Board of Directors Regular Meeting 2000 E. Horsetooth Rd, Fort … · 2017. 10. 10. · Board of Directors Regular Meeting 2000 E. Horsetooth Rd, Fort Collins, CO 80525 Thursday,

Board of Directors Regular Meeting 2000 E. Horsetooth Rd, Fort Collins, CO 80525

Thursday, October 26, 2017, 9:00 a.m. Call to Order

1) Consent Agenda Motion to Approve a. Minutes of the Regular Meeting of September 28, 2017

Public Comment Board Action Items

2) BKD 2017 Audit Plan a. Financial and Pension Engagement Letters Motion to Authorize

3) 2018 Proposed Rate Tariff(s) Resolution 08-17

Management Presentations

4) 2018 Proposed Annual Budget – Public Hearing 5) Fiber Asset Ownership Discussion 6) Zero Net Carbon Model Communication Plan 7) HQ Campus 8) MWTG/SPP Discussion

Executive Session - Status of Wind RFP Reconvene Regular Session Management Reports Monthly Informational Reports

9) Legal & Governmental Affairs Report 10) September 2017 Operating Report 11) September 2017 Financial Report 12) General Management Report

Strategic Discussions Adjournment

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Updated October 17, 2017

2017 BOARD MEETING PLANNING CALENDAR

November

2017

Retirement Committee Meeting

No Board of Directors Meeting

December 7, 2017

Board Action Items

Management Presentations

Management Reports

Monthly Informational

Reports

Retirement Committee Report

HQ Campus Legal & Governmental Affairs Report

2018 Annual Budget Review and Adoption

Strategic Financial Plan

October 2017 Operating Report

2018 Proposed Board of Directors Regular Meeting Schedule

Update on Proposed Fiber Optic Service

October 2017 Financial Report

Wind PPA Approval ZNC Report General Management Report

Fiber Optic Accounting Policy

MWTG/SPP Update

MWTG/SPP Membership Agreement -Authorization to Execute

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2017 Board of Directors

Term Expiration

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

Mayor Todd Jirsa April 2020

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 2019

Mayor Pro Tem Gerry Horak December 2020

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

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.

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Regular Meeting Minutes of the Board of Directors 2000 E. Horsetooth Road, Fort Collins, CO 80525

Thursday, September 28, 2017 ATTENDANCE Board Members Representing Estes Park: Mayor Todd Jirsa and Reuben Bergsten1 Representing Fort Collins: Mayor Wade Troxell Representing Longmont: Mayor Dennis Coombs and Tom Roiniotis Representing Loveland: Mayor Cecil Gutierrez2 and Steve Adams Absent: Mayor Pro Tem Gerry Horak Platte River Staff Jason Frisbie (General Manager/CEO) Joe Wilson (General Counsel) Dave Smalley (Deputy GM and Chief Financial Officer) Karin Hollohan (Chief Administrative Services Officer) Andy Butcher (Chief Operating Officer) Alyssa Clemsen Roberts (Chief Strategy Officer) John Bleem (Chief Communications and Marketing Officer-Interim) Angela Walsh (Executive Assistant) Brad Decker (Strategic Planning Manager) Paul Davis (Customer Services Manager) Shelley Nywall (Controller) Heather Banks (Fuels and Water Manager) Justin Allar (Security Program Supervisor) Rob Morse (IT & Cyber Security Manager) Steve Roalstad (Communications and Marketing Manager) Sabrina Martz (Generation and Power Markets Supervisor) Carol Ballantine (Manager of Power Markets and Generation Dispatch) Paul Crosby (Manager of Operations Technology and CIP) John Collins (Director of Power Delivery) Roy Steiner (HR Manager) Mindy Pfleiger (Senior Accounting Analyst) Megan Thorson (Accountant) Joel Danforth (Customer Services Program Manager) Guests Tim McCollough (Fort Collins Utilities) Will Welch (Wm T. Welch Company LLC) Stuart Lumsden (Gleeds) Joe Bernosky (Loveland Water and Power) 1 Attended via conference call 2 Arrived at 9:15

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Regular Board Meeting Minutes: September 28, 2017

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CALL TO ORDER Chairman Roiniotis called the meeting to order at 9:02 a.m. A quorum of Board members was present and the meeting, having been duly convened, was ready to proceed with business. Platte River management introduced staff to the Board; Rob Morse, IT and cyber security manager, Roy Steiner, HR manager, Paul Crosby, manager of operations technology and CIP, John Collins, director of power delivery, and Megan Thorson, accountant. Director Adams introduced Joe Bernosky from Loveland Water and Power. ACTION ITEMS (1) Consent Agenda

a. Approval of the Regular Meeting Minutes of August 31, 2017

Director Jirsa moved to approve the Consent Agenda as presented. Director Coombs seconded, and the motion carried 6-0. PUBLIC COMMENT None. BOARD ACTION ITEMS (2) Retirement Committee Report (presenter: Steve Adams)

a. Acceptance of the Audited Annual Defined Benefit Pension Plan Report

Committee Chairman, Steve Adams, provided a summary of the August 31, 2017 meeting. As reported at the July Board meeting, the Retirement Committee regularly monitors and evaluates the asset classes and investments in the pension plan portfolio looking for opportunities to diversify, reduce risk, and improve portfolio returns. At the August meeting, the Plan’s investment consultant, Innovest, recommended adding a three percent portfolio allocation in the reinsurance asset class. After a lengthy discussion, the Committee voted 5-1 to invest three percent in the reinsurance asset class and reduce the allocation to large cap domestic equity, fixed income, and hedge funds by one percent for each asset class. The Committee voted 6-0 to purchase approximately $3 million of the Stone Ridge Reinsurance Risk Premium Interval Fund. Innovest provided a report showing the performance of the Plan through June. For the year, Plan assets increased $4.6 million to $99 million. The increase in assets is due to net cash outflows of $474,000 and investment gains of about $5.1 million. The return year-to-date was 5.2 percent, slightly above the benchmark return of 4.9 percent. Per the Committee’s request, staff conducted an RFP process for actuarial consulting services. After reviewing staff’s recommendation, the Plan Administrator, Jason Frisbie, appointed Willis Towers Watson as the Plan’s actuary. The Committee approved the appointment. BKD recently completed their audit of the Defined Benefit Plan for the year ending December 31, 2016. The Plan’s financial statements received a clean audit opinion. BKD’s post audit letter indicated that there were no audit adjustments. The financials reflect a Plan net position of

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$94.4 million as of December 31, 2016, an increase of $4.9 million over 2015. The net pension liability decreased to $19.4 million from $20.5 million reported in 2015. The Retirement Committee accepted the report and recommended that it be presented to the Board for acceptance. Director Adams moved to accept the Audited Annual Defined Benefit Pension Plan Report as presented. Director Jirsa seconded, and the motion carried 6-0. MANAGEMENT PRESENTATIONS (3) 2018 Proposed Annual Budget Work Session (presenter: Shelley Nywall) Shelley Nywall, controller, described the proposed 2018 Budget highlighting the schedule, trends, the budget process, 2018 overview and the 5-year capital forecast. The budget documents were provided within the Board packet starting on page 63. Jason Frisbie, general manager and ceo, added that the proposed budget is consistent with past practices of continued capital investments as well as predictive and preventative maintenance intended to keep facilities operating efficiently, which facilitates Platte River maintaining the lowest wholesale rates in the state. Ms. Nywall referred to Karin Hollohan, chief administrative services officer, to discuss the staffing outlook for future staffing needs. Ms. Hollohan handed out a memo describing the planning process and projecting staffing needs for core business and three other categories within the organized markets, customized resource services, and fiber and broadband services depending on Board provided direction. The handout also outlines the staff increases since 2014 and the requested 2018 positions show a significant slowdown to only three new positions, one of which directly supports Platte River’s core business operations. Ms. Hollohan noted that the drivers for previous additions were regulatory compliance, planning, business modeling and forecasting. Director Troxell asked if staff engages with the four-member municipalities for aggregation of services when developing staffing plans in connection with city utilities for a unified perspective, providing an example of the unified after-hours answering service. Mr. Frisbie noted that staff spends time at utility director meetings and other discussions on certain topics relating to staffing needs and how best to accomplish goals across member municipalities, especially as it relates to IT and operation services. Mr. Frisbie continued that the Board will see an increase of municipal support within the marketing and communication departments now that Platte River is more fully staffed. Director Troxell asked if there is a mechanism for staff to drive conversations to improve unified integration and asked if a resolution by the Board would be the mechanism needed to accommodate staffing discussions on unified integration. Mr. Frisbie offered that the billing system, after hours call center and the AMI center are examples of unified integration discussions already taking place at the utility director level, and feels the Board doesn’t need to provide any mechanism because staff is already engaged. Chairman Roiniotis commented that the after-hours call system has been discussed for almost 18 years, however, various challenges have presented themselves over the years such as systems consistency, and noted that Platte River is the ultimate example of regional collaboration. Chairman Roiniotis continued to note that staff has been driven by the directors and they continually look for ways to leverage each other to move forward. Director Bergsten commented on the perceived call center barrier, noting that it’s not a Platte River barrier, but a need for consensus among Platte River and the member municipalities to move it forward. Director Bergsten continued by complimenting the Energy Efficiency program collaboration and the effectiveness of that program with Platte River and all four municipalities.

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Director Troxell noted that Platte River isn’t the barrier, however, could be the carrier to drive integration of systems within the call center and other regional collaboration opportunities. Director Adams commented on regionalization and remembered a list being provided to the utility directors with items identified for possible regional coordination, and knows that the Utility Directors continue to review the list. Director Adams offered to bring it to the Board for informational purposes. Chairman Roiniotis pointed out that regional broadband is another opportunity for working together. Director Troxell asked that the list be brought to the Board to review. Mr. Frisbie noted that the Fiber Asset presentation later on in the meeting will highlight another opportunity for collaboration as well. The floor was returned to Ms. Nywall for any questions the Board may have up to this point. Director Adams asked about the increase in the budget contingency and asked if the funds affect the rates. Dave Smalley, deputy general manager and chief financial officer, responded that the budget contingency is a mechanism that creates the ability to manage unforeseen events without needing to file a budget amendment with the state and is part of Platte River’s overall reserves. Discussion continued on the budget contingency accounting. Director Bergsten asked if the contingency is counted towards the 200-day reserve. Mr. Smalley confirmed general reserves support the budget contingency and is included in the days reserve calculation. Director Jirsa asked how often Platte River has had to use the contingency funds. Mr. Smalley referred to page 17 within the budget document that charts the historical usage of the funds. Mr. Frisbie added that Platte River has never used it in emergency situations, more to take advantage of opportunities, and this mechanism helps Platte River to stay within budget. Beginning in 2018 the contingency appropriation will represent 10 percent of the operating expenses and capital additions instead of a static number so it may fluctuate a bit from year to year. Mr. Smalley added that the contingency appropriation allows for flexibility with long term projects like the Windy Gap Firming Project. Director Adams switched back to the Energy Efficiency program as it relates to the staffing plan and asked if the staffing additions are reflected within the IGA or Tariff 1 rates. Ms. Nywall responded that it is a direct billing as contracted services to the municipalities. Mr. Frisbie reminded the Board that the program is providing a net $150,000 savings to the municipalities while providing a higher level of customer service. Ms. Nywall continued the Budget presentation with capital additions planned for 2018. Director Adams asked about the mobile crane purchase and the justifications of purchasing versus renting. Mr. Frisbie answered that there is enough consistent work to justify the ownership of a mobile crane. Director Coombs asked how long the 2018 planned outage will last. Staff answered six weeks. Mr. Frisbie continued to note that this outage will be a complete replacement of the turbine generator. Director Adams asked if tours are available for city staffs during the scheduled outage. Mr. Frisbie answered that it’s a good time for city staff to tour and staff will plan to have a Board meeting up there as well. Ms. Nywall moved into the five-year capital forecast plan. Director Troxell requested that the numbers reflect the integration of distribution utilities as an active system, not just by project, and would like to see more intention in accomplishing goals. Mr. Frisbie referred to the demand side management response information as an example of systems integration. Mr. Frisbie also noted that Energy Efficiency funding continues to grow and is another proactive example of systems integration. Andy Butcher, chief operating officer, continued to talk about opportunities as Platte River moves forward into organized markets and the value that will bring to the table. Discussion continued among Directors and staff about possible opportunities and energy resources. Chairman Roiniotis requested a clarification on Director Troxell’s earlier request. Director Troxell wants to see projects and programs that support distribution utility integration

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reflected within the budget. Chairman Roiniotis suggested a statement provided within the budget to summarize the collaboration with the four municipalities. Ms. Nywall continued presenting the five-year capital forecast and summarized the 2018 Budget. Director Adams asked about the cost of living increase of 3.1 percent for salaries. Ms. Hollohan responded that it is the general market adjustment, while market priced jobs may receive more or less than the 3.1 percent, the labor budget reflects the step adjustments and increases as staff move through the salary range within their position as a result of the annual labor surveys. Platte River uses several published survey resources for benchmarking. Mr. Frisbie referred to page 82 that offers more information for the labor budget breakdown. (4) HQ Campus (presenter: Karin Hollohan) Ms. Hollohan introduced owner representatives Will Welch and Stuart Lumsden to provide an update for the HQ campus project and noted that she is very pleased with the current project outcomes. Mr. Welch provided the overview of the work completed since the August Board meeting and discussed the current project processes, cost and budget messages, and the design development schedule. Mr. Lumsden presented the list of items that the design team and leadership team have been focusing on including building square footage and circulation areas, and the site development plan changes, also confirming that the target project cost will be $40-45 million. Director Troxell asked about the redundancy of generators and asked if they were coupled with certain departments. Mr. Welch responded that they are for the two control rooms, and there are redundant supplies from the grid, the two generators and a UPS backup system planned. Mr. Frisbie discussed the differences of the generators versus the UPS redundancy and costs. Discussion among staff and Directors ensued regarding generator duration and demonstration of “ways of doing it”. Wrapping up the presentation, Mr. Welch previewed the project schedule. Director Adams asked to see the site plan and elements of the site plan at the October Board meeting. Ms. Hollohan added that the building itself has the same general design and shape, however, the back buildings have shifted within the site to allow for site efficiencies. Director Troxell asked if any of the community demonstration features and utilization of areas for demonstrations have changed. Mr. Frisbie confirmed that none of the community demonstration features have changed. 10:28 - 10 Minute Break (5) Joint Dispatch Review (presenter: Carol Ballantine) Carol Ballantine, manager of power markets and generation dispatch, presented a history of the joint dispatch agreement (JDA), a status update, and a description of the benefits, costs, and sales and purchases associated with JDA. The JDA is a joint venture between Xcel Energy, Black Hills Colorado and Platte River to increase operational efficiencies, enhance reliability and serve load more economically. Director Troxell asked if balancing authority and wheeling party costs are within the agreements. Ms. Ballantine presented the next slide showing the breakdown of costs to answer Director Troxell’s question. While presenting the cost to serve with and without the JDA slides, Ms. Ballantine noted that numbers shown are hypothetical to illustrate a larger perspective than what the actual numbers would show. Mr. Frisbie clarified that the intra-hour surplus transmission connecting all companies is provided at no cost. Mr. Butcher added that at the top of every hour there is transmission that is not being utilized and sharing transmission is key to joint dispatch with the three parties knowing that surplus transmission is free.

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Director Troxell asked if going into the market will supply additional opportunities. Ms. Ballantine responded that the JDA has helped staff prepare for a market. Though the JDA is not a market, it’s allowing staff to engage in settlements, dispatching and offering the ability to manage resources better, but the JDA is a preliminary step that will go away once the market is established. Director Troxell commented that a virtual power plant within a community could add to the real time dynamic of the system. Chairman Roiniotis asked if there are future possibilities for downsizing staffing levels between JDA and the demand response pilot as we move into the markets. Mr. Butcher added that with the JDA staff will get one or two settlements with two companies, but once Platte River enters into the real market there will be hundreds of settlements and staffing will need to increase within the settlement groups. Mr. Butcher continued that markets will be a new world in financials and data analytics that will require more staff. Chairman Roiniotis commented that JDA is an example of regional collaboration enabling us to integrate more renewables on the system. Director Bergsten commented on the complexity of the industry requires additional staffing, although giving us opportunities to do a lot more with Platte River’s resources. (6) Demand Response Pilot (presenter: Joel Danforth) Joel Danforth, customer services program manager, provided an overview and recap of goals for the demand response pilot, past results, the year-to-date status of the program and future focuses for the pilot. Director Troxell asked if there was additional load reduction on the days of events that could have been addressed. Mr. Danforth responded that there are Fort Collins commercial and industrial customers that are not participating within the program that could have added to the pilot results. Director Troxell continued with possible generating capacity and additional resources within the load centers. Paul Davis, customer services manager, added that while having more resources available for demand response will provide more value it will also add complexity to the program. Examples include the duration of demand response events and the types of resources being utilized. Mr. Danforth continued with the load reduction calculations used within the pilot and discussed a successful event for the Longmont voltage reduction procedures that occurred in early September. Director Troxell asked if the joint technical advisory committee has participation from all four municipalities and asked if any environmental assessment is addressed within the committee. Mr. Danforth responded that yes, all four municipalities participate and the committee is still in the scoping timeframe to determine the direction of the committee. Director Bergsten asked about the charts reflecting savings, noting that it doesn’t look like a whole lot of financial benefit is provided right now. Mr. Frisbie offered that the charts might be confusing but the point is that while Fort Collins is good at clipping their own peak, that response may not provide the most benefit to the Platte River system. Discussion ensued regarding the credit and the rate savings the pilot is testing for future possibilities. Chairman Roiniotis reiterated that the pilot was meant to discover the available demand response on the system while providing credit to the participating municipalities. Tim McCollough with Fort Collins Utilities added to the discussion stating the potential value provided by distributed energy resources. MANAGEMENT REPORTS (7) Fiber Asset Ownership (presenter: Paul Crosby) Paul Crosby, manager of operations technology and CIP, introduced the whitepaper that

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proposes an ownership structure for the fiber assets going forward. At the October Board meeting, Mr. Crosby will be presenting on the proposed structure and a discussion on moving forward. Mr. Frisbie added that the paper also includes the history of the Board’s decisions, where the current structure is now and the whitepaper prepares the Board for ongoing discussions on how to best utilize the assets. Director Bergsten asked Mr. Smalley about the reduction to equity based on the installed fiber. Mr. Smalley answered that when Longmont received ownership of the excess fiber, accounting recorded the transaction reflecting installed costs of the fiber that Longmont retained and reduced their ownership equity in Platte River rather than having Longmont make a direct payment. Mr. Smalley also explained that Fort Collins, Loveland and Estes Park also had their ownership equity reduced using the same formula applied to Longmont, however, it was recognized over a twenty year period. This was done to maintain the proper ownership equity amongst the municipalities. Mr. Smalley commented that we may want to utilize a different methodology going forward that accounts for transfers based on incremental costs. This would better reflect the fact that the majority of costs associated with fiber installation is not the number of fibers but rather the installation of the cable itself. Director Bergsten asked if it was right to assume that through the equity share reductions the municipalities already own the fiber loops? Mr. Smalley responded that if the municipalities elected to take title to the fiber it would simply be a transfer to the cities. Mr. Smalley also stated that Platte River is still evaluating how to account for work on the system, such as the fiber replacement that occurred in Estes Park. Director Bergsten requested a whitepaper on operations, maintenance and service work in Longmont for understanding the relationships between Platte River and the municipality. Director Troxell asked if Mr. Crosby’s whitepaper incorporates the municipalities’ input. Mr. Frisbie said this is the first step to discussion and going through the process to decide how the municipalities are going to utilize the fiber around their cities and within the long haul that connects the four municipalities. Discussion ensued regarding who’s been involved and who will be included in the future conversations within Platte River and utility staffs. Mr. Frisbie offered that this conversation is overdue. Discussion ensued regarding needs and possible usage of the fiber. Director Adams asked about the use of strands, and the active leases that are tying up the strands. Director Adams inquired about the loop with WAPA and to Estes Park, asking if there was another fiber line that was installed to go to Estes Park. Mr. Crosby answered that redundant fiber is planned. Discussion ensued on the use and size of the fiber to Estes Park. Joe Wilson, general counsel, added that conversations between Western have continued regarding the commercial usage of the fiber to the effect that such use was allowed, however, there have been no formal written permission provided. MONTHLY INFORMATIONAL REPORTS (8) Legal & Governmental Affairs Report (presenter: Joe Wilson) Mr. Wilson noted that the special session of the Legislature was set to commence with a pessimistic outlook. The framework for tax reform issued by the Trump Administration continues the present tax-exempt treatment of municipal bonds. Mr. Wilson referred to Mr. Frisbie to talk about the community solar initiative as it relates to the International Trade Commission (ITC) finding with imported solar panels have created serious injury to domestic solar manufacturing companies, ultimately affecting prices for future solar developments. A hearing will be held by the ITC before making a recommendation to the President concerning additional tariffs the imported solar panels which could double the price of panels. Discussion ensued regarding the hearing.

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(9) August Operating Report (presenter: Andy Butcher)

Mr. Butcher offered to answer any questions the Board may have regarding the enclosed reports. Mr. Butcher announced that staff will be taking Rawhide Unit 1 offline for a six-day, unplanned outage on Sunday to address issues with the turbine thrust bearing. Mr. Butcher turned back to the August operating results and noted the positive market sale generation load due to the hot weather in the North East causing higher wholesale market pricing. Mr. Butcher also highlighted the increased positive results regarding the solar facility at Rawhide. Director Coombs asked about tracking the sun’s rays. Mr. Frisbie responded the complexity with the tracking mechanisms and movement during high winds, which juwi hadn’t anticipated. Juwi has made significant progress in their programming of the tracking system and presented data to confirm that over the past two months the panels are performing as projected. (10) August Financial Report (presenter: Dave Smalley) Mr. Smalley referred to the financial report for year to date in 2017 and offered to answer any questions the Board may have. The Board had no questions. (11) General Management Report (presenter: Jason Frisbie) Mr. Frisbie highlighted a few items from the report including a minor update to the Strategic Plan and referred to the updated Values and Strategic Initiatives handed out on the table. Mr. Frisbie notified the Board that staff is considering a February date for the Strategic Plan and will continue to keep the Board updated on the progress of the plan. Mr. Frisbie noted that the zero net carbon (ZNC) initial modeling results will be done on October 31, however, the results will not be ready for public consumption, and asked the Board for their help in communicating that the data will be supplied once they are ready. Director Adams requested a date to provide to the groups who are requesting the results. Mr. Frisbie offered to give a timeline on what the next steps are and timing of presentation. Chairman Roiniotis asked if the third party, PACE Global, involvement will impact the timing and if PACE will also be evaluating the financial impacts. Mr. Butcher answered that PACE is strictly operational results. Mr. Frisbie continued that PACE will help answer other questions about rate impacts. Mr. Butcher reiterated that the preliminary information will be ready for staff on October 31, however, staff would like to share the final results with the Board prior to releasing information to the public. Director Troxell asked when the public engagement opportunities are planned, and suggested Platte River announce future public engagement opportunities prior to October 31. Mr. Frisbie continued with the general management report highlighting upcoming execution of the Colorado River Storage Project (CRSP) contract for federal hydropower. Noting that the capacity and energy will remain the same, this agreement secures this energy for the next forty years. Mr. Frisbie provided an update on staff planning for the community solar project with the municipal staff, and referred to Mr. Wilson’s comment on the solar panel imports warning of a tariff addition and the affects that might have with timing on a community solar project. Mr. Frisbie also pointed out the status of the Wind RFP update noting that staff has engaged a third party to evaluate the possible future transmission congestion at each site being considered. Mr. Frisbie noted that the resources in Tariffs 1 and 7 may be shifted. Director Gutierrez asked why Platte River would create another Tariff if the wind is going to be provided system wide and stay in Tariff 1. Mr. Frisbie responded that large customers are specifically asking for 100 percent renewable energy. Director Gutierrez clarified that there are other groups that want the entire system 100 percent renewable, so why would Platte River peel off the renewables into separate tariffs taking it away from the rest of the system, but asked if he was looking at it incorrectly. Mr.

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Frisbie responded that Director Gutierrez wasn’t looking at it incorrectly, however either method wouldn’t change the carbon free percentage within the overall portfolio. It also wouldn’t change the total cost for each municipality as long as they requested their ownership percentage of the tariff. Chairman Roiniotis commented on the struggle in offering the large commercial customers requesting the 100 percent renewable energy a product to purchase, and Platte River needs something to prove additionality. Director Jirsa cautioned the Board to not get ahead of the process with the zero net carbon modeling because municipalities will be receiving a lot of feedback from the public on the direction Platte River should go and Tariffs will naturally present themselves. Mr. Frisbie predicts that the question will be how much wind can be added to the system regardless of the zero net carbon modeling results because of the attractive pricing, and there is time over the next couple years to figure out the form or tariff that Platte River provides for the additional renewables. Mr. Frisbie concluded that the October Board meeting will be the final meeting for both Directors Gutierrez and Coombs, and that the new Board member orientation is being planned for mid to late November.

Roundtable and Strategic Discussion Topics Board members shared the latest news from the municipalities and discussion topics for future meetings. ADJOURNMENT With no further business, the meeting adjourned at 12:22 p.m. The next regular Board meeting is scheduled for Thursday, October 26, 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 , 2017.

Assistant Secretary

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Memorandum Date: October 18, 2017

To: Board of Directors

From: Jason Frisbie, General Manager/CEO Dave Smalley, Deputy General Manager and Chief Financial Officer Kerry Fields, Manager of Internal Audit

Subject: BKD 2017 Audit Plan

At the Board meeting, Jodie Cates and Anna Thigpen from BKD will discuss the planning and timing ofthe 2017 annual financial audit and will answer any questions that may arise. Attached are copies ofthe BKD pre-audit letter and engagement letter from BKD describing the services and arrangements proposed by BKD for the 2017 annual financial audit. In addition, the Defined Benefit Plan audit engagement letter from BKD is attached describing theservices and arrangements proposed by BKD for the audit of Platte River’s Defined Benefit Plan. The Board authorized Platte River to enter into a five-year agreement with BKD in 2016 to include auditing services for both the financial statement and defined benefit pension plan audits. The base fees stated in the attached engagement letters are $70,900 for the financial statement audit and $19,400 for the defined benefit pension plan audit. The fees are in accordance with contract terms which reflect discounted pricing compared to a three-year contract. Unless there is an issue that requires action separately, staff recommends a motion authorizing the Board Chairman to execute both engagement letters. Attachments

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October 10, 2017 Board of Directors Platte River Power Authority 2000 East Horsetooth Road Fort Collins, Colorado 80525-5721 The purpose of this communication is to summarize various matters related to the planned scope and timing for the December 31, 2017 audit of the financial statements of Platte River Power Authority (the Authority). Please refer to our engagement letter for additional information and the terms of our engagement. OVERVIEW We will conduct our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. PLANNED SCOPE & TIMING We have preliminarily identified the following areas of significant risks of material misstatement due to error or fraud and propose to address these areas as described:

Risk Area Audit Approach Risk of management override of controls Review accounting estimates for bias,

electronic review of journal entries and evaluate business rationale for unusual transactions

Revenue recognition Test the cutoff of revenue to determine that the amounts tested are properly recognized

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Board of Directors Platte River Power Authority October 10, 2017 Page 2

Risk Area Audit Approach GASB No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 1989 FASB and AICPA Pronouncements, Regulated Operations, paragraphs 476-500

Review accounting estimates for bias, review board approval of accounting treatment and test supporting documentation for reasonableness

Capital assets Review for propriety including accounting for disposals, proper capitalization, reasonableness of depreciation, and completeness

We welcome any input you may have regarding the risk areas identified above, any other significant risk areas, in your opinion, or other matters you believe warrant particular attention. We propose the following timeline:

Interim fieldwork is scheduled for November 28-30, 2017 Final fieldwork is scheduled for the weeks of February 5 and 12, 2018 Drafts of the financial statements and management letter, together with our letter

regarding auditor responsibilities, will be furnished by March 8, 2018 Final reports will be issued by March 15, 2018 Audit presentation to the board is preliminarily scheduled for March 29, 2018

Our engagement management team will be comprised of the following:

Jodie Cates, Managing Director Anna Thigpen, Senior Manager

CONTACTS We understand the appropriate person in the governance structure with whom to communicate is Mr. Tom Roiniotis, Chairman of the Board of Directors. If for any reason, any member of the Board of Directors would need to contact us, please call Ms. Jodie Cates or Ms. Anna Thigpen, at 303.861.4545.

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ACCOUNTING & AUDITING MATTERS The following matters are, in our judgment, relevant to the planned scope of the audit as well as your responsibilities in overseeing the financial reporting process.

Segregation of duties Revenue recognition Receivables Third-party service providers Restricted assets Cash and investments Electric utility plant Debt Accrued liabilities Pension plan and related accounting Commitments and contingencies Related-party transactions

CONSIDERATION OF ERROR OR FRAUD One of the most common questions we receive from audit committees is, “How do you address fraud in a financial statement audit?” Our responsibility, as it relates to fraud, in an audit of financial statements is addressed in auditing standards generally accepted in the United States of America.

Our audit approach includes such procedures as:

Engagement Team Brainstorming

o Discussions include how and where we believe the entity’s financial statements might be susceptible to material misstatement due to error or fraud, how management could perpetrate and conceal fraudulent financial reporting and how assets of the entity could be misappropriated

o An emphasis is placed on the importance of maintaining the proper state of mind throughout the audit regarding the potential for material misstatement due to error or fraud

Page 23


Inquiries of Management and Others

o Personnel interviewed include the Board Chair, General Manager/Chief Executive Officer, the Deputy General Manager/Chief Financial Officer, the Controller and others

o Inquiries are directed towards the risks of error or fraud and whether personnel have knowledge of any fraud or suspected fraud affecting the entity

Reviewing Accounting Estimates for Bias

Evaluating Business Rationale for Significant Unusual Transactions

Incorporating an Element of Unpredictability Into the Audit Each Year

* * * * * This communication is intended solely for the information and use of those charged with governance, Board of Directors and management and is not intended to be and should not be used by anyone other than these parties. Sincerely,

Jodie Cates, CPA Managing Director

Page 24

BKD"' CPAs & Advisors 1801 California Street, Suite 2900 II Denver, CO 80202-2606

0 303.861.4545 II fax 303.832.5 705 II bkd.com .......................................................

October 11, 2017

Mr. Tom Roiniotis Chairman of the Board of Directors Platte River Power Authority 2000 East Horsetooth Road Fort Collins, Colorado 80525-5721

We are pleased to confirm the arrangements of our engagement and the nature of the services we will provide to Platte River Power Authority.

ENGAGEMENT OBJECTIVES AND SCOPE

We will audit the basic financial statements of Platte River Power Authority as of and for the year ended December 31 , 2017, and the related notes to the basic financial statements.

Our audit will be conducted with the objective of expressing an opinion on the financial statements.

OUR RESPONSIBILITIES

We will conduct our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Those standards require that we-plan and perform the audit to obtain reasonable rather than absolute assurance about whether the financial statements are free of material misstatement, whether caused by fraud or error. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor' s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an unavoidable risk that some material misstatements may not be detected exists, even though the audit is properly planned and performed in accordance with GAAS.

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Platte River Power Authority October 11, 2017 Page 2

In making our risk assessments, we consider internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. However, we will communicate to you in writing concerning any significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we have identified during the audit. Also, in the future, procedures could become inadequate because of changes in conditions or deterioration in design or operation. Two or more people may also circumvent controls, or management may override the system.

We are available to perform additional procedures with regard to fraud detection and prevention at your request, subject to completion of our normal engagement acceptance procedures. The actual terms and fees of such an engagement would be documented in a separate letter to be signed by you and BKD.

Jodie Cates, Managing Director, is responsible for overseeing and coordinating the engagement. Anna Thigpen, Senior Manager, is responsible for supervising the engagement and authorizing the signing of the report or reports.

We will issue a written report upon completion of our audit of Platte River Power Authority's financial statements. Our report will be addressed to the Board of Directors of Platte River Power Authority. We cannot provide assurance that an unmodified opinion will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion, add an emphasis of matter or other matter paragraph(s), or withdraw from the engagement. If we discover conditions that may prohibit us from issuing a standard report, we will notify you as well. In such circumstances, further arrangements may be necessary to continue our engagement.

YOUR RESPONSIBILITIES

Our audit will be conducted on the basis that management and, where appropriate, those charged with governance acknowledge and understand that they have responsibility:

a. for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America;

b. for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; and

Page 26


c. to provide us with:

1. access to all information of which management is aware that is relevant to the preparation and fair presentation of the financial statements such as records, documentation and other matters;

n. additional information that we may request from management for the purpose of the audit; and

iii. unrestricted access to persons within the entity from whom we determine it necessary to obtain audit evidence.

As part of our audit process, we will request from management and, where appropriate, those charged with governance, written confirmation acknowledging certain responsibilities outlined in this engagement letter and confirming:

• The availability of this information • Certain representations made during the audit for all periods presented • The effects of any uncorrected misstatements, if any, resulting from errors or fraud

aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole

OTHER SERVICES

In addition, we may perform other services for you not covered by this engagement letter. You agree to assume full responsibility for the substantive outcomes of the services described above and for any other services that we may provide, including any findings that may result. You also acknowledge that those services are adequate for your purposes and that you will establish and monitor the performance of those services to ensure that they meet management's objectives. Any and all decisions involving management responsibilities related to those services will be made by you, and you accept full responsibility for such decisions. We understand that you will designate a management-level individual to be responsible and accountable for overseeing the performance of those services, and that you will have determined this individual is qualified to conduct such oversight.

Page 27

Platte River Power Authority October 11, 2017 Page4

ENGAGEMENT FEES

The fee for our service will be $70,900. In addition, you will be billed travel costs and fees for our services from other professionals, if any, as well as an administrative fee of 4% 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 pricing for this engagement and our fee structure are based upon the expectation that our invoices will be paid promptly. We will issue progress billings during the course of our engagement, and payment of our invoices is due upon receipt. Interest will be charged on any unpaid balance after 30 days at the rate of 10% per annum.

Our engagement fee does not include any time for post-engagement consultation with your personnel or third parties, consent letters and related procedures for the use of our reports in offering documents, inquiries from regulators or testimony or deposition regarding any subpoena. Charges for such services will be billed separately.

Our fees may also increase if our duties or responsibilities are increased by rulemaking of any regulatory body or any additional new accounting or auditing standards.

If our invoices for this or any other engagement you may have with BKD are not paid within 30 days, we may suspend or terminate our services for this or any other engagement. In the event our work is suspended or terminated as a result of nonpayment, you agree we. will not be responsible for any consequences to you.

OTHER ENGAGEMENT MATTERS AND LIMITATIONS

BKD is not acting as your municipal advisor under Section 15B of the Securities Exchange Act of 1934, as amended. As such, BKD is not recommending any action to you and does not owe you a fiduciary duty with respect to any information or communications regarding municipal financial products or the issuance of municipal securities. You should discuss such information or communications with any and all internal or external advisors and experts you deem appropriate before acting on any such information or material provided by BKD.

Our workpapers and documentation retained in any form of media for this engagement are the property ofBKD. We can be compelled to provide information under legal process. In addition, we may be requested by regulatory or enforcement bodies to make certain workpapers available to them pursuant to authority granted by law or regulation. You agree that we have no legal responsibility to you in the event we provide such documents or information.

Page 28


You agree to indemnify and hold harmless BKD and its personnel from any claims, liabilities, costs and expenses relating to our services under this agreement attributable to false or incomplete representations by management, except to the extent determined to have resulted from the intentional or deliberate misconduct of BKD personnel.

You agree that any dispute regarding this engagement will, prior to resorting to litigation, be submitted to mediation upon written request by either party. Both parties agree to try in good faith to settle the dispute in mediation. The American Arbitration Association will administer any such mediation in accordance with its Commercial Mediation Rules. The results of the mediation proceeding shall be binding only if each of us agrees to be bound. We will share any costs of mediation proceedings equally.

Either of us may terminate these services at any time. Both of us must agree, in writing, to any future modifications or extensions. If services are terminated, you agree to pay us for time expended to date. In addition, you will be billed travel costs and fees for services from other professionals, if any, as well as an administrative fee of 4% 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.

If any provision of this agreement is declared invalid or unenforceable, no other provision of this agreement is affected and all other provisions remain in full force and effect.

We may from time to time utilize third-party service providers, e.g., domestic software processors or legal counsel, or disclose confidential information about you to third-party service providers in serving your account. We remain committed to maintaining the confidentiality and security of your information. Accordingly, we maintain internal policies, procedures and safeguards to protect the confidentiality of your information. In addition, we will secure confidentiality agreements with all service providers to maintain the confidentiality of your information. In the event we are unable to secure an appropriate confidentiality agreement, you will be asked to provide your consent prior to the sharing of your confidential information with the third-party service provider.

We will, at our discretion or upon your request, deliver financial or other confidential information to you electronically via email or other mechanism. You recognize and accept the risk involved, particularly in email delivery as the Internet is not necessarily a secure medium of communication as messages can be intercepted and read by those determined to do so.

You agree you will not modify these documents for internal use or for distribution to third parties. You also understand that we may on occasion send you documents marked as draft and understand that those are for your review purpose only, should not be distributed in any way and should be destroyed as soon as possible.

Page 29


This engagement letter represents the entire agreement regarding the services described herein and supersedes all prior negotiations, proposals, representations or agreements, written or oral, regarding these services. It shall be binding on heirs, successors and assigns of you and BKD.

If you intend to include these financial statements and our report in an offering document at some future date, you agree to seek our permission to do so at that time. You agree to provide reasonable notice to allow sufficient time for us to perform certain additional procedures. Any time you intend to publish or otherwise reproduce these financial statements and our report and make reference to our firm name in any manner in connection therewith, you agree to provide us with printers' proof~ or masters for our review and approval before printing or other reproduction. You will also provide us with a copy of the final reproduced material for our approval before it is distributed. Our fees for such services are in addition to those discussed elsewhere in this letter.

You agree to notify us if you desire to place these financial statements or our report thereon along with other information, such as a report by management or those charged with governance on operations, financial summaries or highlights, financial ratios, etc., on an electronic site. You recognize that we have no responsibility as auditors to review information contained in electronic sites.

Any time you intend to reference our firm name in any manner in any published materials, including on an electronic site, you agree to provide us with draft materials for our review and approval before publishing or posting such information.

BKD is a registered limited liability partnership under Missouri law. Under applicable professional standards, partners of BKD, LLP have the same responsibilities as do partners in a general accounting and consulting partnership with respect to conformance by themselves and other professionals in BKD with their professional and ethical obligations. However, unlike the partners in a general partnership, the partners in a registered limited liability partnership do not have individual civil liability, directly or indirectly, including by way of indemnification, contribution, assessment or otherwise, for any debts, obligations or liabilities of or chargeable to the registered limited liability partnership or each other, whether arising in tort, contract or otherwise.

Page 30


Please sign and return the attached copy of this letter to indicate your acknowledgement of, and agreement with, the arrangements for our audit of the financial statements including our respective responsibilities. If the signed copy you return to us is in electronic form, you agree that such copy shall be legally treated as a "duplicate original" of this agreement.

Acknowledged and agreed to on behalf of:

PLATTE RIVER POWER AUTHORITY

BY -----------------------------------------------Tom Roiniotis, Chairman of the Board of Directors

DATE ________________________________________ __

BY ----------------------------------------------Dave Smalley, Deputy General Manager/ChiefFinancial Officer

DATE ________________________________________ _

Page 31

Page 32

BKD.~ CPAs & Advisors

1801 California Street, Suite 2900 II Denver, CO 80202-2606 0 303.861.4545// fax 303.832.5705 II bkd.com

11111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111.

October 12, 2017

Tom Roiniotis Chairman of the Board of Directors Platte River Power Authority 2000 East Horsetooth Road Fort Collins, Colorado 80525-5721

We are pleased to confirm the arrangements of our engagement and the nature of the services we will provide to Platte River Power Authority Defined Benefit Plan.

ENGAGEMENT OBJECTIVES AND SCOPE

We will audit the basic financial statements of Platte River Power Authority Defined Benefit Plan as of and for the year ended December 31 , 2017, and the related notes to the basic financial statements.

Our audit will be conducted with the objective of expressing an opinion on the financial statements.

OUR RESPONSIBILITIES

We will conduct our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Those standards require that we plan and perform the audit to obtain reasonable rather than absolute assurance about whether the financial statements are free of material misstatement, whether caused by fraud or error. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement ofthe financial statements, whether due to fraud or error. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an unavoidable risk that some material misstatements may not be detected exists, even though the audit is properly planned and performed in accordance with GAAS.

Page 33


In making our risk assessments, we consider internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness ofthe entity's internal control. However, we will communicate to you in writing concerning any significant deficiencies or material weaknesses in internal control relevant to the audit of the financial statements that we have identified during the audit. Also, in the future, procedures could become inadequate because of changes in conditions or deterioration in design or operation. Two or more people may also circumvent controls, or management may override the system.

We are available to perform additional procedures with regard to fraud detection and prevention at your request, subject to completion of our normal engagement acceptance procedures. The actual terms and fees of such an engagement would be documented in a separate letter to be signed by you and BKD.

Jodie Cates, Managing Director, will oversee and coordinate the engagement. Steve Shanks, Director, is responsible for supervising the engagement and authorizing the signing of the report or reports.

We will issue a written report upon completion of our audit of Platte River Power Authority Defined Benefit Plan's financial statements. Our report will be addressed to the Platte River Power Authority retirement Committee. We cannot provide assurance that an unmodified opinion will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion, add an emphasis of matter or other matter paragraph( s ), or withdraw from the engagement. If we discover conditions that may prohibit us from issuing a standard report, we will notify you as well. In such circumstances, further arrangements may be necessary to continue our engagement.

As Plan Administrator, you have the final decision-making authority on all matters, including accounting matters. Although we may provide you with consulting advice, you are responsible as Plan Administrator for all final decisions regarding plan operations, participation and qualification.

YOUR RESPONSIBILITIES

Our audit will be conducted on the basis that management and, where appropriate, those charged with governance acknowledge and understand that they have responsibility:

a. for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America which includes the determination of the fair value of investments (as applicable);

Page 34


b. for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error;

c. for the supplemental schedules and that they were derived from, and related directly to, the underlying accounting and other records used to prepare the financial statements;

d. for identifying and determining that the Plan complies with the laws and regulations applicable to its activities; and

e. to provide us with:

1. access to all information of which management is aware that is relevant to the preparation and fair presentation of the financial statements such as records, documentation and other matters;

n. additional information that we may request from management for the purpose of the audit; and

iii. unrestricted access to persons within the entity from whom we determine it necessary to obtain audit evidence.

As part of our audit process, we will request from management and, where appropriate, those charged with governance, written confirmation acknowledging certain responsibilities outlined in this engagement letter and confirming:

• The availability of this information • Certain representations made during the audit for all periods presented • Adjusting the financial statements to correct material misstatements • The effects of any uncorrected misstatements, if any, resulting from errors or fraud

aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole

Management is responsible for informing us about related party transactions, including transactions with parties in interest.

We understand that management has determined that the Plan and the trust established under the Plan are qualified under the appropriate section of the Internal Revenue Code and intends to continue them as a qualified plan and trust.

Page 35


OTHER SERVICES

In addition, we may perform other services for you not covered by this engagement letter. You agree to assume full responsibility for the substantive outcomes of the services described above and for any other services that we may provide, including any findings that may result. You also acknowledge that those services are adequate for your purposes and that you will establish and monitor the performance ofthose services to ensure that they meet management's objectives. Any and all decisions involving management responsibilities related to those services will be made by you, and you accept full responsibility for such decisions. We understand that you will designate a management-level individual to be responsible and accountable for overseeing the performance of those services, and that you will have determined this individual is qualified to conduct such oversight.

ENGAGEMENT FEES

Our fees for our services will be $19,400. In addition, you will be billed travel costs and fees for services from other professionals, if any, as well as an administrative fee of 4% 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 pricing for this engagement and our fee structure are based upon the expectation that our invoices will be paid promptly. We will issue progress billings during the course of our engagement, and payment of our invoices is due upon receipt. Interest will be charged on any unpaid balance after 30 days at the rate of 10% per annum.

Our engagement fee does not include any time for post-engagement consultation with your personnel or third parties, consent letters and related procedures for the use of our reports in offering documents, inquiries from regulators or testimony or deposition regarding any subpoena. Charges for such services will be billed separately.

Our fees may also increase if our duties or responsibilities are increased by rulemaking of any regulatory body or any additional new accounting or auditing standards.

If our invoices for this or any other engagement you may have with BKD are not paid within 30 days, we may suspend or terminate our services for this or any other engagement. In the event our work is suspended or terminated as a result of nonpayment, you agree we will not be responsible for any consequences to you.

It is our understanding that all fees will be paid directly by the Plan or Plan Sponsor. You agree to notify us if any portion of our fee will be paid by any third party.

Page 36


OTHER ENGAGEMENT MATTERS AND LIMITATIONS

Our workpapers and documentation retained in any form of media for this engagement are the property ofBKD. We can be compelled to provide information under legal process. In addition, we may be requested by regulatory or enforcement bodies to make certain workpapers available to them pursuant to authority granted by law or regulation. You agree that we have no legal responsibility to you in the event we provide such documents or information.

Our firm, as well as other accounting firms, participates in a peer review program covering our audit and accounting practices. This program requires that once every three years we subject our system of quality control to an examination by another accounting firm. As part of this process, the other firm will review a sample of our work. It is possible the work we perform for you may be selected for its review. If it is, the firm is bound by professional standards to keep all information confidential.

You agree to indemnify and hold harmless BKD and its personnel from any claims, liabilities, costs and expenses relating to our services under this agreement attributable to false or incomplete representations by management, except to the extent determined to have resulted from the intentional or deliberate misconduct of BKD personnel.

You agree that any dispute regarding this engagement will, prior to resorting to litigation, be submitted to mediation upon written request by either party. Both parties agree to try in good faith to settle the dispute in mediation. The American Arbitration Association will administer any such mediation in accordance with its Commercial Mediation Rules. The results of the mediation proceeding shall be binding only if each of us agrees to be bound. We will share any costs of mediation proceedings equally.

Either of us may terminate these services at any time. Both of us must agree, in writing, to any future modifications or extensions. If services are terminated, you agree to pay us for time expended to date. In addition, you will be billed travel costs and fees for services from other professionals, if any, as well as an administrative fee of 4% 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.

If any provision of this agreement is declared invalid or unenforceable, no other provision of this agreement is affected and all other provisions remain in full force and effect.

We may from time to time utilize third-party service providers, e.g., domestic software processors or legal counsel, or disclose confidential information about you to third-party service providers in serving your account. We remain committed to maintaining the confidentiality and security of your information. Accordingly, we maintain internal policies, procedures and safeguards to protect the confidentiality of your information. In addition, we will secure confidentiality agreements with all service providers to maintain the confidentiality of your

Page 37


information. In the event we are unable to secure an appropriate confidentiality agreement, you will be asked to provide your consent prior to the sharing of your confidential information with the third-party service provider.

We may be requested to make certain audit documentation available to the Department of Labor pursuant to authority given to it by law or regulation. If requested, access to such audit documentation will be provided under the supervision of BKD personnel. Furthermore, upon request, we may provide copies of selected audit documentation to the Department of Labor. The Department of Labor may intend, or decide, to distribute the copies of information contained therein to others, including other governmental agencies.

We will, at our discretion or upon your request, deliver financial or other confidential information to you electronically via email or other mechanism. You recognize and accept the risk involved, particularly in email delivery as the Internet is not necessarily a secure medium of communication as messages can be intercepted and read by those determined to do so.

You agree you will not modify these documents for internal use or for distribution to third parties. You also understand that we may on occasion send you documents marked as draft and understand that those are for your review purpose only, should not be distributed in any way and should be destroyed as soon as possible.

This engagement letter represents the entire agreement regarding the services described herein and supersedes all prior negotiations, proposals, representations or agreements, written or oral, regarding these services. It shall be binding on heirs, successors and assigns of you and BKD.

If you intend to include these financial statements and our report in an offering document at some future date, you agree to seek our permission to do so at that time. You agree to provide reasonable notice to allow sufficient time for us to perform certain additional procedures. Any time you intend to publish or otherwise reproduce these financial statements and our report and make reference to our firm name in any manner in connection therewith, you agree to provide us with printers' proofs or masters for our review and approval before printing or other reproduction. You will also provide us with a copy of the final reproduced material for our approval before it is distributed. Our fees for such services are in addition to those discussed elsewhere in this letter.

You agree to notify us if you desire to place these financial statements or our report thereon along with other information, such as a report by management or those charged with governance on operations, financial summaries or highlights, financial ratios, etc., on an electronic site. You recognize that we have no responsibility as auditors to review information contained in electronic sites.

Page 38


Any time you intend to reference our firm name in any manner in any published materials, including on an electronic site, you agree to provide us with draft materials for our review and approval before publishing or posting such information.

BKD is a registered limited liability partnership under Missouri law. Under applicable professional standards, partners of BKD, LLP have the same responsibilities as do partners in a general accounting and consulting partnership with respect to conformance by themselves and other professionals in BKD with their professional and ethical obligations. However, unlike the partners in a general partnership, the partners in a registered limited liability partnership do not have individual civil liability, directly or indirectly, including by way of indemnification, contribution, assessment or otherwise, for any debts, obligations or liabilities of or chargeable to the registered limited liability partnership or each other, whether arising in tort, contract or otherwise.

Please sign and return the attached copy of this letter to indicate your acknowledgement of, and agreement with, the arrangements for our audit of the financial statements including our respective responsibilities. If the signed copy you return to us is in electronic form, you agree that such copy shall be legally treated as a "duplicate original" of this agreement.

Acknowledged and agreed to on behalf of:

PLATTE RIVER POWER AUTHORITY DEFINED BENEFIT PLAN

BY -------------------------------Tom Roiniotis, Chairman of the Board of Directors

DATE __________________________ __

BY -------------------------------Dave Smalley, Deputy General Manager/

Chief Financial Officer

DATE __________________________ __

Page 39

Page 40



From: Jason Frisbie, General Manager/CEO Dave Smalley, Deputy General Manager and Chief Financial Officer Wade Hancock, Financial Planning Manager

Subject: 2018 Proposed Rate Tariff(s)

Under the Amended Contracts for the Supply of Electric Power and Energy between Platte River and each of the four owner municipalities, Platte River’s Board of Directors is required to review the rate for electric power and energy furnished to the owner municipalities at least once each calendar year. This review is typically performed in October for most of the tariffs. The following is a summary of the recommended changes for the 2018 Tariffs.

1. TARIFF—SCHEDULE 1: FIRM RESALE POWER SERVICE. The tariff contains the monthly energy and demand charges for firm resale power service. Charges under this tariff are recommended to increase two percent (2%) as presented to the Board of Directors at the August 2017 meeting and as included in the 2018 proposed budget. Platte River staff is developing a more robust rates framework, communicated to the Board as recently as July 2017, which will include analyzing and revising the cost allocation methodologies. Because cost allocation methodology revisions are anticipated after 2018, staff believes two percent (2%) increases to seasonal demand and energy charges are most appropriate for 2018 to avoid multiple charge adjustments that may not be consistent with Platte River’s long-term goals, including providing system benefits. Additionally, based on the capacitor installation cost recovery calculation, the Power Factor charge is recommended to decrease from $0.38 to $0.36 for each reactive kilovolt-ampere due to a lower rate of return. Below is a brief summary of recommendations for Tariff—Schedule 1: Firm Resale Power Service for the 2018 Tariffs.

The summer season demand charge shall be increased from $11.33 to $11.56

per kilowatt of Billing Demand. The winter season demand charge shall be increased from $8.64 to $8.81 per

kilowatt of Billing Demand. The summer season energy charge shall be increased from $0.04200 to

$0.04284 per kilowatt-hour for all energy supplied. The winter season energy charges shall be increased from $0.04028 to $0.04109

per kilowatt-hour for all energy supplied. The Power Factor charge shall be decreased from $0.38 to $0.36 for each

reactive kilovolt-ampere.

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MEMO – 2018 Proposed Rate Tariff(s) October 2017 Page 2 of 4

Below is a table presented to the Board at their August 2017 meeting as part of the wholesale rate forecast. The table displays the current 2017 Tariff—Schedule 1 charges and the projected impacts of the recommended tariff changes to each of the municipalities.

Based on 2017 Budgeted LoadsBudget

2017Proposed

2018 % Change

Tariff 1 Charges:

Energy: $ per kWh for all energy supplied Jun – Aug 0.04200 0.04284 2.0%Jan – May, Sep – Dec 0.04028 0.04109 2.0%

Demand: $ per kW of Billing Demand Jun – Aug 11.33 11.56 2.0%Jan – May, Sep – Dec 8.64 8.81 2.0%

Tariff—Schedule 1 Average $/MWh1

Estes Park 56.17 57.29 2.0%Fort Collins 58.51 59.68 2.0%Longmont 59.30 60.49 2.0%Loveland 60.14 61.34 2.0%

Total 58.95 60.13 2.0% 1 Average $/MWh = Sum of Monthly (kW Billing Demand x $/kW + kWh Energy Supplied x $/kWh) / Annual MWh Supplied

2. TARIFF—SCHEDULE 2. This Tariff Schedule was eliminated by Board action on

December 14, 2006. 3. TARIFF—SCHEDULE 3: PARALLEL GENERATION. An avoided cost rate is posted

for Qualifying Facilities as defined in Section 201 of the Public Utilities Regulatory Policies Act. These rates apply when Qualifying Facilities sell electricity to Platte River. The capacity rate is recommended to increase from $3.66 to $3.80 per kilowatt/month. The increase is due to higher installed capacity cost estimates. Partially offsetting the increase is lower projected financing rate estimates. The energy rate is recommended to decrease from $0.02290 to $0.02072 per kilowatt-hour, due to decreasing per ton costs for coal delivered at Craig. No customers are currently served on this rate schedule.

4. TARIFF—SCHEDULE 4: WHOLESALE TRANSMISSION SERVICE. This Tariff

remains unchanged. Suggested changes may be brought to the Board in April 2018 after the completion of the 2017 audited financials.

5. TARIFF—SCHEDULE 5. This Tariff Schedule was eliminated by Board action on

December 12, 2002.

6. TARIFF—SCHEDULE 6. This Tariff Schedule was eliminated by Board action on December 12, 2002.

7. TARIFF—SCHEDULE 7: RENEWABLE ENERGY SERVICE. This tariff applies to all Qualified Renewable Energy subscribed for in accordance with the Request Letter

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process above and beyond Renewable Energy provided through TARIFF—SCHEDULE 1. At the August 2017 Board of Directors meeting, the current premium charge under this tariff was recommended to increase four percent (4%); however, since then, staff has revised its recommendation and communicated such with the Utility Directors and the Board of Directors. The Utility Directors initially expressed interest in maintaining the current 2017 premium to help preserve the existing Tariff 7 customer base. To maintain an unchanged rate, while maintaining compliance with Green-e Energy certification requirements, the resources to serve the Wind Energy premium are being reallocated between Tariff 1 and Tariff 7. Current Tariff 7 resources, which include Medicine Bow, Silver Sage, and renewable energy certificates totaling 105,600 MWh annually will be reallocated to Tariff 1. To maintain the same quantity of wind energy in Tariff 7, approximately 44% of Spring Canyon, currently a Tariff 1 renewable energy resource, will be reallocated to Tariff 7 Wind Energy. Resolution No. 12-13 directed that the energy generated from Spring Canyon be placed in Tariff 1. As noted in the accompanying resolution, if the Board adopts the tariff recommendations contained herein, Resolution No. 12-13 will be over-ridden as to the allocation of Spring Canyon energy placed in Tariff 7. Below is a brief summary of recommendations for Tariff—Schedule 7: Renewable Energy Service for the 2018 Tariffs. The current premium charge for Tariff—Schedule 7: Renewable Energy shall be

retitled Wind Energy. The Wind Energy premium remains unchanged at a fixed net charge of $0.025

per kilowatt-hour for all such Wind Energy supplied. Clarifying language has been added to specify that requests for Wind Energy

shall be for a specific volume of renewable energy to be delivered annually, measured in megawatt-hours.

Clarifying language has been added to increase transparency regarding the calculation and valuation of the Wind Energy premium and to differentiate Wind Energy from the new tariff offering a premium charge for Community Solar Energy.

Community Solar Energy is a new premium option subscribed for through the request letter process. Requests for Community Solar Energy shall be for the energy output from a specific share of generation resource capacity that provides the energy, measured in kilowatts.

A Premium Charge for Community Solar Energy has not yet been established and is designated by “xx”. However, the language has been added to TARIFF—SCHEDULE 7 to help facilitate municipal subscriptions required to move forward with a solar power purchase agreement.

8. TARIFF—SCHEDULE 8: STANDBY SERVICE. Remains unchanged.

9. TARIFF—SCHEDULE 9: LARGE USER SERVICE. Remains unchanged.

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10. TARIFF—SCHEDULE 10: This Tariff Schedule was eliminated by Board action on December 13, 2001.

Attached to this memorandum is a proposed resolution that would adopt the revised Tariff Schedules for 2018. Staff recommends adoption of this resolution as proposed. All changes would be effective January 1, 2018. Also attached are the redlined and clean versions of the 2018 Proposed Rate Tariff(s) book. Attachments

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Wholesale Rate at a Glance

• Avoidingsignificantsingleyearratehikesbysmoothingratesovermultipleyears.

• Providinggreaterratepredictabilitytoaidmunicipalownersandcustomerswithmoreaccurate,long-termplanning.

PlatteRiverPowerAuthority’sBoardofDirectorsapprovedStrategicFinancialPlanprovidesdirectionfortheorganizationtocreatelong-termfinancialsustainabilitywhilemaintainingstableandcompetitivewholesalerates.TheboardofdirectorsimplementsappropriaterateincreasesandratesmoothingstrategiesthatachieveStrategicFinancialPlanmetricsandbalancethefollowing:

2018seasonaldemandandenergychargeswillincrease2percentfrom2017.

$72.07$72.07

0

20

40

60

80

100

120

PlatteRiver Tri-State PSCo ARPA

$57.58

$72.07 $72.97

$103.95

• PlatteRiver'saveragewholesalerateis20percentlowerthanthenextlowestregionalprovider.

• RetailratesurveysconductedbytheColoradoAssociationofMunicipalUtilitiesinJuly2017indicateelectricratesinPlatteRiver’sownermunicipalitiesareamongthelowestinColorado.

• PlatteRiverhasprioritizedpreventativeandpredictivemaintenancestrategiesandproactivecapitalinvestmentstoprovidelong-termsystembenefitsandefficiencies.PlatteRiveriscommittedtomanagingcosts,providinglong-termfinancialsustainability,andmaintainingcompetitiverates.

• PlatteRiverhasincreasedthediversificationofitsgenerationportfoliobyexpandingdemandsidemanagement(DSM)andaddingwindandsolarresourceswhilemaintainingcompetitiverates.PlatteRiveriscommittedtocontinuingfuturediversificationofitsgenerationportfolioandloweringitscarbonfootprintwhilemaintainingratecompetitiveness.

Rate CompetitivenessThedirectionprovidedbyPlatteRiver'sBoardofDirector’sandtheStrategicFinancialPlanhavepositionedPlatteRivertohavehighlycompetitiverates.WholesaleratesforenergyprovidedtothePlatteRiver’smunicipalutilitiesarethelowestinColorado.

2016 Average Wholesale Rates ($/MWh)

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Benefits of Rate Increases

Predictably Smooth Rates• The2percentincreasesupportstheboardofdirectors’preferenceforasmooth,predictable

ratepathtobenefitmunicipalutility(retail)owners.

• Basedon2018budgetprojections,arateincreasewasnotrequiredtomeetStrategicFinancialPlanmetricsin2018.However,currentestimatesforecasttheneedtoraiseratesannuallybeginningin2019,someyearsmoredramaticallythanothers.

• Withratesmoothing,beyond2018,PlatteRiverprojects2percentannualincreasesthrough2025and2.8percentincreasesfrom2026through2030–anaverageof2.3percentinannualincreasesfrom2018through2030.

Achieving Strategic Initiatives• RateincreaseshelpPlatteRivermaintainitsAAcreditratingandremainfinanciallystrongby

generatingfinancialreservestoreducetheneedfordebttofundprojects.• Overthelong-term,rateincreaseswillfundcontinuedgeneralinfrastructureinvestment,

continuedportfoliodiversification,andgeneralinflationaryexpensesandmarketbasedassumptions.

○ PlatteRiverwillcontinuetoinvestinitsexistingpowergenerationandelectricaltransmissionassetstomaintainoperationalefficiencyandtoproactivelyaddressfederalandstateregulatoryrequirements.FundswillalsobeneededforgeneralbusinesscapitalassetssuchastheWindyGapFirmingProjectandtheHeadquartersCampusProject.

○ Onbehalfofitsowners,PlatteRiver'splanistoexpanditsinvestmentinnewwindandsolargeneratingassets,DSMexpansion,naturalgasgeneratingcapacity,andexitCraigcoalbasedgeneration.

PlatteRiverisintheprocessofdevelopingamorerobustratesframework.Includedintheprocesswillbeestablishingaratespolicystatement,improvingtransparency,analyzingandrevisingthecostallocationmethodologiestoenhancesystembenefit,andrevisingexistingtariffofferingsandintroducingnewtariffofferings.

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2018 PROPOSED RATE TARIFF(S)

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Tariff—Schedule 1: Adopted: Firm Resale Power Service Page 1 of 2 Effective:

TARIFF—SCHEDULE 1: FIRM RESALE POWER SERVICE

Applicability: This TARIFF—SCHEDULE 1: FIRM RESALE POWER SERVICE (TARIFF—SCHEDULE 1) shall apply to electric power and energy furnished to a Municipality for distribution and resale pursuant to its contract with Platte River Power Authority (Platte River), unless another Tariff Schedule applies. This TARIFF—SCHEDULE 1 shall not be available to a Municipality for service to any retail customer that requests new service entrance capacity of 10,000 kilowatts or greater or any retail customer that has a new load of an unusual nature that cannot be readily served from the Municipality’s distribution system. Electric power and energy services that are provided to a Municipality for resale to customers that are excluded from service under this TARIFF—SCHEDULE 1 shall be under the terms and conditions of TARIFF—SCHEDULE 9: LARGE USER SERVICE.

Character of Service: Alternating current 60 hertz; three-phase; delivery at 115 kilovolt or at other voltages subject to conditions as agreed upon; metering at each delivery point.

Monthly Rate: The Monthly Rate charged by Platte River to the Municipalities under this TARIFF—SCHEDULE 1 shall produce revenues, when combined with revenues from all other sources, sufficient to meet Platte River’s operation and maintenance costs, the cost of any purchased power, principal and interest payments on all indebtedness and provide an earnings margin adequate to meet all bond covenants and provide for the establishment and maintenance of necessary reserves. The Monthly Rate charged under this TARIFF—SCHEDULE 1 shall be as follows: Demand Charge: Summer Season $11.56 per kilowatt of Billing Demand

Winter Season $8.81 per kilowatt of Billing Demand Energy Charge:

Summer Season $0.04284 per kilowatt-hour for all energy supplied Winter Season $0.04109 per kilowatt-hour for all energy supplied

The Summer Season shall be the period June 1 through August 31 of each year. The Winter Season shall be the period January 1 through May 31 and September 1 through December 31.

Billing Demand: The Billing Demand shall be the 60-minute average kilowatt demand of the electric system of the Municipality, computed as the sum of 60-minute average kilowatt demands recorded simultaneously at all delivery points through which such Municipality receives electric power and energy, measured coincident with the Monthly System Peak Demand.

Monthly System Peak Demand: The Monthly System Peak Demand for Platte River shall be the maximum coincident sum of the hourly demands for the Municipalities recorded during the billing month.

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Power Factor: At any delivery point, Platte River will determine the ratio between the Billing Demand and reactive kilovolt-ampere demand at the time of the Monthly System Peak Demand. If in any billing month the 60-minute average reactive kilovolt-ampere demand is found to be in excess of 33% of the maximum kilowatt demand occurring at the same time, an additional monthly charge will be made at the rate of $0.36 for each reactive kilovolt-ampere of such excess.

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Tariff—Schedule 3: Adopted: Parallel Generation Page 1 of 2 Effective:

TARIFF—SCHEDULE 3: PARALLEL GENERATION

Applicability: This TARIFF—SCHEDULE 3: PARALLEL GENERATION (TARIFF—SCHEDULE 3) is applicable to power production facilities operated electrically in parallel with a Municipality’s electric system. Terms of service under this TARIFF—SCHEDULE 3 are dependent upon the size, type, and ownership of the power production facilities and Platte River Power Authority (Platte River) reserves the right to review conditions of such service at least annually.

Small Facilities: Power production facilities owned by a retail customer of a Municipality (Customer) with a maximum output rating of less than 1,000 kilowatts (kW), either individually or aggregated at a single Customer service address, are herein defined as Small Facilities. Small Facilities also include renewable energy generation facilities with a maximum output rating of less than 1,000 kilowatts (kW) that are subject to a financing arrangement under which the Customer holds beneficial title to the facilities. Renewable energy generation may include solar, wind, geothermal, small hydro, and biomass facilities. For each Small Facility, the Municipality shall provide the following information to Platte River: (1) maximum output rating of the facility in kilowatts, (2) physical location of the facility (address), (3) date that the facility began operation, (4) type of facility (photovoltaic solar or other renewable energy source, reciprocating engine, steam turbine, etc.), (5) type of fuel (if any), and (6) any updates or changes to previously reported information. This information shall be provided to Platte River annually by March 31 for facilities installed during the prior calendar year. No payment or other credit will be provided by Platte River for energy or capacity from Small Facilities and Small Facilities will not be subject to Standby or Ancillary Service fees from Platte River. Interconnection of Small Facilities to the Municipality’s distribution system will be at the sole discretion of the Municipality. The Municipality will negotiate details of interconnection, safety requirements, rates and payments, metering, and other arrangements. Platte River shall have the right to review the installation and metering of Small Facilities. Large Facilities: Parallel power generation facilities owned by a Customer having a maximum output rating of 1,000 kilowatts (kW) or greater, either individually or aggregated at a single Customer service address, are herein defined as Large Facilities. At Platte River’s discretion, the terms and conditions for service to Large Facilities may be established by separate contract among the Customer, the Municipality, and Platte River. Contracts for Large Facilities will be evaluated and negotiated on a case-by-case basis, with details of metering, communications, avoided energy and capacity payments, points of delivery, interconnection, ancillary service fees, standby charges, generation scheduling, and other issues considered for each specific facility.

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Other Facilities: Terms and conditions for all other parallel generation facilities proposed for interconnection to a Municipality’s electric distribution system or proposed for direct interconnection with Platte River’s system, including Qualifying Facilities as defined below, shall be established by separate contract. Such contracts will be negotiated on a case-by-case basis, with details of metering, communications, avoided energy and capacity payments, term of agreement, points of delivery, interconnection, ancillary service fees, standby charges, generation scheduling, and other issues defined in each specific contract. Qualifying Facilities: Power production facilities that are Qualifying Facilities as defined in Section 201 of the Public Utilities Regulatory Policies Act may elect to be treated as such rather than as Small Facilities or Large Facilities as set forth above. Platte River shall purchase electric energy and capacity offered by Qualifying Facilities operating in the Municipalities. Operators of such facilities shall consult Platte River in advance of any construction activity, provide to Platte River a copy of a qualifying certificate for the proposed facility (from the Federal Energy Regulatory Commission), and obtain Platte River’s written opinion concerning feasibility of the facility, which opinion shall not be unreasonably withheld. Payment for electric energy and capacity from Qualifying Facilities may be based on Platte River’s avoided energy and capacity rates, as follows:

Capacity: $3.80 per kilowatt per month Energy: $0.02072 per kilowatt-hour

Capacity payments shall be based upon the 60-minute, average kilowatt capacity provided during the hour of Platte River’s monthly peak demand. Avoided energy and capacity payments set forth in any contract with a Qualifying Facility or a Large Facility shall be established based upon, but not be limited to, the following criteria:

• The ability of Platte River to dispatch the Large Facility or Qualifying Facility. • The expected or demonstrated reliability of the Large Facility or Qualifying Facility. • The terms of any contract or other legally enforceable obligation, including the duration of

the obligation, termination notice requirement, and sanctions for non-compliance. • The extent to which scheduled outages of the Large Facility or Qualifying Facility can be

coordinated with scheduled outages of Platte River’s facilities. • The availability and usefulness of capacity and energy supplied from a Large Facility or

Qualifying Facility during annual seasonal peak periods (typically June through August between 3 and 6 pm).

• The usefulness of energy supplied from a Large Facility or Qualifying Facility during -system emergencies, including its ability to separate its load from its generation.

• The individual and aggregate value of energy and capacity from the Large Facility or Qualifying Facility on Platte River’s system.

• The capacity increments and the lead times associated with additions of capacity from the Large Facility or Qualifying Facility.

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Tariff—Schedule 4: Adopted: Wholesale Transmission Service Page 1 of 2 Effective:

TARIFF—SCHEDULE 4: WHOLESALE TRANSMISSION SERVICE

Platte River Power Authority (Platte River) offers open access transmission service through this Open Access Transmission Tariff (OATT). The complete OATT is posted on Platte River’s Open Access Same-Time Information System (OASIS) web site. Any Eligible Customer (as defined in the OAT Tariff) may request transmission service from Platte River under the terms of the OAT Tariff. This OAT Tariff does not apply to any entity taking bundled service under Platte River’s TARIFF—SCHEDULE 1: FIRM RESALE POWER SERVICE; TARIFF—SCHEDULE 8: STANDBY SERVICE; OR TARIFF—SCHEDULE 9: LARGE USER SERVICE. In accordance with the OAT Tariff, Platte River reserves the right to offer a discounted transmission rate for transmission service posted on the OASIS for specific transmission paths. A summary of the charges within the OATT Schedules follows. The Real Power Loss factor is 1.78%. (1) Scheduling, System Control, and Dispatch Service

No charge in addition to that for Transmission Service (Items 7 and 8 below). (2) Reactive Supply and Voltage Control from Generation Sources Service

$43.51 per megawatt (MW) of Reserved Capacity per month. (3) Regulation and Frequency Response Service

Platte River is not a balancing authority and does not offer this service. Upon written request, Platte River will assist in arranging for the local balancing authority operator to provide this service; however, Platte River makes no representation that the local balancing authority operator can or will provide the service. (4) Energy Imbalance Service

Platte River is not a balancing authority and does not offer this service. Upon written request, Platte River will assist in arranging for the local balancing authority operator to provide this service; however, Platte River makes no representation that the local balancing authority operator can or will provide the service. (5) Operating Reserve—Spinning Reserve Service

Platte River is not a balancing authority and does not offer this service. Upon written request, Platte River will assist in arranging for the local balancing authority operator to provide this service; however, Platte River makes no representation that the local balancing authority operator can or will provide the service. (6) Operating Reserve—Supplemental Reserve Service

Platte River is not a balancing authority and does not offer this service. Upon written request, Platte River will assist in arranging for the local balancing authority operator to provide this service; however, Platte River makes no representation that the local balancing authority operator can or will provide the service.

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(7) Long-Term and Short-Term Firm Point-to-Point Transmission Service

The charges can be up to the following limits:

Yearly Delivery $68,108.29 per MW of Reserved Capacity per year Monthly Delivery $5,675.69 per MW of Reserved Capacity per month Weekly Delivery $1,309.77 per MW of Reserved Capacity per week Daily Delivery $261.95 per MW of Reserved Capacity per day Hourly Delivery $16.37 per MW of Reserved Capacity per hour

(8) Non-Firm Point-to-Point Transmission Service


Monthly Delivery $5,675.69 per MW of Reserved Capacity per month Weekly Delivery $1,309.77 per MW of Reserved Capacity per week Daily Delivery $261.95 per MW of Reserved Capacity per day Hourly Delivery $16.37 per MW of Reserved Capacity per hour

Transmission Revenue Requirement

The charge for Network Integration Transmission Service is calculated pursuant to the Federal Energy Regulatory Commission (FERC) Pro Forma Open Access Transmission Tariff Attachment H based on Platte River’s annual transmission revenue requirement of $37,060,620. This transmission revenue requirement is calculated in accordance with the FERC pro-forma Network Service Rate calculation requirement. Joint Dispatch Transmission Service

Joint Dispatch Transmission Service is applicable only to load serving entities in the PSCo Balancing Authority Area that are signatories to a Joint Dispatch Agreement (JDA) under which: (1) participating generating resources of the parties are dispatched as a pool on a least-cost basis respecting transmission limitations; and (2) the Joint Dispatch Transmission Service Customers’ respective transmission service providers have provided within their OATT a transmission service schedule for energy dispatched pursuant to the JDA at a rate equal to zero dollars on a non-firm, as-available basis with the lowest curtailment priority.

Hourly delivery: $0.00 per MW of Reserved Capacity per hour

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Tariff—Schedule 7: Adopted: Renewable Energy Service Page 1 of 3 Effective:

TARIFF—SCHEDULE 7: RENEWABLE ENERGY SERVICE

Applicability: This TARIFF—SCHEDULE 7: RENEWABLE ENERGY SERVICE (TARIFF—SCHEDULE 7) applies to those amounts of Qualified Renewable Energy (Renewable Energy) subscribed for in accordance with the Request Letter process outlined below, available for delivery by Platte River Power Authority (Platte River) to a Municipality for purchase and resale to retail customers of the Municipality (Customer). Renewable Energy supplied under this TARIFF—SCHEDULE 7 shall be above and beyond any Renewable Energy provided through TARIFF—SCHEDULE 1: FIRM RESALE POWER SERVICE. This TARIFF—SCHEDULE 7 provides that a Premium Charge for Renewable Energy subscribed for herein shall be added to the charges for firm energy established by TARIFF—SCHEDULE 1: FIRM RESALE POWER SERVICE. Renewable Energy includes two separate products, Wind Energy and Community Solar Energy, which may be requested individually and are delivered and charged individually. Although structured as Premium Charges, it is possible increases in market energy costs could lead to negative Premium Charges.

Character of Service: Alternating current: 60 hertz; three-phase; delivery at 115 kilovolts or at other voltages subject to conditions as agreed upon.

Request Letter and Confirmation: In order to receive service under this TARIFF—SCHEDULE 7, a Municipality must submit a Request Letter requesting that Platte River deliver specific amounts of additional Wind Energy and Community Solar Energy to the Municipality. Requests for Wind Energy shall be for a specific volume of renewable energy to be delivered annually, measured in megawatt-hours. Requests for Community Solar Energy shall be for the energy output from a specific share of generation resource capacity that provides the energy, measured in kilowatts. Platte River shall confirm in writing the amount of such Wind Energy and Community Solar Energy to be delivered. Once confirmed, Platte River shall be obligated to sell and deliver, and the requesting Municipality shall be obligated to take and pay for all Wind Energy and Community Solar Energy requested in the Request Letters.

Premium Charges: A monthly Premium Charge for all Renewable Energy delivered to the Municipalities under this TARIFF—SCHEDULE 7, shall be assessed as follows: Wind Energy:

A net fixed charge of $0.025 per kilowatt-hour for all such Wind Energy supplied, which shall include an Energy Charge, estimated Energy Credit, and other credits or charges, as defined below:

An Energy Charge for the cost to procure and deliver the energy. An estimated Energy Credit intended to reflect the marginal energy benefit realized by the Platte River system, which could be one of the following for any given unit of energy provided by Wind Energy: avoided coal fuel cost, avoided natural gas fuel cost, avoided market purchase, or increased

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surplus sale revenue. At the end of the calendar year Platte River will review the actual marginal energy benefits and, if found to be different from the estimated Energy Credit, apply the difference between the actual and estimated Energy Credit to the fixed net charge in future years. Other credits or charges will be included if the future Wind Energy results in other system benefits or costs not included above. For example, Wind Energy may result in ancillary services costs or benefits, or may result in benefits due to avoided emissions.

Community Solar Energy:

Individual charges, including an Energy Charge, Capacity Credit, Energy Credit, and other charges and credits, shall be applied to all such Community Solar Energy, as defined below:

An Energy Charge of $XX per kilowatt-hour to procure the energy. Procurement costs will be the amount paid for energy under a power purchase agreement. A Capacity Credit intended to reflect the avoided future cost of marginal capacity anticipated to be realized by the Platte River system, based on the avoided capacity rate published in Platte River’s TARIFF—SCHEDULE 3: PARALLEL GENERATION and the estimated firm capacity provided by the Community Solar Energy project. The Capacity Credit will also include any costs incurred by Platte River related to the capacity of the Community Solar Energy product, such as ancillary services charges. An Energy Credit intended to reflect the marginal energy benefit realized by the Platte River system, which could be one of the following for any given unit of energy provided by Community Solar Energy: avoided coal fuel cost, avoided natural gas fuel cost, avoided market purchase, or increased surplus sale revenue. The Energy Credit will be determined one month in arrears based on the actual marginal energy benefits achieved during the prior month. Other credits or charges will be included if the future Community Solar Energy results in other system benefits or costs not included above. For example, Community Solar may result in in benefits due to avoided emissions.

Suspension or Termination of Deliveries: In the event Platte River is unable to deliver requested Renewable Energy due to Uncontrollable Forces as that term is defined in the Power Supply Agreements or due to contractual breach or default by third parties, Platte River reserves the right to suspend or terminate the delivery of Renewable Energy under this TARIFF—SCHEDULE 7. Qualified Renewable Energy: Sources of Renewable Energy provided under this TARIFF – SCHEDULE 7 are limited to those listed in the Colorado Energy Standard; C.R.S. § 40-2-124. Renewable Energy delivered to Municipalities under this TARIFF—SCHEDULE 7 shall be comprised of either: (i) energy

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generated from Renewable Energy sources, inclusive of the Renewable Energy Certificates (RECs) associated with those sources, or (ii) Platte River system energy combined with RECs from qualified sources.

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Tariff—Schedule 8: Adopted: Standby Service Page 1 of 1 Effective:

TARIFF—SCHEDULE 8: STANDBY SERVICE

Applicability: This TARIFF—SCHEDULE 8: STANDBY SERVICE shall apply to any retail customer of a Municipality (Customer) who opts to supply 1,000 kilowatts or more of electric power for other than emergency back-up purposes, from generation sources, individual or aggregated, located on the Customer’s premises and who receives Standby Capacity from the Municipality (whether Standby Capacity is received by choice or by default). Monthly Charges: Monthly Charges for Standby Capacity and related services shall be established by separate contract. Standby Capacity: Standby Capacity is the capacity, required by Platte River Power Authority (Platte River), to serve Customer load in the event the Customer’s on-site generation fails to operate. The Standby Capacity is typically equal to the capacity provided by the Customer’s on-site generation when it operates. Platte River will consult with the Municipality in determining the actual quantity of Standby Capacity, measured in kilowatts, to be invoiced to the Municipality on the Customer’s behalf. The amount of Standby Capacity shall not exceed the total available output capability of the Customer’s on-site generation equipment. Details of metering and other issues shall be established by contract among the Customer, the Municipality, and Platte River.

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Tariff—Schedule 9: Adopted: Large User Service Page 1 of 2 Effective:

TARIFF—SCHEDULE 9: LARGE USER SERVICE

Applicability: This TARIFF—SCHEDULE 9: LARGE USER SERVICE (TARIFF—SCHEDULE 9) is available for firm and interruptible energy furnished by Platte River Power Authority (Platte River) to Municipalities for resale to Large Users. Large Users are customers meeting any of the following criteria:

• Customer requests new service entrance capacity of 10,000 kilowatts or greater. • Customer has a new load that cannot be readily served from the Municipality’s distribution

system under TARIFF—SCHEDULE 1: FIRM RESALE POWER SERVICE due to the unusual nature of the load.

• Customer metered demand is anticipated to reach 1,000 kW at a single site within twelve (12) months of requesting such service as demonstrated to the Municipality’s and Platte River’s satisfaction; provided, however, that if the metered demand does not reach 1,000 kW within a 12-month time frame, the customer must receive service under another tariff until the metered demand reaches 1,000 kW for a continuous twelve (12) month period.

• Customer with load at a single site with a single meter measuring a minimum metered demand of 1,000 kilowatts (kW) or greater.

• Customer with load at a single site with multiple meters, where the sum of the coincident metered demand for such meters is 1,000 kW or greater.

• Total load for a customer with multiple, non-contiguous sites aggregated under a single Service Agreement provided that the customer has at least one site where the minimum metered demand is 1,000 kW or greater and all loads are located within the Municipality’s service territory.

Prior to receiving service pursuant to this TARIFF—SCHEDULE 9, the Large User must enter into an agreement for electric service (Service Agreement) with the Municipality. The Service Agreement shall identify Platte River as a third-party beneficiary of the Service Agreement. The Service Agreement shall address, at a minimum, the following material terms:

• Charge(s) for service, including responsibility for infrastructure costs • Term of Service Agreement • Initial date of service under this tariff • Rate adjustments • Amount and timing of curtailments or interruptions (if any) • Standby provision

Each of these terms and conditions shall be established in consultation with Platte River and shall be confirmed in a letter from the Platte River General Manager to the Municipality. The Municipality will negotiate the specific form of the Service Agreement with the Large User.

Charges for Service: The charges to a Municipality for service by Platte River under this TARIFF—SCHEDULE 9 shall be determined based on the unique load characteristics and service requirements to the Large User.

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In determining the charges for service, consideration will be given to the following cost of service issues posed by service to the Large User:

• Investments for transmission system facilities and other infrastructure located at or near the Large User site;

• Investments for unique transmission system facilities and other infrastructure necessary to provide service to the Large User;

• The effect of the Large User load on the cost for adding new generation resources; and • The effect of the Large User load on fuel use and fuel mix for power generation.

In order to adequately address the costs of service imposed by the Large User, unique rate structures and cost recovery mechanisms will be examined, including, but not limited to the following:

• Initial fixed costs • Monthly fixed cost charges • Seasonal pricing • Time of use pricing • Marginal cost pricing • Fuel adjustment charges

All charges shall at a minimum be sufficient to recover Platte River’s related cost of service, including expected operating and maintenance costs, related purchased power costs and related principal and interest on Platte River indebtedness over the term of the Service Agreement. All charges and material terms of service are subject to approval by the Platte River Board of Directors. Adjustment of Charges: Unless otherwise agreed, adjustments to the charges will be made on an annual basis at a minimum and will reflect actual changes in Platte River’s cost of service including, but not limited to, financing costs, fuel (including delivery), operation and maintenance, environmental management, and purchased power. Character of Service: Alternating current at approximately 60 hertz; three-phase; delivery at 115 kilovolts or at other voltages subject to conditions as agreed upon; metering at each delivery point. Metering, Invoicing and Losses: The Municipality shall provide to Platte River the monthly demand, energy, power factor and other usage characteristics as may be required for billing the Municipality on a calendar month basis, for the Large User within five (5) business days of obtaining such data. Following its receipt of the monthly billing data for the Large User, Platte River shall prepare and send to the Municipality an invoice for the electric power service provided to the Municipality for the Large User, with the appropriate charges. The Municipality, at its discretion, may opt to include in the Large User’s monthly energy usage the distribution losses that occur between the Platte River point of delivery to the Municipality and the point of delivery to the Large User. In such case, the Municipality shall provide to Platte River the total energy usage including losses of the Large User and an appropriate charge will be invoiced.

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2018 PROPOSED RATE TARIFF(S) REDLINE

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TARIFF—SCHEDULE 1: FIRM RESALE POWER SERVICE

Applicability: This TARIFF—SCHEDULE 1: FIRM RESALE POWER SERVICE (TARIFF—SCHEDULE 1) shall apply to electric power and energy furnished to a Municipality for distribution and resale pursuant to its contract with Platte River Power Authority (Platte River), unless another Tariff Schedule applies. This TARIFF—SCHEDULE 1 shall not be available to a Municipality for service to any retail customer that requests new service entrance capacity of 10,000 kilowatts or greater or any retail customer that has a new load of an unusual nature that cannot be readily served from the Municipality’s distribution system. Electric power and energy services that are provided to a Municipality for resale to customers that are excluded from service under this TARIFF—SCHEDULE 1 shall be under the terms and conditions of TARIFF—SCHEDULE 9: LARGE USER SERVICE.

Character of Service: Alternating current 60 hertz; three-phase; delivery at 115 kilovolt or at other voltages subject to conditions as agreed upon; metering at each delivery point.

Monthly Rate: The Monthly Rate charged by Platte River to the Municipalities under this TARIFF—SCHEDULE 1 shall produce revenues, when combined with revenues from all other sources, sufficient to meet Platte River’s operation and maintenance costs, the cost of any purchased power, principal and interest payments on all indebtedness and provide an earnings margin adequate to meet all bond covenants and provide for the establishment and maintenance of necessary reserves. The Monthly Rate charged under this TARIFF—SCHEDULE 1 shall be as follows: Demand Charge: Summer Season $11.33$11.56 per kilowatt of Billing Demand

Winter Season $8.64 $8.81 per kilowatt of Billing Demand Energy Charge:

Summer Season $0.04200 $0.04284 per kilowatt-hour for all energy supplied Winter Season $0.04028 $0.04109 per kilowatt-hour for all energy supplied

The Summer Season shall be the period June 1 through August 31 of each year. The Winter Season shall be the period January 1 through May 31 and September 1 through December 31.

Billing Demand: The Billing Demand shall be the 60-minute average kilowatt demand of the electric system of the Municipality, computed as the sum of 60-minute average kilowatt demands recorded simultaneously at all delivery points through which such Municipality receives electric power and energy, measured coincident with the Monthly System Peak Demand.

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Monthly System Peak Demand: The Monthly System Peak Demand for Platte River shall be the maximum coincident sum of the hourly demands for the Municipalities recorded during the billing month.

Power Factor: At any delivery point, Platte River will determine the ratio between the Billing Demand and reactive kilovolt-ampere demand at the time of the Monthly System Peak Demand. If in any billing month the 60-minute average reactive kilovolt-ampere demand is found to be in excess of 33% of the maximum kilowatt demand occurring at the same time, an additional monthly charge will be made at the rate of $0.38 $0.36 for each reactive kilovolt-ampere of such excess.

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TARIFF—SCHEDULE 3: PARALLEL GENERATION

Applicability: This TARIFF—SCHEDULE 3: PARALLEL GENERATION (TARIFF—SCHEDULE 3) is applicable to power production facilities operated electrically in parallel with a Municipality’s electric system. Terms of service under this TARIFF—SCHEDULE 3 are dependent upon the size, type, and ownership of the power production facilities and Platte River Power Authority (Platte River) reserves the right to review conditions of such service at least annually.

Small Facilities: Power production facilities owned by a retail customer of a Municipality (Customer) with a maximum output rating of less than 1,000 kilowatts (kW), either individually or aggregated at a single Customer service address, are herein defined as Small Facilities. Small Facilities also include renewable energy generation facilities with a maximum output rating of less than 1,000 kilowatts (kW) that are subject to a financing arrangement under which the Customer holds beneficial title to the facilities. Renewable energy generation may include solar, wind, geothermal, small hydro, and biomass facilities. For each Small Facility, the Municipality shall provide the following information to Platte River: (1) maximum output rating of the facility in kilowatts, (2) physical location of the facility (address), (3) date that the facility began operation, (4) type of facility (photovoltaic solar or other renewable energy source, reciprocating engine, steam turbine, etc.), (5) type of fuel (if any), and (6) any updates or changes to previously reported information. This information shall be provided to Platte River annually by March 31 for facilities installed during the prior calendar year. No payment or other credit will be provided by Platte River for energy or capacity from Small Facilities and Small Facilities will not be subject to Standby or Ancillary Service fees from Platte River. Interconnection of Small Facilities to the Municipality’s distribution system will be at the sole discretion of the Municipality. The Municipality will negotiate details of interconnection, safety requirements, rates and payments, metering, and other arrangements. Platte River shall have the right to review the installation and metering of Small Facilities. Large Facilities: Parallel power generation facilities owned by a Customer having a maximum output rating of 1,000 kilowatts (kW) or greater, either individually or aggregated at a single Customer service address, are herein defined as Large Facilities. At Platte River’s discretion, the terms and conditions for service to Large Facilities may be established by separate contract among the Customer, the Municipality, and Platte River. Contracts for Large Facilities will be evaluated and negotiated on a case-by-case basis, with details of metering, communications, avoided energy and capacity payments, points of delivery, interconnection, ancillary service fees, standby charges, generation scheduling, and other issues considered for each specific facility.

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Other Facilities: Terms and conditions for all other parallel generation facilities proposed for interconnection to a Municipality’s electric distribution system or proposed for direct interconnection with Platte River’s system, including Qualifying Facilities as defined below, shall be established by separate contract. Such contracts will be negotiated on a case-by-case basis, with details of metering, communications, avoided energy and capacity payments, term of agreement, points of delivery, interconnection, ancillary service fees, standby charges, generation scheduling, and other issues defined in each specific contract. Qualifying Facilities: Power production facilities that are Qualifying Facilities as defined in Section 201 of the Public Utilities Regulatory Policies Act may elect to be treated as such rather than as Small Facilities or Large Facilities as set forth above. Platte River shall purchase electric energy and capacity offered by Qualifying Facilities operating in the Municipalities. Operators of such facilities shall consult Platte River in advance of any construction activity, provide to Platte River a copy of a qualifying certificate for the proposed facility (from the Federal Energy Regulatory Commission), and obtain Platte River’s written opinion concerning feasibility of the facility, which opinion shall not be unreasonably withheld. Payment for electric energy and capacity from Qualifying Facilities may be based on Platte River’s avoided energy and capacity rates, as follows:

Capacity: $3.663.80 per kilowatt per month Energy: $0.022900.02072 per kilowatt-hour

Capacity payments shall be based upon the 60-minute, average kilowatt capacity provided during the hour of Platte River’s monthly peak demand. Avoided energy and capacity payments set forth in any contract with a Qualifying Facility or a Large Facility shall be established based upon, but not be limited to, the following criteria:

• The ability of Platte River to dispatch the Large Facility or Qualifying Facility. • The expected or demonstrated reliability of the Large Facility or Qualifying Facility. • The terms of any contract or other legally enforceable obligation, including the duration of

the obligation, termination notice requirement, and sanctions for non-compliance. • The extent to which scheduled outages of the Large Facility or Qualifying Facility can be

coordinated with scheduled outages of Platte River’s facilities. • The availability and usefulness of capacity and energy supplied from a Large Facility or

Qualifying Facility during annual seasonal peak periods (typically June through August between 3 and 6 pm).

• The usefulness of energy supplied from a Large Facility or Qualifying Facility during -system emergencies, including its ability to separate its load from its generation.

• The individual and aggregate value of energy and capacity from the Large Facility or Qualifying Facility on Platte River’s system.

• The capacity increments and the lead times associated with additions of capacity from the Large Facility or Qualifying Facility.

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TARIFF—SCHEDULE 4: WHOLESALE TRANSMISSION SERVICE

Platte River Power Authority (Platte River) offers open access transmission service through this Open Access Transmission Tariff (OATT). The complete OATT is posted on Platte River’s Open Access Same-Time Information System (OASIS) web site. Any Eligible Customer (as defined in the OAT Tariff) may request transmission service from Platte River under the terms of the OAT Tariff. This OAT Tariff does not apply to any entity taking bundled service under Platte River’s TARIFF—SCHEDULE 1: FIRM RESALE POWER SERVICE; TARIFF—SCHEDULE 8: STANDBY SERVICE; OR TARIFF—SCHEDULE 9: LARGE USER SERVICE. In accordance with the OAT Tariff, Platte River reserves the right to offer a discounted transmission rate for transmission service posted on the OASIS for specific transmission paths. A summary of the charges within the OATT Schedules follows. The Real Power Loss factor is 1.78%. (1) Scheduling, System Control, and Dispatch Service

No charge in addition to that for Transmission Service (Items 7 and 8 below). (2) Reactive Supply and Voltage Control from Generation Sources Service

$43.51 per megawatt (MW) of Reserved Capacity per month. (3) Regulation and Frequency Response Service

Platte River is not a balancing authority and does not offer this service. Upon written request, Platte River will assist in arranging for the local balancing authority operator to provide this service; however, Platte River makes no representation that the local balancing authority operator can or will provide the service. (4) Energy Imbalance Service

Platte River is not a balancing authority and does not offer this service. Upon written request, Platte River will assist in arranging for the local balancing authority operator to provide this service; however, Platte River makes no representation that the local balancing authority operator can or will provide the service. (5) Operating Reserve—Spinning Reserve Service

Platte River is not a balancing authority and does not offer this service. Upon written request, Platte River will assist in arranging for the local balancing authority operator to provide this service; however, Platte River makes no representation that the local balancing authority operator can or will provide the service. (6) Operating Reserve—Supplemental Reserve Service

Platte River is not a balancing authority and does not offer this service. Upon written request, Platte River will assist in arranging for the local balancing authority operator to provide this service; however, Platte River makes no representation that the local balancing authority operator can or will provide the service.

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(7) Long-Term and Short-Term Firm Point-to-Point Transmission Service


Yearly Delivery $68,108.29 per MW of Reserved Capacity per year Monthly Delivery $5,675.69 per MW of Reserved Capacity per month Weekly Delivery $1,309.77 per MW of Reserved Capacity per week Daily Delivery $261.95 per MW of Reserved Capacity per day Hourly Delivery $16.37 per MW of Reserved Capacity per hour

(8) Non-Firm Point-to-Point Transmission Service


Monthly Delivery $5,675.69 per MW of Reserved Capacity per month Weekly Delivery $1,309.77 per MW of Reserved Capacity per week Daily Delivery $261.95 per MW of Reserved Capacity per day Hourly Delivery $16.37 per MW of Reserved Capacity per hour

Transmission Revenue Requirement

The charge for Network Integration Transmission Service is calculated pursuant to the Federal Energy Regulatory Commission (FERC) Pro Forma Open Access Transmission Tariff Attachment H based on Platte River’s annual transmission revenue requirement of $37,060,620. This transmission revenue requirement is calculated in accordance with the FERC pro-forma Network Service Rate calculation requirement. Joint Dispatch Transmission Service

Joint Dispatch Transmission Service is applicable only to load serving entities in the PSCo Balancing Authority Area that are signatories to a Joint Dispatch Agreement (JDA) under which: (1) participating generating resources of the parties are dispatched as a pool on a least-cost basis respecting transmission limitations; and (2) the Joint Dispatch Transmission Service Customers’ respective transmission service providers have provided within their OATT a transmission service schedule for energy dispatched pursuant to the JDA at a rate equal to zero dollars on a non-firm, as-available basis with the lowest curtailment priority.

Hourly delivery: $0.00 per MW of Reserved Capacity per hour

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TARIFF—SCHEDULE 7: RENEWABLE ENERGY SERVICE

Applicability: This TARIFF—SCHEDULE 7: RENEWABLE ENERGY SERVICE (TARIFF—SCHEDULE 7) applies to those amounts of Qualified Renewable Energy (Renewable Energy) subscribed for in accordance with the Request Letter process outlined below, available for delivery by Platte River Power Authority (Platte River) to a Municipality for purchase and resale to retail customers of the Municipality (Customer). Renewable Energy supplied under this TARIFF—SCHEDULE 7 shall be above and beyond any Renewable Energy provided through TARIFF—SCHEDULE 1: FIRM RESALE POWER SERVICE. This TARIFF—SCHEDULE 7 provides that a Premium Charge for Renewable Energy subscribed for herein shall be added to the charges for firm energy established by TARIFF—SCHEDULE 1: FIRM RESALE POWER SERVICE. Renewable Energy includes two separate products, Wind Energy and Community Solar Energy, which may be requested individually and are delivered and charged individually. Although structured as Premium Charges, it is possible increases in market energy costs could lead to negative Premium Charges.

Character of Service: Alternating current: 60 hertz; three-phase; delivery at 115 kilovolts or at other voltages subject to conditions as agreed upon.

Request Letter and Confirmation: In order to receive service under this TARIFF—SCHEDULE 7, a Municipality must submit a Request Letter requesting that Platte River deliver specific amounts of additional Renewable Wind Energy and Community Solar Energy to the Municipality. Requests for Wind Energy shall be for a specific volume of renewable energy to be delivered annually, measured in megawatt-hours. Requests for Community Solar Energy shall be for the energy output from a specific share of generation resource capacity that provides the energy, measured in kilowatts. Platte River shall confirm in writing the amount of such Renewable Wind Energy and Community Solar Energy to be delivered. Once confirmed, Platte River shall be obligated to sell and deliver, and the requesting Municipality shall be obligated to take and pay for all Renewable Wind Energy and Community Solar Energy requested in the Request Letters.

Premium Charges: A monthly Premium Charge for all Renewable Energy delivered to the Municipalities under this TARIFF—SCHEDULE 7, shall be assessed as follows: Wind Energy:

A net fixed charge of $0.025 per kilowatt-hour for all such Renewable Wind Energy supplied, which shall include an Energy Charge, estimated Energy Credit, and other credits or charges, as defined below:

An Energy Charge for the cost to procure and deliver the energy. An estimated Energy Credit intended to reflect the marginal energy benefit realized by the Platte River system, which could be one of the following for any given unit of energy provided by Wind Energy: avoided coal fuel cost,

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avoided natural gas fuel cost, avoided market purchase, or increased surplus sale revenue. At the end of the calendar year Platte River will review the actual marginal energy benefits and, if found to be different from the estimated Energy Credit, apply the difference between the actual and estimated Energy Credit to the fixed net charge in future years. Other credits or charges will be included if the future Wind Energy results in other system benefits or costs not included above. For example, Wind Energy may result in ancillary services costs or benefits, or may result in benefits due to avoided emissions.

Community Solar Energy:

Individual charges, including an Energy Charge, Capacity Credit, Energy Credit, and other charges and credits, shall be applied to all such Community Solar Energy, as defined below:

An Energy Charge of $XX per kilowatt-hour to procure and deliver the energy. Procurement costs will be the amount paid for energy under a power purchase agreement. A Capacity Credit intended to reflect the avoided future cost of marginal capacity anticipated to be realized by the Platte River system, based on the avoided capacity rate published in Platte River’s TARIFF—SCHEDULE 3: PARALLEL GENERATION and the estimated firm capacity provided by the Community Solar Energy project. The Capacity Credit will also include any costs incurred by Platte River related to the capacity of the Community Solar Energy product, such as ancillary services charges. An Energy Credit intended to reflect the marginal energy benefit realized by the Platte River system, which could be one of the following for any given unit of energy provided by Community Solar Energy: avoided coal fuel cost, avoided natural gas fuel cost, avoided market purchase, or increased surplus sale revenue. The Energy Credit will be determined one month in arrears based on the actual marginal energy benefits achieved during the prior month. Other credits or charges will be included if the future Community Solar Energy results in other system benefits or costs not included above. For example, Community Solar may result in ancillary services costs or benefits, or may result in benefits due to avoided emissions.

Suspension or Termination of Deliveries: In the event Platte River is unable to deliver requested Renewable Energy due to Uncontrollable Forces as that term is defined in the Power Supply Agreements or due to contractual breach or default by third parties, Platte River reserves the right to suspend or terminate the delivery of Renewable Energy under this TARIFF—SCHEDULE 7. Incentive Payments or Credits: Any monetary benefits that are, or may become, available associated with the generation of Renewable Energy by Platte River as a result of local, state, or federal laws or regulations shall

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accrue solely to Platte River. Revenue received from any such benefits will be credited in the calculation of the Premium Charge. Qualified Renewable Energy: Sources of Renewable Energy provided under this TARIFF – SCHEDULE 7 are limited to those listed in the Colorado Energy Standard; C.R.S. § 40-2-124. Renewable Energy delivered to Municipalities under this TARIFF—SCHEDULE 7 shall be comprised of either: (i) energy generated from Renewable Energy sources, inclusive of the Renewable Energy Certificates (RECs) associated with those sources, or (ii) Platte River system energy combined with RECs from qualified sources.

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Tariff—Schedule 8: Adopted: Standby Service Page 1 of 1 Effective:

TARIFF—SCHEDULE 8: STANDBY SERVICE

Applicability: This TARIFF—SCHEDULE 8: STANDBY SERVICE shall apply to any retail customer of a Municipality (Customer) who opts to supply 1,000 kilowatts or more of electric power for other than emergency back-up purposes, from generation sources, individual or aggregated, located on the Customer’s premises and who receives Standby Capacity from the Municipality (whether Standby Capacity is received by choice or by default). Monthly Charges: Monthly Charges for Standby Capacity and related services shall be established by separate contract. Standby Capacity: Standby Capacity is the capacity, required by Platte River Power Authority (Platte River), to serve Customer load in the event the Customer’s on-site generation fails to operate. The Standby Capacity is typically equal to the capacity provided by the Customer’s on-site generation when it operates. Platte River will consult with the Municipality in determining the actual quantity of Standby Capacity, measured in kilowatts, to be invoiced to the Municipality on the Customer’s behalf. The amount of Standby Capacity shall not exceed the total available output capability of the Customer’s on-site generation equipment. Details of metering and other issues shall be established by contract among the Customer, the Municipality, and Platte River.

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TARIFF—SCHEDULE 9: LARGE USER SERVICE

Applicability: This TARIFF—SCHEDULE 9: LARGE USER SERVICE (TARIFF—SCHEDULE 9) is available for firm and interruptible energy furnished by Platte River Power Authority (Platte River) to Municipalities for resale to Large Users. Large Users are customers meeting any of the following criteria:

• Customer requests new service entrance capacity of 10,000 kilowatts or greater. • Customer has a new load that cannot be readily served from the Municipality’s distribution

system under TARIFF—SCHEDULE 1: FIRM RESALE POWER SERVICE due to the unusual nature of the load.

• Customer metered demand is anticipated to reach 1,000 kW at a single site within twelve (12) months of requesting such service as demonstrated to the Municipality’s and Platte River’s satisfaction; provided, however, that if the metered demand does not reach 1,000 kW within a 12-month time frame, the customer must receive service under another tariff until the metered demand reaches 1,000 kW for a continuous twelve (12) month period.

• Customer with load at a single site with a single meter measuring a minimum metered demand of 1,000 kilowatts (kW) or greater.

• Customer with load at a single site with multiple meters, where the sum of the coincident metered demand for such meters is 1,000 kW or greater.

• Total load for a customer with multiple, non-contiguous sites aggregated under a single Service Agreement provided that the customer has at least one site where the minimum metered demand is 1,000 kW or greater and all loads are located within the Municipality’s service territory.

Prior to receiving service pursuant to this TARIFF—SCHEDULE 9, the Large User must enter into an agreement for electric service (Service Agreement) with the Municipality. The Service Agreement shall identify Platte River as a third-party beneficiary of the Service Agreement. The Service Agreement shall address, at a minimum, the following material terms:

• Charge(s) for service, including responsibility for infrastructure costs • Term of Service Agreement • Initial date of service under this tariff • Rate adjustments • Amount and timing of curtailments or interruptions (if any) • Standby provision

Each of these terms and conditions shall be established in consultation with Platte River and shall be confirmed in a letter from the Platte River General Manager to the Municipality. The Municipality will negotiate the specific form of the Service Agreement with the Large User.

Charges for Service: The charges to a Municipality for service by Platte River under this TARIFF—SCHEDULE 9 shall be determined based on the unique load characteristics and service requirements to the Large User.

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In determining the charges for service, consideration will be given to the following cost of service issues posed by service to the Large User:

• Investments for transmission system facilities and other infrastructure located at or near the Large User site;

• Investments for unique transmission system facilities and other infrastructure necessary to provide service to the Large User;

• The effect of the Large User load on the cost for adding new generation resources; and • The effect of the Large User load on fuel use and fuel mix for power generation.

In order to adequately address the costs of service imposed by the Large User, unique rate structures and cost recovery mechanisms will be examined, including, but not limited to the following:

• Initial fixed costs • Monthly fixed cost charges • Seasonal pricing • Time of use pricing • Marginal cost pricing • Fuel adjustment charges

All charges shall at a minimum be sufficient to recover Platte River’s related cost of service, including expected operating and maintenance costs, related purchased power costs and related principal and interest on Platte River indebtedness over the term of the Service Agreement. All charges and material terms of service are subject to approval by the Platte River Board of Directors. Adjustment of Charges: Unless otherwise agreed, adjustments to the charges will be made on an annual basis at a minimum and will reflect actual changes in Platte River’s cost of service including, but not limited to, financing costs, fuel (including delivery), operation and maintenance, environmental management, and purchased power. Character of Service: Alternating current at approximately 60 hertz; three-phase; delivery at 115 kilovolts or at other voltages subject to conditions as agreed upon; metering at each delivery point. Metering, Invoicing and Losses: The Municipality shall provide to Platte River the monthly demand, energy, power factor and other usage characteristics as may be required for billing the Municipality on a calendar month basis, for the Large User within five (5) business days of obtaining such data. Following its receipt of the monthly billing data for the Large User, Platte River shall prepare and send to the Municipality an invoice for the electric power service provided to the Municipality for the Large User, with the appropriate charges. The Municipality, at its discretion, may opt to include in the Large User’s monthly energy usage the distribution losses that occur between the Platte River point of delivery to the Municipality and the point of delivery to the Large User. In such case, the Municipality shall provide to Platte River the total energy usage including losses of the Large User and an appropriate charge will be invoiced.

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RESOLUTION NO. __-17

Resolution No. __-17: 2018 Proposed Rate Tariff Page 1 of 2

WHEREAS, the AMENDED CONTRACTS FOR THE SUPPLY OF ELECTRIC POWER

AND ENERGY (“POWER SUPPLY AGREEMENTS”) between Platte River Power Authority and

each of the municipalities of Estes Park, Fort Collins, Longmont, and Loveland (collectively

referred to as “Owner Municipalities”), dated September 1, 2010 require the Board of Directors

of Platte River to review the rates for electric power and energy furnished thereunder at such

intervals as it deems appropriate, but not less frequently than once each calendar year; and

WHEREAS, the POWER SUPPLY AGREEMENTS require the Board, if necessary, to

revise such rates to produce revenues which shall be sufficient, but only sufficient, with the

revenues of Platte River from all other sources, (i) to meet the cost of operation and

maintenance, (ii) to meet the cost of purchased power, (iii) to make payments on indebtedness

and provide an earnings margin adequate to obtain revenue bond financing on favorable terms,

and (iv) to provide for reasonable reserves; and

WHEREAS, Platte River’s management has estimated electric energy sales and the

costs of service for 2018 and has submitted to the Board a proposed Budget for the year 2018;

and

WHEREAS, Platte River’s management has advised the Board that the Tariff Schedule

as attached, combined with prior period reserves, will provide sufficient revenues in accordance

with the POWER SUPPLY AGREEMENTS and with Section 6.12 of the General Power Bond

Resolution (No. 5-87); and

WHEREAS, the Tariff Schedule as recommended places some of the energy generated

at the Spring Canyon site into Tariff 7; and

WHEREAS, Resolution No. 12-13 directed that Spring Canyon energy be placed in Tariff

1; and

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Resolution No. __-17: 2018 Proposed Rate Tariff Page 2 of 2

WHEREAS, the directions of Resolution No. 12-13 are over-ridden by the current

resolution to the extent necessary to place sufficient Spring Canyon energy into Tariff 7 to meet

customer demand as defined by the commitment letters received from the Owner Municipalities.

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

Authority that:

(1) The 2018 Rate Tariff Schedule, as attached, is adopted with all changes effective

January 1, 2018; and

(2) Resolution No. 12-13 is modified for purposes of moving an increment of Spring

Canyon energy from Tariff 1 to Tariff 7; and

(3) The General Manager is authorized, on behalf of Platte River, to give written notice

of the Board’s action to the Owner Municipalities in accordance with the POWER

SUPPLY AGREEMENTS and to take such further action with respect to the

implementation thereof as he determines to be necessary.

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 , 2017. Assistant Secretary

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From: Jason Frisbie, General Manager/CEO Dave Smalley, Deputy General Manager and Chief Financial Officer Shelley Nywall, Controller

Subject: 2018 Proposed Annual Budget – Public Hearing

As previewed during the September budget work session, staff anticipated changes to the 2018 Proposed Annual Budget. The updated budget includes total revenues of $223.5 million and total expenditures of $276 million, including a board contingency appropriation of $23 million. Net income is now projected to be $23 million with debt service coverage at 2.50 times. The budget has been updated to reflect the most current information for revenues and expenditures as listed below.

Amount Favorable (Unfavorable)

Revenues Description

$2.4M Surplus Sales

The price for surplus sales has been updated with the most recent forecast adjusted for Platte River’s market. The average price is increasing 2 percent to $23.12 from $22.67 per MWh, which represents $0.4 million of the change. Due to the increase in price, the volume of sales increased 13 percent representing the majority or $2.0 million of the change.

$0.7M Interest Income

The significant decrease in capital additions paired with a slight increase in interest rate projections resulted in an increase in interest income.

($57K) Municipal Sales

The Tariff 7 rate increase was removed to keep the rate flat at $25/MWh, partially offset by small adjustments as a result of the model update.

$3.1M Total increase in revenues


Operating Expenses

Description

($2.0M) Fuel The generation from the coal units increased as a result of increasing the surplus sales price, partially offset by a small decrease in natural gas usage from modeling results.

($0.6M) Operating Expenses

($0.6M) – IT consulting services for network assistance and system engineering are required due to resource constraints and the need to complete required projects, such as the acceleration of the PC replacement cycle to ensure all employees are on the same platform. Other expenses include

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MEMO – 2018 Proposed Annual Budget – Public Hearing October 2017

Page 2 of 4

Debt expense was impacted by the updates to capital additions for the 2018 Budget. The change is listed below.

Capital projects were also reviewed and updated for the 2018 Budget. The changes are listed below.

PCs for the replacement project, insurance compliance and tracking software, and cyber security software services.

($0.1M) – Expenses were included for the permitting, marketing, and administration of the community solar program. Other expenses were updated relating to Xcel’s transmission ancillary services tariff, the fiber locating project, SONET equipment, and substation maintenance.

$0.1M – Wheeling expenses are decreasing due to a rate reduction from WAPA.

Reclassifications were made between production and transmission for proper classification of SCADA Services as a transmission function.

($0.4M) Purchased Power

Fewer reserves will be held on Platte River resources due to an increase in the surplus sales price resulting in higher reserve purchases from Xcel Energy. In addition, Xcel Energy increased the tariff for purchased reserves. Community solar was included and, pending contract negotiations, is anticipated to be online in the fall of 2018. These increases were partially offset by a reduction in supplemental purchases from modeling results.

($3.0M) Total increase in operating expenses


Debt Expense Description

($0.5M) Allowance for Borrowed Funds During Construction

The updates to capital additions and project fund interest income resulted in a decrease in the amount of interest capitalized.


Capital Additions Description

$17.7M Headquarters Campus Decrease as the timeline for project completion was extended to 2020.

$0.8M Bottom Ash and Reclaim Pond – Coal Combustion Residuals Compliance

Decrease as scope and costs were more clearly defined.

$0.7M Generator Stator Rewind – Rawhide Unit 1

Decrease as a result of separating the online monitoring system from this project into a standalone project described below.

($16K) Server and Application Monitoring Software

New project to add a module to the existing SolarWinds monitoring suite. This software will identify issues and root cause of application problems with the ability to customize monitoring.

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Page 3 of 4

Contingency appropriation was impacted by the updates to operating expenses and capital additions for the 2018 Budget. The change is listed below.

($20K) Cyber Asset Management

New project to replace the software that monitors the configurations of the servers and workstations in the operation technology system environment to ensure the systems comply with NERC CIP standards.

($20K) Copier Replacement – Electric Operations

New purchase of a Canon copier as the current one is due for replacement. The new copier will be faster, have better image quality, and cost less per copy/print.

($0.1M) Voltage Regulator Upgrade

Increase as a new estimate was received from the vendor.

($0.1M) Fixed Fire Suppression System – Combustion Turbines

Increase due to adding required climate controlled buildings to house each fire suppression system.

($0.2M) Soot Blower Replacement

Existing project which requires funds in 2018 to continue to replace and standardize all retractable soot blowers for Rawhide Unit 1 to ensure unit heat rate and reliability.

($0.5M) GenAdvisor Generator Online Monitoring System – Rawhide Unit 1

New project to install a monitoring system during the 2018 outage. The system provides information on condition of equipment, reduces inspection time, and will assist in mitigating unplanned outages.

($0.6M) Windy Gap Firming Project

Increase as a result of a change in method of calculating interest during construction costs.

$17.7M Total decrease in capital additions


Contingency Appropriation

Description

$2.0M Contingency Appropriation

The contingency appropriation represents approximately 10 percent of operating expenses and capital additions and has been updated because of the changes in those categories.

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Page 4 of 4

The following table summarizes the 2018 Proposed Annual Budget and outlines impacts from the current changes made to the revenue and expenditure categories.

Attached is the 2018 Proposed Budget at a Glance reflecting the most recent changes. No other changes are anticipated at this time. If additional changes arise, the Board will be informed as soon as reasonably possible to ensure budget adoption in December. A public hearing will be held at the Board meeting to receive comments on the 2018 Proposed Annual Budget. Public notice of the hearing was posted in the four municipalities’ local newspapers in September.

Staff will give a presentation on the changes to the budget at the Board meeting.

Attachment

$ in ThousandsProposed

Budget

Price Updates &

Model Impacts

Other O&M Net Increase

Capital Decrease &

Depreciation*

Favorable (Unfavorable)

Changes

Updated Proposed

BudgetRevenues

Sales to Municipalities 197,073$ (57)$ (57)$ 197,016$ Sales for Resale 21,037 2,439 2,439 23,476 Interest and Other Income 2,369 679 679 3,048

Total Revenues 220,479$ 3,061$ 3,061$ 223,540$

Operating ExpensesPurchased Power 34,173$ (352)$ (352)$ 34,525$ Fuel 47,692 (1,963) (1,963) 49,655$ Production 45,205 344$ 344 44,861$ Transmission 16,830 (368) (368) 17,198$ Administrative and General 24,741 (626) (626) 25,367$

Total Operating Expenses 168,641$ (2,315)$ (650)$ (2,965)$ 171,606$

Debt Expenses 20,272$ (513)$ (513)$ 20,785$

Capital AdditionsProduction 42,048$ (18)$ (18)$ 42,066$ Transmission 3,271 (3) (3) 3,274 General 32,984 17,684 17,684 15,300

Total Capital Additions 78,303$ 17,663$ 17,663$ 60,640$ Total Expenditures 267,216$ (2,315)$ (1,163)$ 17,663$ 14,185$ 253,031$

Contingency Appropriation 25,000$ 2,000$ 2,000$ 23,000$

Total Expenditures and Contingency 292,216$ (2,315)$ (1,163)$ 19,663$ 16,185$ 276,031$

Net Income 23,417$ 746$ (1,163)$ (10)$ (427)$ 22,990$ *Depreciation expense increased by approximately $10K impacting net income.

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• Solar, wind and hydropower resources, including renewable energy credits, will represent approximately 31 percent of the energy provided to the municipalities in 2018. We will proactively incorporate more carbon free resources into our general portfolio of energy resources within the next few years. Our staff will use 2018 to finalize potential contracts, secure transmission and prepare to integrate these additional resources and consider additional carbon free energy sources or other emerging technologies.

• A new 5 MW community solar program is planned for implementation during 2018 to provide solar power to help meet growing customer demand for solar energy.

• Expanding energy efficiency programs will help more customers use less energy but will also drive increases in the demand side management (DSM) expenses. The DSM budget, within the administrative and general category, represents 5 percent of all operating expenses budgeted in 2018. We will also continue collaboration with owner municipalities on the demand response pilot program to identify the value of specific resources and to develop a distributed energy resource strategy.

2018 Proposed Budget at a Glance - Public Hearing

Expenses are managed from a broad perspective, operating the system in a safe, compliant and reliable manner, while cost effectively optimizing resources and expanding environmental stewardship. Platte River communicates and collaborates with owner municipalities to align processes and outcomes to the benefit of all customers.

Key Points

Operating Expenses

Platte River Power Authority’s 2018 Budget supports the mission, values, strategic plan and financial plan established by Platte River's Board of Directors.

2018 Budget Summary (millions)Revenues $223.5

Operating Expenses $171.6

Debt Expenditures $20.8

Capital Additions $60.6

$207 $217 $215 $224

0

50

100

150

200

250

300

2016 Actual 2017 Budget 2017 Estimate 2018 Budget

Operating Expenses Debt Service Expenditures Capital Additions Revenues

$ Mill ions

_

Page 81

• Platte River, along with seven other regional utilities, plans to join a regional transmission organization (RTO) and an organized wholesale energy market. This will enable Platte River to 1) pool energy resources over a larger footprint; 2) use existing transmission systems more efficiently; 3) increase the integration of renewable resources; 4) improve transmission and interconnection planning; 5) and potentially lower costs to our owner municipalities. Budgeted expenses will cover costs needed during the implementation stages of creating a market.

• In 2018, we will make a significant, proactive investment in Rawhide Unit 1 to ensure service reliability and efficiency. Work includes replacement of the original turbine generator and re-winding of the original generator stator. We will also replace and upgrade the bottom ash system of the unit to comply in advance with federal and state solid waste management regulations.

• In spring 2018 we will break ground on the new Headquarters Campus Project, which will ultimately help us better manage the next generation of technologies behind a secure and robust electrical grid and the critical infrastructure necessary to power and protect the communities we serve. Working with several agencies since planning began in 2003, we will also begin construction on the Windy Gap Firming Project to secure the long-term water needs of Rawhide Energy Station.

• Approximately $95 million in debt will be issued to finance construction of the Headquarters Campus and Windy Gap Firming projects. Platte River’s AA credit rating will enable Platte River to achieve favorable financing terms.

• We have been able to control our core generation and transmission expenses through continued preventative and predictive maintenance strategies and proactive capital investments. We are committed to managing costs, providing long-term financial sustainability, and maintaining competitive rates.

• Billing demand and energy deliveries to the municipalities are projected to increase 0.3 percent and 0.9 percent, respectively, from the 2017 Budget. Surplus sales revenues are projected to increase in 2018 due to more energy available for sale because of improved market conditions.

Based on 2018 budget projections, a rate increase was not required to meet Strategic Financial Plan targets in 2018. However, current estimates forecast the need to raise rates annually beginning in 2019, some years more dramatically than others. As part of our planning efforts, we recommend providing our municipal owners and those whom they serve a more predictable path of smaller, more consistent annual rate increases.

Operating Expenses $171.6 million

Revenues $223.5 million

Revenues

88%

9%

2% 1%

Municipal Sales

Surplus Sales Short-term

Wheeling

Interest and Other Income

Fuel

Production

Purchased Power

Administrative and General

Transmission

29%

26%20%

15%

10%

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From: Jason Frisbie, General Manager/CEO Andy Butcher, Chief Operating Officer Paul Crosby, Manager of Operations Technology and CIP

Subject: Fiber Asset Ownership Discussion

There has been a dramatic increase in interest expressed by our municipalities recently in the expanded use of the fiber optic system. Platte River believes that a structured approach is necessary toclarify the responsibilities and opportunities presented by the existing fiber optic network. Platte River staff developed a whitepaper which describes a possible solution that could guide thecreation and delivery of telecommunication services. The whitepaper proposes that the municipalitiestake title to their extra capacity in the fiber system, while Platte River will retain ownership of the twelve fibers and the fiber optic loop base cables. This arrangement has the following advantages: 1) Due totheir exemption from the S.B. 152 restrictions, the municipalities would have more flexibility in the types of services that they could provide and the classes of customers that would be able to receive those services. 2) Continued Platte River management of the fiber network would limit the types of controllable outages discussed in the whitepaper. Based on feedback received at the October 13 Utility Directors’ meeting, if title to the local fiber loops istransferred to the member municipalities there may still be a need for Platte River to continue to ownand manage the long-haul fiber assets as well as leases associated with the local loops. Options to accomplish this will be investigated. Platte River staff will give a presentation on the topics discussed in the whitepaper to begin a processthrough which the Board can provide direction concerning the future of the fiber optic network.

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From: Jason Frisbie, General Manager/CEO Alyssa Clemsen Roberts, Chief Strategy Officer

Subject: Zero Net Carbon Model Communications Plan

Platte River has received a number of inquiries from community leaders and stakeholders regarding the Zero Net Carbon (ZNC) modeling. In anticipation that the ZNC will be of interest to a broad spectrum of the public, a draft communications plan has been developed to ensure Platte River provides its member utilities, communities and the public an opportunity to engage, learn and discuss the ZNC modeling results. At the October Board meeting, staff will present the communications plan for the Board to providefeedback.

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From: Jason Frisbie, General Manager/CEO Karin Hollohan, Chief Administrative Services Officer

Subject: HQ Campus

Will Welch and Stuart Lumsden, Platte River’s owner representatives, will be in attendance to presentan update on the HQ Campus project activity. They will focus primarily on sharing the updated costestimate, resulting from both significant work on their part to delve into cost factors as well as design direction provided by senior management. The design to date results in an estimated building and site cost of $44 million, within the target cost range of $40 to $45 million previously reported to the Board. After careful review, staff chose not to pursue some of the potential cost savings in order to not compromise on initial goals or primary core business functions. A few of those excluded items werereducing the conference room and meeting space, scaling back the look and feel of the atrium, reducing the size of windows, and cutting back on critical system redundancy, all of which staff haschosen not to pursue. They will also share an updated site plan and building renderings. Preliminary work has begun on construction scheduling and phasing, and a schedule update will be provided, as well. While information staff may receive from neighbors during the October 24 open house will not beincluded in the presentation due to the timing of the event and the posting of this presentation, staff willprovide a summary of any comments and questions. Staff will provide a brief introduction and be available to answer any questions that might arise.

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From: Jason Frisbie, General Manager/CEO Andy Butcher, Chief Operating Officer

Subject: Mountain West Transmission Group/Southwest Power Pool Discussion

The Platte River staff presentation will elaborate on the status of the Mountain West Transmission Group and its progress to fully integrate loads into the SPP marketplace. The presentation will also provide an updated timeline, as well as the process that will lead to filing a tariff with the FERC. No action is required today and staff will follow up with discussion in future Board meetings.

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Page 90



From: Joseph B. Wilson, General Counsel

Subject: PLATTE RIVER LEGAL AND GOVERNMENTAL AFFAIRS REPORT – OCTOBER 2017 BOARD MEETING

The following legal issues and governmental/legislative matters were addressed during the reportingperiod; bold-faced type is used to highlight recent or significant developments. LEGAL ISSUES: CURRENT OR THREATENED LITIGATION El Paso Electric Co. vs. Federal Energy Regulatory Commission (FERC) — Over the last four years Platte River has been engaged in a regional transmission planning process under the auspices ofWestConnect, a planning organization formed by the utility participants. The WestConnect footprint covers a vast area generally corresponding with boundaries of the states of Arizona, Colorado, Nevada,New Mexico, Utah, and Wyoming. The planning effort was implemented in response to FERC Order 1000issued in 2011. Order 1000 requires FERC-jurisdictional utilities to create regional transmission planningorganizations with authority to plan transmission expansions and allocate costs to the beneficiaries of thenew transmission projects. Unlike the Eastern Interconnection (generally all areas of the United Stateseast of Colorado excluding most of Texas), the Western Interconnection contains a much largerpopulation of non-jurisdictional utilities – of which Platte River is one. In the WestConnect footprint thebreakdown of the transmission-owning utilities include ten non-jurisdictional utilities and eleven jurisdictional entities. This heavy presence of non-jurisdictionals accounts for the slower market development in the western United States. Non-jurisdictionals are concerned about the mandatory cost allocation provisions of Order 1000. Toaddress this concern, WestConnect developed a transmission planning and development format thatincluded two classes of participants, jurisdictional transmission owners were grouped into one class and non-jurisdictionals were allowed to enroll as “Coordinating Transmission Owners” (CTOs). CTOs couldopt-out of cost allocation, although incentives were provided for their participation in future developments.FERC approved this planning/development format. El Paso Electric Co. and a number of other jurisdictional utilities challenged the FERC decisionsapproving the WestConnect process. These utilities argued that FERC approval violated the mandatethat FERC approve only rates that were “just and reasonable” and, that absent a strong correlation with cost causation, rates would necessarily be unjust and unreasonable. On August 8, the Fifth Circuit Court of Appeals agreed with El Paso and remanded the case to the FERC. The non-jurisdictional participants in WestConnect collectively filed a joint petition requesting the Fifth Circuit reconsider its August 8 order. Reconsideration was denied and the matter will be re-litigated before the FERC.

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Legal and Governmental Affairs Report October 2017 Page 2 of 5

The proceedings on remand before the FERC were complicated by the resignation of Chairman NormanBay. His resignation left the FERC without a quorum. Recently two of the three nominees sent to the Senate by President Trump were confirmed and the FERC now has a quorum. The FERC faces a significant backlog of cases, and immediate action on this matter is not expected. This may not present a significant issue for Platte River because if the Mountain West Transmission Group moves forward withthe creation of an RTO, regional planning functions for the RTO footprint will likely be assumed by theRTO, which may lead to withdrawal from WestConnect. If this occurs, the results of the remand may be irrelevant to Platte River and the issue of cost allocation will be decided through the RTO. ONGOING AND CURRENT MATTERS OF SIGNIFICANCE Renewed Interest in Oil and Gas Development — Recently Platte River was again approached aboutleasing the mineral rights it holds under the Rawhide property. The entity making the request is MontanaOil Properties Inc. Their business plan involves redeveloping areas that were unsuccessfully developedpreviously. They are focusing on the area previously drilled by Marathon. Our 5,000 surface acres is within a larger 20,000 plus acre target area of interest, which includes limited Fort Collins properties north of Rawhide. A law firm has been selected to assist in reviewing the proposed oil and gas leaseagreement. The firm represents landowners and mineral owners exclusively (not oil and gas producers),and has extensive experience negotiating oil and gas leases in Colorado. Platte River’s primary concernsare minimization of surface occupation and protection of its infrastructure. Accordingly, non-standard terms and conditions must be incorporated into any lease agreement to address these concerns. Draft proposals have been exchanged with no agreement being reached. Initially the developer was communicating regularly, but given the recent lack of communication it is possible that the developer haslost interest given the trend in oil and gas prices. Grand Lake Clarity NEPA Process — Platte River is a coordinating agency in the Grand Lake ClarityNational Environmental Policy Act (NEPA) process initiated by the Bureau of Reclamation. Thisproceeding could affect Platte River as both a participant in the Windy Gap Project and as a powercustomer of the Western Area Power Administration. The kick-off meeting occurred on February 10, 2017in Golden, CO. At present the matter will proceed as an Environmental Assessment (EA), but mayconvert to an Environmental Impact Statement (EIS). A “visioning process” yielded a number of capitalprojects that address the clarity issue, but the range of alternatives will be expanded to analyzeoperational modifications that could improve clarity at reduced costs. The draft “purpose and need” statement developed by BOR was discussed during a March 31 conference call. A revised draft will be circulated. At the September 8 meeting seven alternatives were discussed and the BOR and NorthernColorado Water Conservancy District representatives introduced other possible operational or low-cost alternatives for consideration. The need for public scoping meetings was discussed, but due to the highlyseasonal nature of Grand Lake residents such a meeting will probably not occur until summer of 2018. Environmental Protection Agency Clean Power Plan — On February 9, 2016, the Supreme Courtstayed the Clean Power Plan (CPP) rule pending full judicial review. It is unlikely that such judicial review will be complete until 2017 or possibly 2018. This creates significant uncertainty about future complianceplanning efforts. Initially Governor Hickenlooper announced that the state planning process wouldcontinue during the stay, but subsequent to the November, 2016 election state planning efforts have effectively ceased. Following President Trump’s Executive Order on March 28, 2017 directing the Administrator of the EPA to reevaluate the CPP, on October 10, 2017 EPA issued a notice of proposedrule (NOPR) to formally rescind the CPP on the grounds that it exceeds the agency’s statutory authority.

Page 92


With the present bottleneck affecting carbon regulation on the Federal level it is expected that momentummay shift back to the state level. Evidence of this is the recently released Executive Order from Governor Hickenlooper. The order calls upon electric utilities to take action voluntarily to cut emission levels by 25 percent of 2012 levels by 2025 and by 35 percent by 2030. Coal Combustion Residuals (“CCR”) Rule Implementation — As described in the management report, legal counsel is supporting staff in their evaluation of compliance issues relating to the Federal CCR Rule. During 2016 Colorado discontinued its effort to adopt CCR regulations. At least for now, theState has taken the position that it has sufficient authority to ensure environmental protection under theirexisting programs. On January 17, 2017 Platte River staff met with the Colorado Department of PublicHealth and Environment (CDPHE) in Denver. During this meeting, the existing operational plan for themonofill was discussed along with the need for a revised plan. As a result of the meeting, Platte River staff has taken steps toward bringing the plan up to current standards. These steps include increasedgroundwater monitoring and an evaluation of the existing topsoil cover at the monofill. Platte River staff met with CDPHE again on July 13, 2017 to present a high level plan and timelines for compliance options for the ash monofill. The feedback received from the CDPHE was favorable. The CDPHE has requested additional groundwater data and soil borings. During this meeting, the Certificate of Designation (“CD”) for the monofill issued by Larimer County was also discussed. The CD has not been modified since it was issued for the original construction of the site. The CDPHE indicated that the CD may need to bemodified before a new operational plan for the monofill can be approved. Concurrently with updates tothe operational plan for the ash monofill, Platte River staff is working with CDPHE to obtain approval formodifications to the reclaim pond and closure of the bottom ash ponds (one of which will be lined and reopened to provide surge capacity during future boiler washes). In preliminary discussions with Larimer County, the County initially indicated that a full application including a formal review process will not berequired to modify the CD. Recently, the County has indicated that a more formal process may berequired. Discussions are ongoing. Since Platte River’s impoundments (reclaim pond and bottom ashponds) were included in the original site plan approved by the County Commissioners before construction, Platte River staff believes that the County’s initial response was correct and that therequired modifications to the CD may be made administratively through an addendum to our existingdocumentation. Windy Gap Firming Project — The Windy Gap Firming Project (WGFP) continues to obtain necessarystate and federal approvals. The last major outstanding permit, the Section 404 permit, was issued by the U.S. Army Corps of Engineers. Northern Water is preparing to submit a water court application to amend the existing Windy Gap water court decrees. Specifically, Northern Water will be seeking to incorporatethe terms of a 2012 IGA entered into with several West Slope entities. The 2012 IGA provides for theconstruction of Chimney Hollow Reservoir and the storage of up to 90,000 acre-feet of water provided Northern Water complies with specified mitigation measures. Northern Water is the holder of the WindyGap water rights and will therefore be the lead applicant on the water court application. Nevertheless, questions may arise throughout the legal proceeding on which Northern Water may request the input orconsent of the governing bodies of the Windy Gap participants. One issue that the parties needed to resolve involves prepositioning of water in the Chimney Hollow Reservoir – meaning the placement of Colorado/Big Thompson water in Chimney Hollow in anticipation of Windy Gap water deliveries. Thisissue became more complicated with the decision in the Busk/Ivanhoe case, and west slope interests are seeking to limit east slope storage in reservoirs other than Chimney Hollow. Proposed language is beingreviewed by east and west slope representatives. As discussed in the Management Report, Legal is supporting Finance on a request for a Private Letter

Page 93


Ruling from the Internal Revenue Service. A formal request for a Private Letter Ruling was filed withthe IRS on September 14, 2017. Mountain West Transmission Group (“MWTG”) — In May 2016, the Mountain West Transmission Group (“MWTG”), a working group made up of Platte River, Tri-State Generation and Transmission, Public Service Company of Colorado, Black Hills Energy, Colorado Springs Utilities, Basin Electric, and the Western Area Power Administration, issued a Request for Information (“RFI”) for an independenttransmission tariff operator and market administrator. MWTG received responses from several regional transmission operators, including PJM Interconnection LLC, Mid-Continent Independent System Operator, Inc. (“MISO”) and the Southwest Power Pool (“SPP”). After evaluating these responses, MWTG entered into further discussions with SPP about the possibility of full market membership,including Reliability Coordinator (“RC”) services. In furtherance of these discussions, MWTG has been working to develop a more detailed proposal forconsideration by SPP and its membership. Among the issues to be addressed in this proposal are therights of MWTG market participants with respect to revenue requirements and required FERC filings,zonal placement of market participants and allocation of costs, operation of DC ties in an integratedmarket, bylaws and membership agreement revisions to accommodate the interests of the MWTG participants, mitigation of cost impacts to MWTG participants, and governance issues. These efforts havebeen directed by a Steering Committee of MWTG members, which meets biweekly, with specific issuesbeing addressed by various working committees. Initially, MWTG intended to present a detailed proposal to SPP for consideration in July 2017, followed bya “go/no go” decision to pursue final agreements with SPP if the proposal was accepted. This wouldtrigger a stakeholder process within SPP which is anticipated to last approximately six months beforefinal action could be taken by the SPP board. Due to complexities in the negotiations, the decision to proceed with the SPP stakeholder process was not made until the MWTG Steering Committee met on September 14, 2017. Meetings were held with FERC staff in Washington D.C on September 28, 2017 toobtain feedback on some of the key governance aspects of the proposal. SPP publicly discussed the MWTG proposal at stakeholder meetings in Denver and Little Rock on October 13 and 16, 2017, respectively. The basic terms of the MWTG proposal are outlined in the Operating Report. A series of follow up meetings will be held with SPP and with FERC staff to further refine the proposal. It is anticipated that the final proposal will be submitted to the SPP board for approval in mid-2018, with regulatory filings before the FERC and state regulators to follow. Assuming there are no significant regulatory roadblocks or issues in the negotiations with SPP, the MWTG anticipates that the west-side members will commence operation in the SPP market in late 2019. CONTRACTUAL MATTERS Power Production Outage Contracts — The Deputy General Counsel is assisting staff in negotiating contracts forequipment to be supplied and services to be performed during the Fall 2018 plant outage. Negotiationswith Siemens Energy, Inc. (“Siemens”) for the purchase of a new generator rotor have been successful. A purchase order has been sent to Siemens. There is a twenty-four (24) month lead-time related to this purchase. In addition, an Alliance Agreement has been executed with Siemens which will allow Platte River to obtain preferred pricing during the next ten (10) year period. A mechanical contractor repair andmaintenance services agreement has also been executed with Siemens. Outage projects including a

Page 94


stator rewind will be performed under this services agreement. In addition to these projects, an ash handling conversion project is scheduled to be completed during the Fall 2018 plant outage. The ashhandling conversion project shall consist of upgrading Rawhide Energy Station Unit 1’s existing bottomash handling system with a wet to dry conversion. The current process of wet sluicing bottom ash andconveying it to settling ponds will be discontinued. Instead, bottom ash will be collected under the boilerand conveyed to a bunker. Ash will be periodically removed from the bunker and carried to the monofill by truck for disposal. Platte River staff has identified the preferred Contractor for the ash handlingconversion project. However, concerns have been raised regarding the Contractor’s financial stability. Toaddress these concerns, legal staff incorporated additional protections into the procurement andinstallation contract(s) for the project. The contract is expected to be executed shortly. GOVERNMENTAL AFFAIRS: Colorado General Assembly — The Colorado Legislature adjourned on May 10. A recap of relevant legislation was contained in the May legal report. On September 14 Governor Hickenlooper announced that he will call a Special Session of the GeneralAssembly to convene in October to address an issue associated with marijuana taxation. The Special Session lasted two days and did not produce legislation to resolve the taxation issue. United States Congress — The 115th Congress remains in control of the Republican Party.Appointments and confirmation processes have been slow. FERC is a case in point. It lacked a quorum from February until mid-August, and will recommence formal meetings as of September 20. Significant issues were left unresolved at the FERC and those resolved by staff under a delegation order are likely tolead to litigation. Although repeal efforts concerning the Affordable Care Act continue, Congress is turning its attention to tax reform. Municipal interests are gearing up to defend tax-exempt financing, although to date no substantive proposals have emerged. POLICY AND PROCESS DOCUMENT EFFORT: As Platte River matured as an organization it has outgrown its prior means of creating and organizingpolicy and procedure guidance documents. In August of 2015 an inter-disciplinary team was formed to: 1) create an organizational paradigm for guidance documents; 2) standardize the format of documents; 3)routinize the review of guidance documents; and, 4) create a repository so that all guidance documentswill be readily accessible. Significant progress has been made. Consequently, in early 2018 the Board will be asked to rescind ormodify a number of existing policy resolutions.

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Page 96

EXECUTIVE SUMMARY

Category September Variance YTD Variance

Municipal Demand (0.8%) u (0.8%) u

Municipal Energy (1.1%) u (1.5%) u

Baseload Generation 8.5% l (1.9%) u

Wind Generation (15.8%) n (5.3%) n

Solar Generation (8.9%) n (8.9%) n

Surplus Sales Volume 38.5% l 11.7% l

Surplus Sales Price 6.9% l (4.1%) n

Dispatch Cost (5.4%) l (1.2%) u

Variance Key: Favorable: l >2% | Near budget: u +/- 2% | Unfavorable: n <-2%

September 2017

Operating Report

Municipal demand and energy were near budget in September and remain near budget year to date.

Rawhide Unit 1 ran extremely well in September. Craig Unit 1 experienced a forced outage for a tube leak. Craig Unit 2 tripped offline but the unit returned to service the same day. Craig 3 also experienced a tube leak resulting in a forced outage and shafting sharing was provided.

Wind and solar generation were below budget for the month and remain below budget year to date.

Surplus sales volume and revenue were above budget in September. Short term contracts negotiated for September and sales from combustion turbines were contributing factors to the above budget pricing and volume for the month. Year to date sales volume is above budget while pricing is below budget.

Overall dispatch costs were below budget for the month primarily due to the exceptional performance of Rawhide Unit 1, which kept baseload generation costs down, as well as Craig's generation costs coming in significantly below budget. Dispatch costs are slightly below budget year to date.

September 2017 Operating Report Page 1

Page 97

OPERATIONAL OVERVIEW

2017 Goal

0 0 l 4 n

System Disturbances. There were no system disturbances resulting in loss of load during the month of September.

Peak Day Obligation. Peak demand for the month was 582 megawatts which occurred on September 3, 2017, at hour 17:00 and was 5 megawatts below budget. Platte River’s obligations at

the time of peak totaled 604 megawatts.

September Actual YTD Total

Forecast Demand

587

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: September 3, 2017

Hydro Wind Solar Rawhide Craig CTs Purchases

Total Obligation604

Municipal Obligation

582


Page 98

POWER GENERATION - RAWHIDE

Rawhide Unit 1 ran extremely well in September resulting in equivalent availability and capacity factor coming in above budget. Year to date equivalent availability remains near budget while capacity factor remains below budget.

Rawhide emission levels were below compliance limits for the month of September.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

September YTD

Equivalent Availability Factor

Budget Actual

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

September YTD

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

September YTD

SO2 (lb/MBtu)

Limit Actual

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

September YTD

NOx (lb/MBtu)

Limit Actual

0.000

0.002

0.004

0.006

0.008

0.010

0.012

0.014

September YTD

Hg (lb/GWh)

Limit Actual


Page 99

POWER GENERATION - CRAIG

Craig Unit 1 experienced a forced outage as the result of a tube leak. Craig Unit 2 tripped off-line due to loss of vacuum on the main condenser. However, the unit returned to service the same day. Craig 3 also experienced a forced outage due to a tube leak and shafting sharing was delivered. Equivalent availability was below budget for the month and remains below budget for the year. Capacity factor was above budget for the month and is slightly above budget for the year.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

September YTD

Equivalent Availability Factor

Budget Actual

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

September YTD

Net Capacity Factor

Budget Actual


Page 100

POWER GENERATION - CTs

Combustion turbines were run early in the month to make surplus sales, support unit issues and cover load. Natural gas prices were slightly above budget in September, yet remain below budget year to date.

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

September YTD

MWh CT Generation

Budget Actual

$3.10

$3.20

$3.30

$3.40

$3.50

$3.60

$3.70

$3.80

$3.90

$4.00

September YTD

$/MBtuNatural Gas Pricing

Budget Actual


Page 101

POWER GENERATION - RENEWABLES

Wind and solar generation were below budget, for the month as well as for year to date, with solar generation coming in below budget as the result of decreased irradiance.

-

50

100

150

200

250

September YTD

MWh (000s) Wind Generation

Budget Actual

-

10

20

30

40

50

60

September YTD

MWh (000s) Solar Generation

Budget Actual


Page 102

MARKET SALES

Surplus sales volume and pricing were above budget in September. Short term contracts negotiated for September and sales made from combustion turbines were contributing factors to the above budget pricing and volume for the month. Year to date sales volume, including Joint Dispatch, is above budget while pricing remains below budget.

MARKET PURCHASES

Market purchase volumes and expenditures were above budget for September. Joint Dispatch transactions were the main reason that purchase volumes came in so far above budget. The above budget average purchase price, however, was the result of above budget pricing in the bilateral market. Year to date volume is significantly above budget while average pricing remains below budget.

$0

$5

$10

$15

$20

$25

$30

SeptemberBudget

SeptemberActual

$/MWh

$0

$5

$10

$15

$20

$25

$30

YTDBudget

YTDActual

$/MWhAverage Sales Price

-

50

100

150

200

250

SeptemberBudget

SeptemberActual

MWh(000s)

-

100

200

300

400

500

600

700

YTDBudget

YTDActual

MWh (000s)Sales Volume

n Budget n Actual n JDA n Budget n Actual

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

SeptemberBudget

SeptemberActual

Thousands

MWh

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

YTDBudget

YTDActual

Thou

sand

s

MWh

Energy Purchases

$0

$5

$10

$15

$20

$25

$30

$35

$40

SeptemberBudget

SeptemberActual

$/MWh

$0

$5

$10

$15

$20

$25

$30

$35

$40

YTDBudget

YTDActual

$/MWh

Average Purchase Price

n Budget n Actual n JDA n Budget n Actual


Page 103

DISPATCH COST

Blended dispatch costs were below budget for the month, primarily due to Craig costs coming in well below budget which brought the overall resource costs down below budget. Year to date dispatch costs remain below budget, as shown in the chart below.

$0

$10

$20

$30

$40

$50

$60

Rawhide Craig LAP CRSP Purchases JDAPurchases

Wind RawhideSolar

CTs

$/M

Wh

Resource Cost

Budget Actual Blended Actual

$0

$10

$20

$30

$40

$50

$60

Rawhide Craig LAP CRSP Purchases JDAPurchases

Wind RawhideSolar

CTs

$/M

Wh

YTD Resource Cost

Budget Actual Blended Actual

Blended Budget: $29.98 | Blended Actual: $28.37

YTD Blended Budget: $31.23 | YTD Blended Actual: $30.85


Page 104

POWER DELIVERY

Major System Operations Projects Benefitting the Municipalities:

Estimated Finish

Date

Percent

Complete Description

05/2018 60% Boyd Substation

EVENTS OF SIGNIFICANCE

•

•

•

•

•

•

A methodology for providing weather normalized energy sales and peak demand was created.

The Q3 Power Supply Plan was delivered.

Platte River worked with its contractor and engineering department to install a new gas circuit breaker at the Timberline substation.

Location

Loveland

Hourly power production curves for the potential wind farm locations associated with responses to Platte River’s wind RPF were generated.

The three-year boundary meter calibration testing was completed in September.

A paper was distributed to Operations management titled Battery Storage – State of the Industry.


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Page 106

PLATTE RIVER POWER AUTHORITY – Financial Highlights Year-to-Date September 2017

Platte River reported favorable results year to date. Net income of $14.5 million was favorable by $5.4 million compared to budget due to below-budget expenses, partially offset by below-budget revenues. Details of the financial results are described below.

At this time, based on below-budget year-to-date trends for municipal sales, partially offset by savings from fuel, the estimated year-end net income could vary between $12.0 million and $15.3 million. The range is based on the assumption for operations and maintenance expenses, where the low end assumes no variance and the high end assumes a 5% favorable variance.

Below is a summary of key financial variances year to date:

Above-Budget Surplus Sales Revenues: As a result of peaking unit and joint dispatch sales, surplus sales revenues were $0.9 million above budget. The volume of sales was 11.7% above budget and represented an additional $1.5 million in revenue, partially offset by $0.6 million due to 4.1% below-budget average prices.

Below-Budget Operating Expenses: Overall operating expenses were 4.6% below budget mainly due to the items listed below.

o Operations and maintenance expenses were below budget mainly due to timing of expenses for Yampa operating expenses, the Northwest Substation water line repair project, joint facilities vegetation management, and fiber related expenses. Personnel expenses were below budget due to vacant positions. In addition, wheeling expenses were below budget due to requiring less transmission than planned for WAPA’s Craig-to-Ault transmission line outage as sales were made directly from the Craig Station. Rawhide project expenses and software maintenance were either cancelled or delayed but offset by above-budget expenses related to the scheduled minor outage, rotary car dumper modifications, waste compliance activities, and the future closure of impoundments at the site due to environmental regulations.

o Administrative and general expenses were below budget primarily due to timing of expenses for demand side management program expenses and contracted services for planning. Community solar expenses were also delayed. Lastly, personnel expenses are below budget due to vacant positions.

Below-Budget Capital Additions: Capital additions were below budget $16.3 million mainly due to project delays, timing of expenses, and cancelled projects. See page 10 for details of significant projects.

Below are additional financial statement impacts:

Windy Gap Unit Sales and Storage Acquisition Accounting Treatment: The sale of 23 units of Windy Gap water will impact net income in 2017 and beyond. Two of the sales were finalized in June, one in July with the final closing date to occur in the last quarter of 2017. The total projected sale proceeds are $39.0 million. As a result of these transactions, there are three accounting impacts.

Key Financial Results Annual($ Millions) Budget Actual Budget Actual Budget

Net Income/(Loss) 1.5$ 2.0$ 0.5$ 33.3% 9.1$ 14.5$ 5.4$ 59.3% 11.8$

Debt Coverage 2.17x 2.62x .45x 20.7% 1.59x 1.84x .25x 15.7% 1.65x

Total Revenues 17.4$ 17.8$ 0.4$ 2.3% 165.0$ 163.8$ (1.2)$ (0.7%) 216.9$

Municipal Sales Revenue 15.7 15.6 (0.1) (0.6%) 147.9 145.5 (2.4) (1.6%) 191.9

Surplus Sales and Other Revenue 1.7 2.2 0.5 29.4% 17.1 18.3 1.2 7.0% 25.0

Total Operating Expenses 13.2$ 12.8$ 0.4$ 3.0% 130.8$ 124.8$ 6.0$ 4.6% 171.8$

Purchased Power 2.7 2.2 0.5 18.5% 26.8 26.3 0.5 1.9% 35.4

Fuel Expense 3.9 4.4 (0.5) (12.8%) 36.0 36.0 0.0 0.0% 48.8

Operations and Maintenance 4.9 4.4 0.5 10.2% 50.6 47.8 2.8 5.5% 65.6

Administrative and General 1.7 1.8 (0.1) (5.9%) 17.4 14.7 2.7 15.5% 22.0

Capital Additions 5.5$ 2.4$ 3.1$ 56.4% 46.8$ 30.5$ 16.3$ 34.8% 52.3$

September Favorable(Unfavorable)

Year to Date Favorable(Unfavorable)

>2% Favorable | 2% to -2% At or Near Budget | <-2% Unfavorable

Page 107

1. For the transactions that involved Platte River receiving the right to participate in additional storage in the Windy Gap Firming Project, an intangible asset will be recorded, valued for accounting purposes at $7.0 million. The amount reflecting closed transactions was $5.5 million and $1.5 million in June and July, respectively.

2. A net gain of $46.0 million for all Windy Gap units sold, as the majority of the assets were fully depreciated. The amount reflecting closed transactions was $22.0 million and $4.0 million in June and July, respectively.

3. According to FERC accounting guidelines, the intangible asset and net gain will be amortized over the remaining useful life of the plant, which is currently 2046. Over this period, the current estimate of the net impact as a reduction to depreciation expense is $1.3 million annually (or $39.0 million in total). The reduction in depreciation results in a corresponding increase in net income over this time frame. Amortization began in July 2017.

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PLATTE RIVER POWER AUTHORITY

September 2017Non-GAAP Budgetary Basis (In Thousands)

FavorableBudget Actual (Unfavorable)

Revenues

Operating revenuesMunicipal sales 15,731$ 15,604$ (127)$

Short-term surplus sales and wheeling 1,456 1,972 516

Total operating revenues 17,187 17,576 389

Other revenuesInterest income(1)

92 155 63

Other income 101 57 (44)

Total other revenues 193 212 19

Total revenues 17,380$ 17,788$ 408$

Expenditures

Operating expensesPurchased power 2,703$ 2,188$ 515$

Fuel expense 3,867 4,406 (539)

Production expenses 3,684 3,349 335

Transmission expenses 1,243 1,082 161

Administrative and general 1,713 1,753 (40)

Total operating expenses 13,210 12,778 432

Debt expenseInterest expense 763 763 -

Principal 1,215 1,215 -

Allowance for funds used during construction (54) (62) 8

Total debt expense 1,924 1,916 8

Capital additionsProduction 3,475 619 2,856

Transmission 706 1,421 (715)

General 1,286 383 903

Total capital additions 5,467 2,423 3,044

Total expenditures 20,601$ 17,117$ 3,484$

Revenues less expenditures (3,221)$ 671$ 3,892$

(1) Excludes unrealized investment gains and losses.

SCHEDULE OF REVENUES AND EXPENDITURES, BUDGET TO ACTUAL

Month of September

Page 109

PLATTE RIVER POWER AUTHORITYSCHEDULE OF REVENUES AND EXPENDITURES, BUDGET TO ACTUALSeptember 2017 - YEAR TO DATENon-GAAP Budgetary Basis (In Thousands)

Favorable AnnualBudget Actual (Unfavorable) Budget

Revenues

Operating revenuesMunicipal sales 147,850$ 145,447$ (2,403)$ 191,943$

Short-term surplus sales and wheeling 15,764 16,671 907 23,306

Total operating revenues 163,614 162,118 (1,496) 215,249

Other revenuesInterest income(1)

933 1,225 292 1,208

Other income 465 450 (15) 498

Total other revenues 1,398 1,675 277 1,706

Total revenues 165,012$ 163,793$ (1,219)$ 216,955$

Expenditures

Operating expensesPurchased power 26,766$ 26,249$ 517$ 35,431$

Fuel expense 36,002 35,959 43 48,800

Production expenses 37,956 37,376 580 49,402

Transmission expenses 12,624 10,415 2,209 16,187

Administrative and general 17,400 14,745 2,655 22,036

Total operating expenses 130,748 124,744 6,004 171,856

Debt expenseInterest expense 7,294 7,294 - 9,582

Principal 14,673 14,673 - 18,318

Allowance for funds used during construction (449) (711) 262 (560)

Total debt expense 21,518 21,256 262 27,340

Capital additionsProduction 25,875 18,880 6,995 27,479

Transmission 10,279 9,007 1,272 12,520

General 10,687 2,646 8,041 12,311

Total capital additions 46,841 30,533 16,308 52,310

Total expenditures 199,107$ 176,533$ 22,574$ 251,506$

Contingency reserved to Board - - - 20,000

Total expenditures 199,107$ 176,533$ 22,574$ 271,506$

Revenues less expenditures (34,095)$ (12,740)$ 21,355$ (54,551)$

(1) Excludes unrealized investment gains and losses.

September Year to Date

Page 110

PLATTE RIVER POWER AUTHORITYSTATEMENTS OF NET POSITIONUnaudited (In Thousands)

2017 2016Assets

Electric plant, at original costLand and land rights 16,997$ 14,515$ Intangible assets 7,010 - Plant and equipment in service 1,283,764 1,277,099 Less: accumulated depreciation and amortization (823,807) (785,734)

Plant in service, net 483,964 505,880 Construction work in progress 87,257 67,068

Total electric plant 571,221 572,948

Special funds and investmentsRestricted funds and investments 38,896 62,337 Dedicated funds and investments 65,966 57,432

Total special funds and investments 104,862 119,769

Current assetsCash and cash equivalents 23,040 18,952 Other temporary investments 31,891 20,799 Accounts receivable - municipalities 15,560 14,344 Accounts receivable - other 3,791 5,346 Fuel inventory, at last-in, first-out cost 14,133 14,154 Materials and supplies inventory, at average cost 13,544 13,131 Prepayments and other assets 1,603 1,930

Total current assets 103,562 88,656

Noncurrent assetsRegulatory assets 7,008 6,657 Other long-term assets 6,763 -

Total noncurrent assets 13,771 6,657

Total assets 793,416 788,030

Deferred Outflows of ResourcesDeferred loss on debt refundings 8,807 10,357

Pension deferrals 14,549 14,234

Total deferred outflows of resources 23,356 24,591

Liabilities

Noncurrent liabilitiesLong-term debt, net 209,918 228,301 Net pension liability 19,395 20,508 Other liabilities and credits 16,018 8,448

Total noncurrent liabilities 245,331 257,257

Current liabilitiesCurrent maturities of long-term debt 14,580 23,550 Accounts payable 10,701 6,990 Accrued interest 3,051 4,036 Accrued liabilities and other 1,823 1,228

Total current liabilities 30,155 35,804

Total liabilities 275,486 293,061

Deferred Inflows of ResourcesRegulatory credits 9,001 3,792 Pension deferrals 1,507 472

Total deferred inflows of resources 10,508 4,264

Net PositionNet investment in capital assets 372,466 369,099 Restricted 16,749 19,687 Unrestricted 141,563 126,510

Total net position 530,778$ 515,296$

September 30

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PLATTE RIVER POWER AUTHORITYSTATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITIONUnaudited (In Thousands)

Twelve Months EndedMonth of September 30

September 2017 2016

Operating revenuesSales to municipalities 15,604$ 187,535$ 183,569$ Sales for resale and other 1,972 23,521 16,718

Total operating revenues 17,576 211,056 200,287

Operating expensesPurchased power 2,188 35,297 34,998 Fuel 4,406 46,495 43,026 Operations and maintenance 4,423 63,342 61,365 Administrative and general 1,756 18,855 16,809 Depreciation 2,049 26,199 27,138

Total operating expenses 14,822 190,188 183,336

Operating income 2,754 20,868 16,951

Nonoperating revenues (expenses)Interest income 155 1,523 924 Other income 57 585 894 Interest expense (763) (9,867) (9,831) Allowance for funds used during construction 62 1,073 775 Amortization of bond financing costs 177 2,125 1,098 Net decrease in fair value of investments (481) (652) (187)

Total nonoperating revenues (expenses) (793) (5,213) (6,327)

Income before contributions 1,961 15,655 10,624

Contribution of assets to municipalities - (173) (155)

Change in net position 1,961 15,482 10,469

Net position at beginning of period, as previously reported 528,817 515,296 507,704 Adjustment for change in accounting principle - - (2,877)

Net position at beginning of period, adjusted 528,817 515,296 504,827

Net position at end of period 530,778$ 530,778$ 515,296$

Page 112

PLATTE RIVER POWER AUTHORITYSTATEMENTS OF CASH FLOWSUnaudited (In Thousands)


September 2017 2016

Cash flows from operating activitiesReceipts from customers 20,879$ 211,395$ 199,752$ Payments for operating goods and services (9,320) (119,684) (148,284) Payments for employee services (2,788) (36,123) (34,243)

Net cash provided by operating activities 8,771 55,588 17,225

Cash flows from capital and related financing activitiesAdditions to electric utility plant (201) (21,411) (28,922) Payments from accounts payable incurred for electric utility plant additions (2,153) (969) (2,075) Deposits into escrow for bond defeasance - - (119,164) Proceeds from issuance of long-term debt - - 179,170 Principal payments on long-term debt - (23,550) (16,615) Interest payments on long-term debt - (10,851) (8,912)

Net cash (used in)/provided by capital and related financing activities (2,354) (56,781) 3,482

Cash flows from investing activitiesPurchases and sales of temporary and restricted investments, net (8,648) 3,103 (33,237) Interest and other income, including realized gains and losses 306 2,178 1,730

Net cash (used in)/provided by investing activities (8,342) 5,281 (31,507)

(Decrease)/increase in cash and cash equivalents (1,925) 4,088 (10,800)

Balance at beginning of period in cash and cash equivalents 24,965 18,952 29,752

Balance at end of period in cash and cash equivalents 23,040$ 23,040$ 18,952$

Reconciliation of net operating income to net cashprovided by operating activities

Operating income 2,754$ 20,868$ 16,951$ Adjustments to reconcile operating income to

net cash provided by operating activities:

Depreciation 2,049 26,199 27,138 Changes in assets and liabilities which provided/(used) cash:

Accounts receivable 3,304 339 (535)

Fuel and materials and supplies inventories 994 (392) (1,998)

Prepayments and other assets 568 (6,916) (2,846)

Deferred outflows of resources - (315) (14,235)

Accounts payable (1,432) 2,520 (3,870)

Net pension liability - (1,113) 17,631

Other liabilities 115 8,154 (10,237) Deferred inflows of resources 419 6,244 (10,774)

Net cash provided by operating activities 8,771$ 55,588$ 17,225$

Page 113

PLATTE RIVER POWER AUTHORITYSCHEDULE OF NET REVENUES FOR DEBT SERVICEUnaudited (In Thousands)


September 2017 2016Net revenues

Operating revenues 17,576$ 211,056$ 200,287$ -

Operations and maintenance expenses,excluding depreciation and amortization 12,773 163,989 156,198 - - -

Net operating revenues 4,803 47,067 44,089

Plus interest income on bond accountsand other income 212 2,169 1,813

Net revenues before rate stabilization 5,015 49,236 45,902

Rate stabilization Deposits - - - Withdrawals - - -

Total net revenues 5,015$ 49,236$ 45,902$

Bond service

Power revenue bonds 1,978$ 30,427$ 28,757$ Allowance for funds used during construction (62) (1,073) (775)

Net revenue bond service 1,916$ 29,354$ 27,982$

Coverage

Power revenue bond coverage ratio 2.62 1.68 1.64

Page 114

Platte River Power AuthorityOperating Expense Variances Exceeding $100,000 - Month of September 2017

DescriptionFavorable

(Unfavorable)Purchased PowerPurchased power was below budget mainly due to providing energy to Tri-State under theForced Outage Assistance Agreement for Craig Unit 3's forced outage. Purchased reserveswere also below budget as a result of holding additional reserves on the generation units.Additionally, wind and solar facilities produced less generation contributing to the below-budgetvariance. Supplemental purchases were required and partially offset the overall below-budgetvariance. 515,256$ Yampa Operating ExpensesYampa operating expenses billed by Tri-State were less than anticipated. 464,794$

SalariesSalaries were below budget as a result of several vacant positions. 122,176$

Medical and DentalClaims were less than anticipated. Timing of medical expenses is difficult to predict and largeclaims can cause swings in this expense. 116,329$

Contracted ServicesContracted services were above budget mainly due to unanticipated Rawhide Unit 1impoundment expenses, which were partially offset by a catch-up of tower maintenanceexpenses. (177,671)$

Energy Efficiency - Rebates/IncentivesThese expenses were above budget due to the unpredictability of the completion of customers'energy efficiency projects. (183,236)$

Natural GasThe combustion turbines were operated mainly to make additional surplus sales. (210,128)$

CoalCoal was above budget due to generation and price for the Craig units and generation forRawhide Unit 1. Generation for the Craig units was above budget due to favorable surplus salesmarket conditions. The coal price was also above budget mainly due to burning higher costinventory. Partially offsetting the above-budget variance was below-budget coal price forRawhide Unit 1 as a result of favorable transportation prices. (360,069)$

Page 115

Platte River Power AuthorityCapital Addition Variances - Year-end Estimates as of September 2017

Project ($ in Thousands) Budget EstimateFavorable

(Unfavorable)POWER PRODUCTIONBottom Ash and Reclaim Pond - CCR Compliance - This out-of-budgetproject is required to be compliant with the Coal Combustion Residualrule. This project was originally planned for 2018, however, a portion ofthe project will begin in 2017. -$ 2,019$ (2,019)$

Fiber Upgrade - Rawhide Gas Yard - This out-of-budget project wasrequested to re-design the Rawhide gas yard fiber to allow for more fiberflexibility and usability. The project was discussed at the December 2016Board meeting. -$ 152$ (152)$

Gas Yard Balance of Plant Controls Replacement - This out-of-budgetproject is to replace obsolete technology. -$ 225$ (225)$

Controls Upgrade - Baghouse - This out-of-budget project was requestedto replace the solenoid valves wiring scheme to reduce the chance ofbypassing the baghouse and ensuring reliability. -$ 148$ (148)$

Soot Blower Replacement - The project will be above budget due to anincrease in installation labor costs. 369$ 534$ (165)$

Soldier Canyon 10 Inch Water Line Owl Canyon Reroute - This projecthas been delayed because of Larimer County and will not be completedin 2017. The below-budget funds will be requested to be carried over into2018. 152$ -$ 152$

CAT Loader 988 Replacement - This purchase will be below budget asthe trade-in value of the old equipment was higher than anticipated. 570$ 379$ 191$

Rotary Car Dumper Conversion to Variable Frequency Drives - The majority of this project has been delayed to 2018 due to the reallocation ofengineering resources to other capital projects. The below-budget fundswill be requested to be carried over into 2018. 563$ 50$ 513$

Soldier Canyon 10 Inch Water Line CR 19 & 70 Roundabout Reroute -This project has been cancelled for the 2017 budget year due to thereallocation of engineering resources to other capital projects. 1,146$ -$ 1,146$

FUELS AND WATERWindy Gap Firming Project - This project will be above budget due to anincrease in Platte River's participation level from 12,000 acre feet to14,136 acre feet. 1,643$ 2,145$ (502)$

YAMPAYampa Work Orders - These projects will be below budget based onrecent estimates received from Tri-State. The Craig Unit 2 NOx reductionproject is expected to be below budget by $1.3 million due to contingencyfunds not required. 10,876$ 9,445$ 1,431$

At this time, capital expenditures are expected to be approximately $7.7 million below budget at the end of the year.However, some projects will not be completed during 2017 and the remaining funds for those projects, approximately$8.7 million, will need to be carried over into 2018 for project completion. The majority of these projects are summarizedbelow. Thus far in 2017, several additional requests for funds have occurred due to changes in the schedule and scopeof projects. As a result of the need to carry over funds to 2018, current estimates show $1.0 million may be required as abudget contingency appropriation to cover the additional capital project expenses. However, further changes to capitalprojections are anticipated and staff will continue to monitor spending estimates to determine the appropriate amountneeded. Project managers are continuously improving work planning and budgeting by better aligning scope, schedules,and available resources. The projects listed below are projected to end the year with a budget variance of more than$100,000. In addition, the amounts below are costs for 2017 and may not represent the total cost of the project.

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Platte River Power AuthorityCapital Addition Variances - Year-end Estimates as of September 2017

Project ($ in Thousands) Budget EstimateFavorable

(Unfavorable)POWER DELIVERYFiber Optic Route to Estes Park - This project will be below budget due tothe timing of the installation of distribution poles shifting to 2018 based onrecent schedule information from the City of Loveland. The below-budgetfunds will be requested to be carried over into 2018. 5,430$ 1,800$ 3,630$

Circuit Switcher (T1) Addition, Breaker Replacement, Relay Upgrade -Harmony Substation - This project will be below budget due to thereallocation of resources to other capital projects. The below-budgetfunds will be requested to be carried over into 2018. 410$ 10$ 400$

SONET Communication System Replacement - This project will be belowbudget due to internal resource constraints causing a delay in the project.The remainder of the project will be rebudgeted in 2019 due to the newHeadquarters campus. 387$ 80$ 307$

Boyd 115/230kV Substation Transformer T2 Addition - This project willbe below budget due to outage constraints and the complexity ofconstruction. The below-budget funds will be requested to be carried overinto 2018. 3,224$ 3,059$ 165$

Oil Breaker (164) Replacement - Terry Street Substation - This projecthas been cancelled due to internal resource constraints. The below-budget funds will be requested to be carried over into 2018. 138$ -$ 138$

SONET Software Upgrade - This project has been cancelled for the 2017budget year due to internal resource constraints. The below-budget fundswill be requested to be carried over into 2018. 113$ -$ 113$

Breaker Replacement - Ault Substation 2082 (WAPA Joint Facilities) - This out-of-budget project is required in 2017 in order to support anoutage for a transformer replacement to take place in 2018. -$ 104$ (104)$

Foothills Substation - This project will be above budget due to higher thanestimated costs for design and construction. 4,318$ 4,589$ (271)$

CORPORATE SERVICESHeadquarters Campus - This project will be below budget due to aschedule change in the design phase. The below-budget funds will berequested to be carried over into 2018. 3,974$ 2,239$ 1,735$

Low Impact Security - Substation Control Building Access Control - Thisproject will be below budget due to a schedule change as the result ofadditional CIP compliance requirements. The below-budget funds will berequested to be carried over into 2018. 1,021$ 50$ 971$

Low Impact Security - Substations (Owned) - This project will be belowbudget due to a schedule change as the result of additional CIPcompliance requirements. The below-budget funds will be requested to becarried over into 2018. 1,428$ 1,200$ 228$

Low Impact Security - Rawhide - This project will be below budget due tointernal resource constraints. The below-budget funds will be requested tobe carried over into 2018. 494$ 270$ 224$

Page 117

PLATTE RIVER POWER AUTHORITYMONTHLY STATISTICSSeptember 2017

Favorable FavorableBudget Actual (Unfavorable) Budget Actual (Unfavorable)

Resources (MWh)Net generation

Rawhide Unit 1 183,313 193,166 9,853 2,285,833 2,204,820 (81,013) Craig Units 1 and 2 62,796 73,869 11,073 826,320 809,244 (17,076) Combustion turbines 1,032 5,994 4,962 3,601 41,878 38,277

PurchasesWAPA LAP 6,836 6,836 - 109,536 113,136 3,600 WAPA CRSP 33,935 33,935 - 502,467 517,890 15,423 Wind 18,731 15,767 (2,964) 294,045 284,905 (9,140) Solar 5,794 5,277 (517) 65,396 59,458 (5,938) Solar - Municipal Programs 711 677 (34) 6,187 6,857 670 Other purchases 6,798 7,641 843 37,502 64,088 26,586 Joint dispatch agreement purchases - 2,708 2,708 - 31,280 31,280 Forced outage exchange 5,600 - (5,600) 17,400 14,000 (3,400)

Interchange - 237 237 - (642) (642) Total receipts 325,546 346,107 20,561 4,148,287 4,146,914 (1,373)

Deliveries (MWh)Municipal sales

Estes Park 8,963 9,582 619 131,356 130,346 (1,010) Fort Collins 125,769 125,446 (323) 1,527,853 1,529,122 1,269 Longmont 66,552 65,351 (1,201) 812,850 804,471 (8,379) Loveland 62,946 60,850 (2,096) 759,923 725,898 (34,025)

Total municipal sales 264,230 261,229 (3,001) 3,231,982 3,189,837 (42,145)

Solar - Fort Collins program 616 582 (34) 5,291 6,070 779 Solar - Loveland program 95 95 - 896 787 (109)

Surplus salesShort-term surplus sales 48,928 59,279 10,351 819,961 759,613 (60,348) Joint dispatch agreement sales - 8,491 8,491 - 86,848 86,848

Total surplus sales 48,928 67,770 18,842 819,961 846,461 26,500

Forced outage exchange 5,600 9,700 4,100 17,400 21,389 3,989 Losses and other 6,077 6,731 654 72,757 82,370 9,613

Total deliveries 325,546 346,107 20,561 4,148,287 4,146,914 (1,373)

Favorable FavorableBudget Actual (Unfavorable) Budget Actual (Unfavorable)

Coincidental demand (kW)Estes Park 14,933 15,931 998 223,008 217,763 (5,245) Fort Collins 271,827 270,976 (851) 2,868,847 2,884,066 15,219 Longmont 156,528 156,041 (487) 1,582,122 1,574,259 (7,863) Loveland 143,925 139,342 (4,583) 1,482,378 1,420,891 (61,487)

Total coincidental demand 587,213 582,290 (4,923) 6,156,355 6,096,979 (59,376)

Noncoincidental demand (kW)Estes Park 18,156 242,434 Fort Collins 271,278 2,890,088 Longmont 156,665 1,583,598 Loveland 140,475 1,432,889

586,574 6,149,009

September 12 Months Rolling

September 12 Months Rolling

Page 118

October 2017 General Management Report CORPORATE SERVICES Safety. No injuries were reported in September, and we are on track for a zero incident year. Annual first aid training began at Rawhide. A new draft of an updated and revised Rawhide Clearance procedure, Lockout/Tagout, was completed and associated equipment has been placed on order. The new program will incorporate a requirement for personal locks for each employee who works on locked-out equipment. This will ensure a greater level of safety by eliminating the possibility for equipment to be started until each worker removes his/her personal lock from the clearance.

Human Resources. In early November HR will be offering the initial Retirement Readiness course for employees approaching retirement age. In September, twelve employees attended a one-hour session which explains the course and its objectives. The initial program will include from ten to fifteen employees. The program is conducted in three, two-hour sessions, and will address how to prepare for the transition to retirement, social factors, maintaining good health, and volunteer or work options during retirement. Human Resources attended college recruiting fairs in September. The fairs often generate candidates for internships and has also resulted in applicants for current full-time positions. Career fairs attended in September included two at Colorado State University, and one at Colorado School of Mines. Records. Project management will continue to evolve in 2018. In order to more effectively track and manage strategic projects, the staff will simplify the project management tools and templates, focus on capital projects, standardize project planning and prioritization, create a single project repository, and strive for real-time financial results. Zac Coatman, the Project Portfolio Manager will dedicate a portion of his time to one engineering group to assist in strengthening this process. Quarterly stakeholder meetings will promote communication, and facilitate “lessons-learned” opportunities. Security. The security team is nearing completion on the CIP low impact intrusion detection project at Boyd and Foothills substations. Installation of all devices at Rawhide is complete. Coordination for the network and lock hardware components of the project is now underway. Initial meetings with local law enforcement agencies were conducted for the purpose of building community collaboration and partnership for emergency response planning. Facilities. Over the last few months, several entities have been contacted to seek interest in receiving the existing HQ PV solar system as a donation since it is still in operating condition. No entities have expressed interest in utilizing the entire system including panels, inverter, and controls to generate electricity, due primarily to the age of the system, which is about thirty (30) years old. We are now exploring donating the solar panels for educational use or for laboratory testing. Based on outreach to date, we anticipate donating panels to multiple entities, including the National Renewable Energy Lab,

2015 2016

2016 (As of 9/30/2016) 2017 (As of 9/30/2017)

Recordable Incident Rate

2.19 3.15 3.55 0.00

Lost Time Case Rate 0.44 0.90 1.18 0.00 DART (Days away restricted)

0.87 0.90 1.18 0.00

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Platte River Power Authority 2 October 2017 Management Report

Colorado State University’s solar lab, Front Range Community College for classroom and lab use, and schools in the four owner communities. We are working to firm up these donations so the system can be removed prior to any site work associated with the HP campus project. RELIABILITY COMPLIANCE Audit. During September, Platte River compliance staff and subject-matter-experts (SMEs) from multiple departments completed an internal audit of compliance evidence in preparation for our 2018 NERC Reliability Compliance Audit. The audit teams spent several days reviewing compliance narrative explanations, interviewing SMEs, and working through various forms of evidence to prepare for submittal to the Western Electricity Coordinating Council (WECC) later this year. Performing an internal audit is one of several ways Platte River prepares for an upcoming audit engagement. Compliance staff will review potential interview questions that may be asked by auditors, review data requests from prior audits, and reach out to neighboring entities to share lessons learned from those utilities. The 2018 audit will be our fourth audit; the previous three were all successful and provided insights that will help us through the upcoming audit. NERC Alert. On Thursday October 5, Platte River received an industry advisory and recommendation from NERC detailing a potential supply-chain risk associated with Kaspersky-branded software packages. Platte River will be required to evaluate the use of these products on our systems, and determine plans to either remove the software or mitigate the risk. This review is currently underway. A response is due to NERC by January 5, 2018. This alert was also provided to the three member municipalities that are registered with NERC. FINANCE Board Contingency Appropriation.

1. 2017 Capital Additions. As shown below, capital expenditures are expected to be below budget at the end of the year. However, some projects will not be completed during 2017 and the remaining funds for those projects will need to be carried over into 2018 for project completion. The majority of these projects are summarized beginning on page 10 of the financial report. Thus far in 2017, several additional requests for funds have occurred due to changes in the schedule and scope of projects. As a result of the need to carry over funds to 2018, a budget contingency appropriation may be required to cover the additional capital project expenses. However, further changes to capital projections are anticipated and staff will continue to monitor spending estimates to determine the appropriate amount needed. Project managers are continuously improving work planning and budgeting by better aligning scope, schedules, and available resources. The following table represents the estimates for capital expenditures as of September 30, 2017.

Capital Summary $ million 2017 capital budget $ 52.3 Estimated capital expenses at 12/31/17 44.6 Estimated below budget variance $ 7.7 Estimated capital carryovers from 2017 to 2018 (8.7) Potential contingency transfer request $ (1.0)

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2. Closure Costs of Impoundments. Platte River is planning to close two ash ponds as a result of installing a new dry bottom ash system at Rawhide. In addition, another existing pond will be closed and reopened for a new purpose to work with the dry bottom ash system. These facilities are part of the solid waste facilities closure estimate and proof of the financial assurance annual report that is required by the State of Colorado. Platte River has a liability recorded of $7.9 million based on estimated closure costs for several impoundments. The $7.9 million was originally to be expensed over the estimated remaining life of the plant. However, the recording of the estimate of $2.0 million in closure costs for the ponds will be accelerated with the anticipation of closing one pond in 2018 and the other two ash ponds in early 2019. Based on preliminary estimates, it is expected that $0.9 million will be expensed in 2017, $0.9 million in 2018, and $0.2 million in 2019 along with the true up of actual expenses once the facilities are closed. For 2017, a Board contingency transfer may be required to cover the unbudgeted expense related to the accelerated closure costs of the ponds.

2018 Budget Preparation. A public hearing on the budget will be held at this month’s Board meeting. Public notice of the meeting was given in each of the municipalities’ newspapers in September. Also, changes to the 2018 Proposed Annual Budget will be presented by staff in October with Board adoption requested in December. Below is a condensed schedule of the overall budget process.

March to May Kickoff meetings and preparation of budget details by department

June Data compilation and reporting

July Senior management and GM/CEO budget review

August Refine budget and document preparation

September Budget work session with Board

October Public hearing and Board review of budget modifications

November Prepare final budget document

December Final budget review with Board and request adoption

Economic Development. Payments for community economic development have been made per the direction given by each municipality. The payments total the budgeted amount of $60,000, one-half of which is divided equally between the municipalities and the other half based on MWh sales made during 2017. 2017 Year End Financial Audit Plan. Earlier this month, staff met to discuss new accounting pronouncements, significant 2017 activities, and the audit schedule in preparation of the 2017 financial audit to be performed by BKD. Rates Meeting – Municipal and Platte River Staffs. Rate staffs from the municipalities and Platte River have been periodically meeting to improve collaboration on various rate issues. In October, staffs will meet to discuss the 2018 proposed tariffs including modifications to Tariff—Schedule 7: Renewable Energy Service. COMMUNICATIONS & MARKETING Communications and Community Engagement. Public Power Week was celebrated the first full week of October. Platte River and our owner communities worked together to spread the word on the benefits that public power provides as well as the great employees that help keep the lights on.

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Zero Net Carbon Communications. In collaboration with operations leadership, communications staff drafted a strategic communication plan for the Zero Net Carbon (ZNC) modeling, the results of which could become available to the public in late 2017. The plan calls for coordinated communications and messaging to fully inform all audiences. HQ Campus Open House. An overarching communications strategy and plan for the new headquarters was developed and recently approved by internal stakeholders. The plan calls for transparent communications with internal and external audiences. Tactics include a public open house, microsite, electronic updates and collaterals. All adjacent property owners have been invited to the first open house, scheduled for Tuesday, Oct. 24. Platte River leadership and project managers will be on hand to show updated renderings of the new headquarters building and answer any questions that arise. Efficiency Works. Communications worked with Efficiency Works staff to draft a news release announcing a new (and free) refrigerator pick-up and recycling program, available to retail customers in each city. News releases were drafted for Platte River as well as each municipality. The release was scheduled for delivery to local media by mid-October. Cyber Security Awareness Month. October is Cyber Security Awareness Month. Throughout October, staff have shared simple steps and information that will help employees better understand cyber security. The information will assist employees in protecting themselves, their families and our organization. Staff have shared the information on Platte River’s social media platforms to provide the public with valuable cyber security awareness information. Communications Staff. Meetings were completed with key staff at each of the four municipalities to help foster good communications and collaboration between Platte River and municipal owners. Meetings such as this will occur regularly to help ensure consistent messaging. United Way. Platte River’s annual giving campaign began mid-September and ran through mid-October. Employees could donate to United Way through payroll deductions as well as multiple fundraising activities. Several activities were used to support and promote employee involvement including internal communications, presentations at the monthly business meetings, raffle items, candy guessing jars, fundraising breakfast and lunch, and BMW test drives offered by CO’s BMW. Platte River and our employees are committed to making a difference in the communities we serve by working hard every day to provide reliable electricity and by giving back to the communities we live in and serve. Rawhide Tours. Power Trip, a tour organized by Fort Collins Utilities was provided to highlight the path of electrons from generation (Rawhide Energy Station) to end-user within the Fort Collins community. It also included how utility scale renewables and distributed generation (DG) are incorporated at an operational level. In addition, the tour also highlighted how increasing utility and DG renewables are changing operations. The tour started at Rawhide, “the generator,” and the group then “followed the path” of the electricity to the transmission lines, substations and distribution lines. Additionally, a tour was organized through Longmont Power and Communications (LPC), with attendees including personnel from various Longmont businesses, city staff and LPC staff. OPERATIONS Windy Gap Firming Project Update. Financing continues to be a prominent topic of the Windy Gap Firming Project discussions. PFM Financial Advisors has been contracted to complete the first of two final phases of work associated with the pooled financing component of the project. A primary outcome of this initial phase will be to provide the necessary information that participants need to make a final decision on whether or not they will be part of the pooled financing structure. While PFM also serves as municipal advisor to Platte River, they have established an “Information Bubble” to mitigate and manage

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any potential or actual conflicts of interest that may arise as a result of the working relationships. This bubble consists of physical, technological, and procedural barriers that will ensure that the transactions are handled separately. Platte River staff consulted with PFM prior to their retention by the Municipal Subdistrict for work on the project and feels comfortable with the working arrangement. Stantec (formerly MWH Global) continues to move forward with project design and is progressing from the sixty percent design status toward the “pre-final” design status. Leading up to that point will be the development of a revised engineering cost estimate that will be based on more detailed design information and existing site conditions. As the project design nears completion, Northern Water staff is continuing to look ahead toward the construction phase. The first of two “industry days” was held on September 19 and generated significant interest from contractors. There were approximately fifty contractor representatives from a variety of interests who were in attendance, including three leading European asphalt core dam construction firms, as well as ten general contractors. Work activities at the project site continue to progress as well. A test quarry is underway to identify the suitability of on-site materials as an aggregate source for the project. Associated activities include weekly blasting, crushing, and testing of the produced material and are planned to continue into November. Northern Water staff entered into negotiations with the successful logging contract bidder which resulted in a revised plan for tree removal that will reduce the associated contract costs. Logging activities are anticipated to start in mid-October. Bids to relocate the WAPA power line through the project site were received in mid-September and were lower than the engineering estimate. Power line relocation is anticipated to begin later this year. Reservoir construction is anticipated to commence in late 2018 or early 2019 and will last approximately three to four years. The Firming Project is estimated to be complete and ready to begin filling by the spring of 2022. The application to amend the Windy Gap decrees to accommodate the Windy Gap Firming Project was filed on September 29. The Colorado River Water Conservancy District, which represents the interests of key Western Slope parties, is a co-applicant for the amendment. The status of this application will be followed closely over the next several months and updates will be reported as they become available. Rawhide Water Supply Update. The 2017 Windy Gap water year ended on September 30, with the 2018 Windy Gap water year commencing on October 1. With still no Windy Gap water in the system, Platte River will revert to operating in a “Windy Gap Short” mode for the Reuse Plan operations. Staff has secured sufficient C-BT rental water for the Rawhide 10” line operations (process water) for the 2018 Water Year. Initial projections by Northern Water indicate that even an average year of snowpack during the coming winter will most likely result in a Lake Granby spill in 2018. It is, therefore, unlikely that the Windy Gap Project will pump next spring. Consequently, Platte River staff has informed its counterparts at the City of Fort Collins that Windy Gap Short operations will continue to be necessary for at least the first half of the water year. In large part due to the successful Windy Gap unit sales RFP process during the past year, Platte River already has a significant amount of C-BT rental water available for the 2018 water year. The quantity of C-BT rental water will be sufficient to supply the annual process water needs for Rawhide and will also contribute to the cooling water supply as well. Soldier Canyon Dam Maintenance. Preparations are underway for the scheduled outage of the Soldier Canyon outlet works at Horsetooth Reservoir. The outage, required for Northern Water maintenance activities, is scheduled to begin on October 30 and end on November 3, totalling a period of five days. During the outage, raw water will be sourced from the Poudre River which will require coordination with staff from Fort Collins Utilities and Northern Water. Water conservation measures are planned at Rawhide during the maintenance period to guard against a potential supply interruption, although the possibility of such an interruption is unlikely.

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Windy Gap Unit Sales and Storage Acquisition Update. As reported in July, Platte River has been in the process of completing four transactions for the sale of Windy Gap units and the acquisition of additional capacity in the Windy Gap Firming Project. As of July, two transactions were completed, the third was scheduled for later in July, and the fourth one was planned for the fall. The third transaction did close at the end of July and on Monday, Oct 16, the fourth transaction successfully closed. This completes the initial series of transactions which resulted in the acquisition of additional firming capacity (now a total of 14,136AF), the sale of 23 units, the inclusion of short-term lease water options, and a total revenue of approximately $39M. Platte River is currently in discussions with a few entities that have previously expressed interest in purchasing Windy Gap units. Negotiations will also include some potential lease water which will help meet the water resource needs until the Windy Gap Firming Project is complete and operational. Mountain West Transmission Group (MWTG). The Southwest Power Pool (SPP) hosted the first public stakeholder meetings regarding MWTG membership on October 13 and 16 in Denver and Little Rock. Each meeting included the same information and presentations. The stakeholder information document titled “SPP New Member Communication and Integration Process, Background Information October 2017” was provided to the Board in October. Some key points to highlight are:

Cost Shift Mitigation. MWTG agreed to a 7-year mitigation plan for certain MWTG participants whose costs increased due mostly to the de-pancaking of transmission rates. Revenue from transmission service that moves power regionally through or out of the MWTG footprint will be applied to the mitigation. SPP will administer the mitigation and revenue distribution.

DC Ties.The integration of four existing DC ties with 720 MW of bi-directional capacity between

the SPP East and MWTG (SPP West) will increase savings in both regions. The costs of the DC ties will be shared across the East and West on a load ratio share.

SPP Administration Fee Discount. The existing SPP members will have cost savings with the

addition of new members. SPP will discount the administration fees for MWTG during the first three years of membership. MWTG participants will pay fees on a load ratio share for 60 percent in year 1, 65 percent in year 2, and 70 percent in year 3. This is a win-win situation for SPP East and West.

Real-Time Contingency Analysis (RTCA) Tool. Platte River was the driver for this operating

tool to be provided by SPP. RTCA is crucial to the operations of our transmission system. We currently take RTCA service from Peak Reliability, our NERC Reliability Coordinator (RC). If we join SPP, Peak Reliability will no longer provide RC and RTCA services to Platte River. SPP’s costs for both RC and RTCA services will be included in the administration fees. SPP will make available the RTCA to other SPP members on the East and West.

Regional Transmission Cost Allocation. MWTG developed a transmission project cost

allocation methodology more closely aligned to the MWTG transmission topology with longer distances between load centers. SPP’s “Highway-Byway” methodology in the East is driven solely by the operating voltage level and does not consider whether or to what degree a cost allocated project in North Dakota benefits Platte River; everyone pays their load ratio share of the project regardless. Therefore, MWTG will use a beneficiary approach to cost allocation while also adopting a voltage level approach. Upon complying with certain criteria for eligibility of cost allocation, here is a summary of MWTG’s methodology:

Project below 200kV are paid by the local zone

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Projects between 200kV and 300kV are allocated 30 percent on load ratio share and 70 percent to benefitting zones

Projects 300kV and above are allocated 50 percent on load ratio share and 50 percent to benefitting zones

The benefit components (none for local, 70 percent, and 50 percent) accomplish a more reasonable cost allocation of a project based on its voltage level and its geographical placement in the system. The market implementation date is October 1, 2019.

Resource Planning. Zero Net Carbon Modeling. The Resource Planning Department continues to work with Pace Global to develop the zero net carbon study requested by the Board. Initial results are expected to be delivered to Platte River at the end of October. Pace has provided a first draft set of modeling results to Platte River to ensure the consistency of assumptions and methodology. Platte River reviewed the output and provided further direction to refine the modeling details. In addition to Pace, HDR Engineering has been retained as the technical consultant on the project, providing capital cost assumptions, battery storage performance assumptions, and estimates for potential decommissioning of coal assets. Planning is also coordinating with Platte River’s Communications Department to develop the stakeholder process for presenting the findings from the zero net carbon study. A special session for the Board is being considered, potentially on the afternoon of December 7, with community outreach events expected in the week(s) following the Board meeting. Power Supply Plan. The Q3 Power Supply Plan (PSP) was completed and distributed on September 29. The Power Supply Plan is produced quarterly to support Platte River’s budget process and is considered the official budget case. Details from this case were presented by the Finance Department to the Board at the September session. Wind RFP. Platte River continues to assess responses to its 2017 Wind RFP which ranged in capacity offerings from 50 MW to 150 MW. Because of the favorable pricing, driven in part by the phased expiration of federal tax credits, Platte River is considering capacity additions in excess of the 75 MW limit discussed earlier with the Board. A short list of four RFP respondents has been defined and term sheets for project negotiations will be delivered to the short list participants in early October. Platte River’s initial focus is to ensure transmission availability and affordability, but is also working to assess needs for potential additions to the transmission system and congestion impacts that may arise in an RTO environment. Quanta Technology has been retained to perform the congestion analysis and has provided preliminary results for a regional analysis. Resource Planning is also conducting an analysis to further evaluate the limits for wind capacity on Platte River’s system. A recommendation is expected to be made to the Board at the December 7 session on the preferred project(s). CUSTOMER SERVICE Energy Efficiency (EE) Programs. The goal for efficiency programs is 25,000 MWh of new energy savings and 5,000 kW of new demand savings in 2017. Due to additional municipality funding and continued customer support, programs are now projected to result in new energy savings of 31,000 MWh and a demand reduction of 5,000 kW. A total of $9.33 million has been budgeted, with $5.25 million from Platte River and $4.08 million from the member municipalities. The projected result is a levelized cost of energy of $34/MWh, assuming that the entire budget is spent. Year to date, EE programs have achieved 13,725 MWh of new energy savings and 3,000 kW of new summer peak demand reduction at a cost of $4.32 million. We have collectively committed $8.26 million

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of EE program funding, including the $4.32 million spent, to specific programs and projects that are expected to be completed this year, resulting in 23,608 MWh of new energy savings and 5,030 kW of new summer peak demand reduction. The table below compares current results to projected results and breaks the results and commitments out by customer type.

Customer Segment

Service provided YTD Results

YTD Results & Commitments

Budget & Projected Results

Commercial & Industrial

Efficiency assessments

111 280 280

Efficiency project rebates

689 1,010 1,150

Energy savings (MWh)

13,310 22,255 28,300

Residential Efficiency assessments

593 1,000 1,000

Discounted efficient lighting products

29,748 63,000 125,000

Energy savings (MWh)

412 1,352 2,700

Totals Energy savings (MWh)

13,722 23,607 31,000

Funding ($ millions) Total $4.32 $8.26 $9.33Platte River $3.45 $5.25 $5.25Municipality $0.87 $3.01 $4.08

* Projections are updated throughout the year, based on available budgets and estimates of customer participation.

Efficiency Works Business customer participation is exceeding our expectations this year. We committed to more business efficiency projects last month than any previous month. Last month we committed over $1,000,000 in rebates which was a new record as well. This increase in business participation is primarily the result of both the new 50 percent bonus lighting rebate and our increased promotions to businesses and contractors. Community Solar Program Planning. Platte River and municipal staff members are continuing to plan for a 5-MW joint community solar project located at the Rawhide Energy Station. Price quotes received for the project are subject to modification, due to the solar import tariff issue presently before the United States International Trade Commission. If the full tariff requested by the plaintiff in the case is implemented by the U.S., staff members estimate that the impact of the import tariff could add up to $7 per MWh to the price of any negotiated PPA. To address this contingency the PPA will contain terms allowing Platte River a choice to accept this increase or terminate the PPA. We anticipate offering community solar as a new charge under Tariff 7. As in the current Tariff 7 wind program, the municipalities will request and commit to purchase renewable energy by submitting a Request Letter, signed by the Utility Director, and Platte River will respond with a confirmation letter indicating its intent to meet the request. We are currently working with municipal staff members to understand the likely cost range for the solar energy and to execute these Request Letters. Platte River will be seeking Request Letters from the municipalities totaling the entire output of the 5-MW facility, prior to executing a PPA. The output from the facility is estimated to be between 12,000 and 14,000 MWh per year.

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Platte River and municipal staff members also continue to discuss pricing strategies as well as the marketing and administration of the community solar program to clarify program requirements, schedules, and responsibilities. The proposed 2018 tariffs contain a revised version of TARIFF—SCHEDULE 7: RENEWABLE ENERGY SERVICE. The revised tariff now contains two products: Wind Energy and Community Solar Energy. The tariff describes the request and confirmation process as well as the applicable premium charges for each product. Demand Response (DR) Pilot. Phase 2 dispatching of DR events with Fort Collins Utilities commenced on July 1, 2017. Platte River’s Power System Operators scheduled events during the summer months of July and August, but did not schedule an event during the month of September, due to cooler temperatures and the resulting lower load curtailment potential. A separate set of systems for sending and receiving telemetry data have also been set up for validation and billing purposes. Bill credits for participation in the Pilot have been issued for the months of July, August, and September. The Longmont Power and Communications Voltage Reduction (VR) system required updates spanning multiple processes prior to full implementation. Those updates have been finished and the first successful test event dispatched by Platte River Power System Operators was completed in September. Additional tests are ongoing and Platte River anticipates the launch of the VR portion of the Pilot in November following the finalization of the Operating Procedure and training for the Power System Operators. GENERAL & FOLLOW UP ITEMS Rawhide Turbine Update. Rawhide Unit 1 was taken off-line on October 1 to repair the steam turbine thrust bearing. Thrust bearing temperatures were trending higher than normal for the past six weeks. Other than the thrust bearing temperatures, the turbine had been running well with no other issues. Repair parts were obtained from another utility in a parts exchange program and these parts were retrofitted with higher temperature components to increase the reliability of the bearing. Once the parts were secured, the unit was brought off-line and cooled down to allow for the repairs. Initial inspection indicated that the original bearing was damaged and that the new parts and proper bearing alignment would allow the unit to return to normal operation. It is not known, at this time, if the damage to the bearing was internal to the bearing only or if another issue within the turbine itself caused the bearing damage. The unit was brought back on-line Saturday October 7. The thrust bearing and other turbine performance indicators will be monitored very closely to see if there are any issues with the new thrust bearing. It may take a few months of normal operation to determine if there are any further issues with the bearing or the turbine. Strategic Plan. The strategic plan is still in development. The document and plan will be presented at the February Board meeting for Board approval. Tariff 7 Update. In May, staff members provided the Board with a whitepaper on issues related to increasing premiums in Tariff 7 and potential options to mitigate those issues. Staff members and the utility directors have subsequently discussed ways to provide a voluntary program that is attractive to customers. We are presently developing options that would replace the current Tariff 7 premium in the next couple years. At this point, we are pursuing the following:

For 2018 and 2019, replace the existing resources included in Tariff 7 (Medicine Bow wind, Silver Sage wind, and unbundled wind RECs) with an equal quantity of Spring

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Canyon wind. The existing resources will be moved into Tariff 1 and used as part of the base resource mix along with remaining Spring Canyon energy. Making this change provides the following benefits:

o Avoids providing a subsidy, as defined and prohibited by Green-e, of the energy sold to voluntary subscribers. The Green-e standards do not allow energy that is sold to voluntary subscribers to be subsidized by non-subscribers who do not receive the energy. Spring Canyon is a lower-cost resource that can be offered without subsidy at the current premium.

o Provides more Green-e Energy certifiable energy in Tariff 7. Currently the contract for unbundled RECs does not provide RECs that are readily certifiable under the Green-e Energy standard as a renewable energy product. As a result, these RECs are currently used only for the portions of municipality purchases that meet policy sales, not the voluntary sales that are Green-e Energy certified. Spring Canyon wind is Green-e certifiable.

o Improves the market appeal of the voluntary renewables. Avoids any perceived inclusion of unbundled RECs in the voluntary renewable mix. Also provides a newer source of renewables that should have more broad appeal. Federal renewable purchasing policy requires federal agencies to procure specific amounts of renewable energy from facilities less than 10 years old. Spring Canyon can meet this requirement, whereas Medicine Bow cannot.

Some of the changes discussed here are incorporated in the tariffs presented for approval at the upcoming Board meeting.

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Documents

Board of Directors Regular Meeting 2000 E. Horsetooth Rd, Fort … · 2017. 10. 10. · Board of Directors Regular Meeting 2000 E. Horsetooth Rd, Fort Collins, CO 80525 Thursday,