C‐BT system on the West

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B-4 (3)

Slope and another 5% shrink when Windy Gap water is delivered either directly or by exchange to either

Chimney Hollow Reservoir or a Windy Gap allottee on the East Slope.

5. Carryover Shrink

At the end of March each year, a 10% carryover shrink is assessed on any Windy Gap water remaining in

Granby Reservoir with the shrink amount credited to the C‐BT Project. The WGFP Model includes the

10% carryover shrink for the scenarios evaluated. Another proposal that is currently being considered as

part of on‐going contract negotiations includes a 5% carryover shrink on any Windy Gap water

remaining in Granby Reservoir at the end of March. A sensitivity analysis was conducted to estimate the

potential increase in Platte River’s firm yield if the carryover shrink is reduced to 5%.

6. Reintroduction Shrink

In addition to diversion and carryover shrink, reintroduction shrink may also be assessed when Windy

Gap water is reintroduced into the C‐BT system after it has been stored in Chimney Hollow Reservoir.

The WGFP Model was simulated with a 5% reintroduction shrink. The WGFP Model is configured so that

all deliveries from Chimney Hollow Reservoir to Platte River are physically released from the reservoir. It

is likely that the majority of Platte River‘s deliveries from Chimney Hollow Reservoir will be made via an

exchange whereby C‐BT water is released from Horsetooth Reservoir and an equivalent amount of

Windy Gap water is booked over from Platte River‘s account to the C‐BT account in Chimney Hollow

Reservoir. It is difficult to accurately predict when Windy Gap water would be delivered via exchange

versus directly from Chimney Hollow Reservoir. The current proposal being considered as part of on‐

going contract negotiations does not include reintroduction shrink on water delivered by exchange from

Chimney Hollow Reservoir. To evaluate the effects of this proposal, a sensitivity analysis was conducted

to estimate the potential increase in Platte River‘s firm yield if reintroduction shrink is not charged on

deliveries from Chimney Hollow Reservoir to Platte River.

7. Reasonably Foreseeable Future Actions

Several reasonably foreseeable actions are anticipated to occur regardless of the implementation of a

WGFP alternative. Water‐based reasonably foreseeable actions that might affect the WGFP include:

Denver Water Moffat Collection System Project

Increased water use from population growth in Grand and Summit counties

Reduction of Xcel Energy’s Shoshone Power Plant call

Elimination of releases from Williams Fork and Wolford Mountain reservoirs to meet flow

recommendations (10,825 AF of water) for endangered fish

Increase in Wolford Mountain Reservoir contract demand

Expiration of Denver Water’s contract with Big Lake Ditch in 2013

Climatic change

Mountain pine beetle killed trees

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10,825 Project with 5,412.5 AF releases from Granby Reservoir

Subdistrict and Denver Water Fish and Wildlife Enhancement Plans

Denver Water Colorado River Cooperative Agreement

These reasonably foreseeable actions are described in detail in the WGFP EIS. The reasonably

foreseeable future actions listed above were either incorporated in the model or evaluated qualitatively.

Future implementation of water‐based reasonably foreseeable actions would result in changes in the

amount and timing of Colorado River streamflows. In general, less water would be available for

diversion by the WGFP and the firm yield would be less. The reduction in firm yield varies by Windy Gap

Participant (“Participant”) due to differences in each Participant’s ownership in the Windy Gap Project in

relation to the storage they have requested. For the entire WGFP, the total firm yield was estimated to

be about 10 percent or 2,500 AF less because less Windy Gap water would be diverted once reasonably

foreseeable actions are implemented. Average annual Windy Gap diversions were estimated to

decrease by about 5,300 AF. For Platte River, the reduction in firm yield due to the effects of reasonably

foreseeable actions was estimated to be on the order of 400 AF; however, that depends on the level of

firming storage and number of units evaluated. The reduction in firm yield due to reasonably

foreseeable future actions is incorporated in the results presented in Table 1. Potential reductions in

Platte River’s firm yield due to reasonably foreseeable future actions were considered in this analysis.

8. Mitigation Measures

Several mitigation measures have been proposed to offset or minimize impacts from implementation of

the WGFP. The Fish and Wildlife Mitigation Plan (FWMP) that was developed by the Subdistrict in

cooperation with the Colorado Division of Parks and Wildlife (CDPW) was adopted by the Colorado

Wildlife Commission on June 9, 2011 and by the Colorado Water Conservation Board on July 13, 2011.

The principal mitigation measure that has the potential to affect Platte River’s firm yield is the

curtailment of WGFP diversions after July 15 when temperatures in the Colorado River below Windy Gap

Reservoir and above the Williams Fork River exceeds the chronic or acute temperature standard. To

reflect the potential impact of this mitigation measure in the model, each scenario was simulated with

Windy Gap pumping curtailed in August. In addition, it was assumed that Granby Reservoir would fill

one month sooner (in July) at the start of Platte River’s critical period, in which case Platte River would

not have the ability to store Windy Gap water or use water previously stored in Granby Reservoir in that

month due to the spillage of all stored Windy Gap water from Granby Reservoir and no space available

to store pumped Windy Gap water in Granby Reservoir. Potential reductions in Windy Gap pumping in

July as a result of temperature mitigation would likely be small and infrequent; therefore, no changes

were made to reflect temperature mitigation in July in the model.

9. Agreements with Middle Park Water Conservancy District and Grand County

The Participants have negotiated an agreement with Middle Park Water Conservancy District (MPWCD)

and Grand County that would provide firm annual and variable yield to both MPWCD and Grand County.

MPWCD’s firm annual yield would consist of a combination of 850 ac‐ft/yr and 1,450 ac‐ft/yr for a total

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of 2,300 ac‐ft/yr. The 850 AF/yr of firm yield will be generated through a change of the Red Top Ditch.

The 1,450 AF/yr of firm yield will be supplied by the Participants; however, the Participants will receive

the first 3,000 AF of Windy Gap water pumped that is currently allocated to MPWCD. In addition, the

agreement allows MPWCD and Grand County to receive “variable yield”, defined as a portion of the

amount pumped by the Participants. This agreement was not incorporated in the model due to the

complexities of the various conditions of the agreement and limitations with the current operating rules

available in the model. The model reflects that MPWCD’s firm yield is generated by the first 3,000 AF/yr

of Windy Gap water pumped. While this configuration does not reflect all the terms and conditions of

the current agreement, it provides a reasonable approximation of the potential impacts on the

Participant’s firm yield since the first 3,000 ac‐ft of Windy Gap water pumped is not available to the

Participants and is used to generate firm yield for MPWCD. Previous analyses conducted for NCWCD to

evaluate the effects of this agreement show that Platte River’s firm yield is not affected by reductions in

their supply associated with variable yield provided to MPWCD and Grand County. Because Platte River

has such a large portion of the Windy Gap supply in relation to their firming storage and demand, Platte

River is still able to fill their Chimney Hollow Reservoir account in most average and wet years despite

potential reductions in their supply associated with this agreement. While there was no reduction in

Platte River’s firm yield associated with this agreement at an ownership level of 160 units, the risk of a

reduction in firm yield increases at lower ownership levels.

Model Results Summary

Table 1 provides a summary of the results for the model scenarios evaluated. The results presented in

Table 1 are based on a 47‐year study period from 1950 through 1996. The critical period for Platte River

extends from the fall of 1953 when Platte River’s account fills through the spring of 1956 when it

empties. During this drought, which occurs once in the 47 year study period, model results show there

would be no pumping in 1954 and approximately 7,600 AF pumped in 1955.

At 13,000 AF of storage, Platte River’s firm yield ranges from 4,890 AF/yr at an ownership level of 100

units up to 5,085 AF/yr at an ownership level of 160 units. The incremental yield provided by the

additional units is relatively small since the Windy Gap pumping during the critical period is very low. If

Windy Gap pumping needs to be curtailed in August due to temperature mitigation, the firm yield

decreases by about 200 AF/yr.

At 14,000 AF of storage, Platte River’s firm yield ranges from 5,235 AF/yr at an ownership level of 100

units up to 5,430 AF/yr at an ownership level of 160 units. If Windy Gap pumping needs to be curtailed

in August due to temperature mitigation, the firm yield decreases by about 195 AF/yr to 200 AF/yr.

At 15,000 AF of storage, Platte River’s firm yield ranges from 5,490 AF/yr at an ownership level of 100

units up to 5,815 AF/yr at an ownership level of 160 units. If Windy Gap pumping needs to be curtailed

in August due to temperature mitigation, the firm yield decreases by about 230 AF/yr.

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At 16,000 AF of storage, Platte River’s firm yield ranges from 5,730 AF/yr at an ownership level of 100

units up to 6,195 AF/yr at an ownership level of 160 units. If Windy Gap pumping needs to be curtailed

in August due to temperature mitigation, the firm yield decreases by about 225 AF/yr to 270 AF/yr. At

an ownership level of 100 units, the Windy Gap supply is not sufficient to fill Platte River’s account at the

start of the critical period and as a result the additional storage operates less efficiently.

Model results show that if Platte River increases their storage to 16,000 ac‐ft, it becomes supply limited

if it reduces the number of units owned to 100 units. At an ownership level of 100 units, Platte River’s

Windy Gap supply was not sufficient to fill its account prior to the start of the critical period. With fewer

Windy Gap units, Platte River would be more vulnerable to reductions in firm yield that could potentially

occur due to climate change, impacts associated with the agreement with MPWCD and Grand County

and other operating conditions that are difficult to predict.

Model results also show that Platte River is storage limited at higher ownership levels. For example, at

12,000 ac‐ft of storage, Platte River’s firm yield increases by only 185 ac‐ft/yr from an ownership level of

100 units to 160 units. That is because Platte River‘s 12,000 acre‐foot storage account is full prior to the

critical period at all ownership levels evaluated, in which case, Platte River is storage limited. At an

ownership level of 160 units, Platte River’s supply is more than sufficient to fill their account in most

years throughout the study period. At higher storage levels of 15,000 ac‐ft and 16,000 ac‐ft, the

incremental yield generated between ownership levels of 100 units versus 160 units is much higher,

which indicates that Platte River is not storage limited at lower ownership levels of 100 units.

The risk of incurring shortages during short, severe droughts is higher if Platte River reduces the number

of Windy Gap units it owns. This also applies to potential impacts associated with the agreement with

MPWCD and Grand County. While model results show there would be no reduction in Platte River’s firm

yield associated with that agreement, the risk of a reduction in firm yield increases at lower ownership

levels.

Sensitivity Analyses

Two sensitivity analyses were conducted to evaluate the effects of reducing reintroduction shrink and

carryover shrink. The current proposal being considered includes a 5% carryover shrink on any Windy

Gap water remaining in Granby Reservoir at the end of March. To evaluate the effects of reducing the

carryover shrink from 10% to 5%, the scenario with Platte River’s storage at 12,000 AF at an ownership

level of 160 units was simulated with the carryover shrink set to 5%. Model results show that Platte

River’s firm yield would not change. There is no change in Platte River’s firm yield because Platte River

typically does not have much water stored in Granby Reservoir in March. There is no Windy Gap water

stored in Granby Reservoir during Platte River’s critical period and as a result, Platte River’s firm yield is

not impacted by differences in the carryover shrink.

The current proposal being considered as part of on‐going contract negotiations does not include

reintroduction shrink on water delivered by exchange from Chimney Hollow Reservoir. To evaluate the

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effects of this proposal, a sensitivity analysis was conducted to estimate the potential increase in Platte

River’s firm yield if reintroduction shrink is not charged on deliveries from Chimney Hollow Reservoir to

Platte River. The scenario with Platte River’s storage at 12,000 AF at an ownership level of 160 units was

simulated with the reintroduction shrink set to 0%. Model results show that Platte River’s firm yield

would increase by approximately 5% or 250 AF from 4,730 AF/yr to 4,980 AF/yr. To the decree that

Platte River is able to avoid being charged reintroduction shrink by taking delivery of their Windy Gap

water by exchange, their firm yield could be up to 5% higher.

The method that will be used to apportion losses such as evaporation and seepage on C‐BT water stored

in Chimney Hollow Reservoir via prepositioning is currently being considered as part of on‐going

contract negotiations. The current proposal is that losses would not be charged on C‐BT water stored in

Chimney Hollow Reservoir. The WGFP Model is currently configured so that losses are distributed to

each account pro‐rata based on the amount stored in each account. The model is not capable of

apportioning losses to a subset of accounts in the reservoir. Under the current proposal, the losses

assigned to Platte River’s account in Chimney Hollow Reservoir would be higher; however, these

additional losses would likely be offset by potential increases in yield if Platte River is able to take

delivery of their water via exchange and avoid being charged reintroduction shrink.

Synthetic Drought Analysis

A separate analysis was conducted outside of the WGFP Model to determine the demand that could be

met under a synthetic two‐year and three‐year drought assuming that no Windy Gap Water is pumped

for two and three years in a row, respectively. The firm yield was determined assuming that Platte

River’s storage account is full at the start of the critical period. While the model shows there are five

years during the study period when little to no Windy Gap water was pumped, there are no sequences

of back‐to‐back years with no Windy Gap pumping.

The results of this analysis are presented in Table 1. Under a 2‐year drought, the firm yield would range

from 4,265 AF at a storage level of 12,000 AF up to 5,695 AF at a storage level of 16,000 AF. Under a 3‐

year drought, the firm yield would range from 3,050 AF at a storage level of 12,000 AF up to 4,075 AF at

a storage level of 16,000 AF.

Probability plotting was used to estimate the frequency of these synthetic droughts. Modeled Windy

Gap pumping was compared with the total flow in the Colorado River upstream of Windy Gap from April

through August, which is the period during which Windy Gap water is pumped. The total flow above

Windy Gap was then summed for each consecutive 2‐year and 3‐year period from 1950 through 1996

and these values were sorted from low to high. Log plots were generated of these values as shown in

Figures 1 and 2. Higher flow values were not included in these figures in order to develop a more

reliable equation for the curve at lower flow values. Model results show that in 1954, the total flow from

April through August above Windy Gap was approximately 33,700 AF and no Windy Gap water was

pumped. In 1981, the total flow above Windy Gap was approximately 42,400 AF from April through

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August and approximately 540 AF of Windy Gap water was pumped. The average of the total flow above

Windy Gap for 1954 and 1981 was multiplied by 2 to determine the total flow in the months of April

through August that would likely occur in a two year period in which no Windy Gap water would be

pumped. Similarly, the average of the total flow above Windy Gap for 1954 and 1981 was multiplied by

3 to determine the total flow in the months of April through August that would likely occur in a three

year period in which no Windy Gap water would be pumped. Figure 1 shows that a total flow above

Windy Gap of approximately 76,000 AF from April through August over a 2‐year period would occur

once every 57 years. Figure 2 shows that a total flow above Windy Gap of approximately 114,000 AF

from April through August over a 3‐year period would occur once every 250 years. These drought

intervals are an approximation based on model results. Droughts in which no Windy Gap water is

pumped for 2 and 3 consecutive years may occur more or less frequently than estimated due to many

factors including climatic conditions and operating assumptions for both the Windy Gap and C‐BT

projects.

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Table 1: Summary of Windy Gap Firming Project Model Results

x

Deman

d

(AF)

5% Reintroduction Shrink

5% Reintroduction Shrink

& Temperature

Mitigation1

5% Reintroduction Shrink &

2‐yr drought with no WG

Pumping2

5% Reintroduction Shrink &

3‐yr drought with no WG

Pumping3

Storage

Storage:Fir

m Yield

Ratio

Storage

Storage:Fir

m Yield

Ratio

Storage

Storage:Fir

m Yield

Ratio

Approx.

Drought

Interval

Storage

Storage:Fir

m Yield

Ratio

Approx.

Drought

Interval 160 6,195 16,000 2.58 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 140 6,040 16,000 2.65 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 120 5,885 16,000 2.72 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 100 5,730 16,000 2.79 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 160 5,925 ‐‐‐ ‐‐‐ 16,000 2.70 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 140 5,785 ‐‐‐ ‐‐‐ 16,000 2.77 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 120 5,645 ‐‐‐ ‐‐‐ 16,000 2.83 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 100 5,505 ‐‐‐ ‐‐‐ 16,000 2.91 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 160 5,695 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 16,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 140 5,695 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 16,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 120 5,695 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 16,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 100 5,695 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 16,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 160 4,075 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 16,000 3.93 1 in 250 years 140 4,075 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 16,000 3.93 1 in 250 years

120 4,075 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 16,000 3.93 1 in 250 years

100 4,075 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 16,000 3.93 1 in 250 years

160 5,815 15,000 2.58 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 140 5,705 15,000 2.63 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 120 5,595 15,000 2.68 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 100 5,490 15,000 2.73 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 160 5,580 ‐‐‐ ‐‐‐ 15,000 2.69 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 140 5,475 ‐‐‐ ‐‐‐ 15,000 2.74 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 120 5,370 ‐‐‐ ‐‐‐ 15,000 2.79 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 100 5,260 ‐‐‐ ‐‐‐ 15,000 2.85 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 160 5,340 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 15,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 140 5,340 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 15,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 120 5,340 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 15,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 100 5,340 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 15,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 160 3,820 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 15,000 3.93 1 in 250 years 140 3,820 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 15,000 3.93 1 in 250 years

120 3,820 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 15,000 3.93 1 in 250 years

100 3,820 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 15,000 3.93 1 in 250 years

160 5,430 14,000 2.58 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 140 5,365 14,000 2.61 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 120 5,300 14,000 2.64 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 100 5,235 14,000 2.67 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 160 5,235 ‐‐‐ ‐‐‐ 14,000 2.67 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 140 5,160 ‐‐‐ ‐‐‐ 14,000 2.71 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 120 5,085 ‐‐‐ ‐‐‐ 14,000 2.75 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 100 5,005 ‐‐‐ ‐‐‐ 14,000 2.80 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 160 4,980 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 14,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 140 4,980 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 14,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 120 4,980 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 14,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 100 4,980 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 14,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 160 3,560 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 14,000 3.93 1 in 250 years 140 3,560 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 14,000 3.93 1 in 250 years

120 3,560 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 14,000 3.93 1 in 250 years

100 3,560 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 14,000 3.93 1 in 250 years

160 5,085 13,000 2.56 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 140 5,020 13,000 2.59 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 120 4,955 13,000 2.62 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 100 4,890 13,000 2.66 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 160 4,895 ‐‐‐ ‐‐‐ 13,000 2.66 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 140 4,825 ‐‐‐ ‐‐‐ 13,000 2.69 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 120 4,755 ‐‐‐ ‐‐‐ 13,000 2.73 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 100 4,690 ‐‐‐ ‐‐‐ 13,000 2.77 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 160 4,625 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 13,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 140 4,625 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 13,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 120 4,625 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 13,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 100 4,625 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 13,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 160 3,310 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 13,000 3.93 1 in 250 years 140 3,310 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 13,000 3.93 1 in 250 years

120 3,310 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 13,000 3.93 1 in 250 years

100 3,310 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 13,000 3.93 1 in 250 years

160 4,730 12,000 2.54 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 140 4,665 12,000 2.57 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 120 4,605 12,000 2.61 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 100 4,545 12,000 2.64 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 160 4,550 ‐‐‐ ‐‐‐ 12,000 2.64 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 140 4,485 ‐‐‐ ‐‐‐ 12,000 2.68 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 120 4,430 ‐‐‐ ‐‐‐ 12,000 2.71 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 100 4,370 ‐‐‐ ‐‐‐ 12,000 2.75 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐

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Table 1: Summary of Windy Gap Firming Project Model Results

Platte River

Windy Gap

(WG) Units

Demand

(AF)

5% Reintroduction Shrink

5% Reintroduction Shrink &

Temperature Mitigation1

5% Reintroduction Shrink &

2‐yr drought with no WG Pumping2

5% Reintroduction Shrink &

3‐yr drought with no WG Pumping3

Storage

Storage:Firm

Yield Ratio

Storage

Storage:Firm

Yield Ratio

Storage

Storage:Firm

Yield Ratio

Approx. Drought

Interval

Storage

Storage:Firm

Yield Ratio

Approx. Drought

Interval

160 4,265 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 12,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 140 4,265 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 12,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 120 4,265 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 12,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 100 4,265 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 12,000 2.81 1 in 57 years ‐‐‐ ‐‐‐ 160 3,050 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 12,000 3.93 1 in 250 years 140 3,050 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 12,000 3.93 1 in 250 years

120 3,050 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 12,000 3.93 1 in 250 years

100 3,050 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 12,000 3.93 1 in 250 years

Note:

1: No Windy Gap pumping was allowed in August to reflect potential mitigation for temperature standard exceedances.

2: These results were calculated assuming a 2‐year drought with no Windy Gap pumping.

3: These results were calculated assuming a 3‐year drought with no Windy Gap pumping.

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180,000

Figure 1: Drought Interval Associated with Two Years of no Pumping

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0

1 10 100

Drought Interval (Years)

Au

g‐Se

p T

ota

l Flo

w A

bo

ve W

ind

y G

ap (

cfs)

Trendline Data During the Study Period

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300,000 Figure 2: Drought Interval Associated with Three Years of no Pumping

250,000

200,000

150,000

100,000

50,000

0

1 10 100 1000

Drought Interval (Years)

Au

g‐Se

p T

ota

l Flo

w A

bo

ve W

ind

y G

ap (

cfs)

Data During the Study Period Trendline

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Appendix C

Resolutions

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C-1 (1)

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C-1 (2)

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C-2 (1)

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C-2 (2)

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Appendix D

Glossary of Terms

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GLOSSARY OF WATER TERMS for Platte River Water Resources Reference Document

AA

Acre-Foot: The volume of water that would cover one acre of land to a depth of one foot.

Augmentation: A requirement to put water into the stream to prevent reductions in streamflow caused by pumping a well (or some other water use) from affecting the amount of water available to water rights on that stream and the remainder of the stream system.

CC

C-BT: Colorado Big Thompson Project. The Colorado-Big Thompson Project collects water from the upper Colorado River basin on the West Slope and delivers the water beneath the Continental Divide to Colorado's East Slope. The C-BT Project uses a complex system of reservoirs, pump plants, tunnels, pipelines and power plants and relies on two basic forces of nature: melting snow and gravity. After flowing through the power system, water is stored in three East Slope terminal reservoirs: Horsetooth Reservoir west of Fort Collins; Carter Lake southwest of Berthoud; and Boulder Reservoir northeast of Boulder.

CFS: Cubic feet per second. One CFS equals 1.98 acre-feet per day.

Colorado Water Division 1: One of seven water divisions in the state of Colorado. Division 1 includes the South Platte River Basin, the Republican River Basin and the Laramie River Basin. Geographically, Division 1 is located in the northeast quadrant of Colorado.

Cooling Water: reusable effluent stored in Hamilton Reservoir that is used to cool Rawhide Unit 1.

EE

EIA: Environmental Impact Analysis

FF

Firm Water: Firm water can be relied upon and is available even during a drought.

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Fully Consumable Water: Water that can be used and reused to extinction. This is imported, non-native water, in which the return flows have not been historically relied upon.

II

Integrated Operations: A protocol in which C-BT Project water may be delivered to Windy Gap participants in-lieu of Windy Gap water when it isn’t available. Replacement of C-BT water is required from Windy Gap water pumped in subsequent periods.

MM

Municipal Subdistrict: It is a separate conservancy district within the Northern Colorado Water Conservancy District. It was formed by several municipalities to build and operate the Windy Gap Project.

NN

New Foreign Water: Water that is introduced into the Cache La Poudre Basin from the Colorado and Michigan River Basins and whose return flows historically have not been used by others.

Northern Water: Northern Colorado Water Conservancy District. Along with the USBR, jointly operates and maintains the C-BT Project.

PP

Process Water: Windy Gap water that is used at Rawhide for the purpose of service water, boiler water, fire water, and other plant processes in which reusable effluent would not be appropriate.

RR

Return Flows: As pertaining to the Reuse Agreement - Wastewater collection and return flow includes wastewater collected from domestic, commercial and industrial users, treated at wastewater-treatment facilities, and returned to the hydrologic system or released for reuse as reclaimed wastewater (reusable effluent). This is typically an average of 55% of the original quantity of water first used by the municipality.

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Reusable Effluent: Fully consumable water that has been used first through a municipality and then treated in a water reclamation facility. This water can be used to extinction.

UU

USBR: United States Bureau of Reclamation

WW

Windy Gap Firming Project: A project designed to firm the supply of Windy Gap water by creating a storage reservoir along the Front Range. The Firming Project is simply a new reservoir into which Windy Gap water would be pumped in wet years, and stored for use in dry years when the Windy Gap Project does not pump.

Windy Gap Project: The Windy Gap Project consists of a diversion dam on the Colorado River, a 445-acre-foot reservoir, a pumping plant, and a six-mile pipeline to Lake Granby. Windy Gap water is pumped and stored in Lake Granby before it is delivered to water users via the Colorado-Big Thompson Project’s East Slope distribution system.

Windy Gap Unit: A Windy Gap unit is equivalent to 100 acre-feet of water during years of full Windy Gap production.

WSSC: Water Supply and Storage Company