Board of Directors Regular Meeting 2000 E. Horsetooth Rd, Fort … · 2019-04-18 · 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, May 31, 2018, 9:00 a.m.

Call to Order

1) Consent Agenda Motion to Approve a. Minutes of the Regular Meeting of April 26, 2018

Public Comment Board Action Items

2) Debt Financing Reimbursement Resolution Resolution 07-18 3) Policy Approvals and Rescissions

a. Rescissions Resolution 08-18 b. Revised Electronic Mail Policy Resolution 09-18 c. Revised Accounting Policy – Pension Funding Resolution 10-18 d. Revised Accounting Policy – Debt Issuance Cost Resolution 11-18 e. Revised Market Manipulation Policy Resolution 12-18

Management Presentations

4) Wind Transmission Update 5) Synopsis of State Legislation of Interest 6) 2018-2021 Strategic Plan - DRAFT 7) Community Solar/Storage RFP Status 8) Managing Renewables in Markets 9) WAPA Hydro Contracts

Management Reports

10) Rate Design and Philosophy Whitepaper Draft

Monthly Informational Reports

11) Legal & Governmental Affairs Report 12) April 2018 Operating Report 13) April 2018 Financial Report 14) General Management Report

Strategic Discussions Adjournment

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Updated May 23, 2018

2018 BOARD MEETING PLANNING CALENDAR

June 15-20, 2018

APPA National Conference

New Orleans, Louisiana

July 26, 2018

Board Action Items


Management Reports

Monthly Informational

Reports Retirement Committee Report

Rate Design Philosophy Whitepaper & Policy

Wholesale Rate Forecast

Legal & Governmental Affairs Report

2018-2021 Strategic Plan

Update on Proposed Fiber Optic Service

Cyber Security Review

May and June 2018 Operating Report

Energy Efficiency Programs Update

May and June 2018 Financial Report

General Management Report

August 30, 2018 Retirement Committee Meeting

Board Action Items


Management Reports


Reports

Rates Policy Wholesale Rate Forecast


Cyber Security Review

July 2018 Operating Report

Energy Efficiency Programs Update

July 2018 Financial Report

Rate Structure Proposal


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September 27, 2018

Board Action Items


Management Reports


Reports

Retirement Committee Report

2019 Proposed Annual Budget Work Session

Demand Response Pilot Update


Rawhide Rail Contract

August 2018 Operating Report

Staffing Update (MEMO only)

August 2018 Financial Report

MWTG/Markets Update


October 25, 2018 Board Action Items


Management Reports


Reports

2018 BKD Audit Plan Rawhide Rail Contract

Workforce Updates Legal & Governmental Affairs Report

2019 Rate Tariff(s) 2019 Proposed Annual Budget Update – Public Hearing

September 2018 Operating Report

Demand Response Pilot Update

September 2018 Financial Report


November, 2018 Retirement Committee Meeting

No Board of Directors Meeting

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December 6, 2018

Board Action Items


Management Reports


Reports

Retirement Committee Report

Workforce Updates Legal & Governmental Affairs Report

2019 Annual Budget Adoption

2019 Annual Budget Update and Review

October and November 2018 Operating Report

2018 Board Contingency Appropriation Transfer – Capital Additions (if required)

October and November 2018 Financial Report

2019 Proposed Board of Directors Regular Meeting Schedule

Topics to be scheduled:

• Series KK Debt Financing

* This calendar is for planning purposes only and may change at management’s discretion *

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2018 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 Brian Bagley November 2019 Tom Roiniotis—Chairman, Board of Directors December 2018

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

Mayor Jacki Marsh November 2019 Joseph Bernosky December 2022

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

Thursday, April 26, 2018 ATTENDANCE Board Members Representing Estes Park: Mayor Todd Jirsa1 and Reuben Bergsten2 Representing Fort Collins: Mayor Wade Troxell and Mayor Pro Tem Gerry Horak3 Representing Longmont: Mayor Brian Bagley and Tom Roiniotis Representing Loveland: Mayor Jacki Marsh and Joe Bernosky 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) Angela Walsh (Executive Assistant) Shelley Nywall (Controller) Jason Maldonado (Safety, Emergency Management and Security Manager) Steve Roalstad (Communications and Marketing Manager) Justin Allar (Security Program Supervisor) Heather Banks (Fuels and Water Manager) Craig Johnson (Deputy General Counsel) Julie Depperman (Treasury Manager) Rob Morse (IT & Cyber Security Manager) Pat Connors (Vice President of Power Supply) Wade Hancock (Financial Planning Manager) Amy Meger (Record and Information Governance Manager) Guests Alan Braslau (Fort Collins resident) Tim McCollough (City of Fort Collins Electric Director) CALL TO ORDER Chairman Roiniotis called the meeting to order at 9:00 a.m. A quorum of board members was present and the meeting, having been duly convened, was ready to proceed with business. Karin Hollohan, chief administrative services officer, introduced Amy Meger, records and information governance manager. The Chairman noted that Director Jirsa and Bergsten were joining via Skype. Due to the recent withdrawal of PSCo from the Mountain West Transmission Group (MWTG), 1 Attended via Skype. 2 Attended via Skype. 3 Arrived at 9:04 am

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Regular Board Meeting Minutes: April 26, 2018

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staff requested the agenda discussion regarding the topic of ‘MWTG – Regulatory Approval Process’, be changed to ‘MWTG – Ramifications of the PSCo Withdrawal’ and moved to agenda item number 4. Director Bagley moved to accept the revised agenda as presented. Director Troxell seconded, and the motion carried 7-0. ACTION ITEMS (1) Consent Agenda

a. Approval of the Regular Meeting Minutes of March 29, 2018

Director Bernosky moved to approve the Consent Agenda as presented. Director Bagley seconded, and the motion carried 7-0. PUBLIC COMMENT None. BOARD ACTION ITEMS (2) Acceptance of the 2017 Annual Report (presenter: Alyssa Clemsen Roberts) Alyssa Clemsen Roberts, chief strategy officer, presented the 2017 Annual Report to the board and noted the theme of the report reflects the successful collaboration among Platte River and the four owner communities throughout 2017. Ms. Clemsen Roberts noted that there is one comma edit to make prior to final printing, however, if the board recommended any changes, staff would make those as well. The board suggested no edits and complimented staff on the report. Staff will make 150 copies and send the final copies to the board and municipalities as requested. Director Bagley moved to accept the 2017 Annual Report as presented incorporating suggested edits. Director Bernosky seconded. The motion carried 8-0. (3) Revisions to TARIFF—SCHEDULE 4: Wholesale Transmission Service

(presenter: Wade Hancock) Wade Hancock, financial planning manager, presented the proposed TARIFF—SCHEDULE 4: Wholesale Transmission Service revisions and explained how the tariff is applied. Staff recommended adoption of the proposed tariff. Director Bagley asked if the board can set tariffs to a rate they want, or if there are guidelines or regulations governing the rates. Mr. Hancock responded that the board has sole authority to establish rates, however, as to Tariff 4 Platte River follows the Federal Energy Regulatory Commission Pro Forma (FERC Pro Forma) Tariff that prescribes this particular tariff for transmission usage. Director Bagley asked if this is the access rate someone else would pay for using transmission lines and asked if the rates need to be the same regardless of who is using the transmission lines, or can the board make different rates. Mr. Hancock responded that the rate charged must be offered to all users, but that Platte River can lower the rate to offer an incentive for a user as long as that rate is posted for all potential users to consider. Jason Frisbie, general manager and ceo, added that Platte River follows the prescribed pro-forma and that

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entities pay the same for similar cost-based services. Director Bagley also asked if this tariff will be affected by the changes in the Mountain West Transmission Group (MWTG) and as to PSCo he asked if the rate we charge them will change based on the approval of Tariff 4. Andy Butcher, chief operating officer, responded that PSCo serves load in Platte River’s area, and utilizes our transmission system to deliver to this load resulting in charges under our transmission tariff. Mr. Butcher continued stating that if the MWTG moved forward as previously planned, it still wouldn’t affect the revenue requirements presently recovered by Tariff 4. Director Bagley asked if PSCo withdrawing from MWTG immediately affects the relationship between PSCo and Platte River. Mr. Butcher responded that PSCo is Platte River’s balancing authority and a business relationship between the two entities is necessary. Discussion continued among Directors and staff on being in PSCo’s balancing authority. Director Troxell moved to approve Resolution 06-18: Revisions to TARIFF—SCHEDULE 4: Wholesale Transmission Service as presented. Director Bernosky seconded. The motion carried 8-0. MANAGEMENT PRESENTATIONS (4) MWTG – Ramifications of the PSCo Withdrawal (presenter: Craig Johnson) Craig Johnson, deputy general counsel, provided a brief summary of the actions taken by the Mountain West Transmission Group (MWTG) to join the Southwest Power Pool (SPP) and explained the ramifications of the PSCo withdrawal on the six other entities. Mr. Johnson clarified that PSCo withdrawing from the MWTG effectively terminated present efforts with SPP. Director Bagley expressed his understanding that the MWTG intended to integrate into SPP as a group. Joe Wilson, general counsel, added that the MWTG is an unincorporated group of transmission-owning utilities with a common goal in joining a market, and the members were not obligated to move in unison. Mr. Johnson added that PSCo was the largest member in the group and moved into the reasons PSCo provided in the media release effectively removing themselves from the MWTG. Mr. Johnson briefly explained options the remaining MWTG participants could potentially explore. Mr. Johnson explained the costs that MWTG participants would be allocating in connection with the move into the SPP market included direct current (DC) ties and associated assets. Chairman Roiniotis asked who pays the costs of the DC ties currently. Mr. Johnson responded the current owners take on any costs related to the DC ties and cost recovery comes from entities that utilize those ties to move power and because that recovery would be given up in a market those costs would need to be socialized among the participants in the market. Discussion among Directors and staff ensued regarding what DC ties mean and the role they play in the system, what pancake rates are and the role the Western Area Power Administration (WAPA) plays within the overall system. Director Troxell asked for recommendations. Mr. Johnson responded that the group isn’t prepared for recommendations at the time of this meeting, but staff will be working with the other entities on next steps. Mr. Butcher discussed the next steps for the MWTG and discussions that will need to take place. Director Bernosky asked if PSCo’s withdrawal was a means for negotiating a lower package within the group or if it was a complete withdrawal. Mr. Butcher stated he believed it is a complete withdrawal based on past discussions and the long-term relationship Platte River has had with

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PSCo. Director Bagley commented on recently taking a tour with other Mayors and the understanding on getting to 100 percent renewable energy (zero net carbon) by 2030 requires two key features - having transmission and joining a market - and assumes Xcel would have the same requirements. Mr. Butcher responded that Xcel was one of the first to recognize the need for a market due to the amount of wind they have on the system, and they have an extensive transmission system. Discussion among Directors and staff ensued regarding how Platte River could help resolve PSCo’s concerns. Director Troxell asked if the change in leadership had any impact on the decision. Mr. Butcher clarified the difference between PSCo and the larger Xcel Corporate decision. Director Bergsten asked if the Colorado Public Utilities Commission (PUC) denied their request to recover costs was a risk too large to take. Mr. Johnson responded that it wasn’t any one factor that moved PSCo to make the decision. Director Bagley offered lobbying efforts to affect the PUC or PSCo’s withdrawal. Mr. Butcher and Mr. Johnson responded that efforts like that probably wouldn’t foster any changes. Director Troxell suggested that Platte River to move forward and review all options available for moving into a market. Mr. Butcher assured the board that Platte River is doing business as usual, still moving forward, and all existing contracts are in affect noting 1) the current Joint Dispatch Agreements – a market in its own, 2) the 150 MW wind PPA, and 3) continuing the solar and storage RFP process. Mr. Butcher mentioned some short-term considerations, for example reliability coordination in the west, a NERC requirement. Mr. Butcher noted that options are narrow for reliability coordination and Platte River is tied to the balancing authority, which is PSCo and is essential for the integration of new renewables. Director Bagley complimented staff on their work and noted that it’s been a perfect blend of preparing for the future and keeping the system safe and reliable. Mr. Butcher discussed long term considerations such as Joint Dispatch (currently a 10 percent value of a market), however, it doesn’t help integrate renewables, or the potential to join with other markets. Platte River cannot make that decision alone – PSCo and Western Area Power Administration (WAPA) would need to join with us. Discussion ensued among Directors and staff regarding PSCo and WAPA needing to join together and the challenges in considering other options for markets. Mr. Butcher concluded that staff will continue evaluating all options and will provide the board with recommendations with a full analysis by early Fall. Director Troxell commented that now is a great time for Platte River to double down and lead efforts. Director Bernosky commented that he appreciated the email notification from staff sent out on Friday and that it was obvious the news release caught staff off guard, and complimented staff on their quick turn-around for the meeting’s discussion. Mr. Frisbie added that he spoke to David Eves with PSCo directly on Friday and expects a meeting with all MWTG’s CEOs to discuss next steps in moving forward. Director Troxell commented on Platte River zooming out to see other opportunities to changing the game creating other dynamics with other partners and asked if there was any impact regarding the 75 MW of wind or on the solar project. Mr. Butcher responded that Platte River is moving forward with the 150 MW wind and the solar RFP. Mr. Butcher noted that staff is evaluating the 75 MW of additional wind and it is not off the table, but more analysis is needed to see if the additional wind could be added to the system. Discussion ensued regarding distributed generation options to consider and exploring options to bring PSCo back into the MWTG. (5) Draft Strategic Plan (presenter: Alyssa Clemsen Roberts) Ms. Clemsen Roberts provided a presentation on the continued development of the 2018-2021 Strategic Plan, noting that staff is stepping back and taking a higher-level view in producing this plan by tying it to elements relating to Platte River’s mission, vision and values statements. The

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draft focuses on four main areas: customer experience, communications, resource diversification and alignment, and infrastructure advancement. Ms. Clemsen noted that the MWTG/SPP sections will be edited reflecting a more general view of moving into a market and resource integration and diversification. Director Troxell commented that he would like to see mention of leadership within Platte River’s communities on charting new territories and taking an active leadership role in the energy industry. Mr. Frisbie mentioned the narrative within the general manager and chairman letter at the beginning of the document talks about leadership in the industry, however, staff will expand that within the content. Discussion ensued among Directors and staff about leadership and collaboration within the four communities. Director Horak commented on messaging regarding change and growth and why messaging of that type is needed within the document. Ms. Clemsen Roberts clarified that while there is growth in our communities the bigger concentration is related to growth in relationships within the communities. Discussion ensued regarding word usage geared toward positive changes and avoiding trigger words. (6) Safety Program Review (presenter: Jason Maldonado)

Jason Maldonado, safety, emergency management and security manager, provided an overview of Platte River’s safety initiatives, injury prevention programs and statistics. Director Troxell commented on the safety program and asked about the measurement of success. Mr. Maldonado responded that will be addressed later in the presentation. Director Horak asked how safety actions within staff are monitored. Ms. Hollohan responded safety actions are reflected within employee feedback during supervisory meetings, through normal course of safety discussions and reporting. Mr. Maldonado discussed the procedures and programs implemented within the last few years incorporating employee engagement and focus using an example of staff collaboration addressing and solving a hazard on a fan brake at the plant. Director Bagley asked who made the fan brake safety device. Mr. Maldonado responded that the device was made internally. Director Troxell complimented Mr. Maldonado on the presentation and mentioned opportunities for tying safety programs to the strategic plan and to the budget, including comprehensive integration on outcomes and how it relates throughout the whole organization. Director Troxell suggested creating best practices within the programs and to have staff present metrics to the board similar to the operating and financial reports. Director Troxell then referred back to solving the fan brake issue asking if engineering solutions were deployed to design the new mechanism. Ms. Hollohan responded that staff incorporates engineering solutions where appropriate, providing an example of the fall protection installed onto the conveyor belts. Ms. Hollohan addressed the reporting metrics request by Director Troxell noting that the safety department created a new safety report card initiative currently being vetted by the senior leadership team prior to its deployment. Ms. Hollohan also presented the American Public Power Association award (2017 Electric Utility Safety Award of Excellence – first place) Platte River received for “meritorious achievement in attaining a low incident rate during the year 2017” for system with 250,000-999,999 working hours of exposure. Discussion ensued among Directors and staff on how to show the metrics that are complementary to the financial and operational reports using the green, gray and red indicators. Director Horak asked if staff would compare industry safety data with Platte River’s data within the monthly General Management report. Ms. Hollohan responded staff regularly participate in industry surveys to compare data mentioning the challenges of smaller utilities and incident rates. Discussion ensued regarding benchmarking data, incident investigation processes and emergency shut offs on equipment at the plant.

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Director Bergsten complimented Mr. Maldonado and the safety programs. 11:00 – 11:13: Break (7) Debt Financing Update (presenter: Julie Depperman) Julie Depperman, treasury manager, provided a brief overview of the debt financing plan for the next debt issuance and Platte River’s capital plan highlighting two large capital projects - the Windy Gap Firming Project and the headquarter campus. Director Bagley asked about the financing options for the Windy Gap Firming Project and if Platte River will be participating in a pooled financing option. Ms. Depperman responded that participants are still evaluating options. Ms. Depperman mentioned staff will request the board to approve a reimbursement resolution at the May board meeting and noted that the board approval of the reimbursement resolution is not authorization to acquire new debt. When staff is ready to issue new debt, staff will return to the board for authorization. Mr. Frisbie added that the sale of the Windy Gap units is why Platte River would be pursuing only $100 million in bond issuance and mentioned that Platte River will be making the best decision for Platte River regarding the Windy Gap Firming Project financing options. Discussion ensued regarding municipalities’ decisions on the pooled financing. (8) Policy Repository and Resolution Rescissions (presenter: Joe Wilson) Mr. Wilson presented the Platte River internal project - “policy quality management” - which required 1) staff to review over 30 years of resolutions and policies set forth by the board, 2) the classification of guidance documents, 3) the creation of a policy repository, and 4) identifying outdated resolutions for rescission. Mr. Wilson acknowledged the coordination and work completed to date by Ms. Meger, the manager of the project. At the May board meeting, staff will return asking for the board to rescind a number of resolutions and adopt updated resolutions. Chairman Roiniotis complimented staffs’ efforts on the project. MANAGEMENT REPORTS (9) Updated Water Resources Reference Document (presenter: Heather Banks)

Heather Banks, fuels and water manager, introduced the second edition of the water resources reference document as a compilation of “all things water related at Platte River” including agreements and operational activities. Ms. Banks noted that the reference document was to be a yearly updated document, however, a version was not released in 2017 due to the nature of various 2017 water transactions. Director Bernosky complimented and thanked Ms. Banks for the work in compiling all the water related information into one document. Mr. Frisbie added that there will be signification changes and additions reflected in the future versions once the Windy Gap Firming Project is completed and operational. Ms. Banks also noted the changes reflected within the second edition include removing the rescinded or superseded resolutions replaced by the water policy the board approved in 2016. Director Horak suggested adding a page that summarized the new edits or what has changed from version to version.

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MONTHLY INFORMATIONAL REPORTS (10) Legal & Governmental Affairs Report (presenter: Joe Wilson)

Mr. Wilson highlighted a potential litigation item out of Pennsylvania regarding sodium chlorite use by Platte River in the 2001 – 2003 timeframe. Mr. Wilson noted that Platte River provided documentation voluntarily. Director Bagley asked if Platte River was at fault for the barrels. Mr. Wilson responded that the litigation is between the vendor supplying the material and the storage facility housing used barrels. Platte River was identified on a shipping label of some barrels, which were clean. Mr. Wilson added that he will keep the board informed if any further action is requested from Platte River. Mr. Wilson also highlighted efforts to turn the local loop leases over to the municipalities, noting that the Utility Directors are working on an agenda for a work session currently scheduled for June 7, 2018. Mr. Wilson concluded that only two weeks are left in the legislative calendar mentioning both bills involving energy storage have moved through the process and it is likely both will be adopted. Mr. Wilson referred to an email previously sent out to the board regarding a right of first refusal transmission bill, which has since been delayed due to litigation in Minnesota and noted this topic is less urgent now that MWTG is on hold. (11) March Operating Report (presenter: Andy Butcher)

Mr. Butcher highlighted the renewable energy output (wind and solar) performed well in the month of March and joint dispatch (JDA) also performed well by reducing costs for purchase power and adding to Platte River’s power sales volume. Mr. Frisbie added that the average price month-to-date for purchased power was $5.81 per megawatt hour. (12) March Financial Report (presenter: Dave Smalley) Chairman Roiniotis asked the board if there were any questions or comments regarding the February financial report contained within the board materials. No questions were raised. Director Bagley complimented Ms. Depperman on her earlier presentation. (13) General Management Report (presenter: Jason Frisbie) Mr. Frisbie highlighted the rates restructuring process, the community solar RFP bid evaluation, and the Trapper Mine Royalty Rate Reduction equaling $5/ton on all coal for the next 10 years meaning a $2 million annual fuel cost savings for Craig. Director Horak requested an update on the litigation on the Windy Gap Firming Project and the current financial implications. Mr. Wilson responded that the project hasn’t been delayed to date and thus no financial implications have occurred at this early point. A memo will follow. Director Horak commented on Enyo appearing before the energy board and asked if any Platte River staff attended. Ms. Clemsen Roberts confirmed her attendance and commented on the presentation Enyo provided to the energy board regarding transmission line routes. Director Horak commented to the board that they might hear some pushback on transmission routes from the energy board and warned of articles that might come out. City of Fort Collins staff member,

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Tim McCollough, added that the Fort Collins board members will receive a memo with information and recommendations. 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 12:06 p.m. The next regular board meeting is scheduled for Thursday, May 31, 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 Secretary and have affixed the corporate seal of the Platte River Power Authority this day of , 2018.

Secretary

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Memorandum Date: May 23, 2018

To: Board of Directors

From: Jason Frisbie, General Manager/CEO Joe Wilson, General Counsel Dave Smalley, Deputy General Manager and Chief Financial Officer Julie Depperman, Treasury Manager

Subject: Debt Financing Reimbursement Resolution Platte River staff is recommending adoption of a reimbursement resolution to capture expenditures related to the headquarters campus that are incurred before bonds are issued. The reimbursement resolution would allow Platte River to reimburse itself for headquarters campus project expenditures through a future reimbursement bond.

In order to issue a reimbursement bond, IRS Regulation Section 1.150-2 requires issuers to “declare” an “official intent” to reimburse the expenditure later with bond proceeds. The reimbursement bond captures project expenditures that occurred up to 60 days prior to the date of the “official intent.” Platte River must issue the reimbursement bonds and make the reimbursement allocation within 18 months after the date the expenditure was paid or, alternatively, 18 months after the date on which the property resulting from the expenditure was placed in service. In any event, Platte River must make the reimbursement allocation within three years after the date the expenditure was paid.

Platte River put a similar resolution in place for the Series HH, II and JJ bonds. The resolution does not authorize Platte River to issue the debt; it only allows Platte River to capture costs from a future bond issue. The actual authorization to issue debt would require additional board action at a future board meeting. The board will be asked to approve the reimbursement resolution at the board meeting. Attachment

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48402095.2

RESOLUTION NO. __- 18

WHEREAS, Platte River Power Authority (Platte River) is a separate governmental entity

and a political subdivision of the State of Colorado duly organized and existing under the laws of

the State of Colorado, and in particular under the provisions of an act concerning

intergovernmental relationships (Colorado Revised Statutes, Title 29, Article 1, Part 2) of the State

of Colorado (the “Act”) and the Organic Contract establishing Platte River; and

WHEREAS, pursuant to the Act, the Board of Directors of Platte River authorized the

acquisition and construction of electric power and energy facilities (collectively, the “System”),

and Platte River now owns and operates the System; and

WHEREAS, Platte River is authorized pursuant to the Act to issue bonds to finance

projects for the System payable solely out of the net revenues derived from the operation of the

System; and

WHEREAS, Platte River desires to construct a new headquarters campus, including

furnishings, equipment and other personal property therefor, as set forth in its Year 2018 Budget,

(the “Project”) and expects to issue Power Revenue Bonds in an amount presently estimated not

to exceed $50,000,000 (the “Revenue Bonds”); and

WHEREAS, Platte River expects to incur certain capital expenditures relating to the

Project prior to issuing the Revenue Bonds for the Project, and Platte River reasonably intends to

reimburse itself for such prior capital expenditures with proceeds of the Revenue Bonds; and

WHEREAS, this Resolution is intended to constitute Platte River’s declaration of “official

intent” to reimburse itself for such prior capital expenditures within the meaning of Section 1.150-

2 of the regulations promulgated under Section 103 of the Internal Revenue Code of 1986, as

amended.

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Resolution No. __-18: DECLARATION OF OFFICIAL INTENT TO REIMBURSE PRIOR CAPITAL EXPENDITURES

Page 2 of 3 48402095.2

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

follows:

(1) In order to permit Platte River to reimburse itself for prior capital expenditures

relating to the Project from the proceeds of the Revenue Bonds, the interest on

which will be excluded from gross income for federal income tax purposes, the

board hereby determines and declares that:

(a) Platte River intends to incur capital expenditures with respect to the Project

prior to the issuance of the Revenue Bonds and reasonably expects to

reimburse those expenditures from the proceeds of the issuance of the

Revenue Bonds;

(b) The Project consists of the construction of a new headquarters campus for

the System, including furnishings, equipment and other personal property

therefor; and

(c) The maximum principal amount of the Revenue Bonds expected to be

issued to finance the Project is $50,000,000.

(2) The board further determines that it will authorize and issue the Revenue Bonds,

upon terms satisfactory to Platte River at the time of the issuance of the Revenue

Bonds, in one or more series, to pay the cost of the Project, together with the costs

incident to the authorization, issuance and sale of the Revenue Bonds, and will

take all further action that is necessary or desirable in connection therewith.

(3) The officers of Platte River be, and hereby are, authorized and directed to take all

actions necessary or appropriate to effectuate the provisions of this Resolution.

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Resolution No. __-18: DECLARATION OF OFFICIAL INTENT TO REIMBURSE PRIOR CAPITAL EXPENDITURES

Page 3 of 3 48402095.2

(4) If any section, paragraph, clause, or provision of this Resolution is held to be invalid

or unenforceable, the validity or enforceability of any other section, paragraph,

clause, or provision of this Resolution shall in no way be affected.

(5) This Resolution shall take effect immediately upon its passage and adoption.

AS WITNESS, I have executed my name as Secretary and have affixed the corporate seal of the Platte River Power Authority this day of , 2018. Secretary

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From: Jason Frisbie, General Manager/CEO Joe Wilson, General Counsel Amy Meger, Records and Information Governance Manager

Subject: Policy Approvals and Rescissions

The board was provided a whitepaper on the Policy Quality Management project in March and the status of the project was discussed at the April board meeting. At that time the board was informed that one of the final steps in the Policy Quality Management process involves action to rescind a number of obsolete resolutions and the re-adoption of resolutions that have been updated as a result of review by staff.

The obsolete resolutions that staff recommends for rescission are listed below:

• Resolution No. 2-74 – Amended Resolution No. 8-73, which was the fiscal resolution in place at that time. Resolution No. 8-73 was subsequently rescinded, but Resolution No. 2-74 was left in place.

• Resolution No. 42-81 – Limited the use of Rawhide ambulances off-site during construction of Unit 1.

• Resolution No. 58-81 – Created a conflicts of interest policy later replaced by statute. • Resolution No. 64-82 – Created a market-based wage policy; superseded by later compensation

policies, most recently Resolution Nos. 7-13, 6-14 and 12-15. • Resolution No. 13-84 – Like the first resolution listed above, this resolution amends a fiscal

resolution that was subsequently rescinded. • Resolution No. 37-91 – Endorsed transmission access principles subsequently replaced by

Federal Energy Regulatory Commission orders. • Resolution No. 23-95 – Expressed opposition to the sale of the Power Marketing Administrations;

issue still relevant, but language outdated. • Resolution No. 6-04 – Created natural gas hedging policy no longer operationally relevant. • Resolution No. 16-04 – Created a risk management policy, which as a result integrated risk

awareness into operations to a degree that limited the usefulness of the guidance contained in the resolution.

• Resolution No. 8-05 – Given the lack of variable rate finance transactions this policy is no longer necessary.

Adoption of Resolution No. 08-18 will rescind all of the above-listed resolutions.

In addition, there are four policy resolutions that staff recommends rescinding and re-adopting in a revised form. Separate motions will be required for each resolution. Copies of the relevant policies adopted

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MEMO – Policy Approvals and Rescissions

May 2018 Page 2 of 2

through these resolutions are attached with the appropriate resolutions. These resolutions are listed and described below:

• Resolution No. 09-18 – This resolution would rescind Resolution No. 30-97 and re-adopt a more narrowly focused electronic mail policy. Pursuant to C.R.S. § 24-72-204.5, enacted in 1997, political subdivisions of the state are required to adopt an electronic mail policy. The policy must address the circumstances under which the electronic communications of employees will be monitored and inform employees that such communications may be public records subject to inspection. The policy adopted through Resolution No. 30-97 goes well beyond the requirements of C.R.S. § 24-72-204.5, covering issues such as allowable software, prohibited uses, and public records retrieval charges. The policy also covers forms of electronic records storage that are no longer employed. Staff recommends that the board-approved policy be carved back to only those issues required by the statute, with other issues associated with electronic communications addressed through the Employee Handbook and other appropriate process documents. Staff recommends adoption of Resolution No. 09-18.

• Resolution No. 10-18 - Resolution No. 19-09 initially adopted a policy setting out a smoothing mechanism for prospective recognition of additional funding for the defined benefit pension plan. The policy is now being converted to the new policy format. The revised policy does not change the intent, however, references to accounting pronouncements are updated and accounting procedures are removed and placed in a supporting process document. Staff recommends adoption of Resolution No. 10-18.

• Resolution No. 11-18 - Resolution No. 28-12 endorsed the use of GASB Statement No. 62, and thus created an accounting policy smoothing the recognition of debt issuance expenses. This policy is also being converted to the new policy format. The policy language is pared down with the removal of accounting procedures that will be placed in a supporting process document. Staff recommends adoption of Resolution No. 11-18.

• Resolution No. 12-18 – In response to changes in the Federal Power Act, which expanded the jurisdiction of the Federal Energy Regulatory Commission to include the correction of market abuses, Platte River adopted a policy prohibiting market manipulation among its employees. That policy is now contained in Resolution No. 5-13, which superseded prior resolutions on the topic. One of the significant features of the policy is the establishment of a bi-annual internal audit to identify abuses. Audits have been performed since 2006 and none have revealed any abuse. There is no regulatory requirement to conduct two audits each year, rather this was suggested by the FERC as a best practice. Because the audits are time consuming, have not revealed any abusive practices, and because Platte River is not in a position to employ the manipulative practices used by Enron or Dynegy during the California crisis of the early 2000s, Platte River has considered performing only one audit per year. Many other public power systems have cut back on the frequency of audits. Conversely, if Platte River joins an organized market multiple annual audits may make sense. The revised policy requires no less than one audit per year, and thus provides some flexibility to adjust audit frequency. Staff recommends adoption of Resolution No. 12-18.

Attachments

Page 24

RESOLUTION NO. __-18

WHEREAS, through the Policy Quality Management initiative staff has reviewed existing

resolutions that created or amended board-level policies; and

WHEREAS, this review identified a number of resolutions that were obsolete for the

reasons explained in the memorandum dated May 23, 2018; and

WHEREAS, staff recommends that the identified resolutions be rescinded.

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

Authority that the following resolutions are rescinded:

• Resolution No. 2-74











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WHEREAS, political subdivisions are required by C.R.S. § 24-72-204.5 to adopt a written

policy concerning the monitoring of electronic communications, which policy must also include a

notice to employees that electronic communications may be subject to public inspection; and

WHEREAS, Platte River previously adopted an electronic mail policy through Resolution

No. 30-97; and

WHEREAS, a review of the language of Resolution No. 30-97 reveals that its contents

include provisions well beyond the statutory requirements and address forms of electronic

information storage that are no longer used; and

WHEREAS, for the reasons set forth in the memorandum dated May 23, 2018, staff

recommends the rescission of Resolution No. 30-97 and the adoption of a replacement policy that

contains only that direction required by C.R.S. § 24-72-204.5.


Authority that Resolution No. 30-97 is hereby rescinded, and the Electronic Mail Policy attached

to the May 23, 2018, memorandum is hereby adopted.


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Policy Version #: 2.0

Original Effective Date: 07/24/1997 Next Review Date: 06/01/2023

Electronic Mail Policy Page 1 of 2

Purpose:

The purpose of this policy is to meet the requirements of C.R.S. § 24-72-204.5.

Policy:

Platte River Power Authority (Platte River) operates and maintains an electronic mail communication system (email system). The email system is necessary to support the functions of Platte River. Platte River routinely monitors the use of and communications on the email system. Employees have no rights of privacy concerning their use of the email system. Correspondence of employees in the form of electronic mail may be public records under the Colorado public records law and may be subject to public inspection under C.R.S. § 24-72-203.

Implementing Parties and Assigned Responsibilities:

General Counsel shall review legislation and update policy as required. Records Manager shall coordinate open records requests as required by the Colorado Open Records Act.

Associated Items (if applicable):

Employee Handbook Public Records Guideline Board of Directors Resolution No. 09-18

Definitions (if applicable):

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Electronic Mail Policy Page 2 of 2

Document Owner: Records Manager Original Effective Date: 07/24/1997

Authority: Board of Directors Review Frequency: Every 5 years

Counsel Review: General Counsel Current Effective Date: 05/31/2018

Version Date Action Author Change Tracking

(new, review, revision)

1.0 07/24/1997 Original Policy by Board Resolution 30-97 Unknown New

2.0 05/31/2018 Revised – Details contained in Employee Handbook

Records Manager Revised

Page 30


WHEREAS, through Resolution No. 19-09 Platte River’s Board of Directors approved a

policy entitled “Expense Recognition Accounting for Pension Funding” based on principles

contained in Government Accounting Standards Board (GASB) Standard No. 62; and

WHEREAS, upon review of the “Expense Recognition Accounting for Pension Funding”

staff recommends modifications to the policy that will update references to accounting standards

and remove specific accounting procedures with the placement of these procedures in

appropriate process documents; and

WHEREAS, no substantive changes have been made to the policy intent, which involves

smoothing the recognition of certain pension funding expenses over multiple years; and

WHEREAS, the modified policy has been renamed as the “Additional Pension Funding

Expense Recognition Policy” and placed in the new policy document format; and

WHEREAS, for the reasons stated in the memorandum dated May 23, 2018, staff

recommends the rescission of Resolution No. 19-09 and the adoption of the “Additional Pension

Funding Expense Recognition Policy.”

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

Authority rescinds Resolution No. 19-09 and adopts and approves the “Additional Pension

Funding Expense Recognition Policy” as attached to the May 23, 2018, memorandum as the

accounting policy to be applied to additional pension funding charges pursuant to GASB Standard

No. 62, paragraphs 476 - 500.


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TITLE: Additional Pension Funding Expense Recognition Page 1 of 2

Purpose:

The funding of the Platte River Power Authority Defined Benefit Plan is based on cost estimates developed on an actuarial basis. In addition to the base contribution, Platte River has an additional funding charge when the value of the assets is less than 100 percent of liabilities. To lessen the rate impact of the additional funding charge in any one year, the amortization method of expensing the additional funding charge over multiple years is preferred. Governmental Accounting Standards Board Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989, FASB and AICPA Pronouncements, Regulated Operations, paragraph 476-500 (GASB 62) allows certain expenses or revenues to be recognized when included in wholesale rates charged to the municipalities rather than when normally recorded. Any accounting treatment implementing GASB 62 must receive prior approval from the board of directors. Platte River will use GASB 62, as outlined in the “Policy” section below to record the additional funding charge.

Policy: This policy applies to the expense recognition of additional funding for the pension plan. The additional funding charge will be recorded as an item on Statement of Net Position when incurred and amortized over a ten-year period. Each subsequent year’s additional funding charge, if any, will be added on to the calculation and amortized over an additional ten-year period.


The Controller reviews this policy and necessary revisions are brought before the Platte River Board of Directors.


Additional Pension Funding Expense Recognition Procedure Resolution No. 10-18


Page 33



TITLE: Additional Pension Funding Expense Recognition Page 2 of 2

Document Owner: Controller Original Effective Date: 08/27/2009





1.0 08/19/2009 Original Policy Ed Doherty New

1.1 01/23/2018 Moved to new form Tracy Thompson New Form

2.0 05/31/2018 Reviewed and revised, approved by resolution Shelley Nywall Revised

Page 34


WHEREAS, through Resolution No. 28-12 the Platte River Power Authority Board of

Directors authorized the use of GASB Statement No. 62, which allowed the continued recognition

of the costs of debt issuance over the life of the debt; and

WHEREAS, the policy document adopted through Resolution No. 28-12 contained

accounting procedures implementing the board’s policy directive; and

WHEREAS, pursuant to the memorandum dated May 23, 2018, staff recommends that

the policy associated with Resolution No. 28-12 be continued, but reduced to a document that

only endorses the use of GASB Statement No. 62; and

WHEREAS, the accounting procedures previously contained in the policy adopted by

Resolution No. 28-12 be removed to process documentation; and

WHEREAS, the “Debt Issuance Expense Recognition Policy” has been placed in the new

policy format and is attached to the memorandum dated May 23, 2018; and

WHEREAS, staff recommends the rescission of Resolution No. 28-12 and the adoption of

the “Debt Issuance Recognition Policy.”


Authority that Resolution No. 28-12 is hereby rescinded and that the “Debt Issuance Expense

Recognition Policy” as attached to the May 23, 2018 memorandum, which directs the use of

GASB Statement No. 62, paragraphs 476 through 500, is adopted.


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TITLE: Debt Issuance Expense Recognition Policy Page 1 of 2

Purpose: The Governmental Accounting Standards Board (GASB) Statement No. 65 – Items Previously Reported as Assets and Liabilities requires debt issuance costs, except any portion related to prepaid insurance costs, to be recognized as an expense in the period incurred. For rate setting purposes Platte River prefers to recover debt issuance costs as a component of interest expense over the life of the related debt. GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989, FASB and AICPA Pronouncements, Regulated Operations, paragraph 476-500, (GASB 62) allows certain expenses or revenues to be recognized when included in wholesale rates charged to the municipalities rather than when normally recorded. Any accounting treatment implementing GASB 62 must receive prior approval from the board of directors. Platte River will use GASB 62, as outlined in the “Policy” section below to record debt issuance costs.

Policy:

This policy applies to the accounting for debt issuance costs. Debt issuance costs are disclosed in the Official Statement and include all costs incurred to issue the bonds. The debt issuance costs will be recorded as an item on the Statement of Net Position when incurred and amortized over the life of the related debt as a component of interest expense.


The Controller reviews this policy and necessary revisions are brought before the Platte River Board of Directors.


Debt Issuance Expense Recognition Procedure Board Resolution No. 11-18


Page 37



TITLE: Debt Issuance Expense Recognition Policy Page 2 of 2

Document Owner: Controller Original Effective Date: 01/01/2013





1.0 12/13/2012 Created original policy Ed Doherty New

1.1 12/27/2017 Reviewed and put on new form Tracy Thompson New form

2.0 05/31/2018 Reviewed and revised, approved by resolution Shelley Nywall Revised

Page 38


WHEREAS, the adoption of the Energy Policy Act of 2005, which added a new Section

222 to the Federal Power Act, granted the Federal Energy Regulatory Commission (FERC)

expanded jurisdiction over market manipulation; and

WHEREAS, pursuant to this expanded jurisdiction the FERC is authorized to investigate

and sanction public power utilities, such as Platte River Power Authority, for engaging in

manipulation of the wholesale power market; and

WHEREAS, Platte River engages in purchase and sales transactions of electric power

and transmission services; and

WHEREAS, Platte River initially adopted a policy prohibiting market manipulation in

August of 2006 through Resolution No. 14-06; and

WHEREAS, that policy was modified through Resolution No. 05-13 to accommodate an

internal reorganization; and

WHEREAS, for the reasons set forth in the memorandum dated May 23, 2018, staff

recommends that the market manipulation policy be modified to require no less than one audit

annually designed to ascertain whether any manipulative activities are occurring; and

WHEREAS, staff recommends the rescission of Resolution No. 05-13 and the adoption of

the “Market Manipulation Prohibition Policy.”

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

Resolution No. 05-13 is hereby rescinded and the “Market Manipulation Prohibition Policy” as

attached to the memorandum dated May 23, 2018, is hereby adopted. AS WITNESS, I have executed my name as Secretary and have affixed the corporate seal of the Platte River Power Authority this day of , 2018. Secretary

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Policy Version #: 3.0 Original Effective Date: 08/24/2006 Next Review Date: 06/01/2023

TITLE: Market Manipulation Prohibition Policy Page 1 of 3

Purpose:

Prohibit any and all activities that constitute market manipulation as described under Section 222 of the Federal Power Act and the Code of Federal Regulations, Title 18, Part 1c.2. Implement a training program for Platte River employees on the subject of market manipulation and audit the activities of employees engaged in the purchase and sale of electric energy and transmission services on a regular basis.

Policy:

Pursuant to Resolution No. 12-18, it is the express policy of Platte River Power Authority (Platte River) to prohibit any and all activities that constitute market manipulation as described under Section 222 of the Federal Power Act and the Code of Federal Regulations, Title 18, Part 1c.2. Any employee who engages in activities that constitute market manipulation as defined under the above-cited provisions shall be subject to discipline, up to and including possible termination of employment. The Manager of Generation Dispatch and Power Markets, with appropriate help from the General Counsel, will develop a training program for Platte River employees on the subject of market manipulation. The purpose of the training program is to familiarize Platte River employees with the legal prohibitions pertaining to market manipulation as well as their rights and obligations under this policy. Training shall be given to appropriate employees no less than once each year, and to new employees as necessary. The Manager of Internal Audit shall audit the employees engaged in the purchase and sale of electric energy and transmission services on a regular basis, but no less often than annually, with the purpose to ascertain whether market manipulation is occurring. The results of these internal audits will be reduced to writing and submitted to the General Manager. The General Manager shall preserve the audit reports for a period of no less than five years. If there is probable cause to believe that market manipulation has occurred, such finding will be immediately reported to the General Manager for investigation and possible corrective action. The General Manager shall be responsible for reporting the results of such investigation(s) as set forth below. Any employee who suspects market manipulation is occurring shall report such suspicions to the Manager of Internal Audit, the General Counsel, or through the employee hotline. The Manager of Internal Audit or General Counsel shall reduce any and all reported suspicions to writing. If there is probable cause to believe that market manipulation has occurred, such finding will be immediately reported to the General Manager for investigation and possible corrective action. The General Manager shall be responsible for reporting the results of such investigation(s) as set forth below. To the extent possible, the identity of the employee making such report shall be held in confidence during any ensuing investigation. Subsequent to the conclusion of the investigation, the identity of the reporting employee shall remain confidential, unless the General Manager specifically determines it is contrary to Platte River’s or the employee’s best interest to do so.

Page 41



Employees that report suspected instances of market manipulation shall be protected under the “Whistle-Blower” provisions of the Platte River Power Authority Handbook. If instances of market manipulation by Platte River employees are identified by the General Manager following an investigation, such instances shall be immediately reported to the Platte River Board of Directors and to the Federal Energy Regulatory Commission. Platte River Power Authority employees shall fully cooperate with any investigation that may be undertaken by the Federal Energy Regulatory Commission.


The Manager of Generation Dispatch and Power Markets will develop a training program for Platte River employees on the subject of market manipulation. The Internal Auditor shall audit the activities of employees engaged in purchase and sale of electric energy and transmission services.


Board Resolution No. 12-18. Federal Power Act, Section 222. C.F.R. Title 18, Part 1c.2.


NA

Page 42



Document Owner: Legal Assistant Original Effective Date: 08/24/2006





1.0 08/24/2006 Original Policy Board Resolution 05-13 Joe Wilson New

2.0 02/28/2013 Appropriate responsibilities updated Joe Wilson / Deb Schaneman Revision

3.0 05/31/2018 Reviewed and put on new form, Resolution 12-18 Esther Velasquez Revision and new form

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

Subject: Wind Transmission Update A significant share of the risk associated with the construction of the Roundhouse Energy LLC (Enyo) 150 MW wind project stems from the permitting and construction of the new 230 kV transmission line from the existing Rawhide Substation to the new Roundhouse Energy wind collector substation located in southern Wyoming. During the May board meeting, Christine Mikell of Enyo and Daylan Figgs, Environmental Program Manager for the City of Fort Collins Natural Area, will provide an update on the transmission line permitting process and project schedule timeline.

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From: Jason Frisbie, General Manager/CEO Joe Wilson, General Counsel

Subject: Synopsis of State Legislation of Interest The 2018 Colorado legislative session adjourned on May 9. The session was surprisingly productive, particularly in the waning days during which both transportation and the Public Employees Retirement Association were addressed with last-minute fixes, the effectiveness of which are yet to be seen. The Platte River lobbyist, Sandra Solin, will be present to discuss the session as well as the upcoming election season.

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

Subject: DRAFT Strategic Plan (2018-2021) Included in the May board packet is a revised content draft of the 2018-2021 Strategic Plan. The revised draft includes board suggested edits received from the April board meeting. A presentation to facilitate further collaboration will be given at the May board meeting.

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Page 50

Platte River Power Authority

2018 – 2021 Strategic Plan

Content Draft

May 2018

Page 51

Table of Contents

Message from general manager & CEO Page XX

Platte River at a glance Page XX

Mission, Vision, Values Page XX

Platte River board of directors Page XX

Platte River Senior senior management Management management Teamteam

Page XX

Executive Summary Page XX

Strategic Initiatives

Enhanced Customer Experience Page XX

Communications and Community Outreach Page XX

Resource Diversification Page XX

Infrastructure Advancement and Technology Utilization Page XX

Conclusion Page XX

Page 52

Message from chairman and general manager The utility industry has been operating under the “business as usual” strategy for nearly 100 years. Today, the pace of change within the utility industry has accelerated dramatically and continues to gain momentum. What hasn’t changed and won’t change is Platte River’s commitment to providing reliable service, maintaining financial sustainability and being good stewards of the environment.

For us in Northern Colorado, the term “change” is as common as the word “growth.” Growth obviously pertains to more people, more jobs and more buildings within our owner communities – Estes Park, Fort Collins, Longmont and Loveland. Along the streets of our cities and within our work environments, growth also translates to improvement, refinement and diversification. This is good. It means we are transitioning and doing things better than we have in the past.

As a leader in the utility industry in Colorado for many years, Platte River continues to move forward to meet the increasingly diverse needs and wants of our owner communities. More than being the first to bring wind power to our customers and now delivering more than 30 percent of our energy from non-carbon sources, more than aggressively and proactively reducing our environmental impacts, more than consistently providing reliable electric service at the lowest wholesale rates in Colorado, we know people in our communities want choices and Platte River is prepared to deliver them as we move forward.

In the following pages of this strategic plan, you will learn how we plan to remain adaptable and continue to improve. We will:

• Further diversify our generating portfolio and join an expansive energy market to maximize customer value;

• Collaborate closely with our owner communities to enhance energy offerings and help customers understand and use energy more wisely;

• Invest heavily in our key infrastructure to enhance water supplies, improve electronic and physical security, improve digital communication capabilities to our cities and begin building a modern headquarters facility.

Notwithstanding Platte River’s continued evolution within the utility industry, our electricity will continue to be the reliable, increasingly more diversified and good value that for which Platte River is known for. We hope you gain a better understanding of Platte River’s strategic plan by reading this document and invite you to become engaged in our business.

Jason Frisbie

Tom Roiniotis

Page 53

At a glance Platte River Power Authority is a not-for-profit wholesale electricity generation and transmission provider that delivers safe, reliable, environmentally responsible, and competitively priced energy and services to its owner communities of Estes Park, Fort Collins, Longmont, and Loveland, Colorado for delivery to their utility customers.

Headquarters: Fort Collins, Colorado

Began operations: 1973

General manager: Jason Frisbie

Governance: Platte River is governed by an eight-member board of directors comprised of each mayor or designee, and a person appointed by each community’s governing body

The organization: Platte River is a not-for-profit political subdivision of the State of Colorado

Employees (Dec. 31, 2017): 251

Peak municipal demand: 661 MW on July 19, 2017

Projected deliveries of energy (2018): 4,133,000 MWh

Projected deliveries of energy to communities (2018): 3,340,000 MWh

Capacity & and energy

Net resource capacity Rawhide Unit 1 (coal) 280 MW

Rawhide Units A, B, C, D, F (natural gas) 388 MW

Craig Units 1 & 2 (coal) 154 MW

Federal hydropower 90 MW

Wind power 78 MW

Rawhide Flats Solar 30 MW

Total summer effective capacity 931 MW

Note: For capacity calculations, wind facilities are assigned firm capacity of 12.5% of their nameplate capacity and solar facilities are assigned 30% of their nameplate capacity.

Projected deliveries of energy in 2018 (communities)

2% 1% Coal

Hydro

Wind

Purchases/other

Solar

Natural gas

About 32 percent of the energy Platte River will deliver to its owner communities in 2018 is projected to come from non-carbon emitting sources.

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5

Mission, Vision & and Values

Mission

Provide safe, reliable, environmentally responsible and competitively priced energy and services to its owner communities of Estes Park, Fort Collins, Longmont, and Loveland, Colorado, for their utility customers.

Vision

As a respected leader and responsible energy partner, improve the quality of life for the citizens served by our owner communities.

Values

The following listed values tangibly define our daily commitment to following the mission and vision of Platte River, which will strengthen our organization and improve the quality of life in the communities we serve.

Safety Working safely to protect the public, our employees, contractors and the assets we manage.

Integrity Being ethical and holding ourselves accountable to conduct business in a fair, honest, transparent, compliant and environmentally responsible manner.

Service Providing quality service at a competitive price while being responsive to our owners’ needs.

Respect Encouraging constructive dialogue that promotes a culture of inclusiveness, recognizes our differences and accepts differing viewpoints.

Operational Excellence Engaging employees to strive for excellence and continuous improvement.

Sustainability Maintaining financial integrity, minimizing our environmental impact and supporting responsible economic development in our owner communities.

Innovation Striving to provide creative, pioneering and the best in class solutions with resourcefulness and nontraditional approaches.

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Board of Directorsdirectors Platte River is governed by an eight-person board of directors, uniquely designed to bring relevant expertise to the decision-making process. The board includes the mayor (or a designee of the mayor) from each of the owner communities. The other four directors are appointed to four-year terms by the governing bodies of the owner communities.

Need new picture – Board members as of November (two new mayors & Joe B).

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Senior Management management Teamteam Platte River operates under the direction of a general manager who serves at the pleasure of the board of directors. The general manager is the chief executive officer with full responsibility for planning, operations and the administrative affairs of Platte River.

Need new picture – Sr. Management team as of November

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Executive Summarysummary Foundational planning more than 40 years ago largely established the governance structure for Platte River and the organization has engaged in strategy-level planning ever since. Strategic plans have bolstered financial sustainability, addressed regulatory considerations, expanded resources, mitigated risks and addressed changing business conditions over time. Like those of the past, this strategic plan provides high-level direction for implementing Platte River’s Mission mission and Vision vision by focusing on business priorities over the next three to five years. It identifies key initiatives and guides decision-making that aligns resources to achieve objectives that support those priorities. Finally, the plan serves as a critical tool for communicating future strategies with both internal and external audiences.

Platte River’s strategic initiatives are intended to be clear, actionable, and adaptable and to creatively foster strategies and tactics1 that will achieve desired results. Platte River’s board of directors and senior managers collaborated to develop these initiatives, considering an assessment of the organization’s strengths, weaknesses and opportunities.

Leadership’s analysis revealed how Platte River faces the future from a position of strength in terms of its financial position, operational expertise, generation and transmission assets, competitive rates and industry reputation. This strength affords Platte River the ability to take advantage of greater, long-term opportunities on behalf of its owner communities, including expanded resource diversification, more robust community involvement and asset optimization. To pursue these opportunities, Platte River must now leverage its strengths to better serve its owner communities through the following strategic initiatives:

• Enhanced Customer customer Experienceexperience • Collaborative Communications communications and Community community Outreachoutreach • Resource Diversification diversification and Alignmentalignment • Infrastructure Advancement advancement and Technology technology Utilizationutilization

Each of these initiatives are aligned with key, long-term strategic objectives of Platte River’s leadership and are also aligned with its mission and vision.

1 More specific information about the strategies, tactics and activities related to implementing these initiatives will be developed over time, communicated through key business documents, including the strategic financial plan and annual budget, integrated resource plan and annual report

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2018 – 2021 Strategic Initiative Enhanced Customer Experience

As industry leadersenergy experts, Platte River commits to providing ourits owner communities and their customers with solutions and programs to achieve their varied energy goals. An integrated and collaborative approach will be used to balance the objectives and interests of Platte River as well as the owner communities and their retail customers.

Platte River has committed to a comprehensive review of our current rate making practices to address existing and anticipated changes occurring in the utility industry and meet the needs of our municipal owner communitiess. These industry changes are impacting Platte River in the following areas:

• Generation economics driven by environmental regulation, evolving wholesale power markets, social concerns and technology improvements

• Retail end use of power given technological improvements associated with energy efficiency and distributed generation

• Improved metering capabilities to allow more sophisticated wholesale rates that may be passed on to retail customer via owner ‐communities

• Provide a voluntary green tariff for customers seeking more renewable energy • Providing Provide transparent pricing that allow customers to not only understand

energy costs but also respond to signals that benefit the customer, municipal utility and Platte River

Additionally, even more attention will be given to programs and services that improve energy efficiency and that encourage effective use of distributed energy resources. Examples of programs and services include the following:

• Efficiency Works – Platte River was formed with the idea that the four owner

municipalities communities could reduce their cost of electric generation and transmission through economies of scale by joining forces and pooling resources. Platte River will continue to work with its owner communities to deliver efficiency programs that save participants money and that are cost-effective over the long run for all customers. Moving forward, Platte River will partner with Energy Outreach Colorado to expand availability of energy efficiency products services to income-qualified customers within its cities.

• Distributed energy resources (DER) – As technology continues to improve and costs decline, Platte River will work with the owner communities to evaluate DER cost effectiveness and to develop programs and services that support adoption of technologies that can provide net benefits to Platte River, the owner communities and their customers.

• • Electric vehicles (EV) – Electric vehicle technology continues to improve, lowering

transportation costs while reducing greenhouse gas emissions. As a result, EV adoption rates could rise significantly in coming years and strongly influence energy demand throughout the region, not only in the aggregate but also at nontraditional times of the day. To prepare, Platte River will continue to work with the owner communities to measure the adoption rate of EVs within its owner communities. At the same time, Platte River will conduct market research to measure energy consumption (charging loads), charging days and the times of the day that charging typically takes place. Resulting

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10

data will then be used to develop broad, long-term plans to manage electrical system demand while minimizing system costs.

•

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broad, long-term plans to manage electrical system demand while minimizing system costs.

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Strategic Initiativeinitiative

Communications and Community community Outreachoutreach

Internal and external communications at Platte River are integral to the organization’s overall success. Strategies and goals must be shared to successfully align staff with desired outcomes. At Platte River, clear communications should result in employees knowing how their work contributes to achieving our goals while keeping people informed, motivated and engaged. External communications must also be clear and concise and provide a transparent view into Platte River’s business.

Platte River, like many wholesale providers, has historically relied on their distributors to communicate with the public. Today, the rise in attention to broader environmental issues has sparked increased public and stakeholder interest in Platte River’s ongoing operations and strategic plans. Technologies and practices have similarly evolved helping Platte River not only meet the public’s need for more information but also measure the relative effectiveness of communications efforts.

An accurate perception of Platte River will become critical to the effective and successful pursuit of strategic initiatives. Therefore, Platte River must clearly and transparently tell its story through expanded communications and broader participation with community outreach opportunities. Platte River can achieve its outreach objectives by strategically leveraging technologies and by expanding partnerships and collaborations within the communities it serves. With the effective use of resources, Platte River will:

• Participate more consistently with stakeholder groups and civic organizations to

establish and build enduring relationships within the community • Proactively engage with regional news media to transparently share its strategic

initiatives, and respond effectively to all media inquiries • Use advanced technologies and communication techniques, such as microsites,

to more effectively and efficiently communicate directly with internal and external stakeholders and the public

• Employ strategic use of social media to further engage and educate the public about programs, services and energy use

The organization has evolved and grown significantly in the last several years and will continue to evolve and grow, making communications even more important. Technology can and should be used to help make both internal and external communications quick, consistent and easy to consume.

To be successful, Platte River must consistently and accurately convey its messages under a coherent strategy that links cost-effective communications tools/tactics with Platte River’s key audiences. A strategic communications plan that details the use of tools and metrics will be developed and implemented in 2018. This plan will align with and support the short- and long- term objectives of the organization and its leadership.

Community engagement and effective communications will better position Platte River to be viewed as a trusted energy partner. As owners, citizens should understand how they are benefitting from their locally owned and controlled utility.

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Resource Diversification and Alignment

Resource Planning Like many utilities, Platte River and our owner communities are driven by customer desire to make energy choices and reduce environmental impacts. The industry continues its rapid transformation from a business model dominated by central station thermal generation to a future led by renewable power, distributed technologies and energy storage. We have recognized this evolution and are moving to meet customer desires. In 2016, Platte River completed and delivered a customized resource plan (CRP) containing nine plans with varying resource options to our four owner communities. Following the completion of the CRP, the board of directors requested a zero-net carbon (ZNC) system level study to determine the least cost portfolio to obtainof carbon neutrality by 2030. In 2017, Platte River delivered the ZNC study to the board and the public with positive results. At the completion of the ZNC study and outreach efforts, Platte River recognized the 2016 Integrated Resource Plan (IRP) needed to be updated prior to its required date to more accurately depict the future of our energy resource mix and our potential entry into an energy market, and because of the significant movement we have made to diversify the Platte River generating portfolio beyond that which was prescribed in the previous IRP. The IRP will be driven by Platte River’s foundational pillars of system reliability, environmental responsibility and financial sustainability. Platte River will focus on building a long-term diversified portfolio by:

• Formalizing long-term goals for carbon reduction that meet the mutual needs of our

community owners • Adding cost-advantageous renewable power • Conducting a battery storage demonstration project • Accelerating distributed resource options • Finding savings to keep current baseload resources competitive in a broader

marketplace • Identifying market options to reduce long-term reliance on coal resources

Renewable Generation In late 2016, Platte River commissioned the Rawhide Flats Solar installation. The project added 30 MW of solar generating capacity to our resource mix. Early the following year, Platte River requested proposals for additional wind power and, in 2018, announced the purchase of 150 MW of wind to be added by 2020, nearly tripling our amount of wind energy. And Platte River currently plans another 20 MW of solar power, with the potential for a battery storage included.

Platte River will continue to explore more solar and wind energy as part of our long- term, low emissions power portfolio. In addition, Platte River will continue to look forward concerning energy storage and distributed power sources because we believe this technology will continue

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progressing and will likely become key to a long-term, low emissions future.

Energy Market Platte River’s participation in a bilateral market has served our needs very well over the past several years. Our future participation in a broader, organized energy market like the Southwest Power Pool (SPP) or the California Energy Imbalance Market (IM) would enable access to energy resources across a larger footprint, more efficient use of existing transmission systems, increased integration of renewable resources and improved transmission planning. This will likely result in lower overall costs to Platte River’s owner communities. Following several years of research and negotiation to develop a solution to mitigate cost impacts among the transmission owners in the region, Platte River, along with other regional utilities, will continue to pursue membership in a broader, more liquid energy market. Membership in an organized energy market will help achieve our energy goals and we will continue to play a leadership role in the development of the effort. Driven by customer desire to make energy choices and reduce environmental impacts, the electric utility industry continues its rapid transformation from a business model dominated by thermal generation to a future led by renewable power, distributed technologies and energy storage. Platte River recognizes the 2016 Integrated Resource Plan (IRP) needs to be updated prior to its required date to more accurately depict current resources, the future of our energy resource mix and our potential entry into an energy market.

In 1987, Platte River became the first energy provider in Colorado to incorporate wind into its resource mix. Since then, wind energy technologies have matured and, by 2020, wind will account for nearly one-fourth of Platte River’s total energy output with more growth expected in future years.

Similar toAs with wind, solar generation continues to mature toward greater commercial viability. Platte River contracted for 30 MW of solar output from the Rawhide Flats Solar facility. Additionally, another 20 MW of wind with a battery storage component will be added to our energy portfolio within the next three years. Platte River will continue to explore more solar energy, as part of our long- term and low-emissions power portfolio.

(Charts below are placeholders – Two charts energy now and energy in 2020)

Platte River will continue to look forward concerning energy storage and distributed power sources. We believe that battery storage will continue to maturekeep progressing and may become key to a long- term, low-emissions future and that Platte River must gain the expertise needed for when it becomes mature. At the same time, Platte River will become more proficient with distributed energy controls and technologies that are also vital to a low- emissions generation fleet.

Wind Solar Batteries

80,000.0

60,000.0

40,000.0

80,000.0

60,000.0

40,000.0

20,000.0

0.0

80,000.0 60,000.0

40,000.0

20,000.0

0.0

1990

19

94

1998

20

02

2006

20

10

2014

1990

1995

2000

2005

2010

2015

1990

19

94

1998

20

02

2006

20

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2014

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has Platte River’s participation in a bilateral market served customer needs very well over the past several years. Platte River’s future participation in a broader, organized energy market like the Southwest Power Pool (SPP) will enable access to energy resources across a larger footprint, more efficient use of existing transmission systems, increased integration of renewable resources and improved transmission planning, resulting in lower overall costs to Platte River’s municipal owners. Following several years of research and negotiation to develop a solution to mitigate cost impacts among the transmission owners in the region, Platte River, along with

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other regional utilities, is pursuing membership in SPP. To prepare for a positive transition into SPP, Platte River will need to:

• Prepare Platte River’s power generator operators and power schedulers to effectively

offer Platte River’s generation into the real-time and day-ahead market and purchase energy to serve Platte River’s load in this same market

• Become proficient in data analytics to improve evaluation of energy bids and offers • Develop a risk management strategy and procedures to reduce Platte River’s risk of

participating in the day-ahead and real-time market, and manage the congestion cost of delivering output from Platte River’s generators to its load

• Develop the capability and tools to acquire the necessary transmission congestion rights (TCRs) to hedge Platte River’s cost of delivering output from its generators to its load

• Develop the expertise to review SPP settlement statements to ensure Platte River is fairly compensated for the generation it sells and appropriately charged for the energy it purchases in the SPP day-ahead and real-time market

• Develop the capability to offer some of its generation resources into the SPP ancillary services market

• Develop the capability to provide SPP with Platte River’s real-time SCADA data and upload Platte River generator output and load data to the SPP server on daily basis.

The IRP will be driven by Platte River’s foundational pillars of system reliability, environmental responsibility and financial sustainability. Platte River will focus on building a long-term diversified portfolio by:

• Formalizing long-term goals for carbon reduction that meet the mutual needs of our

municipal owners • Adding cost-advantageous renewable power • Conducting a battery storage demonstration project • Accelerating distributed resource options • Finding savings to keep current baseload resources competitive in a broader

marketplace • Identifying market options to reduce long-term reliance on coal resources

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Infrastructure advancement and technology deployment Platte River’s generation, transmission and support assets continue to perform extremely well, largely due to effective management that includes prudent, timely investment and proactive maintenance. Platte River will continue to invest in infrastructure and technology to provide secure, safe and reliable service to our owner communities. Future investments will be focused on:

• Transmission substation security – Platte River has identified and rated the reliability

of the physical security at its substations under standards established by the North American Electrical Reliability Corporation (NERC), based on directives by the Federal Energy Regulatory Commission (FERC). Adherence to these standards help protect equipment from damage that can impact service quality and reliability. Based on evaluations, Platte River will install Intrusion intrusion detection and building access control technologies for at the substations it owns to prevent unauthorized access to equipment, to send an alarm to security personnel in the event of an intrusion and to actively track any intruders within substation property.

• Cyber security – A comprehensive enterprise-wide cyber security system and policies

will be vital to ensure reliable operations, effective regulatory compliance and ongoing vigilance against interference with Platte River systems. A cross- functional security team will manage protective systems and policies that include:

o Drafting, exercising and documenting an overall disaster recovery response plan o Effective employee training o Identification of system weaknesses and vulnerability abatement o Intrusion detection and system hardening techniques o Continual refinement of security policies, procedures, training and tools

necessary for seamless operations and compliance.

• Interactive Energy energy Management management Tools tools -– Utilities have traditionally used a station- based facility models to serve their customers. The industry is becoming much more integrated and requires platforms that allow for greater two-way communications. Platte River recognizes customers today want insight and choices and will look to technology to help provide interactive tools to drive benefits for the customer, owner communities and our electric system.

• Fiber Optic optic Strategic strategic Initiatives initiatives – Platte River has a regional

fiber optic network that connects the four owner communities. Fiber optic cables ring surround each of the four cities and can be used to provide telecommunications connectivity and creates a diverse and redundant communications path.

The fiber optic system network plays an essential role in the reliable operation of Platte River’s transmission system. Power System Operations uses a SCADA (supervisory control and data acquisition) system to monitor and control the transmission system. The SCADA system depends on the fiber optic system to communicate with RTUs (remote terminal unit) located in substations throughout the four owner communities. Protective relaying, which will de-energize a transmission line when needed to safeguard itself and the public, depends on the fiber optic loops to provide communication connectivity to neighboring substation relays.

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line when needed to safeguard itself and the public, depends on the fiber optic loops to provide communication connectivity to neighboring substation relays.

Platte River is committed to supporting the our owner communities’ fiber optic connectivity needs while ensuring that the integrity of the fiber optic system is maintained in support of SCADA control, protective relaying, and broadband. Platte River staff will continue collaborating with the our owner communities to help support their fiber optic related initiatives which include:

o Exploring the establishment of an entity that has the authority to own, implement,

and deliver fiber optic, telecommunications, and broadband services to the four owner communities and the greater Northern Colorado region

o Developing a possible solution to efficiently use the existing fiber optic infrastructure through the leasing of bandwidth instead of dark fiber

o Transferring title to the “extra capacity” non-transmission system fiber strands located within the local loop cables to the municipality in which the local loop cables reside

o Establishing additional protocols, for accessing local loop and long-haul fiber optic strands to protect the fiber system and manage risk to the transmission system, resulting from increased fiber activities

o Setting new fiber optic lease rates that are more closely related to current market value.

• Water Resources resources – Platte River will increase water resource reliability

through the Windy Gap Firming Project to provide a firm water supply for electric generation operations. The firm supply of water will meet the service and process water needs at the Rawhide Energy Station, as well as the cooling water needs (by fulfilling the water exchange requirements under the Reuse Agreement with the City of Fort Collins). Platte River is one of 12 entities participating in the Windy Gap Firming Project to construct a dedicated reservoir to store Windy Gap water (utilizing existing water rights). The Windy Gap Firming Project (Chimney Hollow Reservoir) is needed to support long-term reliable delivery of Platte River’s Windy Gap water. Currently, Windy Gap water cannot be pumped during wet seasons (due to the lack of dedicated storage capacity), or dry seasons (due to the limitations of being a junior water right). With the permitting process recently concluded, the design phase will be completed by the summer of 2018, and construction is scheduled to begin in early 2019. Current projections indicate that the project will be completed with filling to begin by 2023.

• New Headquarters headquarters Project project – Construction on a new

headquarters facility and campus beganwill begin in the spring of 2018. Built shortly after Platte River was formed in the 1970s, the current headquarters building has surpassed its useful life. When finished in 2020, the new headquarters campus will:

o Manage the next generation of technologies behind a secure and robust

electrical grid and the critical infrastructure necessary to power and protect our way of life

o Empower Platte River staff to maximize the benefits of emerging technologies and be more productive in their work

o Provide the community more opportunities to engage with our region’s energy experts and the policy leaders who will guide our cleaner and more diverse energy future

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o Integrate the Americans with Disabilities Act (ADA) requirements to enable greater access to those with special needs

o Add something about LEED?Demonstrate leadership in Northern Colorado promoting good efficiency practices including targeting LEED certification, solar panels and other energy efficiency features

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Acknowledgements / Notes

The 2018 Platte River Power Authority Strategic Plan was purposefully redesigned to focus solely on strategic initiatives and to reduce overlap or redundancy with other key business documents. Please visit www.prpa.org to review Platte River’s:

• Annual Report • Annual Budget • Integrated Resource Plan • Strategic Financial Plan • Past reports and plans

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http://www.prpa.org/

Platte River Power Authority

2018 – 2021 Strategic Plan

Content Draft

May 2018

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Table of contents Message from general manager & CEO Page XX Platte River at a glance Page XX Mission, Vision, Values Page XX Platte River board of directors Page XX Platte River senior management team Page XX Executive summary Page XX Strategic initiatives Enhanced customer experience Page XX Communications and community outreach Page XX Resource diversification and alignment Page XX

Infrastructure advancement and technology development Page XX Conclusion Page XX

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Message from chairman and general manager The utility industry has been operating under the “business as usual” strategy for nearly 100 years. Today, the pace of change within the utility industry has accelerated dramatically and continues to gain momentum. What hasn’t changed and won’t change is Platte River’s commitment to providing reliable service, maintaining financial sustainability and being good stewards of the environment.

As a leader in the utility industry in Colorado for many years, Platte River continues to move forward to meet the increasingly diverse needs and wants of our owner communities. More than being the first to bring wind power to our customers and now delivering more than 30 percent of our energy from non-carbon sources, more than aggressively and proactively reducing our environmental impacts, more than consistently providing reliable electric service at the lowest wholesale rates in Colorado, we know people in our communities want choices and Platte River is prepared to deliver them as we move forward.

In the following pages of this strategic plan, you will learn how we plan to remain adaptable and continue to improve. We will:

• Further diversify our generating portfolio and join an expansive energy market to maximize customer value;

• Collaborate closely with our owner communities to enhance energy offerings and help customers understand and use energy more wisely;

• Invest heavily in our key infrastructure to enhance water supplies, improve electronic and physical security, improve digital communication capabilities to our cities and begin building a modern headquarters facility.

Notwithstanding Platte River’s continued evolution within the utility industry, our electricity will continue to be the reliable, increasingly more diversified and good value for which Platte River is known. We hope you gain a better understanding of Platte River’s strategic plan by reading this document and invite you to become engaged in our business. Jason Frisbie Tom Roiniotis

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Mission, Vision and Values

Mission

Provide safe, reliable, environmentally responsible and competitively priced energy and services to its owner communities of Estes Park, Fort Collins, Longmont, and Loveland, Colorado, for their utility customers.

Vision

As a respected leader and responsible energy partner, improve the quality of life for the citizens served by our owner communities.

Values The listed values tangibly define our daily commitment to following the mission and vision of Platte River, which will strengthen our organization and improve the quality of life in the communities we serve. Safety Working safely to protect the public, our employees, contractors and the assets we manage Integrity Being ethical and holding ourselves accountable to conduct business in a fair, honest, transparent, compliant and environmentally responsible manner Service Providing quality service at a competitive price while being responsive to our owners’ needs Respect Encouraging constructive dialogue that promotes a culture of inclusiveness, recognizes our differences and accepts differing viewpoints Operational excellence Engaging employees to strive for excellence and continuous improvement Sustainability Maintaining financial integrity, minimizing our environmental impact and supporting responsible economic development in our owner communities Innovation Striving to provide creative, pioneering and the best in class solutions with resourcefulness and nontraditional approaches

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Board of directors Platte River is governed by an eight-person board of directors, uniquely designed to bring relevant expertise to the decision-making process. The board includes the mayor (or a designee of the mayor) from each of the owner communities. The other four directors are appointed to four-year terms by the governing bodies of the owner communities.

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Senior management team Platte River operates under the direction of a general manager who serves at the pleasure of the board of directors. The general manager is the chief executive officer with full responsibility for planning, operations and the administrative affairs of Platte River.

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Executive summary

Foundational planning more than 40 years ago largely established the governance structure for Platte River and the organization has engaged in strategy-level planning ever since. Strategic plans have bolstered financial sustainability, addressed regulatory considerations, expanded resources, mitigated risks and addressed changing business conditions over time. Like those of the past, this strategic plan provides high-level direction for implementing Platte River’s mission and vision by focusing on business priorities over the next three to five years. It identifies key initiatives and guides decision-making that aligns resources to achieve objectives that support those priorities. Finally, the plan serves as a critical tool for communicating future strategies with both internal and external audiences.

Platte River’s strategic initiatives are intended to be clear, actionable and adaptable and to creatively foster strategies and tactics1 that will achieve desired results. Platte River’s board of directors and senior managers collaborated to develop these initiatives, considering an assessment of the organization’s strengths, weaknesses and opportunities.

Leadership’s analysis revealed how Platte River faces the future from a position of strength in terms of its financial position, operational expertise, generation and transmission assets, competitive rates and industry reputation. This strength affords Platte River the ability to take advantage of greater, long-term opportunities on behalf of its owner communities, including expanded resource diversification, more robust community involvement and asset optimization. To pursue these opportunities, Platte River must now leverage its strengths to better serve its owner communities through the following strategic initiatives:

• Enhanced customer experience • Collaborative communications and community outreach • Resource diversification and alignment • Infrastructure advancement and technology utilization

Each of these initiatives are aligned with key, long-term strategic objectives of Platte River’s leadership and are also aligned with its mission and vision.

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2018 – 2021 Strategic initiative

Enhanced customer experience

As industry leaders, Platte River commits to providing our owner communities and their customers with solutions and programs to achieve their varied energy goals. An integrated and collaborative approach will be used to balance the objectives and interests of Platte River as well as the owner communities and their retail customers.

Platte River has committed to a comprehensive review of our current ratemaking practices to address existing and anticipated changes occurring in the utility industry and meet the needs of our owner communities. These industry changes are impacting Platte River in the following areas:

• Generation economics driven by environmental regulation, evolving wholesale power markets, social concerns and technology improvements

• Retail end use of power given technological improvements associated with energy efficiency and distributed generation

• Improved metering capabilities to allow more sophisticated wholesale rates that may be passed on to retail customer via owner communities

• Provide a voluntary green tariff for customers seeking more renewable energy • Provide transparent pricing that allow customers to not only understand energy

costs but also respond to signals that benefit the customer, municipal utility and Platte River

Additionally, even more attention will be given to programs and services that improve energy efficiency and encourage effective use of distributed energy resources. Examples of programs and services include:

• Efficiency Works – Platte River was formed with the idea that the four owner communities could reduce their cost of electric generation and transmission through economies of scale by joining forces and pooling resources. Platte River will continue to work with its owner communities to deliver efficiency programs that save participants money and that are cost-effective over the long run for all customers.

• Distributed energy resources (DER) – As technology continues to improve and costs decline, Platte River will work with the owner communities to evaluate DER cost effectiveness and to develop programs and services that support adoption of technologies that can provide net benefits to Platte River, the owner communities and their customers.

• Electric vehicles (EV) – Electric vehicle technology continues to improve, lowering transportation costs while reducing greenhouse gas emissions. As a result, EV adoption rates could rise significantly in coming years and strongly influence energy demand throughout the region, not only in the aggregate but also at nontraditional times of the day. To prepare, Platte River will continue to work with the owner communities to measure the adoption rate of EVs within its owner communities. At the same time, Platte River will conduct market research to measure energy consumption (charging loads), charging days and the times of the day that charging typically takes place. Resulting data will then be used to develop broad, long-term plans to manage electrical system demand while minimizing system cost.

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2018 – 2021 Strategic initiative Communications and community outreach Internal and external communications at Platte River are integral to the organization’s overall success. Strategies and goals must be shared to successfully align staff with desired outcomes. At Platte River, clear communications should result in employees knowing how their work contributes to achieving our goals while keeping people informed, motivated and engaged. External communications must also be clear and concise and provide a transparent view into Platte River’s business. Platte River, like many wholesale providers, has historically relied on their distributors to communicate with the public. Today, the rise in attention to broader environmental issues has sparked increased public and stakeholder interest in Platte River’s ongoing operations and strategic plans. Technologies and practices have similarly evolved helping Platte River not only meet the public’s need for more information but also measure the relative effectiveness of communications efforts. An accurate perception of Platte River will become critical to the effective and successful pursuit of strategic initiatives. Therefore, Platte River must clearly and transparently tell its story through expanded communications and broader participation with community outreach opportunities. Platte River can achieve its outreach objectives by strategically leveraging technologies and by expanding partnerships and collaborations within the communities it serves. With the effective use of resources, Platte River will:

• Participate more consistently with stakeholder groups and civic organizations to establish and build enduring relationships within the community

• Proactively engage with regional news media to transparently share its strategic initiatives and respond effectively to all media inquiries

• Use advanced technologies and communication techniques, such as microsites, to more effectively and efficiently communicate directly with internal and external stakeholders

• Employ strategic use of social media to further engage and educate the public about programs, services and energy use

The organization has evolved and grown significantly in the last several years and will continue to evolve and grow, making communications even more important. Technology can and should be used to help make both internal and external communications quick, consistent and easy to consume. To be successful, Platte River must consistently and accurately convey its messages under a coherent strategy that links cost-effective communications tools/tactics with Platte River’s key audiences. A strategic communications plan that details the use of tools and metrics will be developed and implemented in 2018. This plan will align with and support the short- and long- term objectives of the organization and its leadership.

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Community engagement and effective communications will better position Platte River to be viewed as a trusted energy partner. As owners, citizens should understand how they are benefitting from their locally owned and controlled utility.

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2018 – 2021 Strategic initiative

Resource diversification and alignment Resource Planning Like many utilities, Platte River and our owner communities are driven by customer desire to make energy choices and reduce environmental impacts. The industry continues its rapid transformation from a business model dominated by central station thermal generation to a future led by renewable power, distributed technologies and energy storage. We have recognized this evolution and are moving to meet customer desires. In 2016, Platte River completed and delivered a customized resource plan (CRP) containing nine plans with varying resource options to our four owner communities. Following the completion of the CRP, the board of directors requested a zero-net carbon (ZNC) system level study to determine the least cost portfolio to obtain carbon neutrality by 2030. In 2017, Platte River delivered the ZNC study to the board and the public with positive results. At the completion of the ZNC study and outreach efforts, Platte River recognized the 2016 Integrated Resource Plan (IRP) needed to be updated prior to its required date to more accurately depict the future of our energy resource mix and our potential entry into an energy market, and because of the significant movement we have made to diversify the Platte River generating portfolio beyond that which was prescribed in the previous IRP. The IRP will be driven by Platte River’s foundational pillars of system reliability, environmental responsibility and financial sustainability. Platte River will focus on building a long-term diversified portfolio by:

• Formalizing long-term goals for carbon reduction that meet the mutual needs of our community owners

• Adding cost-advantageous renewable power • Conducting a battery storage demonstration project • Accelerating distributed resource options • Finding savings to keep current baseload resources competitive

in a broader marketplace • Identifying market options to reduce long-term reliance on coal resources

Renewable Generation In late 2016, Platte River commissioned the Rawhide Flats Solar installation. The project added 30 MW of solar generating capacity to our resource mix. Early the following year, Platte River requested proposals for additional wind power and, in 2018, announced the purchase of 150 MW of wind to be added by 2020, nearly tripling our amount of wind energy. And Platte River currently plans another 20 MW of solar power, with the potential for a battery storage included.

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Platte River will continue to explore more solar and wind energy as part of our long- term, low emissions power portfolio. In addition, Platte River will continue to look forward concerning energy storage and distributed power sources because we believe this technology will continue progressing and will likely become key to a long-term, low emissions future. Energy Market

Platte River’s participation in a bilateral market has served our needs very well over the past several years. Our future participation in a broader, organized energy market like the Southwest Power Pool (SPP) or the California Energy Imbalance Market (IM) would enable access to energy resources across a larger footprint, more efficient use of existing transmission systems, increased integration of renewable resources and improved transmission planning. This will likely result in lower overall costs to Platte River’s owner communities. Following several years of research and negotiation to develop a solution to mitigate cost impacts among the transmission owners in the region, Platte River, along with other regional utilities, will continue to pursue membership in a broader, more liquid energy market. Membership in an organized energy market will help achieve our energy goals and we will continue to play a leadership role in the development of the effort.

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2018 – 2021 Strategic initiative Infrastructure advancement and technology development Platte River’s generation, transmission and support assets continue to perform extremely well, largely due to effective management that includes prudent, timely investment and proactive maintenance. Platte River will continue to invest in infrastructure and technology to provide secure, safe and reliable service to our owner communities. Future investments will be focused on:

• Transmission substation security – Platte River has identified and rated the reliability of the physical security at its substations under standards established by the North American Electrical Reliability Corporation (NERC), based on directives by the Federal Energy Regulatory Commission (FERC). Adherence to these standards help protect equipment from damage that can impact service quality and reliability. Based on evaluations, Platte River will install intrusion detection and building access control technologies at the substations to prevent unauthorized access to equipment, to send an alarm to security personnel in the event of an intrusion and actively track any intruders within substation property.

• Cyber security – A comprehensive enterprise-wide cyber security system

and policies will be vital to ensure reliable operations, effective regulatory compliance and ongoing vigilance against interference with Platte River systems. A cross-functional security team will manage protective systems and policies that include:

o Drafting, exercising and documenting an overall disaster recovery response plan o Effective employee training o Identification of system weaknesses and vulnerability abatement o Intrusion detection and system hardening techniques o Continual refinement of security policies, procedures, training

and tools necessary for seamless operations and compliance

• Interactive energy management tools – Utilities have traditionally used a station-based facility model to serve their customers. The industry is becoming much more integrated and requires platforms that allow for greater two-way communication. Platte River recognizes customers today want insight and choices and will look to technology to help provide interactive tools to drive benefits for the customer, owner communities and our electric system.

• Fiber optic strategic initiatives – Platte River has a regional fiber optic

network that connects the four owner communities. Fiber optic cables surround each of the four cities and can be used to provide telecommunications connectivity and create a diverse and redundant communications path.

The fiber optic network plays an essential role in the reliable operation of Platte River’s transmission system. Power System Operations uses a SCADA

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(supervisory control and data acquisition) system to monitor and control the transmission system. The SCADA system depends on the fiber optic system to communicate with RTUs (remote terminal unit) located in substations throughout the four owner communities. Protective relaying, which will de-energize a transmission line when needed to safeguard itself and the public, depends on the fiber optic loops to provide communication connectivity to neighboring substation relays. Platte River is committed to supporting our owner communities’ fiber optic connectivity needs while ensuring that the integrity of the fiber optic system is maintained in support of SCADA control, protective relaying and broadband. Platte River staff will continue collaborating with our owner communities to help support their fiber optic related initiatives which include:

o Exploring the establishment of an entity that has the authority to own, implement, and deliver fiber optic, telecommunications and broadband services to the four owner communities and the greater Northern Colorado region

o Developing a possible solution to efficiently use the existing fiber optic infrastructure through the leasing of bandwidth instead of dark fiber

o Transferring title to the “extra capacity” non-transmission system fiber strands located within the local loop cables to the municipality in which the local loop cables reside

o Establishing additional protocols for accessing local loop and long-haul fiber optic strands to protect the fiber system and manage risk to the transmission system, resulting from increased fiber activities

o Setting new fiber optic lease rates that are more closely related to current market value

• Water resources – Platte River will increase water resource reliability

through the Windy Gap Firming Project to provide a firm water supply for electric generation operations. The firm supply of water will meet the service and process water needs at the Rawhide Energy Station, as well as the cooling water needs by fulfilling the water exchange requirements under the Reuse Agreement with the City of Fort Collins. Platte River is one of 12 entities participating in the Windy Gap Firming Project to construct a dedicated reservoir to store Windy Gap water utilizing existing water rights. The Windy Gap Firming Project (Chimney Hollow Reservoir) is needed to support long-term reliable delivery of Platte River’s Windy Gap water. Currently, Windy Gap water cannot be pumped during wet seasons due to the lack of dedicated storage capacity or dry seasons due to the limitations of being a junior water right. With the permitting process recently concluded, the design phase will be completed by the summer of 2018, and construction is scheduled to begin in early 2019. Current projections indicate that the project will be completed with filling to begin by 2023.

• New headquarters project – Construction on a new headquarters facility and campus began in the spring of 2018. Built shortly after Platte River was formed in the 1970s, the current headquarters building has surpassed its useful life. When finished in 2020, the new headquarters campus will:

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o Manage the next generation of technologies behind a secure and

robust electrical grid and the critical infrastructure necessary to power and protect our way of life

o Empower Platte River staff to maximize the benefits of emerging technologies and be more productive in their work

o Provide the community more opportunities to engage with our region’s energy experts and the policy leaders who will guide our cleaner and more diverse energy future

o Integrate the Americans with Disabilities Act (ADA) requirements to enable greater access to those with special needs

o Demonstrate leadership in Northern Colorado promoting good efficiency practices including targeting LEED certification, solar panels and other energy efficiency features

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17

Acknowledgements / Notes The 2018 Platte River Power Authority Strategic Plan was purposefully redesigned to focus solely on strategic initiatives and to reduce overlap or redundancy with other key business documents. Please visit www.prpa.org to review Platte River’s:

• Annual Report • Annual Budget • Integrated Resource Plan • Strategic Financial Plan • Past reports and plans

Page 87

http://www.prpa.org/

Page 88



From: Jason Frisbie, General Manager/CEO Andy Butcher, Chief Operating Officer Brad Decker, Resource Planning Manager Paul Davis, Customer Services Manager

Subject: Solar and Storage RFP Status Platte River staff will provide an update on the 2018 Solar and Storage Request for Proposals (RFPs) at the May board meeting. The presentation will include a description of the process to date, which includes solicitation of offers, candidate screening and the selection of a short list of participants. Additionally, staff will discuss the next steps as the RFP leads to wholesale program pricing options for Platte River’s owner municipalities.

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From: Jason Frisbie, General Manager/CEO Andy Butcher, Chief Operating Officer Carol Ballantine, Manager of Power Generation Dispatch & Power Markets

Subject: Managing Renewables in Markets Managing renewables in a bilateral market is quite different than managing renewables in an organized energy market. During the May board meeting, staff will give a presentation expanding on the key differences of managing renewables within these different markets.

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From: Jason Frisbie, General Manager/CEO Andy Butcher, Chief Operating Officer Carol Ballantine, Manager of Power Generation Dispatch & Power Markets

Subject: WAPA Hydropower Contracts Platte River has two hydropower contracts; one with the Loveland Area Project (LAP) and another with the Colorado River Storage Project (CRSP). During the May board meeting, staff will provide a brief overview of these two projects, current rates, historical deliveries, and how droughts can impact the energy delivered from these contracts.

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

Subject: Rate Design and Philosophy Whitepaper

Platte River is undergoing a rate strategy and rate design study which is a comprehensive review of its current rate making practices to recognize and address the significant existing and anticipated changes occurring in the electric utility industry. Through the rate strategy and rate design study process, Platte River will develop a rate philosophy and rate strategy to guide the development and implementation of rate designs. As part of the process, Platte River has contracted with NewGen Strategies and Solutions, LLC (NewGen), a management consulting firm specializing in providing economic, strategic, stakeholder and sustainability services to public and private sector utilities. NewGen provides industry expertise, experience providing similar services to other electric utilities, cost of service models, and will provide Platte River training.

The first phase of the rate strategy and rate design study is the development of Platte River’s rate philosophy. NewGen has provided a draft Rate Design Philosophy Whitepaper for the board’s consideration. To establish Platte River’s goals and the guiding policies and principles, feedback from Platte River’s senior management, key staff and the utility directors has been provided.

It is Platte River’s intent to use the concepts from a final whitepaper to develop a rates policy which would be presented to the board for adoption. The concepts of the rates policy will be used for the project’s second phase, rate strategy implementation, which includes the development of rate designs which achieve the board adopted objectives.

Staff is seeking board feedback regarding the whitepaper. At the next board meeting in July, NewGen will review and present the whitepaper and be available to answer any questions. Staff would then provide a rates policy for board adoption at the August meeting.

Attachment

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Preliminary Draft | May 11, 2018

Rate Design Philosophy Whitepaper

Platte River Power Authority Prepared by:

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Economics | Strategy | Stakeholders | Sustainability

Table of Contents

RATE DESIGN PHILOSOPHY ................................................................................................. 1 Platte River’s Current Situation ........................................................................................ 1

Strategic Objectives ............................................................................................... 1 Market Forces ........................................................................................................ 2 Owner’s Service Requirements and Perspectives ................................................. 4

Platte River Anticipated Future State ............................................................................... 5 More Service Options by Owners and Their Customers ........................................ 5 Platte River Rate-Related Goals ............................................................................. 6 Guiding Policies and Principles .............................................................................. 7

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Economics | Strategy | Stakeholders | Sustainability

RATE DESIGN PHILOSOPHY

Service offerings and supporting rate structures should complement the strategic objectives, underlying policies, and values of an organization. When in alignment, pricing signals and associated economic incentives are well understood by all stakeholders vested in the utility’s success. NewGen Strategies and Solutions, LLC (NewGen) developed this “White Paper” for Platte River Power Authority (Platte River) to provide a framework for rate setting into the future. This framework, or philosophy, describes an approach to rate making including objectives to be achieved in the both in the near-term and over the long-term planning horizons. Important benefits of developing this document include increased transparency in the rate setting process and creating a common understanding of the reasoning and justification behind Platte River’s proposed service offerings and rates. This document, and its future revisions, are intended to serve as a “living document” to provide a long-term perspective and focus on ratemaking as Platte River Owners, management, staff, and other important stakeholders address critical issues in a dynamic and rapidly evolving utility environment.

The “White Paper” as presented herein is the result of facilitated sessions held by Platte River with management and staff. The sessions included in-depth discussions pertaining to:

Platte River’s current situation including a discussion of strategic objectives, market forces that impact Platte River’s financial stability, service offerings, cost of service and rate structures, as well as Owner service requirements and perspectives.

Future service offerings and rate structures that address market forces and meet Platte River goals and objectives.

Guiding policies and principles that create the framework for changing services, cost of service methodology, and rate design from the current situation to a desired future state.

The results of these discussions are summarized below.

Platte River’s Current Situation This section provides a summary of Platte River’s current state, including a discussion of its strategic objectives, market forces influencing Platte River’s operating costs and business environment, loads and resources, as well as information on each Owner’s load characteristics and their general perspectives as a group. This section also provides a summary of Platte River’s current service offerings and some observations of these offerings.

Strategic Objectives Platte River’s strategic objectives are supported by the Strategic Financial Plan (SFP), which provides the direction to create long-term financial sustainability, manage the utility’s financial risk, and supports its mission, vision, and values. The following is a summary of the pertinent rate-related requirements and practices within Platte River’s SFP:

The Power Supply Agreements (PSAs) with the municipalities (Owners) require Platte River’s Board to review rates at least once each calendar year. The PSAs also require that rates be sufficient to cover all operating and maintenance expenses, purchased power costs, debt service expenses, and to provide reasonable reserves and adequate earning margins so Platte River may obtain favorable debt financing.

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2 10.01 Rate Design and Philosophy Whitepaper DRAFT

The General Power Bond Resolution requires that rates be sufficient to generate net revenues that cover debt service expense at a minimum of 1.10 times.

Platte River complies with all covenants under the Colorado Revised Statutes, Organic Contract, PSAs, General Power Bond Resolution, supplemental bond resolutions, and all other legal requirements not specifically listed in this SFP.

Platte River strives to maintain long-term competitive rates relative to regional peer wholesale electric providers. Competitive wholesale rates provide the Owner municipalities an economic advantage for their residential, commercial, and industrial customers.

Platte River’s tariffs and charges will be established to achieve the SFP’s targeted financial metrics. Multi-year rate smoothing strategies will also be utilized, as deemed appropriate, to avoid greater single year rate impacts or to accomplish specified financial objectives.

Specific financial metrics included in the SFP are identified as follows:

Generate a minimum 1.50 times fixed obligation charge coverage ratio

Generate a minimum net income equal to 3% of projected annual operating expenses

Target debt ratio less than 50%

Target minimum 200 days unrestricted cash on hand

Market Forces The traditional electric utility business model is undergoing a significant change in the United States, which is impacting almost all utilities, including Platte River. The traditional model with centralized generation stations and a vertically integrated structure is becoming obsolete. This is due to several factors including the expansion of wholesale power markets, which have changed the economics and business objectives of generation and transmission infrastructure from serving native load to serving market load. Other market forces including enabling technologies (at both local (customer) and utility locations) have accelerated demand destruction and improved energy conservation capabilities. While environmental regulatory uncertainty has slowed under the current administration, the shift from coal resources to natural gas and renewables has continued. Cultural shifts have also impacted market forces, as Platte River’s Owners and their customers values have changed with respect to the procurement and use of electricity.

Wholesale Power Markets Wholesale power markets have been implemented in many regions in the country, as is being considered for the Western region (Mountain West Regional Transmission Organization, the “Mountain West RTO”). The short-term likelihood for the establishment of the Mountain West RTO may have decreased with the recently announced departure of Public Service Company of Colorado from the process. However, a general summary of the wholesale power market impacts is below:

Bifurcation of loads and resources

Divergent risk profiles for generation and transmission assets

Accelerated economic obsolescence of marginally efficient generation assets

Separation of demand and energy products

Ease of access to renewable energy resources

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10.01 Rate Design and Philosophy Whitepaper DRAFT 3

Efficient generation assets may produce incremental margins in the competitive market

Attractive regulated returns associated with transmission assets may encourage new transmission investments

Enabling Technologies Enabling technologies are allowing for continued reduction in energy use by all customer classes, due to the following factors:

Installation costs of renewable and non-renewable self-generation have become less expensive and more attractive to end-users.

Cheap and plentiful natural gas has significantly improved the economics and attractiveness of non-renewable self-generation options.

Improvements in battery technologies are fostering end-user interest and experimentation, particularly combined with renewable energy resources.

Demand Response (DR) and Energy Efficiency (EE) technologies provide easily accessible and increasingly convenient load control options.

Switch from Fossil Fuels to Renewable Resources Utilities across the country have been moving away from older coal fired generation, replacing them with cleaner natural gas fired generation. This has been primarily due to projected cost savings from fuel and/or environmental regulations. While environmental regulatory uncertainty has slowed, the trend from coal to natural gas and renewables has not stopped. The following is a summary of some of the factors driving this trend:

Favorable economics for gas generation due to:

• High efficiency

• Cheap and plentiful natural gas

• Lower emissions compared to coal

Plentiful low cost renewable energy, particularly wind products

Environmental concern and preference for renewable energy and natural gas (in general public), as well as a stated preference by retail end users for renewable energy over natural gas

Customer Values Owners and their customers values have changed with respect to the procurement and use of electricity. A summary of the trends that support this change in customer values is provided below:

Environmental concern and preference for renewable energy

Desired control of power supply portfolio with options to meet varying preferences

Increasingly attracted to technological innovation and high efficiency

Increasingly open to new and different business models

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Owner’s Service Requirements and Perspectives The following table provides a summary of each of the four Owners’ contribution to Platte River by demand, energy, and total revenue. This table also includes unique service offerings by Platte River for interruptible services, community solar programs, and renewable energy premium.

Table 1 Summary of Owners

Item Fort Collins Longmont Loveland Estes Park Grand Total Demand (MW) 2,919 1,593 1,422 221 6,155 Energy (MWh) 1,562,183 822,828 728,007 133,025 3,246,043 Demand ($) 28,153,169 15,459,332 12,749,973 2,084,579 58,447,053 Energy ($) 64,940,863 34,219,837 26,965,215 5,518,136 131,644,051 Interruptible ($) -- -- 4,251,482 -- 4,251,482 Community Solar ($) 16,176 8,832 7,247 1,448 33,703 Renewable Energy Premium ($) 1,899,995 540,975 137,498 61,525 2,639,993 Total per Location ($) 95,010,203 50,228,976 44,111,415 7,665,688 197,016,282 % of Grand Total 48% 25% 22% 4% 100%

Platte River Loads and Resources Platte River provides essentially all power requirements to the Owners under the existing PSA. As with most utilities in the country, and as discussed herein, projected load growth for Platte River is expected to be minimal for the foreseeable future. Platte River expects low load growth, approximately 0.9% for energy and 0.3% for demand over the planning horizon. Currently, Platte River has excess capacity of approximately 160 megawatts (MW) in 2018. This does not include the recently signed 150 MW wind power contract, which is anticipated to be available in 2020. Fortunately, for Platte River, its existing power supply portfolio allows it to be a low-cost provider of generation and transmission services compared to other Front Range wholesale providers. However, due to market forces as summarized in the previous section, Platte River’s generation portfolio is moving away from coal in favor of renewable resources that could potentially impact Platte River’s cost structures. Platte River estimates that current long-term renewable contracts are competitive with its system embedded costs.

Owner Perspectives The purpose of this paper is to provide a summary of Platte River’s rate design philosophy. However, Platte River represents its Owners; therefore, a summary of the Owner’s perspective is critical to Platte River’s rate design efforts. The Owners represent a variety of customer types including residential customers, various types of commercial customers, and industrial customers, all of which have different energy usage patterns and expectations from their respective utility providers. For example, some Owners have invested in sophisticated Automated Metering Infrastructure (AMI), while others have not. The owners, however, have aligned perspectives in regard to Platte River’s core values including the value of reliable energy supply, the addition of renewable energy resources, and the importance of stable and competitive wholesale rates.

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Current Rate-Related Service Offerings The following table provides a summary of the current Platte River service offerings provided to its Owners. This will serve as the basis from which new service offerings will be developed as part of the cost of service study currently underway.

Table 2 Summary of Current Platte River Service Offerings

Rate Offering Summary / Description All Requirements firm service to Owners (Schedule 1) Represents 96% of wholesale owner rate revenues Renewable Energy Service adder/premium (Schedule 7) Represents 1% of wholesale owner rate revenues Standby Service (Schedule 8) No supporting rate has been developed Large User Service (Schedule 9) Interruptible load representing 2% of wholesale owner rate

revenues Parallel Generation (Schedule 3) Buy-all-sell-all solar generation representing <1% of wholesale

owner rate revenues Wholesale Transmission Service (Schedule 4) Projected to be $4.6 million in 2018 from third part customers

Platte River’s current wholesale rates are a bundled seasonal two-part rate, which is based on its embedded costs. The summer season is defined as June through August and the winter season is September through May. Platte River’s demand charge is defined as the monthly demand contribution to the Platte River coincident peak, measured in 60-minute intervals. The energy charge is based on the total energy provided for the month. The current wholesale rate structure sends a strong pricing signal with demand charge based on Owner contribution to the Platte River coincident peak.

Platte River Anticipated Future State As indicated, part of the existing analysis being conducted for Platte River is the development and review of its costs of service. It is anticipated that this will result in a shift from demand-related costs to energy-related costs based on a projected shift away from baseload coal resources to new resources with lower costs for capacity. Events that will shift cost structures to energy-related include changes to the Owner’s system load profiles, as a result of increased saturation of DR and EE programs for end-users. Similarly, the anticipated increase in adoption of Electric Vehicles and Distributed Energy Resources (DER, i.e. distributed solar) by end-users is anticipated to exacerbate this shift. These impacts will be combined with an anticipated increase in aggressive peak shifting strategies implemented by the Owners.

More Service Options by Owners and Their Customers Platte River is anticipating increased demand for various service options by its Owners and their customers. These options meet increasing end-user interest in behind-the-retail meter generation, renewable resources power supply, and real or perceived efficiencies associated with load shifting. These end-user and Owner desires translate into wholesale service options that may include the following:

100% renewable portfolios

Standby service

Time-of-use (TOU) rates / rate structures

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Platte River Rate-Related Goals In consideration of Platte River’s current situation as summarized above, Platte River has identified the following goals important to the rate setting process. These goals are as follows:

Improve Value Added of Platte River in Support of Owners – The definition and perception of value may vary between Owner, but for Platte River, value is defined by providing the highest quality products and services to Owners, at a price, when compared to other alternatives, that clearly offers Owners the “best deal” or the highest value added for services rendered.

Offer A Desirable Portfolio of Services and Rates that Meet Owner Needs – Platte River’s objective is to offer Owner’s choices that allow Owner’s to meet their objectives. Given that each Owner has unique objectives, some objectives may be in conflict with each other. With its best efforts, Platte River will accommodate Owner’s needs while establishing services and rates within Platte River’s stated financial goals and underlying cost of service principles.

Better Align Wholesale TOU Pricing Signals with Cost of Service and Owner Retail Pricing Signals – Under Platte River’s current Schedule 1 rate structure, demand-related costs are recovered monthly based on the Owner’s contribution to the Platte River system peak, or coincident peak. From a TOU perspective, the Schedule 1 rate structure concentrates the entire demand-related costs into a single hour each month. This rate structure, when translated into retail TOU rates offerings of the Owners, may send a distorted TOU pricing signal associated with Platte River’s demand-related costs at the time of the Platte River system peak. Given increasing interest and use of TOU retail rates by the Owners, Platte River will consider wholesale rate structures that appropriately consider and quantify the cost of service at different time periods throughout the day and year.

Send Pricing Signals that Result in System Benefits – Similar to the perception of value, the definition and perception of System Benefits may vary between Platte River Owners. For the purposes of rate design, Platte River defines System Benefits as:

• The encouragement of efficient use of utility infrastructure to maximize short- and long-run marginal cost savings.

• Short-run marginal cost savings means maximize opportunities in the daily wholesale power market.

• Long-run marginal costs are typically defined as those costs associated with infrastructure improvements within a five to ten-year planning horizon (beyond the scope of annual or short-term budgeting, for example). A reduction in long-run marginal costs may be determined by the delay or avoidance of future capital-intensive infrastructure additions, such as a power plant. Utilizing a net present value approach, the reduction in future costs or delay of the anticipated need for such investment results in savings to Platte River.

• Service offerings and associated rate design can send a price signal to Owners, and through the Owners to end use customers to encourage the efficient use of utility investment. By creating a pricing system that encourages users to have a higher system load factor, Platte River will utilize its existing investment in a more efficient manner. As a result of great efficiency, the average system costs can be reduced and passed to the Owners in the form of potentially lower rates.

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• Cost based recovery of all product and service offerings that align with Platte River strategic initiatives and meet Owner needs.

Guiding Policies and Principles To accomplish the above describe goals, Platte River is frequently evaluating current service offerings and rate structures. We recommend that Platte River’s service offerings and supporting rate structures should:

Maintain Utility Financial Strength and Viability to the Benefit of the Owners – A financially strong utility offers Owners flexibility and options when faced with financial uncertainty, price volatility, and market threats and opportunities.

For Platte River, financial strength is measured by continued access to low cost capital. Low cost capital is a critical element to Platte River and allows it to invest in resources at the lowest possible cost thereby improving Platte River’s competitive position. This in turn allows Platte River to offer lower power prices for its Owners.

Adequate Recovery of Fixed Costs – Fixed cost recovery is a focus of Credit Rating Agency’s determination of credit worthiness of a utility. Credit Rating Agency’s also recognize that rate design is a strong and effective risk management tool for Platte River. Rate structures that adequately recover fixed costs and reduce operational and credit risk will thereby improve Platte River’s credit ratings.

Rates Must be Fair, Equitable, and Defensible – Fairness, equity, and defensibility are measured against sound economic principles as described in the subsequent supporting principle in consideration of Platte River Board’s policy.

Rates Will be Based on Sound Economic Principles and Business Practices – Service offerings and supporting rate structures should appropriately reflect cost of service principles that align with Platte River’s strategic plan and desired System Benefits. Supporting utility economics should consider Platte River’s embedded costs and its’ short- and long-run marginal costs.

Rates Structures Should Be Stable Over the Long‐Run – To the extent practically possible, changes to existing rate structures should be phased-in gradually over time to minimize adverse economic impacts on Owners and their customers. Further, adopted rate structures should be evaluated frequently so that future changes are made in a timely fashion with lessened impact on Owners.

Rate Offerings Should be Flexible – Platte River’s business environment is rapidly changing given the increasing importance of renewable resources and technological improvements that enable an increasingly diverse portfolio of distributed generation and demand response options. Additionally, the changing Owner loads and the openness to new approaches and business models by the retail customer are impacting Platte River’s business environment. To meet these challenges, Platte River should to offer to its Owners (and through the Owners to their customers) a variety of desired and flexible service options. These service offering should be forward looking and be soundly based on cost of service methodology, as well as anticipated changes in Platte River’s costs, Owner loads, and anticipated responses to service offerings.

Service Offerings Should Demonstrate High Value to Owners – Services and rates should be offered at a competitive price compared to similar services provided by other wholesale electric utilities in the region.

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Platte River Should Continue to Effectively Manage Generation Risk – Platte River’s long-term strategic plan contemplates a changing generation portfolio that moves away from baseload coal assets to renewable generation options, which will impact Platte River’s cost of service. Rate design must adequately address these changes in cost structure to effectively provide an effective risk management tool for the Owners.

Improve Pricing Signals to Owners and Their Customers – Rate structures send pricing signals that incentivize a response in the form of changes in energy usage. In this sense, the pricing signal itself is the incentive, rather than a rebate or credit from Platte River. For Platte River, these signals should encourage System Benefits and provide the Owner valuable information so that they can translate the wholesale rate to their retail customers in a manner best suited for each Owner. Specific attributes of improved pricing signals are:

• Transparency – the various services provided by Platte River to the Owners embedded within a rate structure should be easily identified.

• Ease of understanding – the desired incentives and financial impact of changes in energy usage should be easy to understand.

• Reward behavior that yields System Benefits – an effective incentive must be consistent with economic reward.

• Align with other programs – rate structures should complement other programs offered by Platte River to the Owners.

• TOU cost‐based rate pricing signal – rate design options should support Owner TOU applications (retail rates). For such circumstances, Platte River rates should send appropriate pricing signals that are supported by cost of service.

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From: Joseph B. Wilson, General Counsel

Subject: PLATTE RIVER LEGAL AND GOVERNMENTAL AFFAIRS REPORT – MAY 2018 BOARD MEETING

The following legal issues and governmental/legislative matters were addressed during the reporting period; bold-faced type is used to highlight recent or significant developments. LEGAL ISSUES: CURRENT OR THREATENED LITIGATION 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 of WestConnect, 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 1000 issued in 2011. Order 1000 requires FERC-jurisdictional utilities to create regional transmission planning organizations with authority to plan transmission expansions and allocate costs to the beneficiaries of the new transmission projects. Unlike the Eastern Interconnection (generally all areas of the United States east of Colorado excluding most of Texas), the Western Interconnection contains a much larger population of non-jurisdictional utilities – of which Platte River is one. In the WestConnect footprint the breakdown of the transmission-owning utilities includes 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. To address this concern, WestConnect developed a transmission planning and development format that included 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 could opt-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 decisions approving the WestConnect process. These utilities argued that FERC approval violated the mandate that 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, 2016 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, which was denied.

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Legal and Governmental Affairs Report April 2018 Page 2 of 8

The proceedings on remand before the FERC were delayed by the resignation of Chairman Norman Bay, which deprived the FERC of a quorum. The FERC lacked a quorum for over six months, but with a quorum restored the FERC ruled on the remand during its meeting of November 16, 2017. The FERC re-affirmed its decision to accept the WestConnect cost allocation proposal. In so doing it reiterated the unique jurisdictional characteristics of the Western Interconnect and explained that the WestConnect proposal being approved contained sufficient incentives for non-jurisdictionals to accept cost allocation responsibilities. The Commissioners also noted that they could resort to their authority under Section 211A of the Federal Power Act if non-jurisdictionals refusal to participate in cost allocation would result in rates that were not just and reasonable. El Paso Electric Co. has filed for a second round of judicial review. Commonwealth of Pennsylvania v. Eric Spatt – On April 2, 2018, Platte River received a request for documents associated with a number of persons and entities involved in a criminal proceeding resulting from a hazardous waste warehouse fire that occurred in Pennsylvania in 2014. The documents sought pertain to the chemical sodium chlorite and transactions between Platte River and CDG Environmental, LLC, during the time period January 1, 2001 through December 31, 2003. The request was in the form of letter, but a subpoena may follow. The only documents responsive to the request are Emergency Planning and Community Right-to-Know Act (EPCRA) reporting data forms for these years. Platte River did have a small quantity of sodium chlorite on site during these years, which appears to have been sourced from CDG Environmental, LLC. ONGOING AND CURRENT MATTERS OF SIGNIFICANCE Grand Lake Clarity NEPA Process — Platte River is a coordinating agency in the Grand Lake Clarity National Environmental Policy Act (NEPA) process initiated by the Bureau of Reclamation (BOR). This proceeding could affect Platte River as both a participant in the Windy Gap Project and as a power customer of the Western Area Power Administration. The kick-off meeting occurred on February 10, 2017 in Golden, CO. At present the matter will proceed as an Environmental Assessment (EA), but may convert to an Environmental Impact Statement (EIS). A “visioning process” conducted by BOR yielded a number of capital projects that address the clarity issue, but the range of alternatives will be expanded to analyze operational modifications that could improve clarity at reduced costs. The “purpose and need” statement was adopted on April 1, 2017. At the September 8, 2017 meeting seven alternatives were discussed and the BOR and Northern Colorado Water Conservancy District representatives introduced other possible operational or low-cost alternatives for consideration. At the January 31, 2018 meeting the list of alternatives was narrowed and BOR engineers began an evaluation process. Initial modeling work is complete but is being reviewed internally by the Bureau. A public scoping meeting will be scheduled in Grand Lake for later in the summer of 2018. Environmental Protection Agency Clean Power Plan — 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 proposed rule (NOPR) to formally rescind the CPP on the grounds that it exceeds the agency’s statutory authority. Objections to the NOPR have been filed by a number of states and communities (including Boulder) asserting that the action was invalid because Secretary Pruitt is unalterably biased against the CPP. Prior to the November 2016 election, a stay of the CPP had been issued in certain litigation against EPA. That case remains pending, although on March 1, 2018 the D.C. Circuit Court of Appeals issued an order

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holding the litigation in abeyance for another 60 days and directing the EPA to provide status updates every 30 days. With the present bottleneck affecting carbon regulation on the Federal level, momentum has shifted back to the state level. As noted in prior reports, Governor Hickenlooper issued an Executive Order calling 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, although since the stay of the CPP was issued by the Supreme Court, state planning efforts have effectively ceased. In addition, legislation was introduced in the Colorado General Assembly (H.B. 18-1274) to reduce carbon emissions by 80 percent from 2005 levels, although this bill is generally considered a “messaging” bill and is not expected to pass. Again, while the CPP in its current iteration appears to be dead, the replacement rulemaking continues, and it is likely that a replacement rule will be noticed in the near future. 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, the State has taken the position that it has sufficient authority to ensure environmental protection under their existing programs. On January 17, 2017 Platte River staff met with the Colorado Department of Public Health and Environment (CDPHE) in Denver. During this meeting, the existing operational plan for the monofill was discussed along with the need for a revised plan. As a result of the meeting, Platte River staff has taken steps to update the operational plan. These steps include increased groundwater 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 and the feedback received from the CDPHE was favorable. The CDPHE requested additional groundwater data and soil borings. Concurrently with updates to the operational plan for the ash monofill, Platte River staff obtained approval from CDPHE for modifications to the reclaim pond and closure of the bottom ash ponds which will be replaced with installation of a concrete settling tank with two separate cells and a “reclaim” tank. The CDPHE confirmed that the tanks will not be subject to its regulations. On March 1, 2018 the EPA issued proposed revisions to the 2015 final CCR rule which remains subject to litigation pending before the U.S. Court of Appeals for the D.C. Circuit. The proposal addresses several provisions of the 2015 CCR rule that the D.C. Circuit remanded back to the EPA in 2016, as well as additional provisions in response to comments received since the final rule went into effect. Many of the proposed revisions would allow state regulatory programs more flexibility to establish equivalent standards considering site specific conditions. These revisions will not impact Platte River because Colorado has chosen not to adopt a state regulatory program. Additional revisions may modify current deadlines for groundwater monitoring and analysis. However, even if these modifications are adopted they would be too late to alter Platte River’s chosen path to compliance. Platte River intends to implement major changes to its ash handling operations during the Fall 2018 outage. These include the installation of a new bottom ash handling system with a wet to dry conversion, and the replacement of the bottom ash ponds with a concrete settling tank as discussed above. Windy Gap Firming Project — The Windy Gap Firming Project (WGFP) has obtained all necessary state and federal approvals. Northern Water has submitted a water court application to amend the existing

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Windy Gap water court decrees. Specifically, the Northern Water filing seeks to incorporate the terms of a 2012 IGA entered into with several West Slope entities. The 2012 IGA provides for the construction 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 Windy Gap 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 or consent of the governing bodies of the Windy Gap participants. One issue that the parties needed to resolve involved 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. This issue became more complicated with the decision in the Busk/Ivanhoe case, and west slope interests sought to use this precedent to limit east slope storage in reservoirs other than Chimney Hollow. The Northern Water filing contains limiting language that may restrict other project participants but should not be an issue for Platte River. As discussed in the Management Report, Legal is supporting Finance on a request for a Private Letter Ruling from the Internal Revenue Service. A formal request for a Private Letter Ruling was filed with the IRS on September 14, 2017. A favorable ruling was received on April 17, 2018. On October 26, 2017, a number of environmental groups filed a legal action challenging the NEPA analyses performed by both the Bureau of Reclamation and the Army Corps of Engineers. The Bureau of Reclamation and Army Corps of Engineers filed an Answer on January 16, 2018, generally denying the allegations of the Complaint. Northern Water was not listed as a Defendant but filed a motion to intervene as a party to the litigation on January 26, 2018. The Bureau of Reclamation and Army Corps of Engineers filed their administrative records with the court, which would typically commence the briefing schedule; however, it is anticipated that the plaintiffs will challenge the sufficiency of these filings. 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 independent transmission tariff operator and market administrator. MWTG received responses from several regional transmission operators, including the California Independent System Operator, PJM Interconnection LLC, Mid-Continent Independent System Operator, Inc. 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 worked to develop a more detailed proposal for consideration by SPP and its membership. Among the issues addressed in this proposal are the rights 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 integrated market, 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 have been directed by a Steering Committee of MWTG members, which meets biweekly, with specific issues being addressed by various working committees. Initially, MWTG intended to present a detailed proposal to SPP for consideration in July 2017, followed by a “go/no go” decision to pursue final agreements with SPP if the proposal was accepted. This would trigger a stakeholder process within SPP which would last approximately six months before final action

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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 to obtain 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. Additional meetings were held with FERC staff on December 4 and 5, and again on December 13 to solicit feedback on some of the major deal points from a regulatory perspective. WAPA issued a Federal Register Notice concerning the MWTG proposal to join SPP, which was discussed at LAP and CRSP customer meetings in Phoenix and Salt Lake City on November 8 and 13, 2017. At these meetings, certain WAPA customers expressed concerns about cost shifts that could impact transmission customers, which we anticipated. Platte River filed comments supportive of the MWTG effort on November 27. The basic terms of the MWTG proposal were outlined in a memo and white paper distributed with the December 2017 board packet. MWTG and SPP staff have prepared a “policy memorandum” outlining the terms of the proposal, which was submitted to the SPP board in February 2018. After further revisions to this document, the SPP board approved the policy memorandum at its March 13, 2018 meeting. MWTG and SPP staff will now prepare a membership agreement and tariff revisions to be filed with FERC and state regulators (for the MWTG participants that are subject to state regulatory jurisdiction). Meetings have been scheduled with FERC staff to vet the proposal prior to filing, which should streamline the approval process. It is anticipated that the final documents 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 or early 2020. The board authorized future execution of the SPP membership agreement by the General Manager at its December meeting. On February 23, 2018, Platte River and the other participants in the MWTG issued notices to withdraw from the Peak Reliability Funding Agreement and to cease taking reliability coordination (RC) services from Peak Reliability effective September 2, 2019. Platte River and the MWTG participants had previously executed a letter of intent to accept RC services from SPP. SPP is currently providing RC services to its members and is pursuing certification to offer RC services to transmission owners in the West. The California Independent System Operator (CAISO) has also notified Peak Reliability that it will not take RC services from Peak Reliability after September 2, 2019, and it is also pursuing certification to provide RC services to transmission owners in the West. On April 20, PSCo informed the other MWTG participants that it did not intend to move forward with SPP membership. PSCo was the largest member of the MWTG, and consequently this unexpected development requires a re-examination of regional market and reliability coordination alternatives. Fiber Utilization and Telecommunications — Platte River legal staff are working with electric operations staff to address issues related to fiber utilization and telecommunications. Specifically, the Deputy General Counsel and the Manager of Operations Technology & CIP will be attending a series of meetings with Fort Collins staff beginning in March to discuss the transfer of Platte River’s excess fiber in the Fort Collins ring to the City of Fort Collins. Meetings will occur every two weeks through mid-May. Additionally, legal and operations staff drafted a Memorandum of Understanding between Platte River

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and Estes Park to provide for the installation of a fiber pathway between Glen Haven and Estes Park. Platte River will utilize the fiber pathway for a portion of its long-haul connection between Loveland and Estes Park. This new connection will provide a redundant fiber route to Estes Park thereby enhancing reliable communications within Platte River’s electric system. Legal and operations staff are also researching ways to manage the excess long-haul fibers connecting Platte River’s owner municipalities going forward. The goal is to facilitate, to the extent possible, the services that Platte River can provide in support of the initiatives each municipality is pursuing to provide broadband services within their communities. Legal is assisting in scheduling a fiber working session for June 7. CONTRACTUAL MATTERS Power Production Outage Contracts — The Deputy General Counsel is assisting staff in negotiating contracts for equipment to be supplied and services to be performed during the Fall 2018 plant outage. Negotiations with 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. Siemens recently notified Platte River that an error had been made in the manufacture of the new rotor. Specifically, a manufacturing defect occurred on the exciter end coupling of the new rotor. Platte River staff met with Siemens to discuss options going forward. Siemens has proposed a solution whereby the defect can be mitigated. The proposed solution is acceptable to Platte River engineering staff. However, Platte River will require Siemens to provide an extended warranty for the work performed by Siemens to repair the defect. The Deputy General Counsel is reviewing a proposed contract amendment to incorporate the extended warranty language. Outage projects including a 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 ash handling conversion project shall consist of upgrading Rawhide Energy Station Unit 1’s existing bottom ash handling system with a wet to dry conversion. The current process of wet sluicing bottom ash and conveying it to settling ponds will be discontinued. Instead, bottom ash will be collected under the boiler and 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 handling conversion project. However, concerns have been raised regarding the Contractor’s financial stability. To address these concerns, legal staff incorporated additional protections into the procurement and installation contract(s) for the project. GOVERNMENTAL AFFAIRS: Colorado General Assembly — The Colorado Legislature convened its 2018 session on January 10 and adjourned on May 9. Over 700 bills were introduced during the session. A number of the bills of interest are listed below:

• HB18-1085 – Concerning Research on the Health Effects of Industrial Wind Turbines. This bill was heard in committee on February 8 and postponed indefinitely.

• HB18-1215 – Safe Disposal of Naturally Occurring Radioactive Material. Introduced on February 5, passed out of Health and Environment Committee on March 22 and moved to the House Finance Committee. Passed out of the House on April 25. Postponed indefinitely by the Senate Committee on State, Veterans & Military Affairs on May 3.

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• HB18-1270 – Requires the Public Utilities Commission to Develop Rules for Procurement of Storage by Investor-Owned Utilities. This bill, introduced on March 7, requires the PUC to develop rules for the procurement of energy storage systems by investor-owned utilities, provided that the benefits of procurement outweighs the costs. The PUC is required to act by February 1, 2019. The bill passed out of the House on final reading on April 5 but adopted by the Senate with amendments. Assigned to Conference Committee and was eventually passed by both houses.

• HB18-1274 – Reduce Greenhouse Gas Emissions by 80% by 2050. Also introduced on March 7, this bill requires that greenhouse gas emissions be cut by 80% from 2005 levels by 2050. It does not establish any interim goals nor any enforcement mechanism. Passed out of the House on final reading April 3, and upon introduction in the Senate was assigned to the State, Veterans Affairs and Military Affairs Committee. Postponed indefinitely on April 11.

• HB18-1297 – Climate Change Preparedness and Resiliency. The bill sets normative rather than regulatory goals for the reduction of carbon dioxide emissions generally following the Clean Power Plan goals. Directs various studies and programs for the Colorado Resiliency and Recovery Office of the Division of Local Government. Passed out of Transportation and Energy Committee on March 21 and referred to Appropriations. Passed out of the House on April 24. Postponed indefinitely by the Senate Committee on State, Veterans & Military Affairs on May 1.

• HB18-1345 – Right of First Refusal for Incumbent Transmission Utilities. This bill recognizes a right of first refusal allowing Colorado utilities the opportunity to construct, own and operate any transmission facility recommended for construction in Colorado through the regional transmission planning process established by FERC Order 1000. Platte River and Public Service Company jointly drafted the bill language, which has sponsorship from Representative Jeni Arndt and Senator John Kefalas. Introduced on March 27 and assigned to the Transportation and Energy Committee. Postponed indefinitely by the House Committee on Transportation and Energy on April 26.

• SB18-003 – Re-establishes the Colorado Energy Office. This bill has passed out of the Senate and was introduced in the House on February 27. Assigned to the Transportation and Energy Committee. Passed out of the House unamended April 19. Sent to Governor on May 3.

• SB18-009 – Allow Electric Utility Customers to Install Energy Storage Equipment. This bill requires the Public Utilities Commission to conduct a rulemaking concerning energy storage devices. Municipal utilities are exempted from the coverage of the bill, but any rules adopted by the PUC may be viewed as best industry practices. This bill has passed both the Senate and House and was sent to the Governor on March 12. Signed by the Governor on March 22.

• SB18-064 – Require 100% Renewables by 2035. This bill was postponed indefinitely on Feb. 1. • SB18-167 – Call Before You Dig Modifications. Introduced on February 12, the bill proposes

significant changes to the underground utilities notification process. This bill may have significant implications for municipal utilities and is being followed closely by the Colorado Association of Municipal Utilities. The bill creates an Underground Damage Prevention Safety Commission with authority to levy fines. The bill language contains an exemption for municipalities from the regulatory authority of the Safety Commission, but the language could be subject to varying interpretations as applied to home rule and statutory municipalities. Platte River has requested the sponsor to include an exemption for power authorities, which if included may remove the uncertainty about the exemption for statutory municipalities. The amendatory language suggested by Platte River was approved. Much of the legislative work on this bill occurred toward the end of the session with Senate passage occurring April 27, House passage with

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amendments on May 3, Senate concurrence also on May 3 with the bill being sent to the Governor on May 15.

• SB18-245 – Allow Natural Occurring Radioactive Material Rulemaking. Introduced on April 16, this bill was an attempt to create rulemaking authority in the face of the opposition to HB18-1215. Rep. Arndt, who was the prime sponsor of HB18-1215, served as House sponsor for this bill. SB18-245 simply removed the statutory restriction that prevented the state Board of Health from rulemaking until after federal rules were in place. The bill sets out a public process prior to rulemaking, but may have no direct effect on Platte River operations.

• SJM18-002 – Eliminate Energy Subsidies. Postponed indefinitely on January 25.

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EXECUTIVE SUMMARY

Category April Variance YTD Variance

Municipal Demand (1.3%) u (0.4%) u

Municipal Energy (1.3%) u (0.9%) u

Baseload Generation (9.9%) n (7.5%) n

Wind Generation 3.9% l (1.0%) u

Solar Generation (8.7%) n (5.0%) n

Surplus Sales Volume (6.3%) n (3.7%) n

Surplus Sales Price (2.3%) n (5.4%) n

Dispatch Cost 2.6% n (0.9%) u

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

April 2018Operating Report

Normal April weather patterns resulted in both municipal demand and energy coming in near budget. Year to date, municipal demand and energy are near budget.

Rawhide ran exceptionally well for the month resulting in equivalent availability coming in above budget. Net capacity factor came in well below budget, due to market conditions as well as necessary tuning which required reduced unit output. Both Craig units ran well resulting in equivalent availability and net capacity factor coming in above budget for the month. Year to date, Rawhide equivalent availability and net capacity factor are below budget, while the Craig units’ equivalent

availability is above budget and net capacity factor is below budget.

Wind came in above budget, as spring weather patterns resulted in high wind penetrations throughout the region, while solar came in below budget. Year to date, wind is near budget while solar remains below budget.

Surplus sales volume and pricing came in below budget, as a result of the market’s steep decline

which was caused by an abundance of spring hydropower runoff in the Northwest. Pricing at Mid-Columbia dropped into the single digits and, at times, traded in the negatives which impacted pricing in the Rocky Mountain region, as did the additional wind on the system. It appears that this pattern will continue through May. Year to date, volume and pricing remain below budget.

Dispatch costs were above budget for the month, due to the accommodation of validation runs on all five combustion turbines as well as operations and maintenance (O&M) costs coming in 30 percent over budget as a result of a one-time adjustment. Costs remain below budget year to date.

April 2018 Operating Report Page 1

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OPERATIONAL OVERVIEW

2018 Goal0 0 l 0 l

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

Peak Day Obligation. Peak demand for the month was 412 megawatts which occurred on April 6, 2018 at hour 20:00 and was 6 megawatts below budget. Platte River’s obligation at the time of the

peak totaled 502 megawatts.

April Actual YTD Total

Forecast Demand418

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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: April 6, 2018

Hydro Wind Solar Rawhide Craig CTs Purchases

Total Obligation502

Municipal Obligation

412


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MUNICIPAL LOADS

April Budget April Actual

MW

Total Coincident Demand (MW) 417.7 412.2 (1.3%) u

Estes Park 18.5 19.0 2.8% l

Fort Collins 200.7 196.5 (2.1%) n

Longmont 103.1 101.8 (1.3%) u

Loveland 95.3 94.8 (0.5%) u

%

Total Energy Sales (MWh) 243,851 240,713 (1.3%) u

Estes Park 10,448 10,365 (0.8%) u

Fort Collins 117,616 115,471 (1.8%) u

Longmont 60,557 59,360 (2.0%) u

Loveland 55,230 55,516 0.5% u

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

Favorable / (Unfavorable)

Municipal demand and energy came in near budget for the month of April and remain near budget year to date.

Estes Park19.0

Fort Collins196.5

Longmont101.8

Loveland94.8

Actual April Coincident Demand = 412 MW

Estes Park

10,365

Fort Collins115,471

Longmont59,360

Loveland55,516

Actual April Energy Sales = 240,713 MWh


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SOURCE OF SUPPLY VARIANCE

Resources came in below budget, overall, due to testing on Rawhide Unit 1 and the Craig Units having been dispatched lower into Joint Dispatch. Lower capacity factors, which resulted from the decreased surplus sales market, were another contributing factor. Resources remain below budget, year to date.

April Variance in Production from Energy Resources

Year-to-Date Variance in Production from Energy Resources (MWh)


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SOURCE OF DELIVERY VARIANCE

Loads and obligations came in below budget for the month, due to lower than budgeted municipal and surplus sales. Year to date, loads and obligations are below budget.

April Variance in Deliveries for Loads and Obligations

Year-to-Date Variance in Deliveries for Loads and Obligations


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POWER GENERATION - RAWHIDE

Rawhide ran exceptionally well resulting in equivalent availability coming in above budget. Net capacity factor came in well below budget, due to market conditions as well as necessary tuning which required reduced unit output. Year to date, equivalent availability is near budget while capacity factor is below budget.

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

0%

10%

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April YTD

Equivalent Availability Factor

Budget Actual

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90%

100%

April 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

April YTD

SO2 (lb/MBtu)Limit Actual

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

April YTD

NOx (lb/MBtu)Limit Actual

0.000

0.002

0.004

0.006

0.008

0.010

0.012

0.014

April YTD

Hg (lb/GWh)Limit Actual


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POWER GENERATION - CRAIG

Both Craig units ran well throughout the month resulting in equivalent availability and net capacity factor coming in above budget. Year to date, equivalent availability is above budget while capacity factor is below budget.

0%

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30%

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April YTD

Equivalent Availability Factor

Budget Actual

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April YTD

Net Capacity Factor

Budget Actual


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POWER GENERATION - CTs

The CT control system upgrade was completed in April and validation runs were performed on the units which resulted in above budget generation. Year to date, CT generation is above budget while natural gas pricing is below budget.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

April YTD

MWh CT Generation

Budget Actual

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

April YTD

$/MBtuNatural Gas Pricing

Budget Actual

2018 Annual Budgeted Pricing = $3.21/MBtu


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POWER GENERATION - RENEWABLES

Wind came in above budget, as spring weather patterns resulted in high wind penetrations throughout the region, while solar came in below budget for the month. Year to date, wind is near budget while solar remains below budget.

-

20

40

60

80

100

120

April YTD

MWh (000s) Wind GenerationBudget Actual

-

5

10

15

20

April YTD

MWh (000s) Solar GenerationBudget Actual


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MARKET SALES

Surplus sales volume and pricing came in below budget, as a result of the market’s steep decline which was

caused by an abundance of spring hydropower runoff in the Northwest. Pricing at Mid-Columbia dropped into the single digits and, at times, traded in the negatives which impacted pricing in the Rocky Mountain region, as did the additional wind on the system. Year to date, volume and pricing remain below budget.

MARKET PURCHASES

Market purchases came in above budget, primarily due to the high volume of Joint Dispatch purchases which were priced significantly below budget. Year to date, energy purchases are above budget while pricing remains below budget.

$0

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AprilBudget

AprilActual

$/MWh

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YTDBudget

YTDActual

$/MWhAverage Sales Price

-

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AprilBudget

AprilActual

MWh(000s)

-

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YTDBudget

YTDActual

MWh (000s)Sales Volumen Budget n Actual n JDA n Budget n Actual

-

2,000

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18,000


MWh

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YTDActual

Thou

sand

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Energy Purchases

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YTDBudget

YTDActual

$/MWh

Average Purchase Price

n Budget n Actual n JDA n Budget n Actual


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DISPATCH COST

Dispatch costs were above budget for the month, due to validation runs on the combustion turbines as well as Rawhide's operations and maintenance (O&M) costs coming in 30 percent over budget as a result of a one-time adjustment. Rawhide's overall output was reduced due to unfavorable market conditions and testing which required reduced unit output. However, dispatch costs remain below budget, year to date.

$0

$10

$20

$30

$40

$50

$60

$70

Rawhide Craig LAP CRSP Purchases JDAPurchases

Wind RawhideSolar

CTs

$/M

Wh

April 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 CostBudget Actual Blended Actual

Blended Budget: $30.42 | Blended Actual: $31.21

YTD Blended Budget: $29.76 | YTD Blended Actual: $29.48


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POWER DELIVERY

Major System Operations Projects Benefitting the Municipalities:

LocationEstimated Finish Date

Percent Complete Description

05/2018 95% Boyd Substation

EVENTS OF SIGNIFICANCE

•

•

•

•

•

•

•

•

The City Billing capital project is coming to a close, as the first city invoices created through the new billing system were sent to the cities on the first of the month.

The first quarter Power Supply Plan was completed and distributed to key internal staff members.

The Rawhide gas yard fiber and controls upgrade was successful and completed on schedule.

Loveland

The tuning on Rawhide Unit 1 was successfully completed.

The Boyd 230/115kV Transformer No. 2 was put in service on April 24, as part of the Boyd Substation Expansion project, providing redundant connections between the 230 and 115kV systems in Loveland.

On May 2, during routine preventive maintenance on the spray dryer absorber (SDA) chambers, a door was opened for inspection and was not properly documented on the clearance tags. As a result, when the chamber was put into service, the door was left open which resulted in a malfunction of the baghouse. Control room operators followed standard operating instructions and made a significant load drop to minimize the exceedance. The issue was resolved in 12 minutes and measures have been taken to prevent a reoccurrence.

The Craig-Ault line, which is the primary transmission path used to bring Craig generation to load, came out of service on April 16. It was scheduled to be out of service until May 11 but came back in service two weeks earlier than planned.

Platte River ERT had five off-site mutual aid calls with Wellington Fire, Nunn Fire and PVH Paramedic Services.


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FINANCIAL HIGHLIGHTS YEAR-TO-DATE

KEY BUDGET VARIANCES YEAR-TO-DATE

Surplus sales revenues were below budget $0.7 million primarily due to a soft surplus sales market. The Rawhide Unit 1 forced outage also contributed to lower sales. The average price was approximately 5 percent below budget or $0.4 million of the variance. The volume of sales was also 4 percent below budget and represented $0.3 million of the variance.

AprilFinancial Report

At this time, the estimate for year-end net income could vary between $24 million and $25 million. Savings are anticipated from lower fuel expenses. Additionally, the Series KK bond issuance will most likely be delayed to 2019 and depreciation projections were revised downward. Partially offsetting these savings are year-to-date trends for municipal and surplus sales. The range is also based on the assumption for operations and maintenance expenses, where the low end assumes no variance and the high end assumes a 2% favorable variance.

TOTAL REVENUES

Platte River reported favorable results year to date. Net income of $3.6 million was favorable by $1.9 million compared to budget due to below-budget expenses, partially offset by below-budget revenues. Approximately $2.1 million of the below-budget expenses are expected to be incurred later in the year. Details of the financial results are described below.

Interest and other income was above budget due to higher-than-anticipated interest rates and more cash on hand from the sale of the Windy Gap water units.

TOTAL OPERATING EXPENSES

Chemical expenses, software maintenance expenses, mercury CEMS umbilical replacement, fleet maintenance web-based system, joint facilities, planning initiatives, SONET equipment technical support and routine maintenance expenses were below budget primarily due to timing of expenses. These expenses were partially offset by additional expenses for Rawhide Unit 1's forced outage. The net impact was $1.1 million below budget.

Energy efficiency program expenses were $1.3 million below budget due to the unpredictability of the completion of customers' energy efficiency projects. The funds are expected to be spent by the end of the year.

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

Net Income/(Loss) (0.3)$ -$ 0.3$ 100.0% 1.7$ 3.6$ 1.9$ 111.8% 22.6$

Debt Coverage 1.06x 1.16x .10x 9.4% 1.53x 1.79x .26x 17.0% 2.48x

Budget ResultsTotal Revenues 15.8$ 15.6$ (0.2)$ (1.3%) 69.4$ 68.5$ (0.9)$ (1.3%) 223.5$

Sales to owner communities 13.9 13.7 (0.2) (1.4%) 59.4 59.0 (0.4) (0.7%) 197.0

Sales for resale 1.3 1.2 (0.1) (7.7%) 7.6 6.9 (0.7) (9.2%) 18.9

Wheeling 0.4 0.4 0.0 0.0% 1.5 1.6 0.1 6.7% 4.6

Interest and other income 0.2 0.3 0.1 50.0% 0.9 1.0 0.1 11.1% 3.0

Total Operating Expenses 13.7$ 13.3$ 0.4$ 2.9% 57.6$ 54.5$ 3.1$ 5.4% 172.0$

Purchased power 2.8 2.9 (0.1) (3.6%) 11.5 12.3 (0.8) (7.0%) 34.5

Fuel 3.6 3.3 0.3 8.3% 16.4 15.5 0.9 5.5% 49.7

Production 3.7 4.0 (0.3) (8.1%) 15.3 14.4 0.9 5.9% 45.2

Transmission 1.4 1.4 0.0 0.0% 5.9 5.3 0.6 10.2% 17.2

Administrative and general 2.2 1.7 0.5 22.7% 8.5 7.0 1.5 17.6% 25.4

Capital Additions 6.5$ 3.8$ 2.7$ 41.5% 18.1$ 9.6$ 8.5$ 47.0% 73.5$

April Favorable(Unfavorable)

Year to Date Favorable(Unfavorable)

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

Page 1 of 13

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Project ($ in Thousands) Budget EstimateFavorable

(Unfavorable)

Estimated Carryover Request

ABOVE BUDGET PROJECTS* Bottom Ash and Reclaim Pond CCR Compliance - This

project will be above budget due to a design change. Due to environmental reasons and high groundwater levels, a concrete tank is required to house liquid waste streams rather than lining existing earthen ponds. A concrete tank is not subject to waste impoundment regulations and will prevent leakage into the groundwater, thus negating the need for future monitoring. 17,671$ 21,166$ (3,495)$

* Boyd 115/230kV Substation Transformer T2 Addition - This project will be above budget due to wheeling expenses for an unforeseen shoofly installation required by Tri-State and Xcel Energy in addition to increases in labor and financing costs. 883$ 1,390$ (507)$

* Windy Gap Firming - This project will be above budget due to an increase in Platte River's participation from 14,136 acre feet to 16,000 acre feet. 3,185$ 3,615$ (430)$

** Airflow Spoilers - This project will be above budget due to under estimating the number of spoilers needed and contract labor needed to install them. 257$ 367$ (110)$

** Coal Dust Pneumatic Conveying System - This project will be above budget due to a design change from a cyclone separator to a bag house design. 345$ 569$ (224)$

Personnel expenses were above budget $0.1 million. Additional medical expenses were incurred during the first quarter due to a large medical claim resulting in Platte River expense of approximately $1.0 million. The additional expense is reflected in April results but was mostly offset by lower wages and more wages being allocated to capital expenditures than planned, resulting in a small impact to net income. Since this claim has now satisfied its deductible for this year, further significant adjustments are not anticipated in 2018.

CAPITAL ADDITIONS (year-end estimates as of April 2018)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 2018 and may not represent the total cost of the project. Further changes to capital projections are anticipated and staff will continue to monitor spending estimates to ensure capital projects are appropriately funded.

Fuel expenses were $0.9 million below budget mainly due to lower generation as a result of Rawhide Unit 1's forced outage, market conditions and joint dispatch purchases. As a result of the market conditions, more reserves were held on the generation units rather than purchasing from Xcel Energy. The coal and transportation prices for Rawhide Unit 1 were also favorable compared to budget. In addition, the royalty rate reduction for Trapper Mine has lowered the coal price for the Craig Units.Storm water holding basin cleaning expenses were $0.3 million below budget due to the work being delayed as a result of a change in scope of the Bottom Ash and Reclaim Pond capital project.Yampa expenses were $0.3 million below budget due to timing of expenses.Purchased power expenses were above budget $0.8 million primarily due to supplemental purchases as a result of the Rawhide Unit 1 forced outage. Additional purchases were also made under the joint dispatch agreement because of favorable pricing. Holding more reserves on the generation units than planned and below-budget wind and solar generation partially offset the additional purchases.

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BELOW BUDGET PROJECTSLow Impact Security - Substation Control Building Access - This project will be below budget due to a significantly lower vendor estimate on conduit and a reassessment of the project costs. 1,541$ 790$ 751$ Low Impact Security - Substations Owned - This project will be below budget due to a significantly lower vendor estimate on conduit and a reassessment of the project costs. 772$ 206$ 566$ Low Impact Security - Rawhide - This project will be below budget due to a significantly lower vendor estimate on conduit and a reassessment of the project costs. 457$ 30$ 427$

* Mobile Crane Replacement - This purchase was below budget due to finding a suitable used crane instead of purchasing a new crane as originally planned. 710$ 380$ 330$ Yampa Work Orders - These projects will be below budget based on recent estimates from Tri-State. Two projects originally budgeted for 2018 have been canceled. 1,065$ 887$ 178$ DELAYED PROJECTSTransmission Line Vault Upgrades - Rogers Road - The majority of this project has been delayed due to a decision to reallocate engineering resources to other capital projects. The below-budget funds will be requested to be carried over into 2019 to complete the project. 267$ 43$ 224$ 224$ Fixed Fire Suppression System - Combustion Turbines - A portion of this multi-year project has been delayed due to a change in the project scope, which includes an additional phase of protection. Due to the increased scope of work, this will be budgeted in future years with a new charter and scope to complete fire protection on Units A-D. A portion of the 2018 funds will be used to complete Unit F. 326$ 57$ 269$ CANCELED PROJECTSRotary Car Dumper Conversion to Variable Frequency Drives - This project is canceled due to reallocating resources to allow a greater focus on outage projects. This project will be redefined and budgeted in a future year. 1,249$ -$ 1,249$ Engine 12 Replacement - This project is canceled and will be reassessed to determine if a second fire engine is required. 420$ -$ 420$ Vacuum Truck Replacement - This project is canceled as a result of an updated mechanic assessment which determined replacement is not needed at this time. 380$ -$ 380$ Spray Dry Absorber Feed and Feed Prep Pump Replacement - This project is canceled due to resource constraints and other higher priority projects taking place during the outage. This project will be budgeted for a future year. 190$ -$ 190$ OUT-OF-BUDGET PROJECTSSoldier Canyon 10 Inch Water Line Reroute - CR 70 & CR 17 Bridge - Larimer County plans to replace the irrigation ditch bridge at the intersection of CR 70 & CR 17 which necessitates rerouting Platte River's water line just east of the bridge. -$ 266$ (266)$

** Revenue Meters Replacement - The existing meters are at the end of life and are no longer supported. With the high likelihood of joining a market in the future, the existing meters need to be replaced to accommodate the requirement for high-side loss compensation. The new meters also have enhanced data reporting capabilities. -$ 216$ (216)$

* Project details or amounts have changed since last report.** Project is new to the report. Page 3 of 13

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Budget Schedules

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April 2018Non-GAAP Budgetary Basis (In Thousands)

FavorableBudget Actual (Unfavorable)

Revenues

Operating revenues

Sales to owner communities 13,865$ 13,711$ (154)$ Sales for resale 1,312 1,201 (111) Wheeling 375 404 29

Total operating revenues 15,552 15,316 (236) Other revenues

Interest income(1) 185 226 41 Other income 7 26 19

Total other revenues 192 252 60

Total revenues 15,744$ 15,568$ (176)$

Expenditures

Operating expenses

Purchased power 2,764$ 2,953$ (189)$ Fuel 3,634 3,327 307 Production 3,757 3,962 (205) Transmission 1,400 1,379 21 Administrative and general 2,162 1,722 440

Total operating expenses 13,717 13,343 374 Debt expense

Principal 1,215 1,215 - Interest expense 763 763 - Allowance for funds used during construction (70) (59) (11)

Total debt expense 1,908 1,919 (11) Capital additions

Production 3,226 2,609 617 Transmission 970 570 400 General 2,293 615 1,678

Total capital additions 6,489 3,794 2,695

Total expenditures 22,114$ 19,056$ 3,058$

Revenues less expenditures (6,370)$ (3,488)$ 2,882$

(1) Excludes unrealized holding gains and losses on investments.

Month of April

SCHEDULE OF REVENUES AND EXPENDITURES, BUDGET TO ACTUAL

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SCHEDULE OF REVENUES AND EXPENDITURES, BUDGET TO ACTUALApril 2018 - YEAR TO DATENon-GAAP Budgetary Basis (In Thousands)

Favorable AnnualBudget Actual (Unfavorable) Budget

Revenues

Operating revenues

Sales to owner communities 59,400$ 58,959$ (441)$ 197,016$ Sales for resale 7,560 6,887 (673) 18,856 Wheeling 1,521 1,629 108 4,620

Total operating revenues 68,481 67,475 (1,006) 220,492 Other revenues

Interest income(1) 738 853 115 2,793 Other income 184 193 9 256

Total other revenues 922 1,046 124 3,049

Total revenues 69,403$ 68,521$ (882)$ 223,541$

Expenditures

Operating expenses

Purchased power 11,565$ 12,319$ (754)$ 34,525$ Fuel 16,376 15,489 887 49,654 Production 15,295 14,427 868 45,194 Transmission 5,937 5,286 651 17,199 Administrative and general 8,484 7,011 1,473 25,412

Total operating expenses 57,657 54,532 3,125 171,984 Debt expense

Principal 4,860 4,860 - 12,162 Interest expense 3,051 3,051 - 10,946 Allowance for funds used during construction (246) (226) (20) (2,323)

Total debt expense 7,665 7,685 (20) 20,785 Capital additions

Production 11,490 6,059 5,431 45,164 Transmission 2,816 1,717 1,099 5,772 General 3,791 1,863 1,928 22,574

Total capital additions 18,097 9,639 8,458 73,510

Total expenditures 83,419$ 71,856$ 11,563$ 266,279$

Contingency reserved to board - - - 23,000

Total expenditures 83,419$ 71,856$ 11,563$ 289,279$

Revenues less expenditures (14,016)$ (3,335)$ 10,681$ (65,738)$


April Year to Date

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Financial Statements

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STATEMENTS OF NET POSITIONUnaudited (In Thousands)

2018 2017Assets

Electric plant, at original cost

Land and land rights 16,997$ 16,997$ Plant and equipment in service 1,303,290 1,287,194 Less: accumulated depreciation and amortization (849,575) (791,398)

Plant in service, net 470,712 512,793 Construction work in progress 84,169 71,280

Total electric plant 554,881 584,073 Special funds and investments

Restricted funds and investments 42,512 63,102 Dedicated funds and investments 84,058 59,991

Total special funds and investments 126,570 123,093 Current assets

Cash and cash equivalents 19,681 12,350 Other temporary investments 34,939 20,848 Accounts receivable - owner communities 13,675 13,226 Accounts receivable - other 5,177 3,727 Fuel inventory, at last-in, first-out cost 15,753 14,588 Materials and supplies inventory, at average cost 13,723 13,430 Prepayments and other assets 2,742 3,046

Total current assets 105,690 81,215 Noncurrent assets

Regulatory assets 7,142 6,829 Other long-term assets 6,235 7,293

Total noncurrent assets 13,377 14,122 Total assets 800,518 802,503

Deferred Outflows of Resources

Deferred loss on debt refundings 7,990 9,423 Pension deferrals 14,549 14,235

Total deferred outflows of resources 22,539 23,658

Liabilities

Noncurrent liabilities

Long-term debt, net 207,797 226,048 Net pension liability 19,395 20,508 Other liabilities and credits 16,129 15,959

Total noncurrent liabilities 243,321 262,515 Current liabilities

Current maturities of long-term debt 14,580 23,550 Current portion of capitalized lease obligation - - Accounts payable 11,450 10,718 Accrued interest 3,814 4,243 Accrued liabilities and other 2,522 1,895

Total current liabilities 32,366 40,406 Total liabilities 275,687 302,921

Deferred Inflows of Resources

Regulatory credits 11,951 6,325 Pension deferrals 1,508 472

Total deferred inflows of resources 13,459 6,797

Net Position

Net investment in capital assets 352,218 367,831 Restricted 25,178 33,513 Unrestricted 156,515 115,099

Total net position 533,911$ 516,443$

April 30

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Unaudited (In Thousands)

Twelve Months EndedMonth of April 30

April 2018 2017Operating revenues

Sales to owner communities 13,711$ 191,749$ 186,853$ Sales for resale 1,201 20,018 16,985 Wheeling 404 4,835 4,456

Total operating revenues 15,316 216,602 208,294

Operating expensesPurchased power 2,953 35,280 33,608 Fuel 3,327 48,929 46,486 Operations and maintenance 5,327 62,867 59,908 Administrative and general 1,739 22,779 17,039 Depreciation 1,564 24,451 27,334

Total operating expenses 14,910 194,306 184,375 Operating income 406 22,296 23,919

Nonoperating revenues (expenses)Interest income 226 2,111 1,313 Other income/(loss) 26 547 750 Interest expense (763) (9,239) (10,343) Amortization of bond financing costs 177 2,125 2,127 Allowance for funds used during construction 59 767 1,499 Net decrease in fair value of investments (124) (1,002) (269)

Total nonoperating revenues (expenses) (399) (4,691) (4,923)

Income before contributions 7 17,605 18,996 Contribution of assets to owner communities (137) (137) (173) Change in net position (130) 17,468 18,823 Net position at beginning of period, as previously reported 534,041 516,443 497,620 Net position at end of period 533,911$ 533,911$ 516,443$

STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

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Unaudited (In Thousands)

Month ofApril 2018 2017

Cash flows from operating activitiesReceipts from customers 16,057$ 214,266$ 209,696$ Payments for operating goods and services (10,283) (125,645) (116,275) Payments for employee services (2,958) (37,925) (33,676)

Net cash provided by operating activities 2,816 50,696 59,745

Cash flows from capital and related financing activitiesAdditions to electric utility plant (1,946) (32,358) (43,462) Payments from accounts payable incurred for electric utility plant additions (1,688) (1,412) (651) Proceeds from disposal of electric utility plant 7 39,524 2,352 Deposits into escrow for bond defeasance - - (263) Principal payments on long-term debt - (23,550) (16,615) Interest payments on long-term debt - (9,668) (7,800)

Net cash used in capital and related financing activities (3,627) (27,464) (66,439)

Cash flows from investing activitiesPurchases and sales of temporary and restricted investments, net 2,844 (18,622) 5,175 Interest and other income, including realized gains and losses 247 2,721 1,976

Net cash provided by/(used in) investing activities 3,091 (15,901) 7,151

Increase in cash and cash equivalents 2,280 7,331 457 Balance at beginning of period in cash and cash equivalents 17,401 12,350 11,893 Balance at end of period in cash and cash equivalents 19,681$ 19,681$ 12,350$

Reconciliation of net operating income to net cash

provided by operating activitiesOperating income 406$ 22,296$ 23,919$

Adjustments to reconcile operating income to net cash provided by operating activities

Depreciation 1,564 24,451 27,334 Changes in assets and liabilities which provided/(used) cash

Accounts receivable 740 (1,898) 1,607 Fuel and materials and supplies inventories (365) (1,459) 867 Prepayments and other assets 1,230 936 (9,544) Deferred outflows of resources - (315) (9,094) Accounts payable (1,441) 349 (850) Net pension liability - (1,113) 13,815 Other liabilities 289 787 7,743 Deferred inflows of resources 393 6,662 3,948

Net cash provided by operating activities 2,816$ 50,696$ 59,745$

Note: Certain prior year line items have been reclassified to conform to the current year's presentation.

Twelve Months EndedApril 30

STATEMENTS OF CASH FLOWS

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SCHEDULE OF NET REVENUES FOR DEBT SERVICEUnaudited (In Thousands)

Twelve Months EndedMonth of April 30

April 2018 2017Net revenues

Operating revenues 15,316$ 216,602$ 208,294$ Operations and maintenance expenses,excluding depreciation and amortization 13,346 169,855 157,041

Net operating revenues 1,970 46,747 51,253 Plus interest income on bond accountsand other income (1) 252 2,712 2,068

Net revenues before rate stabilization 2,222 49,459 53,321 Rate stabilization

Deposits - - - Withdrawals - - -

Total net revenues 2,222$ 49,459$ 53,321$

Bond servicePower revenue bonds 1,978$ 24,566$ 33,315$ Allowance for funds used during construction (59) (767) (1,499)

Net revenue bond service 1,919$ 23,799$ 31,816$

CoveragePower revenue bond coverage ratio 1.16 2.08 1.68


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May 2018 General Management Report

CORPORATE SERVICES Safety. No injuries were reported in April.

* Note: Formula for criteria listed is: # of cases x 200,000 hours / actual hours worked. According to the most recent Bureau of Labor Statistics (BLS) data available (2016), the average recordable incident rate for Fossil Fuel Electric Power Generation is 1.2. Platte River was awarded the first place for the American Public Power Association's (APPA) 2017 Safety Awards of Excellence in the group that includes utilities with work hours between 250,000-999,999. IT. Staff completed the replacement of its backup system, which was due for an upgrade, resulting in a cost savings over $100,000. The new system will reduce the amount of administrative overhead, provide site-to-site and site-to-cloud replication, eliminate the need for backup tapes, significantly reduce recovery times, provide full data encryption (a cyber security requirement), and reduce our electric usage by approximately 80 percent. HR. Human Resources participated in several career and job fair outreach events in April. The events include a CSU Engineering Fair, CSU Lead Conference (diversity-focused career event), NOCO-Net career fair and a Fort Collins High School Career Planning event. These events help keep Platte River on the mind of area schools and organizations as a local employer-of-choice. HR organized a tour of Rawhide (RH) for newly hired Headquarters (HQ) employees. The tour was led by plant management and included stops on the turbine deck, various floors to see components that feed the boiler, the switchyard, and peaking units. Tours such as this give HQ employees an early appreciation for the key role RH plays in Platte River’s operations for our customers. Bring Your Daughters and Sons to Work Day 2018 – 50 children and 35 parents attended this year which is an increase of 17 percent for kids and 20 percent for parents from 2017. Tours at Rawhide this year included the following areas: bison, fuel handling, heavy equipment, water lab and the emergency equipment. The tours were followed by a group lunch and photos.

2016 2017 2017 (As of 4/28/2017)

2018 (As of 4/28/2018)

Recordable Incident Rate 3.15 0.43 0.00 1.24Lost Time Case Rate 0.90 0.00 0.00 0.00DART (Days away restricted) 0.90 0.00 0.00 0.00

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Platte River Power Authority 2 May 2018 Management Report

Records, Business Services, and Project Management. Staff developed and distributed a new reporting tool to the Rawhide and System Engineering groups which provides real-time visibility of financial and labor data to project managers. Prior to the implementation of this tool, retrieving project financials and labor data was time-consuming and often inaccurate. Having access to this financial and labor data gives project managers the ability to make informed decisions and provide accurate status reports to stakeholder, finance, and senior management; and serves as a great example of continuous process improvement. Facilities. Painting on the Laporte substation interior has been completed, as was the installation of the HVAC system at Long’s Peak substation. HVAC preventative maintenance was completed in all of Platte River’s substations as well. Projects completed at Rawhide include the repair to the crusher building roof, concrete sealing of the million-gallon fuel oil tank, and installation of a cooling compressor for the HVAC system in the control room. Security. Another key milestone in the CIP low-impact intrusion detection project was achieved in April when all security camera feeds were transferred from a virtual management server to a physical, on-site management server. This effort was coordinated with IT and will significantly decrease the bandwidth requirements of the security network and increase reliability of the system. RELIABILITY COMPLIANCE On May 3, 2018, staff members from multiple departments within Platte River participated in a cyber-security incident response exercise. The table-top exercise is required to be conducted annually under the North American Electric Reliability Corporation (NERC) Critical Infrastructure Protection (CIP) standard CIP-008-5. During the exercise, participants are given limited information over the course of several hours. Participants must analyze, classify, respond, and recover assets that have become corrupted due to a cyber-security breach. The exercise also requires proper communication and reporting to the various regulatory agencies such as U.S. Department of Energy, NERC’s Electric Information Sharing and Analysis Center (E-ISAC), as well as local law enforcement. The result of the exercise was positive. Staff was able to work through the scenario, while implementing the Incident Response Plan. Platte River will now have 90-days to formally document lessons learned and make any needed changes to the Incident Response Plan. Staff is still documenting lessons learned, but two key items were identified during the exercise debrief. The first is to mobilize compliance personnel at the early stages of an incident to ensure all documentation and evidence are properly collected. The second item is to communicate and share information on a real-time basis across the various Platte River departments with similar systems and hardware to assist in situational awareness and troubleshooting. FINANCE Pension Audit. BKD conducted audit fieldwork on the 2017 Defined Benefit Plan Financial Statements the second week of May. Staff completed internal control questionnaires, audit schedules, and the financial statements and notes for their review. BKD anticipates an audit report issuance date in early June. Once the audit report is received, it will be filed with the State of Colorado in accordance with state filing requirements. The report will be reviewed by the Defined Benefit Retirement Committee at its next meeting, then recommended for acceptance by the Board of Directors. 2018 Capital Additions – Board Contingency. At this time, capital additions are under budget. Thus far in 2018, several additional requests for funds have occurred and changes have been made to the schedule and scope of projects. The bottom ash project, a significant outage project, is requiring $3.5

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million in additional funds for 2018. Due to high groundwater levels, a concrete tank is the preferred option to house liquid waste streams rather than the alternative of lining the existing earthen ponds. A concrete tank is not subject to waste impoundment regulations and will prevent leakage into the ground water. The project is also reported on page 2 of the financial report. 2018 projects have been reviewed and canceled to cover the additional funds required for this project and to ensure appropriate resources are available. However, further changes to capital projections are anticipated and staff will continue to monitor spending estimates to ensure the capital projects are appropriately funded. Project managers are continuously improving work planning and budgeting by better aligning scope, schedules and available resources. 2019 Budget Preparation. Platte River’s 2019 budget process is well underway. During the month of May, departmental budgets go through the initial review by division managers before being submitted to Accounting for final compilation. We are continually looking for ways to improve the existing process, work planning and budgeting by better aligning scope, schedules and available resources. Below is a condensed schedule to show 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

Benefit Allocation. Benefit costs for monthly reporting are recorded based on an estimate derived from budgeted expenses and allocated to appropriate operating accounts based on actual labor incurred. Actual expenses are collected in a clearing account. At the end of each quarter the difference between budget and actual for benefits are removed from the clearing account and allocated to the appropriate operating accounts. The quarterly adjustments are made in April, July, October and at year end to zero out the clearing account. Normally these quarterly adjustments average less than $0.1 million, however due to a large medical claim excluded from Platte River’s stop loss insurance coverage, an adjustment for additional medical expenses of approximately $1.0 million was made and is reflected in April results. Since this claim has now satisfied its deductible for this year, further significant quarterly adjustments in 2018 are not anticipated. The additional expense to operating expenses was mostly offset by lower wages and more wages being allocated to capital expenditures than planned, resulting in a small impact to net income.

EIA-861 Filing. Form EIA-861, Annual Electric Utility Report, was updated for the reporting year 2017 and submitted to the Energy Information Administration, a division of the U.S. Department of Energy. The form collects information such as peak load, generation, electric purchases, sales, revenues, customer counts and demand-side management programs, green pricing and net metering programs, and distributed generation capacity. The form is a reporting requirement and Platte River completed its submission for the April 2018 deadline.

FERC FORM 714 Filing. Electric transmitting utilities operating planning areas (with annual peak demand over 200 MW) are required to electronically file FERC Form 714. Items reported include utilities located in the planning area, hourly loads, and 10-year energy and demand forecasts. Platte River completed its submission for the June 1, 2018, deadline.

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COMMUNICATIONS & MARKETING Communications. In advance of the June 5 groundbreaking event, updates were made to the new headquarters microsite. The monthly employee newsletter was issued May 1. Topics covered included an overview of the emergency response team at Rawhide, the Boyd substation expansion project and the APPA Safety Award of Excellence that was awarded to Platte River. Staff began drafting an outreach and communications plan for use during the integrated resource plan (IRP) process. Emphasis will be placed on community outreach and engagement as well as multi-channel communications. Community engagement. The communications and marketing department organized participation in the Larimer County Corporate Food Fight during the month of April and Platte River staff donated nearly $800. Additionally, several Platte River staff participated in community Earth Day and Arbor Day events.

Strategy. A second draft copy of the strategic plan is included in May’s board packet, incorporating suggestions and edits from the board of directors. Tours. Seven separate tours for approximately 140 total visitors were conducted at the Rawhide Energy Station. OPERATIONS Windy Gap Firming Project Update. The project review board conducted its 90 percent design review meeting at the end of April and the majority of the findings were minor, with just a few areas requiring additional geotechnical study and design work. One particular area of concern is the left abutment of the dam which is showing a zone of weathered material. Stantec, the project design engineering firm, presented the review board with potential solutions and is currently conducting a complete analysis of those options. Once a preferred option is selected, Stantec will make the necessary revisions to the design for final review by the Colorado Division of Water Resources-Dam Safety section. This review is targeted for July or August, after which the design will be considered complete. Various environmental mitigation efforts associated with the Windy Gap Firming Project continue to progress independently of the reservoir design, including the design of the Colorado River connectivity channel project and riparian monitoring on the Colorado River below the Windy Gap Reservoir, which needs to take place for a sufficient length of time prior to the construction of the connectivity channel per the terms of the 1041 permit. In addition, Firming Project participants are supporting a project to upgrade the Fraser waste water treatment plant which will improve water quality in the upper Colorado and Fraser rivers. Project financing is a regular discussion item among project participants and PFM Financial, the project municipal finance advisor, continues to monitor market conditions and evaluate project funding alternatives. Indications are that long-term rates may eventually start to move higher but are currently remaining relatively stable and are still lower than the 10-year average. As part of the financing analysis, PFM Financial proposed to engage Fitch Ratings for an initial and confidential rating assessment of several potential pooled financing scenarios for the senior bonds. The participants agreed to move forward with this step, as it will provide participants with preliminary feedback with respect to the anticipated rating outcome as well as the impact of key contract and structural issues (step-up and debt service reserve fund). Participants will then be able to make informed financing decisions to choose the approach that works best for them. Platte River staff will continue to evaluate the options to determine the best approach, specifically for Platte River, in terms of pooled or individual financing. The timeline for issuing bonds is still to be determined and will be based on the timing of construction activities.

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Unless stayed during litigation, reservoir construction is anticipated to commence in late 2019 and will last approximately four years. The Firming Project is estimated to be complete and ready to begin filling in 2023. Rawhide Water Supply Update. Northern Water staff continues to monitor hydrologic conditions and update their forecast for Windy Gap and the C-BT system. On April 25, a noteworthy event occurred when the Windy Gap pumps were started and began pumping Windy Gap water into Lake Granby for the first time since 2013. The total amount of water that will be pumped is uncertain and will be limited by available storage capacity in Lake Granby. Based on current projections, it is likely that enough water will be pumped to cover the debts owed to the C-BT system (the amount of water used since October 2017) and obligations owed to Middle Park. There may be a small amount of additional water pumped which will be credited towards the participants’ 2018 orders to be used this summer and fall but will likely not fulfill all the orders. The pumping decisions are based on a variety of factors including water rights, water availability, the availability of storage space in Lake Granby, snowpack projections and anticipated inflows into Lake Granby. The end goal is to pump as much water as possible without spilling that water from Lake Granby. Northern Water staff will continue to monitor conditions and make adjustments to the plan, as needed, based on updated snowpack and runoff information. Having access to some pumped Windy Gap water will be very beneficial to Platte River and will reduce the amount of rental water that will be needed. Mountain West Transmission Group (MWTG). Xcel Energy announced on April 20 that it is withdrawing from the MWTG and will no longer pursue participation in the Southwest Power Pool (SPP). Consequently, the MWTG’s efforts to integrate with SPP have been suspended. The remaining MWTG members are currently considering whether joining SPP without Xcel would be economically viable and are evaluating other available options. Because Xcel is Platte River’s balancing authority, staff will coordinate with Xcel to evaluate options such as the California ISO energy imbalance market, an expanded Joint Dispatch Agreement, and other opportunities that may bring value to our customers. Roundhouse (Enyo) – Rawhide 230 kV Transmission Line. Enyo is currently working with key stakeholders to develop at least three potential transmission line route options for delivering the wind output located on the Duck Creek Ranch in Wyoming to Platte River’s Rawhide Substation. This new 230 kV radial transmission line is estimated to be 18 miles to 20 miles in length, depending on which transmission line route is ultimately selected. Christine Mikell of Enyo has been meeting with key stakeholders from the City of Fort Collins, including several representatives from the Natural Areas Department, Water Resources, Water Reclamation, Environmental Services and Community Relations. On April 19, 2018, Christine Mikell and Jason Graham, Water Reclamation & Biosolids Division Manager for the City of Fort Collins, provided an update on the transmission line that will cross Meadow Springs Ranch in a joint meeting of the Fort Collins Water Board and Energy Board. The presentation was well received, with several comments from Energy Board members in support of the project. Resource Planning. Solar/Storage Request for Proposals (RFPs). Platte River received a significant number of responses to its solar and storage RFP that was released on February 21. The RFP called for 20 MW of solar generation plus 1-5 MW of battery storage to be installed at the Rawhide Energy Station. Platte River staff screened and ranked nearly 300 individual bid structures from dozens of counterparties to develop a short list of qualified applicants. Discussions are underway with the short-listed participants to determine finalists for deal structure negotiations. A term sheet will be delivered to the finalists by mid-May, with a signed PPA expected in late-summer 2018. Output from the proposed project is expected by the end of 2019.

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Solar/Storage Wholesale Program and Pricing Model. Some of the municipalities may wish to use the energy from this project to support voluntary renewable programs such as green-pricing programs or community solar programs. To support the municipalities’ program planning efforts, Platte River staff continue to have frequent meetings with municipality staff to keep them informed about the project. In addition, we are beginning to discuss how the solar and storage will be priced at wholesale. To ensure consistent understanding among Platte River and the municipalities, we are developing a project charter to document Platte River’s and the municipalities’ expectations for the project scope, communications and wholesale pricing structure. Power Supply Plan (PSP). The first quarter Power Supply Plan was completed and delivered in April. The document and underlying analysis are revised quarterly and are used for both the annual budget and near-term rate forecasts. Outputs from the first quarter effort are used for the preliminary budget and are refined with updated information in the following months. The next update will be finalized on July 15 and those results will be incorporated into the revised budget and used for additional rate projections. 2019 Integrated Resource Plan (IRP). Platte River’s planning staff presented a preliminary project plan for the 2020 IRP at the April board meeting. The first steps in the process will include budgeting, contracting, and resource mobilization. It is anticipated the next IRP will be submitted in 2020, one year earlier than required in WAPA’s five-year cycle. The accelerated submittal will reflect Platte River’s recent actions taken to reduce carbon output, including the planned retirement of Craig 1 and the acquisition of additional renewable power. The IRP will also include revised expectations for a long-run trajectory to further decarbonize Platte River’s portfolio. CUSTOMER SERVICE Demand Response (DR) Pilot. Platte River Operators did not dispatch any DR events during the month of April due, in part, to a temporary transition in the physical location of the generation desk which required a significant amount of changes to hardware, communications systems and physical security. A new Power System Operator was hired and has been trained on the DR software in preparation for the upcoming peaking season. Electric Vehicle (EV) Study. The preferred vendor for the EV monitoring and control technology informed us that their product will not be ready for launch this year as previously represented. Platte River staff are exploring alternative technologies available for EV charge-session data collection and will develop a revised plan with municipal stakeholders on the best approach for completing the study. Energy Efficiency (EE) Programs. Platte River’s 2018 goals for efficiency programs are 32,000 MWh of new energy savings and 6,500 kW of new demand savings. A total of $12.4 million has been budgeted by Platte River and the owner communities for these EE programs, consisting of approximately $1 million in costs to manage and promote programs to customers and coordinate with municipal staff and $11.4 million in program spending for contracted services and rebates. Of this, Platte River covers $8.3 million and the owner communities will provide $4.1 million. The projected result is a levelized cost of energy of $41 per MWh, assuming that the entire budget is spent. Levelized cost is the total budget annualized over a 12-year estimated savings lifetime at a four percent annual discount rate. Year to date, EE programs have achieved 4,334 MWh of new energy savings and 611 kW of new summer peak demand reduction at a program cost of $2.23 million. We have collectively committed $9.08 million of EE program funding, including the $2.23 million spent, to specific programs and projects that are expected to be completed this year which will result in 20,596 MWh of new energy savings and 2,567 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.

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Customer Segment

Service provided YTD Results YTD Results &

Commitments

Budget & Projected

Results [1] Commercial & Industrial

Efficiency assessments 37 277 277 Efficiency project rebates 225 623 1,181

Energy savings (MWh) 4,174 16,696 27,600 Residential Efficiency assessments

& rebates 433 894 894

Discounted efficient products [2] 9,148 76,500 76,500

Energy savings (MWh) 189 3,900 3,900 Totals Energy savings (MWh) 4,334 20,596 31,500 Cost and Funding ($ millions) Staff cost $0.33 [3] $0.97 $0.97 Program cost $1.90 $8.11 $11.52 Total cost $2.23 $9.08 $12.49 Platte River funding $1.80 $7.46 $8.29 Municipality funding $0.43 $1.62 $4.20 Total funding $2.23 $9.08 $12.49

1. Projected results are updated throughout the year, based on available budgets and estimates of customer participation.

2. Discounted efficient products include rebates for smart thermostats; appliances; Efficiency Works Store products; refrigerator and freezer recycling in Longmont and Estes Park; LED lighting; and lighting controls.

3. YTD staff costs are estimated from the annual staff budget, assuming monthly costs are one twelfth the annual costs.

Efficiency Works Store and In-store Rebates. The Efficiency Works Store completed its first month of operation. To date, there have been 32 products sold via the online store: nine smart thermostats and 23 smart plugs and power strips. Through our retailer partners, the program has rebated an additional 79 smart thermostats in 2018. We continue to build market awareness though social media, email marketing, digital advertising, and by marketing directly to customers through other EE program promotions. Over the next few months, we will be adding in-store rebates for selected efficient appliances as well as adding new retail partners. Efficiency Works Business. Relative to 2017, year-to-date participation in the Efficiency Works Business program has increased significantly, with 35 percent more projects and 114 percent more energy savings. We expect this trend to continue in 2018 and to help us achieve this year’s increased energy-savings and demand-savings goals. Efficiency Works Homes. We have completed the transition of program administration for the Homes program from our third-party administrator, CLEAResult, to our in-house staff and a new group of auditing contractors. This has been a successful transition and we have already benefitted from the work of our new staff, due to lower-than-expected costs, increased efficiency and control, and increased responsiveness to the needs of our owner municipalities and their customers. This has been accomplished while maintaining the level of participation experienced in previous years.

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Documents

Board of Directors Regular Meeting 2000 E. Horsetooth Rd, Fort … · 2019-04-18 · Board of Directors Regular Meeting . 2000 E. Horsetooth Rd, Fort Collins, CO 80525 . Thursday,