Board of directors regular meeting VIRTUAL MEETING ONLY · 2020-07-07 · Board of directors regular meeting . 2000 E. Horsetooth Road, Fort Collins, CO 80525 . Thursday, July 30,

Board of directors regular meeting 2000 E. Horsetooth Road, Fort Collins, CO 80525

Thursday, July 30, 2020, 9:00 a.m. *VIRTUAL MEETING ONLY*

Call to order

1) Consent agenda Motion to approve a. Minutes of the regular meeting of May 28, 2020

Public comment

Committee report

2) Retirement committee report

Board action items

3) Executive session – personnel matters, matters subject to negotiation and attorneyclient privilege Motion (2/3 vote required)

4) Reconvene regular session5) Responsible transition plan for Rawhide employees Resolution 08-20

Management presentations

6) Center for Public Deliberation and Inside Information survey results7) Windy Gap Firming Project update

Management reports – for informational purposes only

8) Formal response to state goals9) Energy Efficiency programs update

Monthly informational reports – for informational purposes only

10) Legal, environmental and compliance report11) May and June 2020 operating report12) May and June 2020 financial report13) May and June general management report

Strategic discussions

• IRP moving forward

Adjournment

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Updated July 21, 2020 This calendar is for planning purposes only and is subject to change.

2020 BOARD MEETING PLANNING CALENDAR

August 27, 2020 Retirement Committee Meeting

Board Action Items

Management Presentations

Management Reports

Monthly Informational

Reports

Reimbursement resolution for generator outlet line

Energy Efficiency programs update

2021 Rate tariff schedules

Legal, environmental and compliance report

Standards of conduct July 2020 operating report

IRP recap and recommendations

July 2020 financial report

Wholesale rate projections

General management report

September 24, 2020

Board Action Items


Management Reports


Reports

Retirement committee report

2021 Proposed strategic budget – work session

DER strategy committee update


Standards of conduct 2021 Rate tariff schedules

Water Resources Reference document

August 2020 operating report

IRP approval Accounting policies – GASB 62

August 2020 financial report


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October 29, 2020 Board Action Items


Management Reports


Reports

2020 BKD audit plan 2021 Proposed strategic budget update – public hearing

Benefits updates – memo only (much like staffing update)


2021 Rate tariff schedules

DER strategy committee update

September 2020 operating report

Accounting policies – GASB 62

September 2020 financial report


November, 2020 Retirement Committee Meeting

No Board of Directors Meeting

December 10, 2020

Board Action Items


Management Reports


Reports

Retirement committee report

2021 Strategic budget update and review


2021 Strategic budget adoption

October 2020 operating report (November 2020 report, if available)

2020 Board contingency appropriation transfer – capital additions (if required)

October 2020 financial report (November 2020, if available)

2021 Proposed board of directors regular meeting schedule


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Topics to be scheduled:

• Synopsis of State Legislation of interest – this will be dependent on timing of legislature resuming and if they come back in fall

• Windy Gap Firming Project update – provided by Northern Water o Chimney Hollow Reservoir tour

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

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2020 BOARD OF DIRECTORS

Owner communities Term expiration

Town of Estes Park P.O. Box 1200, Estes Park, Colorado 80517 Mayor Wendy Koenig April 2024 Reuben Bergsten December 2024

City of Fort Collins P.O. Box 580, Fort Collins, Colorado 80522 Mayor Wade Troxell—Chair, Board of Directors April 2021 Ross Cunniff December 2020

City of Longmont 350 Kimbark Street, Longmont, Colorado 80501 Mayor Brian Bagley November 2021 David Hornbacher—Vice Chair, Board of Directors December 2022

City of Loveland 500 East Third Street, Suite 330, Loveland, Colorado 80537 Mayor Jacki Marsh November 2021 Joseph Bernosky December 2021

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Our vision To be a respected leader and responsible power provider improving the region’s quality of life through a more efficient and sustainable energy future.

Our mission While driving utility innovation, Platte River will safely provide reliable, environmentally responsible and financially sustainable energy and services to the owner communities of Estes Park, Fort Collins, Longmont and Loveland.

Our values Safety Without compromise, we will safeguard the public, our employees, contractors and assets we manage while fulfilling our mission. Integrity We will conduct business equitably, transparently and ethically while complying fully with all regulatory requirements. Service As a respected leader and responsible energy partner, we will empower our employees to provide energy and superior services to our owner communities. Respect We will embrace diversity and a culture of inclusion among employees, stakeholders and the public. Operational excellence We will strive for continuous improvement and superior performance in all we do. Sustainability We will help our owner communities thrive while working to protect the environment we all share. Innovation We will proactively deliver creative solutions to generate best-in-class products, services and practices.

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Memorandum

Date: 7/22/2020 To: Board of directors From: Jason Frisbie, general manager and chief executive officer

Angela Walsh, board secretary Subject: Consent agenda

Staff is requesting approval of the following item(s) on the consent agenda, supporting documents are included for each item. Approval of the consent agenda will approve all item(s) unless a member of the board removes an item from consent for further discussion. a) Minutes of the regular meeting of May 28, 2020

Attachment

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Regular meeting minutes of the board of directors

2000 E. Horsetooth Road, Fort Collins, CO Thursday, May 28, 2020

ATTENDANCE Board members via MS Teams Representing Estes Park: Mayor Wendy Koenig and Reuben Bergsten Representing Fort Collins: Mayor Wade Troxell and Ross Cunniff Representing Longmont: Mayor Brian Bagley and David Hornbacher Representing Loveland: Mayor Jacki Marsh and Joe Bernosky Platte River staff via MS Teams Jason Frisbie (General Manager/CEO) Sarah Leonard (General Counsel) Dave Smalley (Chief Financial Officer and Deputy GM) Andy Butcher (Chief Operating Officer) Alyssa Clemsen Roberts (Chief Strategy Officer) Angela Walsh (Executive Assistant/Board Secretary) Wade Hancock (Financial Planning and Rates Manager) Trista Fugate (Director of Community and Government Affairs) Shelley Nywall (Director of Finance) Heather Banks (Fuels and Water Manager) Julie Depperman (Director of Treasury Services) Libby Clark (Director of Human Resources and Safety) Guests Tim McCollough (City of Fort Collins) Theresa Connor (City of Fort Collins) Public call in line – guests unknown CALL TO ORDER Chair Troxell called the meeting to order at 9:01 a.m. A quorum of board members was present via MS Teams. The meeting, having been duly convened, proceeded with the business on the agenda. Chair Troxell announced that the Platte River staff decided to keep the board, staff and public safe by hosting a virtual meeting, and a call line had been opened for the public to call in on and listen to the meeting. He stated that all presentations had been postponed until in-person meetings could resume, and staff invited the public to send in public comments via email to the board secretary to be dispersed to the board in lieu of in-person comments. Director Hornbacher made a motion to revise the agenda to include an executive session to discuss agenda item 5; Debt financing plan, for the purposes of conferring with staff about negotiation strategies for a current matter and, as appropriate, instructing negotiators. Director Bergsten seconded. The motion carried 8-0 via roll call vote.

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Regular board meeting minutes: May 28, 2020

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ACTION ITEMS (1) Consent agenda

a. Approval of the regular meeting minutes of Apr. 28, 2020

Director Bergsten moved to approve the consent agenda as presented. Director Koenig seconded. The motion carried 8-0 via roll call vote. PUBLIC COMMENT No comments were submitted prior to the start of the meeting. BOARD ACTION ITEMS (2) Revision to wholesale transmission service (Tariff WT-21)

(presenter: Wade Hancock) Wade Hancock, financial planning and rates manager, referenced the materials within the board packet starting on page 17 and noted that Tariff WT-21 sets the terms and conditions for unbundled transmission services to entities other than Platte River’s owner communities. Mr. Hancock added the board reviews the wholesale transmission service tariff on an annual basis within the 2nd quarter after the audited year-end financial results are available to ensure rates reflect recent costs for operation and transmission usage. Approval of Resolution 07-20 will go into effect June 1, 2020. Chair Troxell commented on reactive power and voltage control being more explicitly outlined within the new rate structure. Director Bernosky moved to approve Resolution 07-20: revision to wholesale transmission service (Tariff WT-21) as presented. Director Bergsten seconded. Director Bergsten thanked staff for transparency of the rates. The motion carried 8-0 via roll call vote. MANAGEMENT REPORTS (3) Statewide carbon reduction goal (presenter: Trista Fugate)

Trista Fugate, director of community and government affairs, discussed the statewide goals for carbon reduction that requires electric utilities to submit a Clean Energy Plan (CEP) to the state as outlined in the board packet starting on page 27. Ms. Fugate noted that Platte River will have to file a CEP with 80% greenhouse gas reductions by 2030 or Platte River will be subject to additional regulation and fees associated with greenhouse gas emissions through 2030 that may be implemented by the air quality control commission (AQCC). The format for the CEP was undetermined as of the May board meeting. Alyssa Clemsen Roberts, chief strategy officer, highlighted the number of moving parts as they relate to energy legislation, energy regulation and environmental regulation and how they relate to Platte River Power Authority. Ms. Clemsen Roberts summarized the actions taken by Platte River and the board by approving the Resource Diversification Policy and working through the process to develop the Integrated Resource Plan (IRP). She noted the current global pandemic has slowed the IRP process, however, Platte River plans are in line with the state’s actions on

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proposed statewide carbon reduction goals. Ms. Clemsen Roberts and the senior leadership team recommends and requests that the board support moving forward with submitting a CEP to the state. Director Hornbacher supported the recommendation of being proactive when working with the state by submitting a CEP. Director Cunniff also supported moving forward with submitting a CEP and supports Platte River being a leader within the state. Director Bernosky requested clarification about what the confirmed submittal requirements/commitments by Platte River will be and asked what the downside to not submitting a plan. Ms. Clemsen Roberts responded that if Platte River did not submit a CEP Platte River will be required to go to the AQCC and participate through a separate regulatory process, noting that by submitting a CEP Platte River would be exempt from this next step process that could potentially result in more stringent requirements and fees. Ms. Clemsen Roberts added that Platte River is not regulated by the Public Utilities Commission (PUC) in Colorado and submitting a CEP does not expand PUC control over Platte River. We would simply submit the CEP to comply with the state mandates and reduce risks of further regulations and expenses. Director Marsh supported submitting a CEP and asked that we strive for 90% by 2030 and asked what percentage of clean energy Platte River will have with the Roundhouse wind project online. Jason Frisbie, general manager and CEO, responded the addition of both the Roundhouse project and the Rawhide Prairie Solar project will put Platte River just over 50% noncarbon energy generation delivered to the owner communities. Director Marsh noted receiving public comments on the National Renewable Energy Lab and asked if Platte River staff has evaluated their cost structure and also asked if projects includes the costs for transmission and related construction costs. Andy Butcher, chief operating officer, responded that the IRP includes total costs for wind and solar projects including transmission and interconnection costs under a 20-year purchased power agreement. Director Marsh requested a report showing the costs increasing over the 30 years for wind and solar versus the renewable energy lab explanation of costs. Director Bergsten will follow recommendations by the Platte River staff and as a board member noted an element of risk within the energy industry that no one can predict costs. He is concerned with making long-term commitments without understanding unanticipated consequences – that Platte River cannot eliminate options when making commitments. Director Troxell asked Ms. Clemsen Roberts if the CEP will to limit flexible plan changes if a plan is submitted. Ms. Clemsen Roberts noted the CEP rules are uncertain, but she believes it can be a flexible plan and requirements of meeting greenhouse gas emission reductions must be met. Staff will return to the July board meeting with more information regarding the CEP. Director Koenig confirmed her understanding of reaching the 80% carbon reduction goal does not limit going further. Staff confirmed it would be at least 80%. Director Bagley expressed concerns about setting policy as a board being different than a city council and the possibilities of Platte River achieving the goals, echoing voices of caution from other board members by adjusting goals back and forth. Director Bagley continued by supporting recommendations from Platte River staff on what the board should do. Ms. Clemsen Roberts responded there is less risk for Platte River to submit a CEP and will provide more

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details at the July board meeting. Mr. Frisbie responded directly to Director Bagley’s questions regarding the 80% reduction from the 2005 carbon emissions numbers and mentioned that this includes the three coal units on the system with anticipated closure dates prior to 2030. Mr. Frisbie continued by stating the Resource Diversification Policy was a blueprint to maintain the three pillars and to recognize the goal of 100% by 2030 with caveats beyond our control as a good start to the IRP. Director Bergsten commented on external focus on one of the three pillars, not all pillars, while eliminating options to take advantage of the other two pillars and requested keeping all options in mind for moving forward before making future decisions that are irreversible. Further discussion ensued among directors and staff regarding submitting a CEP and future flexibility in choosing resources compatible with moving toward a market. Staff will return to the board at the July meeting on recommendations to move forward with submitting a CEP. (4) Financial update – COVID-19 stress test, rate projections and 2021 budget

(presenter: Dave Smalley)

Dave Smalley, chief financial officer, provided information provided within the memo on page 33 of the board packet and the long-term rate projections and effects from COVID-19. Mr. Smalley noted this is the time of year staff would communicate the planned rate increase for the following year, as well as long term rate smoothing trajectory, but due to the COVID-19 impacts resulting in significant revenue uncertainty due to lower municipal load requirements and surplus sales pricing staff will need more time to determine 2021 impacts. Mr. Smalley noted several interim steps staff is taking to evaluate and refine the 2021 projections and will provide a recommendation at the August board meeting. Director Bernosky commented on experiencing the same uncertainties at the city level and requested any preliminary results to city staff just to give an idea for planning purposes. Mr. Smalley confirmed he would share information with all owner community rates staff. Director Hornbacher thanked the staff for providing information and supporting the Longmont staff navigating through the processes. (5) Debt financing plan revised to Executive Session

Mr. Smalley referenced the memo and whitepaper in the board packet starting on page 37 and noted the revised agenda to include moving into executive session to discuss the debt financing plan. Chair Troxell noted that per the agenda modification requested at the start of the meeting staff has requested the board of directors go into executive session for the purposes of conferring with staff about negotiation strategies for a current matter and, as appropriate, instructing negotiators. Director Hornbacher moved that the Board of Directors go into executive session for the purposes of conferring with staff about negotiation strategies for a current matter and, as

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appropriate, instructing negotiators. Director Bergsten seconded. The motion carried 8-0 via roll call vote. The General Counsel has advised that an executive session is authorized in this instance pursuant to Colorado Revised Statutes, Section 24-6-402, subsection 4(e)(I); provided that no formal action will be taken during the executive session.

Reconvene regular session

Chair Troxell reconvened the regular session and asked if there was any further discussion or action from the executive session. No members had further discussion and no actions were taken. (6) Platte River’s return to work planning (presenter: Libby Clark)

Libby Clark, director of human resources and safety, provided highlights outlined within the board packet information, starting on page 49, of Platte River’s planning efforts for returning staff back to the office and other facilities who have been working remotely since March 13. Director Cunniff asked about the need for temperature checks given the uncertainty of fever being a consistent symptom. Ms. Clark responded that the guidance continuously changes as far as symptoms of COVID-19 and updated guidance will be taken into consideration when the time comes to bring people back into the facilities. Ms. Clemsen Roberts added that she participates on a weekly call with CDPHE, the CDC and the Governor’s office and will ask that question again and follow up. MONTHLY INFORMATIONAL REPORTS (were for informational purposes only) (7) Legal, environmental and compliance report (presenter: Sarah Leonard) No questions received from the board. (8) April operating report (presenter: Andy Butcher)

No questions received from the board. (9) April financial report (presenter: Dave Smalley) No questions received from the board. (10) General management report (presenter: Jason Frisbie) No questions received from the board. Roundtable and strategic discussion topics Board members shared the latest news from the owner communities. ADJOURNMENT With no further business, the meeting adjourned at 11:36 a.m. The next regular board meeting

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is scheduled for Thursday, July 30, at 9:00 a.m. at the Platte River Power Authority, 2000 E. 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 , 2020.

Secretary

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Memorandum

Date: 7/22/2020 To: Board of directors From: Jason Frisbie, general manager and chief executive officer Subject: Retirement committee report

The retirement committee held its quarterly meeting on May 28, 2020. The minutes of that meeting are included in the board packet.

At the board meeting, the committee chair, Joe Bernosky, will provide a summary of the May retirement committee meeting.

Attachment

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NTAC:3NS-20

Meeting minutes of the defined benefit plan committee Meeting conducted online via Microsoft Teams

Thursday, May 28, 2020

ATTENDANCE Committee members Joseph J. Bernosky (chairman) Jason Frisbie (plan administrator) Brian Bagley 1 Ross Cunniff Wendy Koenig Dave Smalley Platte River staff Libby Clark (director of human resources and safety) Caroline Schmiedt (deputy counsel) Julie Depperman (director of treasury services) Kaitlyn McCarty (executive administrative assistant)

Guests Jason Palmer, Daniel Phillips and Armand Yambao of Northern Trust Asset Management (Northern Trust) Lloyd Nordstrom of Willis Towers Watson (Towers Watson) CALL TO ORDER The meeting was called to order at 12:33 p.m. A quorum was present and the meeting, having been duly convened, was ready to proceed with business. ACTION ITEMS (1) Review minutes of February 27, 2020, meeting. Chairman Bernosky asked for a motion to approve the minutes from the February 27, 2020, meeting. Mr. Frisbie moved to approve the minutes as submitted. Ross Cunniff seconded, and the motion carried 4-02. (2) Required plan contribution for 2021. Lloyd Nordstrom, senior consultant with Willis Towers Watson, the plan's actuary, reviewed the 2020 actuarial valuation (2021 funding) memo (included in the meeting materials). Platte River's funding for the defined benefit plan will decrease from $7.6 million in 2020 to $4.6 million in 2021. The decrease in funding is due to the positive return on assets during 2019. The 2021 funding includes a $1.1 million additional funding charge. The additional funding charge is implemented (amortized over five years) when the estimated present value of accrued benefits exceeds the estimated market value of assets. If assumptions

1 Joined the meeting at 12:39pm 2 Koenig did not vote since she was not present at the prior meeting, Bagley was not present at the time of the vote.

Defined Benefit Plan Committee Meeting Minutes: May 28, 2020

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NTAC:3NS-20

are met going forward, the plan’s actuary projects a steady decline in funding over the period of 2022 to 2041, with funding falling below $1.0 million beginning in 2031. Mr. Nordstrom explained that because the plan closed to new participants in 2010, an overall decline in contributions is projected. (There were 102 active employees in the plan on Jan. 1, 2020, down from 119 on Jan. 1, 2019.) Mr. Nordstrom reviewed the historical funding and pension information table included in the memo and explained to the committee how the total recommended contribution for the funding year is determined. (3) First quarter investment performance. Jason Palmer and Dan Phillips reviewed the first quarter performance and highlighted the plan’s performance relative to its benchmarks (included in the meeting materials). Mr. Phillips reviewed the asset class returns surrounding the COVID-19 pandemic. Northern Trust summarized key market developments, economic indicators, and significant events which impacted the market. Northern Trust reviewed the plan’s portfolio position for the first quarter and overviewed their firm’s asset allocation process. The process includes development of a tactical asset allocation and strategic asset allocation. The portfolio is comprised of risk control and risk assets and was moderately overweight in risk assets for the quarter. Page 13 of the quarterly investment report provides rationale for the portfolio’s positioning in each asset class. Northern Trust presented the tactical asset allocation changes that occurred during the first quarter. Utilizing the outsourced chief investment officer (OCIO) model, Northern Trust uses the investment policy statement (IPS) to determine whether allocation changes are appropriate and within the committee-approved ranges. When tactical changes are made, Mr. Frisbie, Mr. Smalley, and Ms. Depperman are notified, and the remaining committee members are provided an update at each quarterly meeting. In the first quarter, no tactical asset allocation changes were made. The investment manager changes that were made include eliminating FlexShares Morningstar Developed Markets ex-US Factor Tilt Fund, eliminating FlexShares Morningstar Emerging Markets Factor Tilt Fund, adding FlexShares Developed Markets ex-US Quality Low Volatility Index Fund and adding FlexShares Emerging Markets Quality Low Volatility Index Fund. Northern Trust reviewed the plan’s investment performance for the quarter. The portfolio experienced an investment return down 14.3% for the quarter, with a benchmark return of -13.9%. Since the inception date, the portfolio experienced an investment return of 6.1%, compared to the benchmark which returned 5.8%. For the quarter, the plan assets decreased from $106.4 million to $90.2 million, which accounts for contributions, income, depreciation, benefit payments and expenses. Northern Trust confirmed all asset allocations were within the target policy allocations. Northern Trust provided a performance summary of each of the funds which includes a total market value for each fund as well as the allocation percentage and rate of return. Northern Trust does not recommend any investment manager changes at this time as they continue to monitor the market during the COVID-19 pandemic. (4) Asset/ liability study. Armand Yambao reviewed the asset and liability study (included in the meeting materials). He reaffirmed that the current strategic asset allocation provides a reasonable balance to manage the asset volatility while earning sufficient returns to improve the funded ratio over time. Platte River’s disciplined contribution strategy continues to be key and contribution amounts could decline over time. The plan is 85% funded as of December 31, 2019,

Defined Benefit Plan Committee Meeting Minutes: May 28, 2020

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NTAC:3NS-20

if the funded status improves above 90% after 5 years, de-risking the plan could result in lower portfolio volatility and lower long-term costs. Mr. Yambao explained that this could be accomplished by implementing a dynamic asset allocation. Starting in 2025, the dynamic strategy assumes that the current strategic allocation is shifted to a “low risk” mix if the funded ratio exceeds 90%. (5) Educational session: low volatility strategies. Jason Palmer and Dan Phillips reviewed the quality low volatility strategy and highlighted why low volatility is an important tool in the Platte River portfolio (included in the meeting materials). Mr. Phillips explained that volatility spikes have become very frequent throughout the current pandemic and since the financial crisis. Quality low volatility seeks to deliver strong up/down market capture ratio (90%/73% realized for Northern Trust’s Quality Low Volatility US strategy since inception), manages risk with lower tracking error to benchmark by mitigating sector/region bias and efficiently captures the low volatility and quality factor premiums. (6) Other business. (None) The next regular committee meeting is scheduled for August 27, 2020, at 12:30 p.m. in the Platte River Power Authority Board Room. The meeting adjourned at 2:00pm. Chairman Joseph J. Bernosky

Memorandum


Sarah Leonard, general counsel Subject: Executive session

Consistent with Colorado law governing open meetings, the Platte River Board of Directors may convene an executive session to disuss, among other things, non-public personnel matters, matters that may be subject to negotiations and matters protected by attorney-client privilege. Staff therefore recommends the board convene an executive session to further consider the general manager’s and general counsel’s compensation (which are non-public personnel matters), to discuss pending matters that may be subject to negotiations and to receive legal advice concerning Platte River’s governance structure. Convening an executive session to discuss these matters is permitted by sections 24-6-402(4)(b), 24-6-402(4)(e)(I) and 24-6-402(4)(f)(I) of the Colorado Revised Statutes. No action will be taken by the board during executive session. There is no documentation for public use.

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No materials will be provided for this section.

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Memorandum


Sarah Leonard, general counsel Subject: Responsible transition plan for Rawhide employees

In light of Platte River’s recent announcement of plans to close the Rawhide Unit 1 coal plant (Rawhide) by 2030, all members of Platte River’s Board of Directors have emphasized the importance of the long-term wellbeing of Platte River employees working at Rawhide. At the board’s request, staff is presenting a resolution for the board’s consideration to communicate to Rawhide’s employees, and Platte River as a whole, the board’s commitment to a responsible transition for Rawhide’s employees. The proposed resolution is intended to capture and formalize board members’ feedback to management since the Rawhide closure announcement and will be shared throughout the organization promptly after board approval.

Attachment

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RESOLUTION NO. 08-20

Resolution No. 08-20: Responsible Transition for Rawhide Employees Page 1 of 2

Background

A. The Rawhide Unit 1 coal plant (Rawhide) is a world-class facility due to the skill

and dedication of the outstanding employees who have supported Rawhide’s operation since

1984.

B. Platte River Power Authority (Platte River) has announced the planned closure of

Rawhide by 2030, consistent with the board’s Resource Diversification Policy and Platte River’s

proactive role in carrying out state and federal environmental policies.

C. It is of paramount importance that Rawhide’s employees, who have continuously

delivered superior performance to safely operate Platte River’s most reliable and cost-effective

energy resource, have Platte River’s unwavering support as they transition through Rawhide’s

closure and decommissioning process.

Resolution

The board of directors of Platte River Power Authority therefore resolves that Platte

River’s management is directed to plan for and implement a responsible transition process for

Rawhide’s employees, built on these foundational principles:

1. Transparency. Platte River management will make every effort to proactively and

transparently communicate impacts to employees as decisions are made. This includes

timelines of planned events as they are determined.

2. Workforce Planning. Platte River management will continue to evaluate and identify

future workforce demands and communicate Platte River needs to staff.

3. Workforce Opportunities. Platte River management will prioritize internal staff for

workforce opportunities where Rawhide employees have relevant qualifications and

experience.

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RESOLUTION NO. 08-20

Resolution No. 08-20: Responsible Transition for Rawhide Employees Page 2 of 2

4. Workforce Training. Platte River management will provide training for Rawhide

employees when appropriate to successfully transition into new roles.

5. Retention Strategies. Platte River management will evaluate, design, and implement

employee retention strategies to ensure Rawhide continues to provide safe, reliable, and

financially responsible energy to our owner communities until its closure date, and that

Rawhide’s decommissioning process shows the same care and excellence as its

operations.

6. Transition Support. For those Rawhide employees whose future paths lead away from

Platte River, management will seek to ease their transitions with placement support and

incentives when appropriate.

AS WITNESS, I have signed my name as Secretary and have affixed the corporate seal of the Platte River Power Authority this day of , 2020. Secretary Adopted: July 30, 2020 Vote: ___

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Memorandum


Alyssa Clemsen Roberts, chief strategy officer Subject: Center for Public Deliberation and Inside Information survey results

Platte River contracted with Colorado State University’s (CSU) Center for Public Deliberation and Inside Information, an industry respected market research organization, to measure public opinions concerning Platte River and its three core pillars, the IRP process and the four energy mix options discussed within the IRP.

While both studies were conducted separately, they were designed to be complementary, without overlap. Taken in tandem, the studies provide a quantitative measurement of public opinion and a qualitative analysis of the public opinion; thus, explaining what the public thinks and why.

Principals from both the Center for Public Deliberation and Inside Information will present their findings to the board and be available to answer questions.

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Memorandum

Date: 7/22/2020 To: Board of directors From: Jason Frisbie, general manager/CEO

Dave Smalley, chief financial officer and deputy general manager Sarah Leonard, general counsel Julie Depperman, director of treasury services

Subject: Windy Gap Firming Project update

The purpose of this memorandum is to provide an update on the Windy Gap Firming Project, the allotment contract and Platte River’s financing strategy. The memorandum includes two options for funding the Windy Gap Firming Project. Staff recommends proceeding with option 2: participation in the Municipal Subdistrict, Northern Colorado Water Conservancy District’s pooled financing. Windy Gap Firming Project

Platte River has been working with the Municipal Subdistrict, Northern Colorado Water Conservancy District (the subdistrict) on the Windy Gap Firming Project (firming project) for almost two decades. During those years, Platte River has incurred preliminary costs of $13.6 million related to permitting, design, engineering and pre-construction activities. Platte River paid cash for these expenses and has since reimbursed $1.9 million of the costs with proceeds from the series HH bonds. The total cost of the project has been increasing over the years as the project is further defined and professionals hired by the subdistrict fine-tune cost estimates as the actual construction date approaches.

In 2013, the subdistrict estimated total project costs of the firming project of $286 million, with Platte River’s portion totaling $40 million for 12,000 acre-feet of storage. The most recent estimate (November 2019) indicates total project costs of $655 million, with Platte River’s portion totaling $116 million for 16,000 acre-feet of storage.

Construction of the project is currently on hold due to litigation pending in federal court. Platte River is reviewing options to finance its portion of the firming project through the issuance of up

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Platte River Power Authority

Windy Gap Firming Project update

7/22/2020

2

to 30-year tax-exempt bonds or participation in the subdistrict’s pooled financing combined with cash reserves.

Allotment contract review

• Each entity that wishes to participate in the firming project must sign an allotment contract.

• The terms of all allotment contracts will be essentially identical. There are separate provisions in the allotment contracts to govern obligations of participants contributing cash for construction costs and those participating in the subdistrict’s pooled financing. Participants can also choose to participate through a combination of cash contributions and pooled financing.

• Platte River has worked hard over the last several months to negotiate changes to the allotment contract and has made significant progress to:

o more strongly discourage default by pooled financing participants (by increasing allotment forfeiture), and

o make default provisions more equitable between participants contributing to construction costs with cash and those participating in the pooled financing.

• Platte River continues to work with subdistrict representatives to make sure payment security terms are compatible with Platte River’s obligations under its power bond resolution.

• We are hopeful that, while the final terms of the allotment contracts may not be optimal from Platte River’s perspective, they will present a reasonable balance of risk and benefits.

Financing options

Platte River has been in discussions with the subdistrict regarding Platte River’s financing plan and Platte River’s power bond resolution requirements. While Platte River was optimistic the discussions could lead to a practical solution, in May of 2020, the subdistrict board informed Platte River that it was unwilling to accommodate obligations Platte River has under its power bond resolution.

The subdistrict’s position effectively removed the option for Platte River to issue debt directly to finance the firming project. Subdistrict requirements would cause Platte River to violate power bond resolution requirements. The central issues are the subdistrict is not willing to allow Platte

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7/22/2020

3

River bond holders to have first lien on bond proceeds and will not allow Platte River to have control of disbursements from the project fund trust. Both of these are required under Platte River’s bond covenants.

Staff has been working on financing alternatives that allow Platte River to continue to participate in the firming project. While these options may not provide the lowest cost or may introduce additional risk to Platte River, at this point staff believes these are the most feasible options.

To reduce the size of the financing under either option shown below, Platte River is exploring generating additional cash reserves by selling Windy Gap units.

• Sale of ten Windy Gap units could generate up to $27 million in cash. o Platte River originally owned 160 Windy Gap units o In 2016, the board approved the sale of up to 60 units o Through 2019, Platte River sold 40 units, with proceeds totaling $75.9 million o Platte River is currently negotiating with two municipalities to sell a total of ten

Windy Gap units at $2.7 million per unit.

Option 1: Platte River debt issuance

• During 2020, Platte River would issue approximately $78 million of bonds to reimburse expenses related to our new headquarters campus ($47 million), the 230-kV generator outlet line from the Roundhouse Renewable Energy Project to the Rawhide Substation ($20 million) and preliminary expenses related to the firming project ($11 million).

• Combined with the $27 million in proceeds from the sale of Windy Gap units, this should provide enough to fund Platte River’s current portion of the estimated cost of the firming project.

• In May 2018, the board passed resolution 07-18 permitting Platte River to reimburse itself for capital expenditures on the headquarters campus project from the proceeds of revenue bonds.

• If Platte River intends to issue debt for the generator outlet line, staff will ask the board to approve a resolution in August 2020 permitting Platte River to reimburse itself for capital expenditures on the 230-kV generator outlet line from the proceeds of revenue bonds.

• Proceeds from the bond sale would reimburse expenses for headquarters campus and generator outlet line, freeing up other reserves until construction starts on the firming

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project. (The construction start date is currently unknown due to pending litigation. The firming project has been delayed for the last several years.)

• Delay in firming project construction creates negative arbitrage of approximately $2.9 million per year in carrying costs of holding cash at current interest rates.

• Rates are currently favorable for issuing debt, but significant volatility due to the pandemic could disrupt markets and cause rate fluctuation and lower investor demand.

• Bonds would need to be issued by October 2020 to meet the requirements to reimburse for the headquarters campus project. After this date, the amount of allowable reimbursement declines with time per reimbursement regulations.

• Platte River may have to issue additional bonds in future years if project costs increase before construction is completed.

Option 2: Participation in the subdistrict’s pooled financing

• The subdistrict will issue debt (20-30 year term) on behalf of participants near the start of construction.

• Participants in the pooled financing will also be allocated a pro rata share of a subordinate state loan. The loan with the state is currently at a favorable rate (2.08%) and provides $90 million of funding.

• Pooled financing includes additional debt to fund a bond reserve and cash reserves to fund a liquidity fund.

• Platte River could reduce its financing participation by the amount of cash reserves ($27 million) received from the sale of Windy Gap units. The $27 million would be transferred to the subdistrict near the start of construction and held in escrow.

• Pooled financing includes step-up provisions in the event of a default. Step-up provisions carry additional risk by subjecting Platte River to potential increased debt service if other pooled participants default on bond service payments. (See pooled financing step-up provisions section below.)

• Analysis provided by Platte River’s financial advisor indicates financing costs at current rates are comparable to Platte River issuing its own debt due to a favorable subordinate state loan, but the state funds and rate are not yet contractually secured.

• Pooled financing avoids negative arbitrage prior to construction due to the timing of issuing debt near the start of construction.

• Currently, investor demand is strong for essential wholesale electric utility service bonds, but the market may price pooled financing with other municipalities higher.

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Pooled financing step-up provisions

• Under current step-up provisions a defaulting participant loses half of its “vested” allotment rights and all of its unvested allotment rights. A defaulting participant remains in the project and must continue to make O&M payments on the portion of the vested allotment it retains. (The concepts of vested and unvested allotment rights reflect aggregate contributions to project capital costs at the time of default.)

• Defaulting participants (whether cash contributors or participants in pooled financing) remain liable for their defaulted payment obligations.

• Mandatory step-up obligations for pooled financing participants in any single year are limited to 35% of their then-existing loan-funded firming project allotments.

• Exhibit A attached to this memorandum provides a summary of the default provisions included in the allotment contract.

Recommendation

Staff recommends funding the firming project through a combination of cash from the sale of Windy Gap units and participation in the subdistrict’s pooled financing, which includes the subordinate state loan. By strengthening the step-up provisions and revising language in the allotment contracts, significant progress has been made in mitigating the potential risks associated with participation in the pooled financing. Based on current market conditions and assuming the subdistrict will secure a favorable state loan, the cost of the pooled financing is comparable to Platte River issuing debt for the headquarters campus and 230-kV generator outlet. In addition, Platte River can avoid the $2.9 million per year carrying costs of holding cash at current interest rates associated with Platte River issuing debt in 2020.

Staff will be available at the board meeting to answer questions.

Attachments

Exhibit A: summary of Windy Gap Firming Project allotment contract default provisions Exhibit B: Windy Gap Firming Project allotment contract

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Exhibit A: Summary of Windy Gap Firming Project allotment contract default provisions

Discussion draft July 6, 2020

Timing/type of default

Initial budgeted construction costs Overbudget construction costs

Post-construction capital costs O&M costs

Cash participant

Lose 50% of vested allotment (if any); lose 100% of unvested.

Option to contribute cash; failure shifts Participant into pooled financing group.

Option to contribute cash; failure shifts Participant into pooled financing group; allotment fully vested; lose 50% of vested allotment.

100% forfeiture.

Pooled financing participant

Lose 50% of vested allotment; lose 100% of unvested.

Same as for initial construction costs.

Lose 50% of vested allotment.

100% forfeiture.

Reallocation of cash participants’ forfeited allotments

Forfeited allotment (1) offered to non-defaulting participants, then (2) offered to other Windy Gap participants, then (3) allocated to non-defaulting participants. Whoever takes on the forfeited allocation must fill the financial “hole” caused by the default.


Same as for construction costs.

Forfeited allotment is allocated to non-defaulting participants, who take on overdue and future O&M payment obligations.

Step-up for loan participants’ forfeited allotment

Forfeited allotment (1) offered to non-defaulting loan participants (voluntary step-up), then (2) any unsubscribed amount is allocated to non-defaulting loan participants (mandatory step-up). Mandatory step-up obligations in any single year limited to 35% of existing allotment. Whoever takes on the forfeited allocation must fill the financial “hole” caused by the default.


Same as for construction costs.

Forfeited allotment is allocated to non-defaulting participants, who take on overdue and future O&M payment obligations.

Other default tools

• A defaulting participant remains liable for all unfulfilled payment obligations. • Available legal and equitable remedies apply to defaulting participants (or the Enterprise, if it defaults). • Prevailing party in litigation can recover its costs and attorneys’ fees. • Any participant can enforce the obligations of another participant.

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EXHIBIT B: ALLOTMENT CONTRACT BETWEEN THE WINDY GAP FIRMING PROJECT WATER ACTIVITY ENTERPRISE, MUNICIPAL SUBDISTRICT,

NORTHERN COLORADO WATER CONSERVANCY DISTRICT, AND [ACTUAL ALLOTTEE NAME*], FOR CAPACITY IN THE WINDY GAP FIRMING PROJECT

This Allotment Contract (“Contract”) for an allotment of capacity in the hereinafter defined

and described Windy Gap Firming Project is entered into this ____ day of __________, 2020, by and between the Windy Gap Firming Project Water Activity Enterprise (“WGFP Enterprise”) and [Actual Allottee Name*] (“[Actual Allottee Name*]”), pursuant to C.R.S. § 37-45-131 and C.R.S. §§ 37-45.1-103(4), 106(4).

RECITALS

A. The WGFP Enterprise is a government-owned business within the meaning of Article X, § 20(2)(d) of the Colorado Constitution organized pursuant to C.R.S. §§ 37-45.1-101 et seq. that is owned by the Municipal Subdistrict, Northern Colorado Water Conservancy District (the “Subdistrict”), and whose address is 220 Water Avenue, Berthoud, Colorado 80513. The WGFP Enterprise is a water activity enterprise that will exercise the authorities granted by C.R.S. §§ 37-45-101 et seq., 37-45.1-101 et seq., 31-35-401 et seq., and any other relevant grant of statutory authority, for the purpose of the planning, financing, acquisition, construction, operation, administration, maintenance, repair, replacement, rehabilitation, and improvement of the Windy Gap Firming Project.

B. [Actual Allottee Name*] is a [add description of party (enterprise)*].

C. The Windy Gap Firming Project (“WGFP”) is described in general in the U.S.

Bureau of Reclamation Record of Decision, together with supporting documents for the WGFP dated December 2011, as may be amended from time to time.

D. The WGFP has not, as of the date of this Contract, been financed, constructed, and completed. This Contract therefore includes provisions that address the WGFP before and after completion of construction and commencement of project operation. This Contract also includes provisions that apply only if and to the extent that [Actual Allottee Name*] satisfies all or a portion of its Capital C&E Funding Obligations through either Capital C&E Funding Cash Payments or participation in WGFP Financing.

• PART I, “Contract Definitions,” consists of Section 1, which includes definitions that apply

to this entire Contract.

• Part II, “Provisions Applicable to All WGFP Allottees,” consists of Sections 2 through 6 and applies to [Actual Allottee Name*] regardless of its chosen means of satisfying its Capital C&E Funding Obligations, unless specifically provided otherwise. Section 2 is an allotment by the WGFP Enterprise to [Actual Allottee Name*] of capacity in the WGFP. Section 3 includes provisions that are applicable prior to WGFP Completion, as that term is defined herein. Section 4 includes provisions that are relevant to the operation of the WGFP after WGFP Completion. Section 5 includes other general terms and conditions,

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including terms on Default and forfeiture under this Contract. Section 6 includes provisions relating to [Actual Allottee Name*]’s obligations to pay for the WGFP.

• PART III, “Provisions Applicable to Cash Allottees,” consists of Section 7, which includes provisions that apply to [Actual Allottee Name*] only to the extent that it satisfies all or a portion of its Capital C&E Funding Obligations through Capital C&E Funding Cash Payments, and then only for the term of any payments for Capital C&E using proceeds from such Capital C&E Funding Cash Payments.

• PART IV, “Provisions Applicable to Loan Allottees,” consists of Section 8, which includes provisions that apply to [Actual Allottee Name*] only to the extent that it satisfies all or a portion of its Capital C&E Funding Obligations through participation in a WGFP Financing, and then only for the term of repayment of the WGFP Financing (including any refinancing of the same) in which [Actual Allottee Name*] participates. The terms of Section 8 are not in effect at such times as there is no outstanding WGFP Financing in which [Actual Allottee Name*] participates.

The effective date and terms of each Section of this Contract are provided in Section 5.1*.

AGREEMENT

THEREFORE, in consideration of the facts recited above and of the covenants, terms and conditions set forth herein, the parties agree as follows:

PART I – CONTRACT DEFINITIONS 1. Definitions. The following definitions shall apply to this Contract unless expressly modified

herein. 1.1. “Acre-foot” means 43,560 cubic feet of water.

1.2. “Capital C&E Funding Cash Payment” means the payment by [Actual Allottee

Name*] of any Capital C&E Funding Obligations in cash to the WGFP Enterprise.

1.3. “Capital C&E Funding Obligations” means [Actual Allottee Name*]’s pro rata obligation, based on the WGFP Participation Percentages, to fund Capital C&E, which obligation shall equal the product of the Capital C&E multiplied by [Actual Allottee Name*]’s WGFP Participation Percentage. For reference purposes, each WGFP Allottee’s Capital C&E Funding Obligation for Initial C&E pursuant to Section 6.2.1* is set forth in Exhibit A* opposite each WGFP Allottee’s name, which exhibit the WGFP Enterprise may update from time to time as needed. For reference purposes, the amount of each WGFP Allottee’s Capital C&E Funding Obligations for any additional Capital C&E under Sections 6.2.2* and 6.2.3* will be set out in Exhibit B* (with separate tables for each additional Capital C&E), which exhibit the WGFP Enterprise may update from time to time as needed. [Actual Allottee Name*] may fulfill its

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Capital C&E Funding Obligations through Capital C&E Funding Cash Payments, participation in a WGFP Financing, or a combination thereof.

1.4. “Carriage Contract” means that Amendatory Contract, 2014 Contract

No. 15XX650003, entered into on December 19, 2014, between the Subdistrict, the District, and the United States of America for the purpose of utilizing the unused capacity of the facilities of the Colorado–Big Thompson Reclamation Project for the carriage of Windy Gap Project Water, and any subsequent amendments or successor contracts for the same purpose.

1.5. “C-BT Project Water” means water from the Colorado–Big Thompson Reclamation

Project.

1.6. “Chimney Hollow Reservoir” means that reservoir to be located in Sections 4, 5, 8, and 9, T4N, R70W, and Sections 33 and 34, T5N, R70W, 6th P.M., Larimer County, Colorado, and generally described in the U.S. Bureau of Reclamation Record of Decision, together with supporting documents, for the WGFP.

1.7. “Contract” means this contract.

1.8. “Costs and Expenses” or “C&E” means any and all costs and expenses incurred for

the WGFP, all of which are encompassed by one of the following defined terms:

1.8.1. “Capital C&E” means and includes any and all Initial C&E, Completion C&E, and Future Extraordinary C&E, including if applicable any and all WGFP Financing Costs associated with the same. 1.8.1.1. “Initial C&E” means the WGFP Enterprise’s initial estimated costs

of construction and completion of the WGFP with approximately 90,000 acre-feet of usable water storage capacity to be funded by the WGFP Allottees under Section 6.2.1*.

1.8.1.2. “Completion C&E” means the WGFP Enterprise’s costs in excess

of Initial C&E, if any, that are necessary for the construction and completion of the WGFP with approximately 90,000 acre-feet of usable water storage capacity to be funded by the WGFP Allottees under Section 6.2.2*.

1.8.1.3. “Future Extraordinary C&E” means the WGFP Enterprise’s

costs of any individual repair, replacement, rehabilitation, improvement, or regulatory compliance activities incurred after Initial C&E and Completion C&E that are required to be undertaken under Section 6.2.3* for the continued safe operation of the WGFP and that, because of the large amount of such costs, cannot be paid (1) using the Operating Reserve Fund or (2) by the WGFP Allottees through an annual payment for Operating C&E.

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1.8.2. “Operating C&E” means any and all costs, exclusive of Initial C&E,

Completion C&E, and Future Extraordinary C&E, incurred by the WGFP Enterprise (1) to administer, operate, maintain, repair, replace, rehabilitate, and improve the WGFP; (2) attributable to the delivery and storage of water in Chimney Hollow Reservoir that are not paid pursuant to a WGFP Allottee’s Windy Gap Project allotment contract, including, without limitation, pumping costs, carriage costs, and power interference costs; and (3) to meet regulatory requirements associated with the WGFP. Operating C&E specifically includes any and all “Costs and Expenses” that are not Capital C&E that may accrue after execution of this Contract.

1.9. “Default” means any event described in Sections 5.3.1* and 8.10* hereof.

1.10. “District” means the Northern Colorado Water Conservancy District, a quasi-municipal entity and political subdivision of the State of Colorado created under and having the powers provided in the Water Conservancy Act, C.R.S. §§ 37-45-101 et seq.

1.11. “Enterprise Board” means the Board of Directors of the WGFP Enterprise.

1.12. “Final Default” has the meaning provided in Section 5.3.5*.

1.13. “Financing Document” means any indenture, trust agreement, loan agreement,

installment purchase agreement, or other financing document entered into by the WGFP Enterprise in connection with any WGFP Financing Obligation (as defined in Section 8.2*).

1.14. “Fiscal Year” means the fiscal year of the WGFP Enterprise, which currently begins on October 1 of each calendar year and ends on September 30 of each calendar year, or such other twelve-month period which may be designated by the WGFP Enterprise as its Fiscal Year.

1.15. “Interim Agreements” means previously executed agreements between [Actual Allottee Name*] and the WGFP Enterprise under which [Actual Allottee Name*] agreed to pay a pro rata portion, based on the WGFP Participation Percentages, for the operation, maintenance, legal, administrative, improvement, and other costs of developing the WGFP before execution of this Contract.

1.16. “Liquidity Fund” means a reserve fund established under Section 8.4.1*.

1.17. “Loan Allottee Financing Obligation” means the obligation of a Loan Allottee to pay

a percentage of the total WGFP Financing Costs (as defined in Section 8.2*) that is equal to the Loan Allottee’s WGFP Financing Participation Percentage.

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1.18. “Operating Costs & Reserves” means, collectively, Operating C&E and the amounts required to be deposited into the Operating Reserve Fund and such other reserves as the Enterprise Board may determine are necessary to establish and maintain in relation to Operating C&E (if any) pursuant to Section 6.1.2*.

1.19. “Operating Fund” means a fund established to provide for the payment of the Operating C&E of the WGFP.

1.20. “Operating Reserve Fund” means a reserve fund established to provide for the

payment of Operating C&E if the moneys contained in the Operating Fund are insufficient to make such payments. The Operating Reserve Fund shall be maintained such that the amount of money in the fund shall equal the aggregate of two years of Operating C&E, as estimated by the WGFP Enterprise based on a five-year rolling average (except in the first five years of the Operating Reserve Fund’s existence, during which time the WGFP Enterprise will estimate based on available information) and taking into consideration the WGFP Enterprise’s reasonable expectations as to future Operating C&E.

1.21. “Prepositioned C-BT Project Water” means C-BT Project Water stored in Chimney Hollow Reservoir pursuant to the Carriage Contract.

1.22. “Prepositioned Windy Gap Project Water” means Windy Gap Project Water stored

in Chimney Hollow Reservoir as the result of C-BT Prepositioning pursuant to the Carriage Contract.

1.23. “Subdistrict” means the Municipal Subdistrict, Northern Colorado Water

Conservancy District, a quasi-municipal entity and political subdivision of the State of Colorado created under and having the powers provided in the Water Conservancy Act, C.R.S. §§ 37-45-101 et seq.

1.24. “Water Year” means the period from October 1 of one calendar year through

September 30 of the next succeeding calendar year.

1.25. “WGFP Allotment” means the quantity of capacity in the WGFP, expressed in “WGFP Units,” granted to [Actual Allottee Name*] by this Contract, or if the context requires, granted to each WGFP Allottee by WGFP Allotment Contracts. Each WGFP Allottee’s WGFP Allotment is shown in Exhibit A*. A WGFP Allotment does not include an allotment of Windy Gap Project Water, which is granted by the Subdistrict in separate Windy Gap Project allotment contracts.

1.26. “WGFP Allotment Contract” means any contract between the WGFP Enterprise and

a WGFP Allottee for a WGFP Allotment, including this Contract if the context requires.

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1.27. “WGFP Allottee” means each entity that holds a WGFP Allotment pursuant to a WGFP Allotment Contract, including [Actual Allottee Name*]. Exhibit A* lists all current WGFP Allottees.

1.27.1. “Cash Allottee” means a WGFP Allottee that, under Section 6.2*, satisfies all

or a portion of its Capital C&E Funding Obligations through Capital C&E Funding Cash Payments pursuant to Section 7*. A WGFP Allottee is a Cash Allotee to the extent that it satisfies its Capital C&E Funding Obligation through Capital C&E Funding Cash Payments, and then only for the term of any payments of Capital C&E using proceeds from Capital C&E Funding Cash Payments made by such WGFP Allottee.

1.27.2. “Loan Allottee” means a WGFP Allottee that, under Section 6.2*, satisfies all or a portion of its Capital C&E Funding Obligation through participation in a WGFP Financing pursuant to Section 8*. A WGFP Allottee is a Loan Allottee to the extent that it satisfies its Capital C&E Funding Obligation through participation in WGFP Financing, and then only during the term of such WGFP Financing.

1.28. “WGFP Completion” means the determination pursuant to Section 3.3* of this

Contract.

1.29. “WGFP Enterprise” has the meaning assigned to the term in the introductory paragraph of this Contract.

1.30. “WGFP Financing” means a financing by the WGFP Enterprise of Capital C&E

through one or more loans, lines of credit, notes, bond issues, or other forms of indebtedness, and any refinancing of the same, on behalf of the Loan Allottees participating in such WGFP Financing. WGFP Financing includes the CWCB Loan (as defined in Section 8.2*) and any other lien borrowings that may be subordinated to other financing.

1.31. “WGFP Financing Participation Percentage” means the quotient of a Loan

Allottee’s Capital C&E Funding Obligations that are to be paid through a WGFP Financing divided by the total amount of Capital C&E Funding Obligations to be paid by the WGFP Allottees through a WGFP Financing. To the extent a WGFP Allottee is a Loan Allottee for the Initial C&E, the WGFP Allottee’s WGFP Financing Participation Percentage that is applicable to the WGFP Financing for such Initial C&E is set forth in Exhibit A* opposite each WGFP Allottee’s name. The amount of each WGFP Allottee’s WGFP Financing Participation Percentage that is applicable to additional Capital C&E under Sections 6.2.2* and 6.2.3* will be set out in Exhibit B*.

1.32. “WGFP Participation Percentage” means the quotient of the number of WGFP Units

held by a WGFP Allottee divided by the total number of WGFP Units, as such WGFP Participation Percentage may be modified in accordance herewith. The WGFP

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Participation Percentages for each WGFP Allottee are set forth in Exhibit A* opposite each WGFP Allottee’s name.

1.33. “WGFP Unit” means 1/90,000th of the usable water storage and conveyance capacity

in the WGFP. There are 90,000 WGFP Units total.

1.34. “Winding-Up Agent” means the agent appointed by the Enterprise Board in accordance with Section 3.4* hereof.

1.35. “Winding-Up Resolution” means a resolution adopted by the Enterprise Board in

accordance with and after making the determination required by Section 3.4*.

1.36. “Windy Gap Firming Project” or “WGFP” means Chimney Hollow Reservoir and related or ancillary features constructed, operated and maintained by the WGFP Enterprise for the purpose of providing storage and delivery of water for use pursuant to WGFP Allotment Contracts.

1.37. “Windy Gap Project” means that project (including the acquisition and perfection of

water rights) constructed by the Subdistrict for the diversion, carriage, and delivery of water from the Colorado River pursuant to the Carriage Contract.

1.38. “Windy Gap Project Water” means water from the Windy Gap Project and also is

referred to in the Windy Gap Project allotment contracts as “Subdistrict water.” Storage and conveyance of Windy Gap Project Water in the WGFP does not change such water’s status as Windy Gap Project Water.

PART II – PROVISIONS APPLICABLE TO ALL WGFP ALLOTTEES

2. Allotment of WGFP Units. The WGFP Enterprise hereby allots and confirms to [Actual

Allottee Name*] a WGFP Allotment of XX* WGFP Units commencing as of the date of execution of this Contract and for so long thereafter as [Actual Allottee Name*] fully complies with all the terms, conditions and obligations hereinafter set forth. This WGFP Allotment is subject to C.R.S. § 37-45-101 et seq., C.R.S. § 37-45.1-101 et seq., the Carriage Contract, and the rules and regulations of the WGFP Enterprise, as may be established or amended from time to time. This Allotment is a complete substitute for the grant to [Actual Allottee Name*] of rights in the WGFP in any prior or current Interim Agreements between the WGFP Enterprise and [Actual Allottee Name*]. For reference purposes, each WGFP Allottee’s WGFP Allotment is shown in Exhibit A*.

3. Construction and Completion of WGFP. 3.1. Obligation of WGFP Enterprise to Construct and Complete the WGFP. The

WGFP Enterprise agrees to diligently pursue the WGFP in good faith and to pursue the construction, completion, and operation of the WGFP provided that the WGFP Allottees provide all required funding under their respective WGFP Allotment Contracts, the WGFP Enterprise has the ability, and the WGFP is feasible and practical.

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By entering into this Contract and accepting payments from [Actual Allottee Name*], the WGFP Enterprise does not warrant that it will construct and complete the WGFP.

3.2. Prior Agreements. All prior Interim Agreements and amendments thereto, including

the [Xth*] Amendment to the [Xth*] Interim Agreement, dated *, are terminated and of no further force and effect upon the effective date of this Contract under Section 5.1*. Any unexpended funds made available to the WGFP Enterprise pursuant to such Interim Agreements shall be transferred into the Operating Fund and credited by the WGFP Enterprise to amounts payable by [Actual Allottee Name*] under this Contract for Operating C&E, or into the Operating Reserve Fund.

3.3. WGFP Completion. The WGFP shall be deemed to be complete for purposes of this

Contract upon the Colorado State Engineer’s final certification of Chimney Hollow Reservoir for storage of water to its full capacity.

3.4. WGFP Termination Before WGFP Completion. The WGFP may be terminated

before WGFP Completion in the following manner:

3.4.1. If the Enterprise Board determines that the WGFP will be terminated before WGFP Completion because of infeasibility, impracticality, inability, or failure of the WGFP Allottees to fund the WGFP as provided in Section 3.1*, it shall first adopt a WGFP Winding-Up Resolution.

3.4.2. Upon the adoption of a WGFP Winding-Up Resolution by the Enterprise Board under Section 3.4.1*, and consistent with the rights, if any, of Larimer County, the WGFP Enterprise shall first offer to the Subdistrict to sell to it, at fair market value as determined by a majority of a panel of three licensed appraisers (one selected by the WGFP Allottees, one selected by the Subdistrict, and the third selected by these two selected appraisers), (1) the Chimney Hollow Reservoir site, (2) any partially constructed or completed physical works or assets that divert water into or release water from the Chimney Hollow Reservoir site, and (3) any other non-physical rights, interests, or obligations related to the WGFP. If the Subdistrict accepts such offer for any or all of the offered interests, then it shall close upon such interests within 180 days of the appraiser panel’s determination of fair market value. The WGFP Enterprise and [Actual Allottee Name*] specifically agree that the Subdistrict is a third-party beneficiary to this Contract for purposes of this Section 3.4.2* and Section 5.10*.

3.4.3. Upon adoption of a Winding-Up Resolution by the Enterprise Board, the

Enterprise Board shall appoint a WGFP Winding-Up Agent. The WGFP Winding-Up Agent shall, upon expiration of the time for the Subdistrict to accept the offer described in Section 3.4.2* above, prepare a plan for disposition of WGFP, and upon approval of the Enterprise Board, implement the disposition of WGFP assets pursuant to the plan, including the disposition of unexpended and unobligated funds of the WGFP Enterprise. Non-cash assets shall be liquidated by the Winding-Up Agent in a commercially

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reasonable manner. Proceeds from the disposition of WGFP Enterprise assets and any other cash or cash equivalents then held by the WGFP Enterprise shall be first used, based on the WGFP Participation Percentages, to distribute cash to the WGFP Allottees that satisfied their Capital C&E Funding Obligations through Capital C&E Funding Cash Payments and to repay debts of the WGFP Enterprise incurred for WGFP Financing; provided, however, that any moneys contributed by a Cash Allottee and held at the time of winding-up in such Cash Allottee’s subaccount in a fund or reserve fund established under Section 6.1*, or in such Cash Allottee’s Escrow Fund under Section 7* and the terms of such Cash Allottee’s Escrow Agreement, shall not be used to repay debts of the WGFP Enterprise incurred for WGFP Financing. Any remaining funds shall then be distributed to the WGFP Allottees based on their respective WGFP Participation Percentages. [Actual Allottee Name*] shall be entitled to copies of any work products developed by the WGFP Enterprise or its consultants on behalf of the WGFP Allottees, and the WGFP Enterprise shall convey to [Actual Allottee Name*], as a tenant in common with all other WGFP Allottees who are not in Default of their respective WGFP Allotment Contracts, a pro rata interest in all real and personal property remaining after implementation of the plan for disposition of WGFP Assets pursuant to this Section 3.4*.

3.4.4. Upon completion of the winding-up process described in this Section 3.4*, the Enterprise Board shall adopt a resolution of termination of the WGFP. Upon the adoption of such resolution, all WGFP Allotments shall be terminated.

4. WGFP Operation After WGFP Completion.

4.1. Use of WGFP Allotment. [Actual Allottee Name*] agrees that its WGFP Allotment

shall only be used for the storage and delivery of Windy Gap Project Water to which [Actual Allottee Name*] is entitled, storage of Prepositioned C-BT Project Water under the terms of the Carriage Contract, or storage and delivery of such other legally available water as the Enterprise Board shall authorize for storage and delivery in the WGFP, which authorization shall not be unreasonably withheld. [Actual Allottee Name*]’s receipt and use of Windy Gap Project Water also is subject to the Carriage Contract and [Actual Allottee Name*]’s Windy Gap Project allotment contract(s). [Actual Allottee Name*] shall have the right to assign or otherwise agree to the use of [Actual Allottee Name*]’s WGFP Allotment by one or more WGFP Allottees.

4.2. Prepositioning. The Subdistrict shall have the right to preposition C-BT Project Water

in any portion of the WGFP not used by [Actual Allottee Name*] for the storage of water in [Actual Allottee Name*]’s WGFP Allotment under Section 4.1*. Prepositioned C-BT Project Water shall become Prepositioned Windy Gap Project Water when Windy Gap Project Water is available and designated for storage in Chimney Hollow Reservoir. Prepositioned C-BT Project Water shall be allocated to WGFP Allottees that have ordered and paid for the delivery of Windy Gap Project Water into Chimney Hollow Reservoir in the then current Water Year. Further details

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of allocation of Prepositioned C-BT Project Water will be developed in the operating criteria described in Section 4.7*.

4.3. Estimate of Charges. The WGFP Enterprise shall furnish [Actual Allottee Name*] with an estimated statement of anticipated C&E required to be paid in the following year under this Contract on or before the last business day in August of each year, which statement may be used by [Actual Allottee Name*] for budgeting purposes.

4.4. Estimated Demand and Delivery Schedule. On or before the last business day in

September of each year, [Actual Allottee Name*] shall provide the WGFP Enterprise with an estimated demand and delivery schedule for Windy Gap Project Water that will be stored in or delivered from the WGFP for the following Water Year, which schedule will be used by the WGFP Enterprise for purposes of submitting a proposal to the U.S. Bureau of Reclamation in accordance with the Carriage Contract. The schedule shall contain the time, delivery points, and quantities of water which [Actual Allottee Name*] estimates it shall require. This schedule may be modified from time to time as the need warrants within the physical capabilities of the C-BT Project, Windy Gap Project, and WGFP.

4.5. Billing Statement. On or before the last business day of December of each year, the

WGFP Enterprise shall render a billing statement to [Actual Allottee Name*] for C&E required to be paid in the following year under this Contract. The billing statement shall be based upon actual C&E incurred by the WGFP Enterprise during the current Water Year and planned C&E for the upcoming Water Year. Any credit from the previous Water Year or any additional C&E from the previous Water Year shall be included in the billing statement rendered. Each billing statement shall be accompanied by reasonable supporting documentation showing the basis and derivation of C&E shown in the billing statement. After receipt of the billing statement, [Actual Allottee Name*] shall pay the net C&E charges shown on the billing statement of estimated C&E on or before the last business day of January of the succeeding calendar year*.

4.6. Billing Statement Dispute Resolution. If [Actual Allottee Name*] disputes the correctness of any billing statement by the WGFP Enterprise, it shall pay the WGFP Enterprise the full amount billed when due and shall, before or contemporaneously with such payment, inform the WGFP Enterprise that such payment is made wholly or partially under protest and request an explanation of the billing statement from the WGFP Enterprise. If the bill is determined to be incorrect, the WGFP Enterprise shall issue a corrected billing statement to [Actual Allottee Name*]. Any overpayment shall be refunded to [Actual Allottee Name*] within sixty (60) days. If the WGFP Enterprise and [Actual Allottee Name*] fail to agree on the correctness of a bill within one hundred twenty (120) days after [Actual Allottee Name*] gives notice to the WGFP Enterprise that a payment is made wholly or partially under protest, then the parties may agree to submit the dispute to binding arbitration or, failing such agreement, proceed to protect and enforce their respective rights by appropriate judicial proceeding.

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4.7. Operating Criteria. [Actual Allottee Name*] acknowledges and understands that the storage and delivery of water in the WGFP will require and will be implemented pursuant to operating criteria agreed upon between the WGFP Allottees and the WGFP Enterprise that will address additional operational, financial, and other details of the WGFP. [Actual Allottee Name*]’s WGFP Allotment will be operated on substantially the same terms as all other WGFP Allottees. The operating criteria shall not modify or amend this Contract or result in a material adverse effect on [Actual Allottee Name*]’s rights under this Contract to control its WGFP Allotment, or its ability to have water diverted into, stored in, or released from the WGFP under its WGFP Allotment on a pro-rata and substantially similar basis with other WGFP Allottees.

4.8. Delivery Points. The WGFP Enterprise’s liability and responsibility to [Actual

Allottee Name*] to deliver a quantity of water ordered for delivery by release from the WGFP under this Contract shall end and cease at the moment that such quantity of water is released out of WGFP structures or facilities. The WGFP Enterprise agrees to cooperate with [Actual Allottee Name*] in the coordination and accomplishment of conveyance and delivery of water from that point to [Actual Allottee Name*] through structures or facilities not owned by the WGFP Enterprise.

4.9. Capacity Limitations. In the event that orders of water from the WGFP exceeds

available delivery capacity at any WGFP structure or facility, the available capacity at such structure or facility shall be allocated between the WGFP Allottees requiring delivery through such structure or facility in proportion to their respective WGFP Participation Percentages.

5. Other General Terms.

5.1. Effective Date and Term. No provision of this Contract shall take effect until each

WGFP Allottee identified in Exhibit A* duly authorizes, executes, and delivers to the WGFP Enterprise its respective WGFP Allotment Contract, and the WGFP Enterprise duly authorizes, executes, and delivers to the WGFP Allottees their respective WGFP Allotment Contracts. Sections 1, 2, 4, 5, and 6* of this Contract shall be perpetual unless terminated pursuant to this Contract. Section 3* shall be in effect until WGFP Completion. Section 7* of this Contract shall be in effect during the term of any payments of Capital C&E using proceeds from Capital C&E Funding Cash Payments made by such WGFP Allottee. Section 8* of this Contract shall be in effect during the term of any WGFP Financing in which [Actual Allottee Name*] participates.

5.2. Transfer of a WGFP Allotment.

5.2.1. Transfer to Existing WGFP Allottee. Subject to the terms and conditions set

forth in any Financing Documents, the Enterprise Board shall approve a requested transfer of WGFP Units constituting all or a portion of [Actual Allottee Name*]’s WGFP Allotment to one or more other WGFP Allottees that have a WGFP Allotment as of the time of the transfer if the Enterprise Board determines that (1) the WGFP Allottee receiving the additional WGFP Units

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has an existing or future need for additional WGFP Units, (2) the WGFP Allottee receiving the additional WGFP Units has sufficient financial capacity, and (3) the transfer will not create a material risk under applicable law.

5.2.2. Transfer to Other Parties. [Actual Allottee Name*] may transfer all or a portion of its WGFP Allotment to an entity that will use the WGFP Allotment within the Subdistrict that is not an existing WGFP Allottee at the time of the proposed transfer but that holds, or has the legal ability to acquire, an allotment of Windy Gap Project Water with the approval, in its discretion, of the Enterprise Board; provided, however, that the Enterprise Board shall disclose, in writing, the basis for a decision to not approve a proposed transfer under this Section 5.2.2*.

5.2.3. If [Actual Allottee Name*], with approval of the Enterprise Board as required

by this Section 5.2*, transfers a part of its WGFP Allotment to another entity, then [Actual Allottee Name*] shall be relieved of its obligations hereunder to the extent of said transfer, except as otherwise provided herein, specifically including in Section 8*. If [Actual Allottee Name*], with approval of the Enterprise Board as required by this Section 5.2*, transfers all of its WGFP Allotment to another entity, then [Actual Allottee Name*] shall no longer participate in the WGFP and [Actual Allottee Name*] shall be relieved of its obligations, except as otherwise provided herein, specifically including in Section 8*.

5.3. Default.

5.3.1. Event of Default. An event of Default shall occur upon any breach of this

Contract, including, without limitation:

5.3.1.1. Capital C&E Funding Cash Payments. The failure of [Actual Allottee Name*] to pay when due amounts payable pursuant to Sections 6.2* and 7* of this Contract for Initial C&E. As provided in Section 6.2.2.1*, if [Actual Allottee Name*] elects to pay its Capital C&E Funding Obligations for Completion C&E or Future Extraordinary C&E under this Contract through Capital C&E Funding Cash Payments, then failure to timely make its Capital C&E Funding Cash Payment for such Completion C&E or Future Extraordinary C&E after so electing shall not constitute an event of Default, but in such event [Actual Allottee Name*] shall be obligated to pay its Capital C&E Funding Obligations for such Completion C&E or Future Extraordinary C&E through participation in a WGFP Financing in the same manner as provided in Section 6.2.2.2* and Section 8*.

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5.3.1.2. WGFP Financing. The failure of [Actual Allottee Name*] to pay when due amounts payable pursuant to Sections 6.2* and 8* of this Contract.

5.3.1.3. Operating Costs & Reserves. The failure of [Actual Allottee Name*] to pay when due amounts payable pursuant to Section 6.3* of this Contract.

5.3.1.4. The violation of C.R.S. § 37-45-101 et seq., C.R.S. § 37-45.1-101

et seq., or the rules and regulations of the WGFP Enterprise, as may be established or amended from time to time.

5.3.2. Notice of Default. Upon a Default, the WGFP Enterprise in the case of a

Default by [Actual Allottee Name*], or [Actual Allottee Name*] in the case of a Default by the WGFP Enterprise, shall give the defaulting party and all other WGFP Allottees written notice of the Default in accordance with Section 5.16* and, if applicable, Section 5.4.3* or Section 5.5.4*, on or before the first business day of March following the Default.

5.3.3. Use of WGFP Allotment While in Section 5.3.1* Default. Beginning on the day notice is received under Section 5.3.2* and continuing for so long as [Actual Allottee Name*] is in Default under this Section 5.3*, [Actual Allottee Name*] may place water into storage in its WGFP Allotment but shall have no rights to take water out of storage from or otherwise use any water stored therein; provided, however, that if [Actual Allottee Name*] is in Default under Section 5.3.1.4* for violation of a rule or regulation of the WGFP Enterprise and such rule or regulation authorizes a WGFP Allottee to take water out of storage from or otherwise use any water stored in its WGFP Allotment during the term of any Default for violation of the rule or regulation, those terms of the rule or regulation shall control. [Actual Allottee Name*] may continue to use and exercise its rights in the Windy Gap Project during any time it is in Default under this Section 5.3*. Water in storage under [Actual Allottee Name*]’s WGFP Allotment shall continue to be assessed evaporative and other losses during any period of Default under this Section 5.3*. The Subdistrict may continue to use the WGFP Allotment of [Actual Allottee Name*] under this Section 5.3.3* for storage of Prepositioned C-BT Project Water; however, other WGFP Allottees shall have no right to use the WGFP Allotment of [Actual Allottee Name*] under this Section 5.3.3* for the term of the Default. Upon [Actual Allottee Name*]’s cure of its Default under Section 5.3.4*, [Actual Allottee Name*]’s rights to use its WGFP Allotment and any water stored therein shall be restored, subject to any operational limitations that may exist.

5.3.4. Cure. For events of Default other than those Defaults under Sections 5.3.1.1* (Capital C&E Funding Cash payments), 5.3.1.2* (WGFP Financing payments), and 5.3.1.3* (payments of and into Operating Costs & Reserves), [Actual

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Allottee Name*] or the WGFP Enterprise, as the case may be, shall have 60 days from receipt of a Notice of Default given under Section 5.3.2.* to cure a Default by performance or acceptance by the non-defaulting party of an alternate means of or plan for cure of the Default. In the case of a proposed alternate means of or plan for cure of a Default by [Actual Allottee Name*], the WGFP Enterprise shall give notice of the proposed alternate means or plan for cure to all other WGFP Allottees before taking formal action rejecting or accepting the same. A non-defaulting party’s acceptance of a plan for cure of a Default under this Section 5.3.4* shall not constitute a waiver of any rights, claims, defenses, or remedies under this Contract. [Actual Allottee Name*]’s rights to cure events of Default under (1) Sections 5.3.1.1* and 5.3.1.2* are as provided in Section 5.4.5* and (2) Section 5.3.1.3* are as provided in Section 5.5.5*.

5.3.5. Final Default. For events of Default other than those Defaults under Sections

5.3.1.1* (Capital C&E Funding Cash payments), 5.3.1.2* (WGFP Financing payments), and 5.3.1.3* (payments of and into Operating Costs & Reserves), a Final Default shall occur upon (i) the expiration of the period for cure of a Default if [Actual Allottee Name*] or the WGFP Enterprise, as the case may be, does not cure the Default or the non-defaulting party does not accept, within the period for cure, a plan for an alternate means of or plan for cure of the Default, or (ii) failure of [Actual Allottee Name*] or the WGFP Enterprise, as the case may be, to perform under a duly accepted alternate means of or plan for cure of the Default. Notice of a Final Default under this Section 5.3.5* shall be given to the WGFP Enterprise and all WGFP Allottees no later than the first business day of the first February after the cure period terminates. Final Default with respect to events of Default under (1) Sections 5.3.1.1* and 5.3.1.2* shall occur as provided in Section 5.4.6*, and (2) Section 5.3.1.3* shall occur as provided in Section 5.5.6*.

5.3.6. Consequences of Final Default. The consequences of Final Default shall be

as specified in this Contract.

5.3.6.1. Capital C&E Funding Cash Payments. The consequence of [Actual Allottee Name*]’s Final Default under Section 5.3.1.1* shall be as described in Section 5.4* of this Contract.

5.3.6.2. WGFP Financing. The consequence of [Actual Allottee Name*]’s

Final Default under Section 5.3.1.2* shall be as described in Section 5.4* of this Contract.

5.3.6.3. Operating Costs & Reserves. The consequence of [Actual Allottee Name*]’s Final Default under Section 5.3.1.3* shall be as described in Section 5.5* of this Contract.

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5.3.6.4. The consequence of [Actual Allottee Name*]’s Final Default for any breach of this Contract other than a failure to pay amounts due under this Contract shall be as described in Section 5.5.6* and Section 5.5.7* of this Contract, except that Final Defaults for violations of the rules and regulations of the WGFP Enterprise shall be remedied as provided in such rules and regulations and shall result in forfeiture and termination of [Actual Allottee Name*]’s WGFP Allotment in accordance with Section 5.5.6* and Section 5.5.7* only if the violated rule or regulation so provides.

5.3.6.5. A Final Default by [Actual Allottee Name*] shall not terminate any

obligation to pay amounts due under this Contract as established by Sections 6*, 7*, and 8* of this Contract.

5.3.6.6. Upon a Final Default for any breach of this Contract by the WGFP

Enterprise, [Actual Allottee Name*] and the WGFP Enterprise agree to confer in good faith to attempt to resolve the Final Default, and if conferral fails to resolve the Final Default, then to participate in nonbinding mediation.

5.3.7. Enforcement of Remedies. In addition to the other remedies set forth herein, including in this Section 5.3*, upon the occurrence of a Final Default as defined herein, the WGFP Enterprise or [Actual Allottee Name*], as the case may be, shall be entitled to proceed to protect and enforce the rights vested in such party by this Contract by such appropriate judicial proceeding as such party shall deem most effectual, either by action of law or by suit in equity, whether for the specific performance of any covenant or agreement contained herein or to enforce any other legal or equitable right vested in such party by this Contract or by law, and the prevailing party shall be entitled to an award of its reasonable costs and attorney fees.

5.4. Default on Capital C&E Funding Obligations Under Sections 5.3.1.1* and 5.3.1.2*

5.4.1. Capital C&E Funding Obligations Default. Failure of [Actual Allottee

Name*] to pay amounts due under Section 6.2* and in accordance with Section 7* or Section 8*, as applicable, shall constitute an event of Default under Section 5.3.1.1* or Section 5.3.1.2*, as applicable.

5.4.2. Grace Period. If [Actual Allottee Name*] is in Default under Section 5.4.1*

and fully pays its defaulted payments within 30 days after such payments are due, then [Actual Allottee Name*] shall no longer be considered in Default under Section 5.4.1* and no interest, penalties, or other Default obligations or consequences shall attach.

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5.4.3. Notice of Default. On the first business day after the grace period under Section 5.4.2* runs, the WGFP Enterprise shall notify each WGFP Allottee of the names of all WGFP Allottees, if any, in Default under Section 5.4.1*.

5.4.4. WGFP Financing Liquidity Fund. For each Loan Allottee in Default under

Section 5.4.1*, the WGFP Enterprise shall on the first business day after the grace period under Section 5.4.2* runs apply such Loan Allottee’s Liquidity Fund to cover that Loan Participant’s defaulted payment.

5.4.5. Cure Period. [Actual Allottee Name*] has until the last business day of

January of the succeeding calendar year to cure any Default under Section 5.4.1*. A Loan Allottee cures a Default under Section 5.4.1* by reimbursing the Liquidity Fund, plus a late-fee penalty of 5%, and by reimbursing any other expenses incurred by the WGFP Enterprise or any other WGFP Allottee as a result of such Default. A Cash Allottee cures a Default under Section 5.4.1* by paying the defaulted Capital C&E Funding Cash Payment and reimbursing any expenses incurred by the WGFP Enterprise or any other WGFP Allottee as a result of such Default. If [Actual Allottee Name*] timely cures a Default under this Section 5.4.5*, then no part of [Actual Allottee Name*] WGFP Allotment shall be forfeited and reallocated under Section 5.4.6*.

5.4.6. Final Default; Penalties and Reallocation of WGFP Allotment. If [Actual

Allottee Name*] does not timely cure a Default under Section 5.4.5*, then Final Default shall be deemed to have occurred and all or a portion of [Actual Allottee Name*]’s WGFP Allotment shall be permanently forfeited and reallocated as follows:

5.4.6.1. For purposes of this Section 5.4.6*, to the extent that [Actual

Allottee Name*] is a Loan Allottee for Initial C&E and Completion C&E (if any) and in Default under Section 5.3.1.2*, “Vested Allotment” shall mean that proportion of [Actual Allottee Name*]’s WGFP Allotment attributable to its participation in a WGFP Financing for Initial C&E and Completion C&E (if any) that is equal to the quotient of the amount of its Capital C&E Funding Obligations (not including WGFP Financing Costs other than principal) paid by [Actual Allottee Name*] immediately prior to the date of the Default under Section 5.4.1* divided by the total amount of [Actual Allottee Name*]’s Capital C&E Funding Obligations for Initial C&E and Completion C&E (if any) satisfied through participation in a WGFP Financing (not including WGFP Financing costs other than principal), rounded down to the nearest whole WGFP Unit; and “Unvested Allotment” shall mean the remainder of [Actual Allottee Name*]’s WGFP Allotment attributable to [Actual Allottee Name*]’s participation in a WGFP Financing for Initial C&E and Completion C&E (if any).

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5.4.6.2. For purposes of this Section 5.4.6*, to the extent that [Actual Allottee Name*] is a Cash Allottee for Initial C&E and in default under Section 5.3.1.1*, “Vested Allotment” shall mean that proportion of [Actual Allottee Name*]’s WGFP Allotment attributable to its satisfaction of its Capital C&E Funding Obligations through Capital C&E Funding Cash Payments that is equal to the quotient of the amount of such Capital C&E Funding Obligations for Initial C&E paid by [Actual Allottee Name*] through Capital C&E Funding Cash Payments, if any, immediately prior to the date of the Default under Section 5.4.1* divided by the total amount of such WGFP Allottee’s Capital C&E Funding Obligations for Initial C&E satisfied through Capital C&E Funding Cash Payments, rounded down to the nearest whole WGFP Unit; and “Unvested Allotment” shall mean the remainder of [Actual Allottee Name*]’s WGFP Allotment attributable to [Actual Allottee Name*]’s satisfaction of such Capital C&E Funding Obligations through Capital C&E Funding Cash Payments.

5.4.6.3. Upon [Actual Allottee Name*]’s satisfaction of all Capital C&E

Funding Obligations for Initial C&E under Section 6.2.1* and Completion C&E under Section 6.2.2*, [Actual Allottee Name*]’s “Vested Allotment” shall be considered to be all (100%) of [Actual Allottee Name*]’s WGFP Allotment, and any other Capital C&E Funding Obligations for Future Extraordinary C&E under Section 6.2.3* shall have no effect on [Actual Allottee Name*]’s “Vested Allotment.”

5.4.6.4. A WGFP Allottee in Final Default under this Section 5.4.6* shall forfeit any and all right, title, claim, or interest, whether express or implied, in or to its Unvested Allotment plus fifty percent (50%) of its Vested Allotment, including any water then in storage in such Unvested Allotment and Vested Allotment. The WGFP Enterprise shall give notice to all WGFP Allottees of such forfeiture by the first business day of February of the calendar year in which such forfeiture occurs. [Actual Allottee Name*], by executing this Agreement, certifies that it has fully disclosed to the governing body of [Actual Allottee Name*] the existence and consequence of this Contract, and agrees that but for its acceptance of the forfeiture of a WGFP Allotment pursuant to this Section 5.4.6.4*, the WGFP Enterprise would not have entered into this Contract or any other agreement related to WGFP. [Actual Allottee Name*] waives any and all legal or equitable claims, in any forum, to WGFP, WGFP Allotments, or WGFP assets, or against the WGFP Enterprise, arising out of a Final Default under this Section 5.4* by [Actual Allottee Name*]. Irrespective of such forfeiture, a WGFP Allottee

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shall remain liable to the WGFP Enterprise to pay the full amount of its Capital C&E Funding Obligations.

5.4.6.5. A defaulting Loan Allottee’s forfeited Unvested Allotment and

Vested Allotment, including any water then in storage in such Unvested Allotment and Vested Allotment, shall be reallocated under Section 5.4.6.6* to all Loan Allottees that step up in proportion to the amounts each Loan Allottee stepped up thereunder. A defaulting Cash Allottee’s forfeited Unvested Allotment and Vested Allotment, including any water then in storage in such Unvested Allotment and Vested Allotment, shall be reallocated to all non-defaulting WGFP Allottees by the WGFP Enterprise under the terms of Section 5.5.7*.

5.4.6.6. Loan Allottee Step-Up.

5.4.6.6.1. Voluntary Step-Up. By March 15 following any Final

Default under Section 5.4.6*, any Loan Allottee may voluntarily step up to (1) make all or part of the defaulted payment (including replenishment of the Liquidity Fund), and (2) assume the obligation for all future annual debt service and Operating C&E payments for that portion of a defaulting Loan Allottee’s obligation. If two or more Loan Allottees volunteer to step up under this Section 5.4.6.6*, then each will assume a pro rata portion (based on their respective WGFP Financing Participation Percentages), or agreed upon amount, of the defaulted payment.

5.4.6.6.2. Mandatory Step-Up. If not all defaulted payments are

covered by Loan Allottees who choose to voluntarily step up under Section 5.4.6.6.1*, then for any portion of the defaulted payment not voluntarily assumed under Section 5.4.6.6.1*, the following mandatory step-up process is initiated on the first business day of April.

5.4.6.6.3. All Loan Allottees, including all Loan Allottees who

voluntarily stepped up under Section 5.4.6.6.1*, shall be assessed pro rata, based on the WGFP Financing Participation Percentages of the Loan Allottees not then in Default, to make up the defaulted payment (plus late fees and other expenses) by payment to the WGFP Enterprise on or before the first business day of July and must make all future annual payments for that pro rata portion of the defaulting Loan Allottee’s WGFP Allotment.

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5.4.6.6.4. For each non-defaulting Loan Allottee, mandatory step-up in any single year under Section 5.4.6.6.2* shall not exceed thirty-five percent (35%) of the Loan Allottee’s then-existing Loan Allottee Financing Obligation.

5.5. Default on Operating C&E Payments Under Section 5.3.1.3*.

5.5.1. Operating Costs & Reserves Default. [Actual Allottee Name*]’s failure to

fully pay its payments due under Section 6.3.1* by the last business day of January of each calendar year shall constitute an event of Default.

5.5.2. Operating Reserve Fund to Cover Deficiency. In the event that [Actual

Allottee Name*] fails to fully and timely pay its pro-rata share of Operating C&E under Section 6.3.1*, the WGFP Enterprise may draw upon [Actual Allottee Name*]’s portion of the Operating Reserve Fund or such other reserves as the Enterprise Board may establish and maintain in relation to Operating C&E pursuant to Section 6.1.2* to make up any deficiency as a result of the failure of [Actual Allottee Name*] to make a payment required under Section 6.3*.

5.5.3. Grace Period. If [Actual Allottee Name*] is in Default under Section 5.5.1*

and fully makes its payments due under Section 6.3* by the last business day of February, then [Actual Allottee Name*] shall no longer be considered in Default under Section 5.5.1* and no penalties or other Default obligations or consequences shall attach.

5.5.4. Notice of Default. On the first business day of March of each calendar year,

the WGFP Enterprise shall notify [Actual Allottee Name*] of the names of all WGFP Allottees, if any, whose payments due under Section 6.3* remain in Default after the grace period provided in Section 5.5.3*.

5.5.5. Cure. [Actual Allottee Name*] may cure a Default under this Section 5.5* by

paying, on or before the last business day of January of the succeeding calendar year, an amount equal to (1) any Operating C&E then due or in Default; (2) a late-fee penalty of 1.5% of the amount of Operating C&E in Default for each month in Default after the grace period provided in Section 5.5.3* terminates, which shall be deposited into the Operating Reserve Fund in addition to any other amounts owed to such fund under this Contract; and (3) any other expenses incurred by the WGFP Enterprise or any other WGFP Allottee as a result of such Default. Alternatively, [Actual Allottee Name*] may cure a Default under this Section 5.5.5* by obtaining the WGFP Enterprise’s acceptance, on or before the last business day of January of the succeeding calendar year, of an alternate means of or plan for cure of the Default and thereafter fully performing under such alternate means of or plan for cure; the WGFP Enterprise shall give notice of the proposed alternate means or plan for cure to all other WGFP Allottees before taking formal action rejecting or

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accepting the same. The WGFP Enterprise’s acceptance of a plan for cure of a Default under this Section 5.5.5* shall not constitute a waiver of any rights, claims, defenses, or remedies under this Contract.

5.5.6. Final Default and Forfeiture. Final Default shall occur if [Actual Allottee

Name*] fails to cure its defaulted payment under Section 5.5.5* by the date provided therein or fails to fully perform under a duly accepted alternate means of or plan for cure of the Default. If [Actual Allottee Name*] has committed a Final Default under this Section 5.5.6*, then [Actual Allottee Name*] shall completely forfeit any and all right, title, claim, or interest, whether express or implied, in or to WGFP, including, without limitation, any and all WGFP Allotments or rights to WGFP assets under this Contract or any other agreement related to the WGFP. Any water in storage under a forfeited WGFP Allotment at the time of forfeiture shall not be available to the defaulting party and shall be reallocated along with the WGFP Allotment as provided in Section 5.5.7*. [Actual Allottee Name*], by executing this Contract, certifies that it has fully disclosed to the governing body of [Actual Allottee Name*] the existence and consequence of this Contract, and agrees that but for its acceptance of the termination of a WGFP Allotment and the consequences of Default, the WGFP Enterprise would not have entered into this Contract or any other agreement related to WGFP. Except for claims of breach under the express terms of this Contract, [Actual Allottee Name*] waives any and all legal or equitable claims, in any forum, to WGFP, WGFP Allotments, or WGFP Assets, or against the WGFP Enterprise, arising out of a Final Default under this Contract by [Actual Allottee Name*]. Irrespective of such termination, [Actual Allottee Name*] shall remain liable to the WGFP Enterprise to pay the full amount of its Capital C&E Funding Obligations under this Contract. The WGFP Enterprise shall send a notice of forfeiture under this Section 5.5.6* to all WGFP Allottees on the first business day of February in the calendar year in which the cure period terminates.

5.5.7. Reallocation of Forfeited WGFP Allotment. WGFP Allotments forfeited

under Section 5.3.6.4* or Section 5.5.6* shall be reallocated by the WGFP Enterprise through a sealed-bid auction open to all non-defaulting WGFP Allottees. Auction bids to purchase all or a portion of the forfeited WGFP Allotment shall be submitted to the WGFP Enterprise on or before the first business day of April of the calendar year in which the cure period terminates and the WGFP Allotment is forfeited. In the event that the WGFP Enterprise receives one or more successful bids, closing on the sale of WGFP Allotments to such successful bidders shall occur by the first day in July of the same calendar year. The proceeds of any auction sale shall be applied first to cover the cure amount described in Section 5.5.5*, except any monthly penalty, and second to cover any Operating C&E accrued during the disposition process that are attributable to the purchased WGFP Allotment. Any excess proceeds shall be distributed to [Actual Allottee Name*], less the monthly penalty provided in Section 5.5.5* if applicable. In the event the proceeds of any auction sale do

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not cover the cure amount described in Section 5.5.5*, except any monthly penalty, and all Operating C&E accrued during the disposition process that are attributable to the purchased WGFP Allotment, the successful bidder(s) purchasing the WGFP Allotment shall pay the deficiency attributable to the amount of WGFP Units purchased at such auction sale.

5.5.7.1. In the event that the entire WGFP Allotment forfeited under Section

5.5.6* is not reallocated through the auction described in Section 5.5.7*, the WGFP Enterprise shall in its discretion offer the remaining WGFP Allotment to other entities that are not existing WGFP Allottees at the time of the proposed transfer but that hold an allotment of Windy Gap Project Water. In the event that the WGFP Enterprise’s offer is accepted by one or more entities under this Section 5.5.7.1*, closing on the sale shall occur by the first business day in September of the same calendar year. The proceeds of any such sale shall be applied first to cover the cure amount described in Section 5.5.5*, except any monthly penalty, and second to cover any Operating C&E accrued during the disposition process that are attributable to the purchased WGFP Allotment. Any excess proceeds shall be distributed to [Actual Allottee Name*], less the monthly penalty provided in Section 5.5.5* if applicable. In the event the proceeds of any sale under this Section 5.5.7.1* do not cover the cure amount described in Section 5.5.5*, except any monthly penalty, and all Operating C&E accrued during the disposition process that are attributable to the purchased WGFP Allotment, the purchaser(s) of the WGFP Allotment shall pay the deficiency attributable to the amount of WGFP Units purchased.

5.5.7.2. In the event that the entire WGFP Allotment forfeited under Section

5.5.6* is not reallocated through the auction described in Section 5.5.7* or under Section 5.5.7.1*, the WGFP Enterprise shall reallocate such remaining WGFP Allotment to the non-defaulting WGFP Allottees pro rata based on the WGFP Participation Percentages. The WGFP Allottees who receive a portion of the reallocated WGFP Allotment under this Section 5.5.7.2* shall pay the amount then owing (except for the monthly cure penalty if applicable) on the WGFP Allotment on or before the first business day of November of the same calendar year in which the WGFP Allotment is forfeited.

5.5.8. If, in a particular Fiscal Year, [Actual Allottee Name*] is in Default under the terms of this Section 5.5* with respect to payments to cover its pro-rata share of Operating C&E due under Section 6.3.1* and also in Default under the terms of Section 5.4*, then the terms of this Section 5.5*, and not Section 5.4*, shall govern.

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5.6. Liability of WGFP Enterprise and [Actual Allottee Name*].

5.6.1. WGFP Enterprise Liability. Any and all obligations of the WGFP Enterprise that may arise under this Contract, whether financial or otherwise, shall be payable solely from the revenues, income, rents and receipts earned by the WGFP Enterprise. Nothing herein shall be deemed to prevent the WGFP Enterprise from making any payments from any other legally available source. In no event shall the WGFP Enterprise be required to spend any money from taxes in violation of Section 20(4) of Article X of the Colorado Constitution in the performance of its obligations under this Contract or which would cause the WGFP Enterprise to lose its enterprise status as such status is defined in the Colorado Constitution. In addition, neither the WGFP Enterprise, the Subdistrict, nor the District shall be required to expend any funds or impair any assets of the Subdistrict or the District in the performance of any of the WGFP Enterprise’s obligations under this Contract. The obligations of the WGFP Enterprise under this Contract do not constitute a debt or indebtedness of the WGFP Enterprise, the Subdistrict, or the District within the meaning of any constitutional, charter or statutory provision or limitation, and shall not be considered or held to be a general obligation of the WGFP Enterprise, the Subdistrict or the District.

5.6.2. Allottee Liability. Any and all obligations of [Actual Allottee Name*] that may

arise under this Contract whether financial or otherwise, shall be payable solely from the revenues, income, rents and receipts earned by [Actual Allottee Name*] from the operation of its [water activity] enterprise. Nothing herein shall be deemed to prevent [Actual Allottee Name*] from making any payments from any other legally available source. In no event shall [Actual Allottee Name*] be required to spend any money from taxes in violation of Section 20(4) of Article X of the Colorado Constitution in the performance of its obligations under this Contract or which would cause [Actual Allottee Name*] to lose its enterprise status as such status is defined in the Colorado Constitution. In addition, [Actual Allottee Name*] shall not be required to expend any funds or impair any assets of its parent entity in the performance of its obligations under this Contract. The obligations of [Actual Allottee Name*] under this Contract do not constitute a debt, indebtedness or multiple fiscal year obligation of its parent entity within the meaning of any constitutional, charter or statutory provision or limitation, and shall not be considered or held to be a general obligation of [Actual Allottee Name*] or of its parent entity.

5.6.3. [Actual Allottee Name*] shall not be liable to another WGFP Allottee or to the WGFP Enterprise, and the WGFP Enterprise shall not be liable to the WGFP Allottees, for consequential, indirect, punitive, or special damages arising under this Contract.

5.6.4. Governmental Immunity. The WGFP Enterprise and [Actual Allottee Name*] are each relying on, and do not waive or intend to waive by any

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provision of this Contract, the monetary limitations or any other rights, immunities, defenses, or protections provided by the Colorado Governmental Immunity Act, C.R.S. § 24-10-101 et seq., as amended from time to time.

5.7. Amendments. This Contract may be amended only with the written consent of (1) the

WGFP Enterprise, (2) at least 75.0% of the WGFP Allottees, and (3) WGFP Allottees that collectively hold at least 75.0% of all WGFP Units; provided, however, that if any WGFP Financing is outstanding, any amendment to this Contract will be subject to the terms and conditions set forth in any Financing Documents; and further provided that this Contract may not be amended without [Actual Allottee Name*]’s written consent in a manner that results in a material adverse impact on the rights of [Actual Allottee Name*]under this Contract to control its WGFP Allotment or have water diverted into, stored in, or released from the WGFP under its WGFP Allotment on a pro-rata and substantially similar basis with other WGFP Allottees.

5.8. Limitations on Rights of Allottee. In addition to all the other terms, conditions and

covenants contained herein, it is specifically understood and agreed by and between the parties hereto that the rights of [Actual Allottee Name*] hereunder are subject to the following terms, conditions and limitations, to all intents and purposes as though set forth verbatim herein, and made a part hereof by reference:

5.8.1. The Water Conservancy Act of Colorado, C.R.S. § 37-45-101 et seq.;

5.8.2. The water activity enterprise statute, C.R.S. § 37-45.1-101 et seq.;

5.8.3. The Carriage Contract; provided that if any amendment to the Carriage

Contract is proposed which would affect the right of [Actual Allottee Name*] to use or reuse its full allotment of Windy Gap Project Water, the approval of such amendment shall first be obtained from [Actual Allottee Name*];

5.8.4. The rules, regulations and policies of the Enterprise Board, as may be

established and amended from time to time; provided, however, that any such rules, regulations or policies shall not result in a material adverse impact on the rights of [Actual Allottee Name*] under this Contract to control its WGFP Allotment or to have water diverted into, stored in, or released from the WGFP under its WGFP Allotment on a pro-rata and substantially similar basis with other WGFP Allottees; and

5.8.5. The requirements or conditions of any state or federal law, permits or regulatory

approvals for the WGFP.

5.9. Future Participation. Nothing herein shall be construed in any manner that will obligate [Actual Allottee Name*] to participate in any future or other project of the Subdistrict or the WGFP Enterprise that is not a part of the WGFP or preclude Allottee from participation therein.

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5.10. Third Party Beneficiaries. Any WGFP Allottee shall have the right as a third-party beneficiary to initiate and maintain suit to enforce the obligations of other WGFP Allottees hereunder. The Subdistrict shall have the right as a third-party beneficiary to initiate and maintain suit to enforce its rights under Section 3.4.2*. Except as otherwise provided by this Section 5.10*, Section 3.4.2*, and Section 8.17*, enforcement of the terms and conditions of this Contract and all rights of action relating to such enforcement shall be strictly reserved to the parties.

5.11. Authorization. [Actual Allottee Name*] attaches hereto a true and correct copy of

[Actual Allottee Name*]’s records authorizing the officers, whose names appear hereon, to enter into this Contract.

5.12. Counterparts. This Contract may be executed by the WGFP Enterprise and [Actual

Allottee Name*] in separate counterparts, each of which when so executed and delivered shall be an original, and all such counterparts shall together constitute but one and the same instrument. Facsimile and electronic signatures shall be binding for all purposes.

5.13. Entire Agreement; Merger of Prior Agreements. This Contract, together with the

statutes, contracts, rules, regulations and policies listed in Section 5.8*, constitute the entire agreement and understanding of the parties and supersedes all prior agreements and understanding between the parties relating to the subject matter hereof. This Contract may not be interpreted, modified or changed by reference to other documents, understandings or agreements, whether written or oral, unless the interpretation, modification or change is subsequently agreed to in writing by the parties hereto.

5.14. Severability. If one or more clauses, sentences, Sections, paragraphs or provisions of

this Contract shall be held to be unlawful, invalid or unenforceable, the remainder of this Contract shall not be affected thereby.

5.15. Choice of Law; Venue. This Contract shall be governed by the laws of the State of

Colorado, and each party hereto consents and submits to venue in the District Court of Weld County, Colorado.

5.16. Notices. Notices authorized or required to be given under this Contract shall be in

writing and shall be deemed to have been given when mailed, postage prepaid, or delivered during working hours, to the relevant party’s address set forth in Exhibit C*, or to such other address as a party may provide to the other party and all other WGFP Allottees from time to time. If specified herein, notice required to be given to all WGFP Allottees shall be given to the addresses set forth in Exhibit C* or to such other addresses as the WGFP Allottees may provide to the WGFP Enterprise and the other WGFP Allottees from time to time.

5.17. Construction Reports and Meetings. The WGFP Enterprise will provide [Actual

Allottee Name*] with written monthly reports, together with financial reports regarding payment of charges and costs and expenditures during construction of the

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WGFP, on the progress of construction and the expenditure of funds. In addition, the WGFP Enterprise shall schedule and hold meetings of all WGFP Allottees at the offices of the District at least quarterly at which time the WGFP Enterprise shall present and discuss the financial reports regarding payment of charges and costs by the WGFP Allottees and the expenditure of funds.

5.18. Financial Reporting Requirements; Audits. The WGFP Enterprise shall furnish to

[Actual Allottee Name*], as soon as available and in any event within one hundred eighty (180) days after the end of each Fiscal Year, the financial statements of the WGFP Enterprise as of the end of such Fiscal Year, all prepared in accordance with generally accepted accounting principles and in reasonable detail; provided that the WGFP Enterprise shall be in compliance with this reporting requirement when such information is published on the WGFP Enterprise’s website or the Municipal Securities Rulemaking Board’s Electronic Municipal Marketplace Access System (EMMA), or any service or services established by the Municipal Securities Rulemaking Board (or any of its successors) as a successor to EMMA. [Actual Allottee Name*] may request an independent audit of the WGFP Enterprise’s financial statements for a Fiscal Year (as well as associated WGFP accounting records, supporting documentation, and billings to WGFP Allottees), to be paid for by [Actual Allottee Name*], by sending a written audit request to the WGFP Enterprise before the end of the succeeding Fiscal Year. If more than one WGFP Allottee requests an independent audit for a given Fiscal Year, then only one audit shall occur, and the audit shall be paid for by the WGFP Allottees that requested the audit based on their respective WGFP Participation Percentages.

5.19. Most Favored Party. The terms and provisions of the WGFP Allotment Contracts for

each of the WGFP Allottees will be substantially similar and in no event shall the WGFP Enterprise offer an Allotment Contract to another WGFP Allottee with more favorable provisions based on all of the terms and conditions of the WGFP Allotment Contract as a whole without first offering to [Actual Allottee Name*] the opportunity to amend this Contract to contain such favorable provisions.

6. WGFP Funding.

6.1. Establishment of Funds.

6.1.1. In addition to the funds established in Sections 7.4* and Section 8.4*, the

WGFP Enterprise shall establish and maintain an Operating Fund and an Operating Reserve Fund, with segregated accounts for each WGFP Allottee, to be used for disbursements to pay for the Operating C&E of the WGFP under the WGFP Allotment Contracts.

6.1.2. The WGFP Enterprise may establish and maintain additional reserve funds as

it shall determine are necessary for operation, maintenance, repair, replacement, rehabilitation, or improvement of WGFP structures or facilities, with segregated accounts for each WGFP Allottee.

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6.2. Payment of Capital C&E Funding Obligations. [Actual Allottee Name*] agrees to

pay its Capital C&E Funding Obligations through Capital C&E Funding Cash Payments under the terms of Section 7*, participation in a WGFP Financing under the terms of Section 8*, or a combination thereof.

6.2.1. Initial C&E. The Initial C&E to be funded by the WGFP Allottees shall be

$[XXXXXXXX]*. [Actual Allottee Name*] agrees to pay its Capital C&E Funding Obligations for Initial C&E under this Section 6.2.1* through [Capital C&E Funding Cash Payments under the terms of Section 7*] [participation in a WGFP Financing under the terms of Section 8*]. Exhibit A* indicates each WGFP Allottee’s Capital C&E Funding Obligation for such Initial C&E and chosen means of payment for such Initial C&E.

6.2.2. Completion C&E. If the WGFP Enterprise determines that the WGFP

Allottees’ payment of their respective Capital C&E Funding Obligations to fund Initial C&E under Section 6.2.1* will be depleted and Completion C&E must be incurred to complete construction of the WGFP, then the WGFP Enterprise shall give notice as soon as reasonably practicable to the WGFP Allottees of the need to pay additional Capital C&E Funding Obligations under this Section 6.2*, the estimated total amount of Completion C&E to be incurred, and whether the WGFP Enterprise will undertake additional WGFP Financing for the Completion C&E. If the WGFP Enterprise offers the option to participate in additional WGFP Financing, then [Actual Allottee Name*] shall, within ninety (90) days of such notice, elect in writing to the WGFP Enterprise to pay its Capital C&E Funding Obligations for such Completion C&E under this Contract through Capital C&E Funding Cash Payments, participation in a WGFP Financing, or a combination thereof. If no such election is made, [Actual Allottee Name*] shall be obligated to pay its Capital C&E Funding Obligations for such Completion C&E through participation in a WGFP Financing under Section 6.2.2.2*. The WGFP Enterprise will update Exhibit B* from time to time as needed under this Section 6.2.2*.

6.2.2.1. To the extent that [Actual Allottee Name*] elects to pay its Capital

C&E Funding Obligations for such Completion C&E under this Contract through Capital C&E Funding Cash Payments, then it shall make such payments in accordance with Section 7* and on substantially the same terms as other WGFP Allottees making Capital C&E Funding Cash Payments, and agrees to execute any documents and agreements necessary to bind [Actual Allottee Name*] to such terms. If [Actual Allottee Name*] fails to timely make its Capital C&E Funding Cash Payment for such Completion C&E after so electing, then [Actual Allottee Name*] shall be obligated to pay its Capital C&E Funding Obligations for such Completion C&E through participation in a WGFP Financing in the same manner as provided in Section 6.2.2.2*.

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6.2.2.2. To the extent that [Actual Allottee Name*] is obligated to pay its

Capital C&E Funding Obligations for such Completion C&E under this Contract through participation in a WGFP Financing, then it shall make such payments and participate in such WGFP Financing in accordance with Section 8* and any applicable Financing Document and on substantially the same terms as any other WGFP Allottees participating in the WGFP Financing, and agrees to execute any documents and agreements necessary to bind [Actual Allottee Name*] to such terms.

6.2.3. Future Extraordinary C&E. If the WGFP Enterprise determines that Future

Extraordinary C&E must be incurred, then the WGFP Enterprise shall give notice as soon as reasonably practicable to [Actual Allottee Name*] of the need to pay additional Capital C&E Funding Obligations under this Section 6.2* and the estimated total amount of Future Extraordinary C&E to be incurred. The Enterprise Board, in consultation with the WGFP Allottees, shall set a timeline for the WGFP Allottees to elect in writing to pay the Capital C&E Funding Obligations for such Future Extraordinary C&E under this Contract through Capital C&E Funding Cash Payments, participation in a WGFP Financing, or a combination thereof in accordance with the process described in Sections 6.2.2.1* and 6.2.2.2*, and for the WGFP Allottees to make such payments of their respective Capital C&E Funding Obligations for such Future Extraordinary C&E to the WGFP Enterprise. If no such election is made, [Actual Allottee Name*] shall be obligated to pay its Capital C&E Funding Obligations for such Future Extraordinary C&E through participation in a WGFP Financing in accordance with the process described in Section 6.2.2.2*.

6.2.3.1. Notwithstanding the foregoing in Section 6.2.3*, if an emergency

or natural disaster imminently threatens life, health, safety, or damage to the WGFP, the WGFP Enterprise may incur Future Extraordinary C&E to make reasonably necessary emergency repairs to mitigate threatened damage, provided that the WGFP Enterprise shall notify [Actual Allottee Name*] of such emergency and the need for such expenditures in advance (or if not possible in advance, then as soon as practicable), and whether the WGFP Enterprise will undertake additional WGFP Financing for the future Extraordinary C&E. In the event that the WGFP Enterprise incurs such emergency Future Extraordinary C&E, and if the WGFP Enterprise offers the option to participate in additional WGFP Financing, then [Actual Allottee Name*] shall have thirty (30) days to elect in writing to pay its Capital C&E Funding Obligations for such emergency Future Extraordinary C&E through Capital C&E Funding Cash Payments in accordance with the process described in Section 6.2.2.1*. If no such election is made, then [Actual Allottee Name*] shall be obligated to pay its Capital C&E Funding

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Obligations for such emergency Future Extraordinary C&E through participation in a WGFP Financing in accordance with the process described in Section 6.2.2.2*.

6.2.4. To the extent [Actual Allottee Name*] satisfies any of its Capital C&E Funding

Obligations through Capital C&E Funding Cash Payments, other than Capital C&E Funding Cash Payments for emergency Future Extraordinary C&E incurred by the WGFP Enterprise prior to the giving of notice to [Actual Allottee Name*], the WGFP Enterprise may require that [Actual Allottee Name*] provide adequate assurance in advance of closing on the corresponding WGFP Financing that it will be able to provide the required Capital C&E Funding Cash Payment on the date such Capital C&E Funding Cash Payments are due to the WGFP Enterprise under Section 7.3* or such other date as is agreed to by the WGFP Enterprise and [Actual Allottee Name*].

6.3. Payment of Operating C&E and into Reserve Funds.

6.3.1. To the extent that [Actual Allottee Name*] meets its Capital C&E Funding

Obligations under Section 6.2* through participation in WGFP Financing, [Actual Allottee Name*] hereby agrees to fund all of its portion of Operating Costs & Reserves during the term(s) of any debt incurred for WGFP Financing in which [Actual Allottee Name*] participates in accordance with Section 8* hereof. When [Actual Allottee Name*] is not participating in any WGFP Financing or no debt is outstanding on WGFP Financing in which [Actual Allottee Name*] participates, [Actual Allottee Name*] agrees to fund its portion of Operating Costs & Reserves by paying to the WGFP Enterprise, on or before the last business day of January of each calendar year, the following amounts:

6.3.1.1. An amount equal to the product obtained by multiplying [Actual

Allottee Name*]’s WGFP Participation Percentage by the total amount of all Operating C&E estimated by the WGFP Enterprise to be incurred by the WGFP Enterprise in the then current calendar year, which the WGFP Enterprise shall deposit in the Operating Fund to be drawn upon in proportion to the WGFP [Actual Allottee Name*]’s WGFP Participation Percentages to pay for Operating C&E as they are incurred;

6.3.1.2. Any amount needed to replenish any draws theretofore made on [Actual Allottee Name*]’s subaccount in the Operating Reserve Fund, which the WGFP Enterprise shall deposit in the Operating Reserve Fund;

6.3.1.3. An amount equal to the product obtained by multiplying [Actual Allottee Name*]’s WGFP Participation Percentage by the total amount needed to increase the amount on deposit in the Operating

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Reserve Fund to equal the aggregate of the following two years of Operating C&E as estimated by the WGFP Enterprise under Section 1.20*, which the WGFP Enterprise shall deposit in the Operating Reserve Fund to be drawn upon when the moneys contained in [Actual Allottee Name*]’s subaccount in the Operating Fund are insufficient to make payments on Operating C&E; and

6.3.1.4. An amount equal to the product obtained by multiplying [Actual

Allottee Name*]’s WGFP Participation Percentage by the total amount needed to replenish and maintain such other reserves as the Board may determine are necessary to establish and maintain in relation to Operating C&E, if any, pursuant to Section 6.1.2*.

6.4. Funding. In order to meet [Actual Allottee Name*]’s obligations under this Contract to pay its pro rata share of Operating C&E and its Loan Allottee Financing Obligations, if any, [Actual Allottee Name*] agrees as follows: 6.4.1. [Actual Allottee Name*] shall to the fullest extent permitted by law fix rates,

charges, or assessments so that [Actual Allottee Name*] will at all times have sufficient money to meet its obligations hereunder, and confirms (1) that, in accordance with C.R.S. § 31-35-402(1)(h), payments of its outstanding obligations to pay its pro rata share of Operating C&E and its Loan Allottee Financing Obligations, if any, under this Contract (i) constitute special obligations of [Actual Allottee Name*], payable solely from the revenues and other moneys derived by [Actual Allottee Name*] from its [entity name/type (water activity enterprise/utility enterprise/etc. )], and (ii) shall be treated as expenses of operating such [entity name/type (water activity enterprise/utility enterprise/etc.)]; and (2) that there are no liens, charges or encumbrances thereon, or priority of payments with respect thereto, prior to the payment of the expenses of operating such [entity name/type (water activity enterprise/utility enterprise/etc.)], including amounts hereunder. [Actual Allottee Name*] represents that it constitutes an “enterprise” within the meaning of Article X, Section 20 of the Colorado Constitution (TABOR) and does not have the legal authority to levy a tax. [Actual Allottee Name*]’s outstanding obligations to pay its pro rata share of Operating C&E and its Loan Allottee Financing Obligations if any, under this Contract do not constitute a general obligation debt or indebtedness of [Actual Allottee Name*] within the meaning of any constitutional or statutory debt limitations or provisions, and are not payable in whole or in part from the proceeds of ad valorem property or other taxes of [Actual Allottee Name*].

6.4.2. Nothing herein shall be construed as prohibiting [Actual Allottee Name*] from (1) using any other funds and revenues legally available therefor for purposes of satisfying any provisions of this Contract or (2) incurring obligations payable on a parity with the obligations under this Contract so long as [Actual Allottee Name*]’s obligations to pay its pro rata share of Operating C&E and its Loan

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Allottee Financing Obligations, if any, under this Contract continue to constitute special obligations of [Actual Allottee Name*], payable solely from the revenues and other moneys derived by [Actual Allottee Name*] from its [entity name/type (water activity enterprise/utility enterprise/etc.)], and are treated as expenses of operating such [entity name/type (water activity enterprise/utility enterprise/etc.)].

6.4.3. [Actual Allottee Name*] shall make payments required by this Contract

whether or not the WGFP is permitted, undertaken, completed, operable, operated or retired and notwithstanding the suspension, interruption, interference, reduction, or curtailment of operation of the WGFP in whole or in part for any reason whatsoever. Such payments are not subject to any reduction, whether offset or otherwise, and are not conditioned upon performance by the WGFP Enterprise or any other WGFP Allottee under this Contract or any other agreement.

6.4.4. [Actual Allottee Name*] shall take all reasonable steps to maintain its status as

an enterprise as defined in Section 20 of Article X of the Colorado Constitution.

6.4.5. [Actual Allottee Name*] shall not be liable under this Contract for the obligations of any other WGFP Allottee except as otherwise expressly set forth herein. Each WGFP Allottee shall be solely responsible and liable for performance of its obligations under its respective WGFP Allotment Contract. The obligation of each WGFP Allottee to make payments under its respective WGFP Allotment Contract is a several obligation and not a joint obligation with those of the WGFP Allottees.

6.5. Security. [Actual Allottee Name*] hereby represents and warrants that the revenues

of its [entity name/type (water activity enterprise/utility enterprise/etc.)] are pledged to pay the operation and maintenance expenses of such [entity name/type (water activity enterprise/utility enterprise/etc.)] along with any indebtedness incurred by [Actual Allottee Name*] for the purpose of financing or refinancing improvements to its [entity name/type (water activity enterprise/utility enterprise/etc.)]. Furthermore, [Actual Allottee Name*] hereby represents and warrants that, in accordance with C.R.S. § 31-35-402(1)(h), [Actual Allottee Name*]’s obligations to pay its pro rata portion of Operating C&E and its Loan Allottee Financing Obligations, if any, under this Contract constitute special obligations of [Actual Allottee Name*], payable solely from the revenues and other moneys derived by [Actual Allottee Name*] from its [entity name/type (water activity enterprise/utility enterprise/etc.)], and shall be treated as expenses of operating such [entity name/type (water activity enterprise/utility enterprise/etc.)]. [Actual Allottee Name*] hereby covenants that it will not issue or otherwise incur any indebtedness or other obligation that has a lien on the revenues of its [entity name/type (water activity enterprise/utility enterprise/etc.)] prior or superior to its obligation to pay the operating expenses of its [entity name/type (water activity enterprise/utility enterprise/etc.)].

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6.6. Cooperation, Disclosure and Documents. [Actual Allottee Name*] shall cooperate with the WGFP Enterprise for the purpose of expediting the issuance of WGFP Financing Obligations (as defined in Section 8.2*) to finance the applicable portion of Capital C&E by providing such information and disclosure as may be reasonably required for such purpose, and by delivering all closing documents reasonably required by the WGFP Enterprise’s counsel at the closing of each series of WGFP Financing Obligations. The WGFP Enterprise and [Actual Allottee Name*] will adopt, deliver, execute and make any and all further assurances, instruments and resolutions as may be reasonably necessary or proper to effect any financing and refinancing of Capital C&E and to allow the WGFP Enterprise to comply with reporting obligations, to assure the WGFP Enterprise of [Actual Allottee Name*]’s intention to perform hereunder and for the better assuring and confirming unto the WGFP Enterprise and any Lender (as defined in Section 8.2*) the rights and benefits provided to them herein.

6.7. Maintenance of Tax-Exempt Status of WGFP Financing Obligations. Notwithstanding any other provision of this Contract, no WGFP Allottee will take any action or omit to take any action, directly or indirectly, in any manner, which would result in any of the WGFP Financing Obligations (as defined in Section 8.2*), the interest on which was intended to be excludable from gross income for federal income tax purposes, being treated as an obligation not described in Section 103(a) of the Internal Revenue Code of 1986, as amended, by reason of classification of such WGFP Financing Obligations as a “private activity bond” within the meaning of Section 141 of said Code, by reason of classification of such WGFP Financing Obligations as an “arbitrage bond” within the meaning of Section 148 of said Code, or for any other reason.

PART III – PROVISIONS APPLICABLE TO CASH ALLOTTEES

7. Provisions Applicable to Cash Allottees.

7.1. Applicability. This Section 7* shall, unless modified by express language in a

subsequent agreement, be applicable to [Actual Allottee Name*] to the extent that it meets its Capital C&E Funding Obligations under Section 6.2* through Capital C&E Funding Cash Payments. [Actual Allottee Name*] is referred to herein as a Cash Allottee to the extent that it meets its Capital C&E Funding Obligations under Section 6.2* through Capital C&E Funding Cash Payments.

7.2. Additional Definitions. In addition to the definitions in Section 1*, the following definitions shall apply to this Section 7*.

7.2.1. “Escrow Agreement” means the escrow agreement between the WGFP

Enterprise and Cash Allottee as more particularly described in this Section 7*.

7.2.2. “Escrow Fund” means the escrow fund established under the Escrow Agreement.

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7.3. Payment of Capital C&E Funding Obligations.

7.3.1. Initial C&E. To the extent [Actual Allottee Name*] meets its Capital C&E Funding Obligations for Initial C&E under Section 6.2.1* through Capital C&E Funding Cash Payments, [Actual Allottee Name*] hereby agrees to provide its Capital C&E Funding Cash Payment for such Initial C&E to the WGFP Enterprise on or before the date of sale of any WGFP Financing, exclusive of a CWCB Loan (as defined in Section 8.2*), for such amount of Capital C&E. 7.3.1.1. In the event that the WGFP Enterprise, in consultation with the

WGFP Allottees, determines that a portion of the Initial C&E should be incurred before the date of sale of any WGFP Financing (exclusive of a CWCB Loan) and paid for using the CWCB Loan and Capital C&E Funding Cash Payments, the WGFP Enterprise shall give notice to the WGFP Allottees of its intent to incur such Capital C&E and, to the extent [Actual Allottee Name*] meets its Capital C&E Funding Obligations for Initial C&E under Section 6.2.1* through Capital C&E Funding Cash Payments, [Actual Allottee Name*] agrees to provide a portion of its Capital C&E Funding Cash Payment corresponding to the proportion of the Initial C&E to be incurred before the date of sale of any WGFP Financing (exclusive of a CWCB Loan) to the WGFP Enterprise within sixty (60) days after WGFP Enterprise sends the notice described herein; in such event, the remainder of [Actual Allottee Name*]’s Capital C&E Funding Obligations for Initial C&E under Section 6.2.1* shall still be due to the WGFP Enterprise on or before the date of sale of any WGFP Financing for such amount of Capital C&E, exclusive of a CWCB Loan.

7.3.2. Completion C&E and Future Extraordinary C&E. To the extent [Actual

Allottee Name*] elects to meet its Capital C&E Funding Obligations for Completion C&E under Section 6.2.2* or its additional Capital C&E Funding Obligations for Future Extraordinary C&E under Section 6.2.3*, other than Capital C&E Funding Cash Payments for emergency Future Extraordinary C&E incurred by the WGFP Enterprise prior to the giving of notice to [Actual Allottee Name*], through Capital C&E Funding Cash Payments, [Actual Allottee Name*] hereby agrees to provide its Capital C&E Funding Cash Payment to the WGFP Enterprise on or before the date of sale of any associated WGFP Financing, or on such other date as agreed to by the WGFP Enterprise and [Actual Allottee Name*].

7.3.3. For sixty (60) days immediately before a Capital C&E Funding Cash Payment

associated with Capital C&E is due to the WGFP Enterprise in accordance with this Section 7.3*, Cash Allottee agrees to place the funds to be provided to WGFP Enterprise in an escrow account and schedule such funds for release to the WGFP Enterprise on the date such Capital C&E Funding Cash Payments

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are due to the WGFP Enterprise, except that Cash Allottee may release and provide such funds to the WGFP Enterprise in advance of such due date in its discretion.

7.3.4. To the extent [Actual Allottee Name*] meets any of its Capital C&E Funding

Obligations through Capital C&E Funding Cash Payments, [Actual Allottee Name*] hereby represents, warrants, and covenants that such Capital C&E Funding Cash Payments shall and will be delivered to the WGFP Enterprise free and clear of any prior lien, including any pledge of the revenues of its [entity name/type (water activity enterprise/utility enterprise/etc.)].

7.4. Escrow Agreement; Escrow Fund. In addition to the funds established under Section 6.1*, the WGFP Enterprise shall establish and maintain an Escrow Fund pursuant to an Escrow Agreement between the WGFP Enterprise and Cash Allottee in the form attached hereto as Exhibit D*, with segregated accounts for each WGFP Allottee required to make payments into such Escrow Fund. The WGFP Enterprise shall deposit the proceeds of Cash Allottees’ Capital C&E Funding Cash Payments into the Escrow Fund

7.5. Disbursements From Escrow Fund to Pay for Capital C&E. Pursuant to the terms

of the Escrow Agreement, the WGFP Enterprise shall disburse amounts from the Escrow Fund on a periodic basis for the payment of amounts due and owing on account of the Cash Allottee’s Capital C&E Funding Obligations attributable to its Capital C&E Funding Cash Payment. Pursuant to the terms of the Escrow Agreement, such periodic disbursements from the Escrow Fund shall occur simultaneously with disbursements from the funds and accounts funded with proceeds provided by all other WGFP Allottees, whether through the provision of Capital C&E Funding Cash Payments or through participation in WGFP Financing, and each disbursement from the Escrow Fund shall be in an amount where the ratio of such amount to the total disbursements for Capital C&E Funding Obligations for such period is equal to the Cash Allottee’s pro-rata share of Capital C&E Funding Obligations attributable to its Capital C&E Funding Cash Payment at the time of any such disbursement.

7.6. To the extent [Actual Allottee Name*] satisfies any of its Capital C&E Funding

Obligations through Capital C&E Funding Cash Payments, if the WGFP Enterprise holds any proceeds from [Actual Allottee Name*]’s payment of its Capital C&E Funding Obligations after the WGFP Enterprise determines that all Capital C&E have been paid in full, then the WGFP Enterprise shall, at [Actual Allottee Name*]’s option, either reimburse such proceeds to [Actual Allottee Name*] or transfer and credit such proceeds to [Actual Allottee Name*]’s payment of other C&E due under this Contract.

PART IV – PROVISIONS APPLICABLE TO LOAN ALLOTTEES

8. WGFP Financing.

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8.1. Applicability. This Section 8* shall, unless modified by express language in a subsequent agreement, be applicable to [Actual Allottee Name*] to the extent that it participates in a WGFP Financing and for the term of repayment of any such WGFP Financing in which [Actual Allottee Name*] participates. [Actual Allottee Name*] is referred to herein as a Loan Allottee to the extent that it participates in any WGFP Financing.

8.2. Additional Definitions. In addition to the definitions in Section 1*, the following definitions shall apply to WGFP Financing and this Section 8*.

8.2.1. “CWCB Loan” means a loan or loans issued or to be issued to the WGFP

Enterprise by the Colorado Water Conservation Board under an intergovernmental loan contract.

8.2.2. “Debt Service Fund” means a fund established under any Financing Document to provide for the payment of WFGP Financing Obligations.

8.2.3. “Debt Service Reserve Fund” means a reserve fund established under any

Financing Document to provide for the payment of WFGP Financing Obligations when the moneys contained in the Debt Service Fund for such WGFP Financing Obligations are insufficient to make such payments.

8.2.4. “Lender” means any lender, bondholder, noteholder, lessee or other holder of

any other obligation or indebtedness (including the State of Colorado, the United States of America, or any department, bureau or other affiliated entity thereof) issued in connection with a WGFP Financing of the WGFP Enterprise which constitutes a WGFP Financing Obligation.

8.2.5. “Revenue Fund” means a fund established to provide for the disbursement of

annual payments made by Loan Allottees under the terms of Section 8.6*. 8.2.6. “Subordinated Lien Loan Fund” means a fund established hereunder to

provide for the payment of any lien borrowings that are subordinate to WGFP Financing Obligations, including the CWCB Loan.

8.2.7. “Subordinated Lien Loan Reserve Fund” means a reserve fund established

under Section 8.4*.

8.2.8. “WGFP Financing Costs” means any and all costs associated with a WGFP Financing, including but not limited to (a) the principal of and interest on all WGFP Financings, (b) fees payable to Lenders and others related to the issuance and administration of a WGFP Financing, and (c) reserves required in connection with a WGFP Financing, if any. WGFP Financing Costs are included in the definition of Capital C&E.

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8.2.9. “WGFP Financing Obligation” means the obligation of the WGFP Enterprise to repay an amount of money borrowed from a Lender through a WGFP Financing.

8.3. Issuance or Incurrence of WGFP Financing Obligations. The WGFP Enterprise

will use its best efforts to issue or cause to be issued WGFP Financing Obligations. The WGFP Enterprise may obtain such WGFP Financing in one or more transactions and by one or more means. The WGFP Financing Obligations shall be issued, in one or more issuances, only upon approval of the Enterprise Board. To the extent [Actual Allottee Name*] participates in any WGFP Financing, [Actual Allottee Name*] authorizes an initial WGFP Financing for the Initial C&E (less that amount funded by Capital C&E Funding Cash Payments) as described in Section 6.2.1* and defined in Exhibit A, and such WGFP Financing for Completion C&E or Future Extraordinary C&E as determined by the Enterprise Board to be necessary under Section 6.2.2* and Section 6.2.3*, respectively.

8.4. WGFP Financing Funds. In addition to the funds established in Section 6.1*, there shall be established and maintained either by the WGFP Enterprise or under any Financing Documents the following funds and reserve funds, with segregated accounts for each Loan Allottee, to be used under the terms of this Section 8*: a Revenue Fund; a Debt Service Fund; a Debt Service Reserve Fund; a Subordinated Lien Loan Fund; a Subordinated Lien Loan Reserve Fund; and a Liquidity Fund.

8.4.1. Liquidity Fund. For each WGFP Financing undertaken by the WGFP

Enterprise, whether senior lien or subordinate lien, in which [Actual Allottee Name*] participates, and to the extent of such participation, Loan Allottees shall, on a due date or due dates set by the WGFP Enterprise in its discretion and noticed to the WGFP Allottees, deposit with the WGFP Enterprise an amount equal to the product of Loan Allottee’s WGFP Financing Participation Percentage multiplied by 30% [NOTE: Tentative consensus of 7/6/2020 Legal Committee Meeting] of the maximum annual debt service on such WGFP Financing, which the WGFP Enterprise shall deposit in the Liquidity Fund in segregated accounts for each Loan Allottee. Such Liquidity Fund shall be held by the WGFP Enterprise to be applied separately from any reserves required for the borrowings. Upon full repayment of a WGFP Financing, the WGFP Enterprise shall return the amount each Loan Allottee deposited in the Liquidity Fund for such WGFP Financing to such Loan Allottee. Any interest accrued by the Liquidity Fund shall be transferred to the Operating Fund and credited, based on the WGFP Financing Participation Percentages, to each Loan Allotte’s payment of amounts due to such fund under this Contract.

8.5. Payment of Loan Allottee’s Capital C&E Funding Obligations and Operating

C&E. To the extent [Actual Allottee Name*] participates in any WGFP Financing and for the term of any such WGFP Financing, Loan Allottee hereby agrees to pay, on or before the last business day of January of each calendar year, an amount equal to the sum of the following:

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8.5.1. An amount equal to the product obtained by multiplying Loan Allottee’s WGFP

Participation Percentage by the total amount of all Operating C&E estimated by the WGFP Enterprise to become due in the then current calendar year;

8.5.2. An amount equal to the product obtained by multiplying Loan Allottee’s WGFP Financing Participation Percentage by the total amount of principal of and interest to become due, on or prior to January 14 of the following calendar year, on all WGFP Financing;

8.5.3. Any amount needed to replenish any draws theretofore made on Loan

Allottee’s subaccount in the Operating Reserve Fund;

8.5.4. An amount equal to the product obtained by multiplying Loan Allottee’s WGFP Participation Percentage by the total amount needed to increase the amount on deposit in the Operating Reserve Fund to equal the aggregate of the following two years of Operating C&E as estimated by the WGFP Enterprise under Section 1.20*;


Allottee’s subaccount in the Debt Service Reserve Fund;

8.5.6. An amount equal to the product obtained by multiplying Loan Allottee’s WGFP Financing Participation Percentage by the total amount needed to increase the amount on deposit in the Debt Service Reserve Fund to equal the amount required to be on deposit therein under any Financing Document;


Allottee’s subaccount in the Subordinated Lien Loan Reserve Fund;

8.5.8. An amount equal to the product obtained by multiplying Loan Allottee’s WGFP Financing Participation Percentage by the total amount needed to increase the amount on deposit in the Subordinated Lien Loan Reserve Fund to equal the amount required to be on deposit therein under any Financing Document;


Allottee’s subaccounts in such other reserves as the Enterprise Board may determine are necessary to establish and maintain in relation to Operating C&E, if any, pursuant to Section 6.1.2*;

8.5.10. An amount equal to the product obtained by multiplying Loan Allottee’s WGFP

Participation Percentage by the total amount needed to increase the amount on deposit in such other reserves as the Enterprise Board may determine are necessary to establish and maintain in relation to Operating C&E, if any, pursuant to Section 6.1.2* to equal the amount determined by the Enterprise Board to be necessary to be on deposit therein;

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8.5.11. An amount equal to Loan Allottee’s obligation to contribute funds into the

Liquidity Fund as provided in Section 8.4.1*; and

8.5.12. Any amount due from Loan Allottee pursuant to Voluntary Step-Up or Mandatory Step-Up under Section 5.4.6.6*.

8.6. Revenue Fund. The WGFP Enterprise shall deposit all amounts paid by Loan Allottee

under Section 8.5* into the Revenue Fund and credit such amounts to Loan Allottees’ subaccounts therein. Monies in the Revenue Fund shall be disbursed periodically by the WGFP Enterprise to the following funds in the following order of priority:

8.6.1. To the Operating Fund, the full amount of the current Operating C&E

attributable to all Loan Allottees;

8.6.2. To the Debt Service Fund, an amount equal to the WGFP Financing Costs for such period, except for financing costs for any subordinated lien borrowing, including the CWCB Loan;

8.6.3. To the Subordinated Lien Loan Fund, an amount necessary to pay the debt

service for such period on all subordinated lien borrowings, including the CWCB Loan;

8.6.4. To the Operating Reserve Fund, an amount necessary to replenish any prior draws made in respect of any and all Loan Allottees and to increase the amount on deposit therein to equal the aggregate of the following two years of Operating C&E as estimated by the WGFP Enterprise under Section 1.20*;

8.6.5. To the Debt Service Reserve Fund, an amount necessary to replenish any prior

draws made in order to pay WGFP Financing Costs and to increase the amount on deposit therein to equal the amount required to be on deposit therein under any Financing Document;

8.6.6. To the Subordinated Lien Loan Reserve Fund, an amount necessary to replenish

any prior draws made in order to pay any subordinated lien borrowings, including the CWCB Loan, and to increase the amount on deposit therein to equal the amount required to be on deposit therein under any Financing Document;

8.6.7. To such other reserves as the Enterprise Board may determine are necessary to

establish and maintain in relation to Operating C&E, if any, pursuant to Section 6.1.2*, an amount necessary to replenish any prior draws made in order to pay Operating C&E and to increase the amount on deposit therein to equal the amount determined by the Enterprise Board to be necessary to be on deposit therein;

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8.6.8. To the Liquidity Fund, an amount necessary to maintain such fund at the amount described in Section 8.4.1*; and

8.6.9. If any amount remains, to a surplus fund established and maintained by the

WGFP Enterprise to be used by the WGFP Enterprise in its discretion for any lawful purpose of the WGFP Enterprise.

8.7. Billing Statement and Payment of WGFP Financing Costs and Operating C&E.

As a component of the Billing Statement described in Section 4.5*, the WGFP Enterprise shall furnish Loan Allottee with a written statement of the estimated WGFP Financing Costs for each succeeding Fiscal Year, if any, taking into account applicable credits received by the WGFP Enterprise and estimated investment earnings on moneys, if any, related to WGFP Financing Obligations and held by the WGFP Enterprise. Allottee shall pay, or cause to be paid, to the WGFP Enterprise, on or before the last business day of January of each calendar year, 100% of the WGFP Financing Costs billed to Allottee in such written statement.

8.8. Interest on Late Payment. Any amount of the WGFP Financing Costs billed in a

Fiscal Year by the WGFP Enterprise under Section 8.7* which remains unpaid after the last business day of February shall bear interest from such day at the per annum interest rate of eighteen percent (18%) until paid. To the extent [Actual Allottee Name*] is a Loan Allottee, interest paid by Loan Allottee shall not change the WGFP Participation Percentage or WGFP Financing Participation Percentage of Loan Allottee but shall be applied to the payment of WGFP Financing Costs of the Loan Allottees other than the Loan Allottee paying such interest in accordance with the applicable Financing Documents.

8.9. WGFP Enterprise Responsibility Regarding Collected Funds. The WGFP

Enterprise shall apply the funds paid by Loan Allottee pursuant to Section 8.5* solely as provided in Section 8.6*. The WGFP Enterprise shall keep amounts collected under this Contract from Loan Allottee in a designated account for the WGFP Financing Obligations, promptly pay when due the WGFP Financing Costs, provide WGFP Financing accounting and payment information to all WGFP Allottees, and take such other reasonable actions as may be requested by Loan Allottee and agreed to by the WGFP Enterprise; provided, that failure of the WGFP Enterprise or of Loan Allottee to make payment required by Section 8* of a WGFP Allotment Contract shall not relieve Loan Allottee of its obligation to pay all amounts owed under this Contract.

8.10. Loan Allottee Bankruptcy or Insolvency. In addition to a failure to pay any amounts

due under Section 8.5*, Default under Section 5.3.1.2* shall also include, without limitation, Loan Allottee’s act of filing any petition or instituting any proceedings under any act or acts, state or federal, dealing with or relating to the subject of bankruptcy or insolvency or under any amendment of such act or acts, either as a bankrupt or as an insolvent or as a debtor or in any similar capacity, wherein or whereby Loan Allottee asks or seeks or prays to be adjudicated a bankrupt, or to be discharged from any or all of its debts or obligations, or offers to its creditors to effect a

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composition or extension of time to pay its debts, or asks, seeks or prays for a reorganization or to effect a plan of reorganization or for a readjustment of its debts or for any other similar relief, or Loan Allottee’s act of making a general or any assignment for the benefit of its creditors. A Default under this Section 8.10* shall be subject to the Default, forfeiture, and other provisions of Section 5.4*.

8.11. Future Financings. In the event [Actual Allottee Name*] participates in any future

borrowing or refinancing authorized by this Contract, [Actual Allottee Name*] agrees to undertake the same obligations as are set forth in this Section 8*.

8.12. Obligation Is Not Subject to Reduction. Loan Allottee shall make payments under

Section 8.5* of this Contract whether or not WGFP is permitted, undertaken, completed, operable, operated or retired and notwithstanding the suspension, interruption, interference, reduction, or curtailment of operation of WGFP or of water or storage contracted for in whole or in part for any reason whatsoever. Such payments are not subject to any reduction, whether offset or otherwise, and are not conditioned upon performance by the WGFP Enterprise or any other Loan Allottee under this Contract or any other agreement. If and to the extent Loan Allottee transfers all or a part of its WGFP Allotment associated with any WGFP Financing under the terms of Section 5.2*, Loan Allottee shall remain liable for its obligations to pay the WGFP Enterprise for the WGFP Financing associated with the transferred WGFP Allotment in the event and to the extent not paid by the transferee acquiring such WGFP Allotment.

8.13. Several Obligation. No Loan Allottee shall be liable under its respective WGFP Allotment Contract for the obligations of any other Loan Allottee except as expressly set forth in Section 5.4* hereof. Each Loan Allottee shall be solely responsible and liable for performance of its obligations under its respective WGFP Allotment Contract. The obligation of each Loan Allottee to make payments under its respective WGFP Allotment Contract is a several obligation and not a joint obligation with those of the other WGFP Allottees.

8.14. Limited Obligations of WGFP Enterprise. WGFP Financing Obligations incurred

by the WGFP Enterprise pursuant to this authorization are special revenue obligations of the WGFP Enterprise payable solely from the amounts received by the WGFP Enterprise from the Loan Allottees under the WGFP Allotment Contracts. WGFP Financing Obligations do not constitute a general obligation debt or indebtedness of the WGFP Enterprise within the meaning of any constitutional or statutory debt limitations or provisions. The WGFP Enterprise does not have the legal authority to levy a tax.

8.15. Allocation of Project Expenses; Disbursements. Allottee agrees that all WGFP

Financing Costs are to be paid solely from the amounts received by the WGFP Enterprise from the Loan Allottees under the WGFP Allotment Contracts, and are not the responsibility of the WGFP Enterprise, the WGFP Allottees that did not participate in WGFP Financing to the extent that they did not participate, or the District.

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8.15.1. The Financing Documents relating to WGFP Financing Obligations shall

provide that simultaneously at the time of the disbursement of any proceeds of WGFP Financing Obligations there will be a disbursement of proceeds from the funds holding cash payments made by WGFP Allottees not participating in WGFP Financing, and that in each instance the disbursement of proceeds of WGFP Financing Obligations and the disbursement of proceeds from the funds holding cash payments made by WGFP Allottee not participating in WGFP Financing shall be in proportion to the applicable WGFP Participation Percentage of each WGFP Allottee.

8.16. Pledge or Assignment to Lender. The WGFP Enterprise may pledge and assign to any Lender all or any portion of the payments received under this Contract from Allottee. Such pledge and assignment by the WGFP Enterprise shall be made effective for such time as the WGFP Enterprise shall determine and provide that the Lender shall have the power to enforce this Contract if an event of default occurs under the applicable Financing Document.

8.17. Lender is Third Party Beneficiary. Any Lender shall have the right as a third-party

beneficiary to initiate and maintain suit to enforce this Contract to the extent provided in any Financing Document.

[Remainder of Page Intentionally Left Blank]

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DATED: __________________________ [ALLOTTEE] By: [NAME] [TITLE] ATTEST: By: Title:

DATED: __________________________ WINDY GAP FIRMING PROJECT WATER ACTIVITY ENTERPRISE By: [NAME] [TITLE]

Page 79

EXHIBIT A Initial C&E

WGFP Allottee

WGFP Allotment (WGFP Units)

WGFP Participation Percentage

Capital C&E Funding

Obligation (Initial C&E)

Capital C&E Funding Cash

Payment (Initial C&E)

WGFP Units Attributable to Capital C&E Funding Cash

Payment (Initial C&E)

WGFP Financing

(Initial C&E)

WGFP Units Attributable to

WGFP Financing (Initial C&E)

WGFP Financing

Participation Percentage

(Initial C&E)

Broomfield 26,464 29.40% $0.00 $0.00 0 $0.00 0 0.00% Platte River Power

Authority 16,000 17.77% 0.00 0.00 0 0.00 0 0.00%

Loveland 9,587 10.65% 0.00 0.00 0 0.00 0 0.00% Greeley 9,189 10.21% 0.00 0.00 0 0.00 0 0.00% Longmont 8,000 8.88% 0.00 0.00 0 0.00 0 0.00% Erie 6,000 6.66% 0.00 0.00 0 0.00 0 0.00% Little Thompson

Water District 4,850 5.38% 0.00 0.00 0 0.00 0 0.00%

Superior 4,726 5.25% 0.00 0.00 0 0.00 0 0.00% Louisville 2,835 3.15% 0.00 0.00 0 0.00 0 0.00% Fort Lupton 1,103 1.22% 0.00 0.00 0 0.00 0 0.00% Lafayette 900 1.00% 0.00 0.00 0 0.00 0 0.00% Central Weld

County Water District

346 0.38% 0.00 0.00 0 0.00 0 0.00%

Totals 90,000 100.00% $ 0.00 $ 0.00 0 $ 0.00 0 100.00%

Page 80

EXHIBIT B# Completion C&E/Future Extraordinary C&E

WGFP Allottee Capital C&E

Funding Obligation

Capital C&E Funding Cash

Payment

WGFP Units Attributable to Capital C&E Funding

Cash Payment

WGFP Financing

WGFP Units Attributable to WGFP Financing

WGFP Financing Participation Percentage

Broomfield $0.00 $0.00 0 $0.00 0 0.00% Platte River Power

Authority 0.00 0.00 0 0.00 0 0.00%

Loveland 0.00 0.00 0 0.00 0 0.00% Greeley 0.00 0.00 0 0.00 0 0.00% Longmont 0.00 0.00 0 0.00 0 0.00% Erie 0.00 0.00 0 0.00 0 0.00% Little Thompson

Water District 0.00 0.00 0 0.00 0 0.00%

Superior 0.00 0.00 0 0.00 0 0.00% Louisville 0.00 0.00 0 0.00 0 0.00% Fort Lupton 0.00 0.00 0 0.00 0 0.00% Lafayette 0.00 0.00 0 0.00 0 0.00% Central Weld

County Water District

0.00 0.00 0 0.00 0 0.00%

Totals $ 0.00 $ 0.00 0 $ 0.00 0 100.00%

Page 81

EXHIBIT C

IF TO: MAILING ADDRESS

Windy Gap Firming Project Water Activity Enterprise

c/o WGFP Project Manager 220 Water Avenue Berthoud, CO 80513

Broomfield

Central Weld County Water District

Greeley

Erie

Fort Lupton

Lafayette

Little Thompson Water District

Longmont

Louisville

Loveland


Superior

Page 82

EXHIBIT D

[Form of Escrow Agreement]

Page 83

Page 84

Memorandum


Alyssa Clemsen Roberts, chief strategy officer Subject: Formal response to state goals

At the May 28 board meeting, staff presented an overview of the statewide carbon reduction goals and associated clean energy plan.

To recap: in 2019 the legislature passed a statewide goal to reduce 2025 greenhouse gas (GHG) emissions by at least 26%, 2030 GHG emissions by at least 50%, and 2050 GHG emissions by at least 90% compared to a 2005 baseline (HB19-1261). Although these are statewide goals, the electric utility sector is being asked to reduce its emissions by 80% from 2005 GHG emission levels by 2030 (HB19-1261 and SB19-236). The plan to reach 80% reduction must be filed with the public utilities commission (expected filing deadline is Q1 2021); if Platte River fails to do so, it will be subject to additional regulation and/or fees associated with GHG emissions through 2030 that may be implemented by the Air Quality Control Commission (AQCC).

Since the May board meeting, Platte River staff has actively participated in biweekly Clean Energy Plan (CEP) guidance work group meetings facilitated by Colorado Department of Public Health & Environment (CDPHE), and attended weekly CEP small work group meetings related to the following topics:

• CEP data form • PUC process • Co-op/muni CEP process • Beneficial electrification

Additionally, staff has had multiple conversations with CDPHE regarding the Regional Haze program, which to reduce visibility impairment in protected lands such as national parks and forests. Rawhide Energy Station is subject to this program due to its proximity to Rocky

Page 85


Formal response to state goals

7/22/2020

2

Mountain National Park. Currently, CDPHE is evaluating Rawhide Unit 1 to determine if additional emissions reductions are needed under the Regional Haze program. An initial hearing with AQCC will take place on Aug. 20, 2020; the final decision will be made by the AQCC at a hearing in Nov. 2020.

Leading up the first hearing, it was necessary for Platte River to notify the state of its intentions related to the closure of Rawhide Unit 1 (July deadline). The recently announced closure date of Unit 1 will be a significant consideration in the hearing process and is expected to help avoid the need for additional controls and the significant costs that come with the controls. (Please see attached letter to CDPHE.)

Attachment

Page 86

July 30, 2020 Mr. John Putnam Director of Environmental Programs Colorado Department of Public Health and Environment 4300 Cherry Creek Drive South Denver, CO 80246 Dear Mr. Putnam, Platte River Power Authority is proud to inform you of significant actions we have announced in support of the state’s objectives concerning carbon emissions, regional haze and air quality in general. On June 16, we announced we will retire our coal-fired Rawhide Unit 1 resource no later than December 31, 2029, ending our reliance on coal beginning in 2030. On July 8, we and our partners announced the early retirement of Craig Unit 2, by September 30, 2028. For your reference, I have enclosed copies of the news releases issued on those days. The early retirements of Rawhide Unit 1, Craig Unit 2 and the previously announced retirement of Craig Unit 1 by the end of 2025 represent significant steps to achieve our noncarbon goals and provide strong support for the state’s climate action plan. I also want to inform you of our intent to file a Clean Energy Plan with the Colorado Public Utilities Commission, in alignment with Senate Bill 19-236. Our Clean Energy Plan will meet or surpass not only the requirements of statute but also align with our Resource Diversification Policy, adopted by our board in 2018, and our integrated resource plan, which we will file with the Western Area Power Administration later this year. My staff and I look forward to continuing our productive working relationship to achieve our collective goals. If you have any questions, please feel free to contact me. Sincerely,

Jason Frisbie General Manager and CEO Platte River Power Authority JEF/tlf Enclosure cc: Garrison Kaufman

Page 87

Page 88

Memorandum

Date: 7/22/2020

To: Board of directors

From: Jason Frisbie, general manager and chief executive officer Alyssa Clemsen Roberts, chief strategy officer Paul Davis, energy solutions manager

Subject: Energy Efficiency programs update

Platte River collaborates with the four owner communities to offer efficiency programs under the Efficiency Works™ banner. Through Efficiency Works programs Platte River and its owner communities engage with retail customers and provide them with information, technical support and rebates to help them manage their energy use and costs. By managing customers’ energy use, Platte River is able to manage its load as well as the costs and risks associated with providing electricity.

Please find the attached update on efficiency programs for January through June 2020. Staff will return during the August board meeting to provide a presentation and to answer questions on efficiency programs.

Attachment

Page 89

Page 90

1 | Page

Efficiency programs update: January through June 2020

July 22, 2020

Efficiency Works – overview, budgets and goals

Through Efficiency Works programs, Platte River and its owner communities engage with customers and their service providers to help customers better manage their electric use. COVID-19 has resulted in several challenges that required adjustment to our budgets and program approaches. Staff remains committed to finding novel ways to continue providing customers with efficiency services while ensuring compliance with proper safety protocols and guidance.

Efficiency Works began the year with a total budget of $13.8 million, consisting of approximately $12.3 million in program spending for rebates, assessments and contracted services and $1.5 million for Platte River to administer the programs. Platte River’s portion of the budget was $10.9 million and the owner communities intended to provide $2.9 million in supplemental and directive funding. To mitigate the financial impacts to the owner communities and their customers due to reduced loads and revenue resulting from COVID-19, Platte River reduced the budget for efficiency programs by $1 million. Fort Collins and Longmont recently indicated their intent to add a combined $500,000 in funding to support participation in business programs, as described in the Efficiency Works Business section below. The result of these budget adjustments is that we now have a total budget of $13.4 million, consisting of approximately $11.9 million in program spending for rebates, assessments and contracted services and $1.5 million for Platte River to administer the programs. Under updated budgets, Platte River is now expected to provide $9.9 million and the owner communities will provide $3.5 million to fund the Efficiency Works programs. Note that Platte River’s goal is to spend efficiency funds equitably among the cities, in proportion to each communities’ load-ratio share, while each owner community’s funding is spent only on programs, projects or services provided within that community.

Efficiency Works started the year with an energy savings goal of 28,500 MWh from Platte River’s funding and as much as 5,500 MWh additional with the owner community funding for a total energy savings of 34,000 MWh. It is too early to say with certainty how close we will come to achieving these energy savings goals due to changes in funding and challenges predicting customer participation during the global pandemic.

As of the end of June, Efficiency Works programs have achieved total energy savings of 12,400 MWh and have spent $4.5 million on programs, including administration costs. An

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additional $3.8 million has been committed to specific projects and programs. We will continue to commit funding as driven by customer participation within the available budget of $13.4 million.

COVID-19 impacts on efficiency program services

Historically, many of our efficiency program services have required one-on-one interaction among utility staff, our contractors, customers and customers’ service providers. However, to comply with social distancing guidelines, Platte River has suspended in-person work by our staff and our contractors. This has resulted in a suspension of many services we normally provide at a customer’s site. Examples include on-site energy assessments for homes and businesses and on-site field services within regional retailers for our marketplace programs. We have shifted to virtual services where possible, discussed in greater detail below. We also continue to process rebate applications for homes and businesses whose owners make efficiency upgrades on their own with their own third-party service providers.

Energy solutions staff are currently developing a process in conjunction with Platte River’s safety and human resources staff to support a return to on-site, in-person work provided that it can be done in compliance with all federal, state and local requirements as well as Platte River’s safety standards, which may exceed these requirements. The process is not only intended to address how to re-start services as conditions permit, but also to re-suspend services if the COVID-19 risk situation worsens.

Efficiency Works Business

Participation in business rebates has been strong providing a good start to the first half of 2020. All months have shown activity within historical normal/average ranges for rebate applications with no noticeable slowdown due to COVID-19. Longmont and Fort Collins have provided additional directive funding to continue a 25% LED lighting bonus rebate until November 15, 2020. This bonus was scheduled to end July 1, 2020 to maintain business program cost effectiveness in a segment of the program that has seen strong participation. The decision to continue it for the first six months of 2020 was made in late 2019 in response to strong participation and a desire to improve the cost effectiveness of the program over the long term while driving higher participation early in the year. Since participation has remained strong throughout the pandemic and since the business program was projected to spend its funding and exceed its goals, Platte River initially recommended ending the bonus in all owner communities. However, Fort Collins and Longmont staff indicated a desire to drive additional participation by extending the bonus and providing additional funding to the program. Therefore, the bonus has ended as planned in Estes Park and Loveland but will continue in Fort Collins and Longmont. Fort Collins and Longmont are

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anticipated to provide an additional $300,000 and $200,000, respectively. Most of this funding will be directive rather than supplemental, since continuation of the bonus is a departure from a common program. All on-site/in-person field services by Platte River and its contractors continue to be suspended due to COVID-19. This includes assessments and direct installation in businesses and multifamily housing as well as rebate inspections for completed rebate projects. We have added an ability to provide energy advising over the phone by directing some calls to Franklin Energy. However, the need for this service by customers has been low. Staff have also initiated virtual training sessions for service providers interested in participating in business efficiency programs to replace in-person trainings that were provided in the past. The midstream rebate program, which provides rebates to distributors to sell high efficiency packaged cooling equipment, continues to operate, though we project lower participation levels. We are also refining service offerings that are intended to capture savings from improvements in the way buildings are operated and maintained. The level and type of service differs based on building size and the complexity of HVAC and control systems. For smaller, less complex buildings, we are piloting the Performance Plus program, which works with a limited number of third-party HVAC maintenance contractors to perform enhanced maintenance compared to their typical scope of services to achieve greater energy savings. For larger and more complex buildings, we are working on a planned revamp of our retro-commissioning program to broaden its appeal and provide increased energy savings in future years. Since the beginning of the year, business programs have achieved 11,400 MWh of energy savings at a program cost $3.27 million. Business programs have committed $5.7 million in funding to programs and projects that will save a projected 21,400 MWh, inclusive of the projects completed and paid. Business programs appear to be on track to meet energy savings goals totaling about 30,000 MWh due largely to continued strong response by customers and service providers to the rebate program.

Efficiency Works Homes

Compared to the business programs, the Efficiency Works Homes program has experienced greater impact from COVID-19 service suspensions.

The Homes program continues to process rebates for home retrofits completed by third-party service providers. Unlike the business program, we have seen some slowdown in participation compared to previous years. Despite this slowdown, we continue to find interest from service providers that want to join the program. Staff are providing virtual training sessions to these

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service providers to help them become acquainted with the programs and its requirements. Staff are also developing new specialized virtual training for technical trainings that have typically done in person and on site.

Prior to COVID-19, the Homes staff were preparing to launch a new Home Check Up assessment intended as a complement to the existing “Streamlined” assessment. The Streamlined assessment expedites a customer’s path to completing an insulation and air sealing upgrade to their home. It achieves this by completing a thorough assessment of the home’s efficiency upgrade potential and preparing a work order for a range of efficiency upgrades based on standardized pricing from third-party service providers that have agreed to participate in the program. This permits the customer to more quickly complete a project if they so choose, without needing to seek multiple bids from contractors. Although the Streamlined assessment has been well received, it typically takes five hours to complete and so, is not always the best fit for a customer who wants a shorter assessment or is perhaps not interested in receiving quotes for insulation and air sealing projects. The Home Check Up was designed to require less time commitment from a customer while providing the owner communities with a lower-cost service option. However, COVID-19 has prevented launch of this new assessment option as well as suspended existing Streamlined assessments.

In response to the suspension of on-site assessments, staff have developed, tested and launched a new virtual advising service that includes a one-hour online video meeting between a customer and a professional energy advisor. Prior to the virtual advising session, the customer is asked to provide photos of the home’s exterior and energy-using equipment that is readily accessible to them, such as furnaces, air conditioners and water heaters. During the virtual advising session, the advisor reviews this information and discusses the customer’s questions and concerns related to home comfort and efficiency. After the session, the customer receives a report providing them with steps they can take to increase their home’s performance. Advisors have begun reaching out to the roughly 130 people who are currently on a wait list for an on-site assessment to see if they are interested in proceeding instead with the virtual advising session at no cost to them. While this service may not meet all the owner communities’ and customers’ goals in the same way that an on-site assessment can, it is intended to provide a high-quality service to customers while COVID-19 makes an on-site assessment an unacceptable risk. We also expect that virtual advising will remain an option even if the risk is mitigated in the future.

Year to date, the Homes program has achieved 193 MWh of energy savings at a program cost of $235,000. If the current pace of participation holds, the energy savings for the program may not achieve its goal of 570 MWh.

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Efficiency Works Income Qualified

Platte River partners with Energy Outreach Colorado (EOC) to provide income qualified services to residential and commercial customers that meet the program’s income and business-type and business-mission requirements (e.g., multifamily projects that house income-qualified residents and nonprofits that serve income-qualified members of our communities).

These program services have been paused due to COVID-19 risk. We are working on a process to provide pre-built efficiency kits to customers who are approved for income qualified services by EOC. The kits will contain a variety of energy saving upgrades (e.g., LED lighting, faucet aerators, etc.) that are easily installed by the homeowner or renter. In addition, we are working on plans to better align the rebate application process used by EOC with Platte River’s existing business programs, while also supporting the work EOC does to reach qualified businesses and support them through the program participation process.

Since January, Income Qualified programs have achieved 165 MWh energy savings at a cost of $129,000. Due to COVID-19 restrictions, it is likely that this program will fall short of its goal of 565 MWh.

Efficiency Works Marketplace

Marketplace programs engage customers in a variety of ways to influence how they use and purchase appliances, lighting and other equipment.

The Midstream Lighting program continues to provide instant, point-of-purchase rebates within participating retailers for specialty LED lighting products. Staff also continue to seek greater engagement and participation from retailers in our Shift appliance rebates program. The Shift model provides instant, point-of-purchase discounts on selected high-efficiency entry-level appliances. We are nearing execution of an agreement with a national retailer with a local presence that we hope will boost participation in this innovative program model.

A new Efficiency Works Store launched on June 3 after a five-month pause to migrate to a new vendor. The store sells a variety of products that save energy and/or water including LED lighting, smart lighting, smart thermostats and efficient showerheads. Instant rebates are provided for selected products to qualified customers.

As we approached the pause of the Efficiency Works Store, we recognized that this would limit customer participation in the marketplace sector. Therefore, we took the opportunity to begin offering a “downstream” rebate option for selected marketplace products (e.g., smart

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thermostats, ENERGY STAR night-sky compliant lighting and efficient water products where supported by the owner communities). Downstream rebates are paid directly to customers after a customer has submitted a rebate application and proof of purchase via an online form. Participation has grown in this area and we have received 179 rebate applications year to date.

Marketplace programs also include the Refrigerator Recycling Program, which Platte River implements on behalf of Estes Park, Fort Collins and Longmont. (Loveland implements their own version of this program.) Platte River paused this program service due to COVID-19, since our program picks up refrigerators and freezers from within the home. However, we have recently restarted it with the provision that the program vendor, ARCA, only picks up refrigerators placed outside the home.

Year to date Marketplace programs have achieved 627 MWh of energy savings at a program cost of $105,000. It is likely that this program area will fall short of budgeted energy savings due to COVID-19 restrictions and slow growth in program participation.

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Memorandum

Date: 7/22/2020 To: Board of Directors From: Sarah Leonard, general counsel Subject: Legal, Environmental and Compliance Report – July board meeting

LEGAL ISSUES: CURRENT OR THREATENED LITIGATION INVOLVING PLATTE RIVER T-Mobile Cellular Equipment Litigation Background: Beginning in the early 2000s, Platte River entered into a series of leases to permit VoiceStream to place cellular telephone antennas and related equipment on certain transmission towers in the Fort Collins area. These leases, which were for an initial term of five years with two five-year extension options, were later assumed by T-Mobile. In 2016, at the direction of the owner communities’ utilities directors, Platte River conducted a risk assessment of the transmission tower attachments. This study concluded that the pole attachments presented an unacceptable risk to the reliability of Platte River’s system because, among other things, transmission lines would need to be taken out of service whenever maintenance was performed on the cellular antennas. Accordingly, Platte River informed T-Mobile that it would not extend the leases beyond their then-current terms. T-Mobile later requested additional time to find alternative locations for its cellular antenna facilities, and Platte River agreed to brief extensions of these leases. However, it soon became apparent that T-Mobile was not taking reasonable steps to relocate its facilities. In December 2018, Platte River entered into final lease extensions with T-Mobile, on the condition that no further extensions would be required. These extensions, for leases DN03028D, DN03077B and DN03292D, expired on Sept. 30, Oct. 31 and Nov. 30, 2019, respectively. As the expiration of the leases approached, T-Mobile informed Platte River that it would not be removing its equipment by the expiration of the leases, as relocation was taking “longer than we had hoped.” Platte River requested documentation of T-Mobile’s efforts to relocate the facilities, but no further information has been provided. Accordingly, on Oct. 11, 2019, Platte River filed for breach of contract and declaratory relief in the Larimer County District Court seeking, among other things, money damages for T-Mobile’s breach

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Platte River Power Authority Legal, Environmental and Compliance Report – July board meeting

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of the leases and a declaration of Platte River’s rights to remove the cellular antenna facilities at T-Mobile’s expense. T-Mobile answered the complaint on Nov. 14, 2019, and the case is now “at issue.” Among other things, T-Mobile has asserted “necessity” and “impossibility of performance” as defenses to Platte River’s claims for breach of contract. This matter is subject to simplified civil procedure, which means that discovery will be limited, and procedure is generally expedited. The court has not yet set a trial date. In early 2020, the parties shared initial disclosures of witnesses and documents, and Platte River served an initial set of discovery requests to obtain further information about T-Mobile’s affirmative defenses. All discovery was completed by May 31, 2020. Current Status: Platte River and T-Mobile conducted mediated negotiations on June 29, 2020, and reached agreement on principal elements of a settlement. On July 9, outside counsel for Platte River transmitted a proposed form of settlement agreement to T-Mobile’s outside counsel. As of the date of this report, we are awaiting T-Mobile’s response. Potential Claim Background Staff sent a demand letter in connection with the potential claim against a contract vendor discussed in executive session at the July 2019 board meeting. The vendor responded on Oct. 24, 2019, generally denying any responsibility for the claim. Platte River then engaged outside counsel to represent its interests in this matter. Current status: Platte River staff coordinated with outside counsel to develop a formal complaint against Platte River’s former vendor. The complaint was served on the vendor on July 10, 2020 and filed in court on July 21. We will continue to update the board as this matter develops.

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LITIGATION MATTERS OF INTEREST TO PLATTE RIVER Southwest Power Pool Western Energy Imbalance Service filing with the Federal Energy Regulatory Commission Background: On Sept. 9, 2019, the Southwest Power Pool announced that Basin Electric Power Cooperative (Basin), Tri-State Generation and Transmission Association (Tri-State), and the Western Area Power Administration (Western) committed to join the Southwest Power Pool’s western energy imbalance service, which is a regional energy imbalance market in the western interconnection anticipated to begin operations in February 2021. To implement this new market, the Southwest Power Pool will require changes to its tariff (as approved by the Federal Energy Regulatory Commission (FERC)), including details of how the market will operate and the rates that will be charged to participants in that market. To secure FERC approval, the Southwest Power Pool must demonstrate that its proposed rates are “just and reasonable.” Platte River has a significant interest in the Southwest Power Pool market because Platte River purchases hydropower from Western and shares many common transmission interests with it and with Tri-State. There are significant questions on how the Southwest Power Pool’s market will affect entities in the West, as well as how it will allocate market costs. Platte River staff and its Washington, D.C. legal counsel met with FERC Commissioners and their staff in late January (ahead of the Southwest Power Pool’s anticipated filing) to raise these concerns. We understand that representatives of other Colorado utilities similarly reached out to FERC. On Feb. 21, 2020, the Southwest Power Pool filed its proposed tariff changes with FERC, asking FERC to approve its proposal by May 21, 2020. Although Platte River, along with Joint Dispatch Agreement (JDA) participants Public Service Company of Colorado (PSCo), Black Hills Colorado Energy (Black Hills), and Colorado Springs Utilities, has announced its intent to join the Western Energy Imbalance Market operated by California Independent System Operator’s (California ISO), the Southwest Power Pool’s tariff filing may have significant impacts on Platte River and other utilities in the western interconnection. Among other things, there are potential issues with “seams”; that is, how rates and use of transmission facilities that overlap within the Southwest Power Pool’s energy imbalance service market footprint and other adjacent market territories will be managed. For example, Western jointly owns transmission lines with Platte River and other utilities that will not be part of the Southwest Power Pool’s western energy imbalance service market, and there are other parties with contractual rights on transmission paths that will be managed by the Southwest Power Pool. The Southwest Power Pool’s FERC filing leaves open significant questions as to how these “seams” issues will be addressed. In addition, there are concerns about the lack of any cost-benefit analysis demonstrating the benefits of participation in the western energy imbalance service or whether those benefits would outweigh the approximate $9 million start-up cost and $5 million annual administrative cost. There are concerns

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about whether the western energy imbalance service would allow one or more participants to exercise market power. In light of the considerations outlined above, Platte River filed to intervene and submitted a protest in the FERC proceeding on Mar. 20, and continues to coordinate with the other JDA participants. PSCo, Black Hills, and Colorado Springs Utilities intervened and raised concerns similar to those cited by Platte River (as well as several additional issues, in the case of Black Hills). Numerous other parties intervened. Basin, Tri-State, and Western intervened to support the Southwest Power Pool’s proposal. The Colorado Public Utilities Commission, as well as a coalition of public interest organizations, filed comments highly critical of the proposed governance structure. On Apr. 9, Basin, Tri-State, Western, and the Southwest Power Pool all filed answers to comments and protests that criticized various aspects of the Southwest Power Pool proposal. Answers are prohibited under FERC’s procedural rules, but FERC chooses from time to time to waive this restriction if it finds additional filings aid in its decision-making process. On Apr. 20, FERC’s Office of Market Regulation issued a notice to the Southwest Power Pool, identifying a range of areas in which FERC staff found the filings to be deficient. Many overlapped with the concerns Platte River raised in its protest. Current status: On May 22, 2020, the Southwest Power Pool responded to the FERC deficiency letter, offering further information on proposed cost recovery, use of transmission service, market power mitigation, determination of locational marginal prices, remedies for resource insufficiency, and governance, among other areas. This triggered additional supporting and opposing comments. Platte River filed a supplemental protest on June 12, 2020, emphasizing in particular its concerns about the Southwest Power Pool’s apparent intent to use all physically available transmission capacity within the market footprint in real time (without regard to ownership or market participation) to facilitate market transactions. We are currently awaiting a FERC decision in this proceeding, and will update the board about any further developments as they occur.

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FERC Order for PJM Interconnection, LLC to Expand Minimum Offer Price Rule Background: On Dec. 19, 2019, FERC issued an order (December 19 Order) on capacity auctions in the PJM Interconnection (PJM), which is a FERC-regulated regional transmission organization in the eastern United States. The December 19 Order does not apply outside of PJM, but it has raised alarm bells throughout the public power community because of the reasoning FERC used to reach its decision. In simple terms, since organized energy markets began to mature in the United States, market participants and regulators have struggled with the risk that generating units needed infrequently (but indispensable during periods of highest power demand) will not remain financially viable if their income depends on energy sales over a small number of hours each year. Mandatory capacity auctions (where all load-serving entities must buy at auction enough offered capacity to meet their assigned portions of system peak) have been one tool through which market operators and regulators have attempted to solve this problem. In the context of PJM, FERC concluded that capacity resources (primarily renewable power projects) that benefit from state-provided incentives (subsidies, in FERC’s view) were undermining capacity auctions by unfairly depressing auction prices (especially harmful to traditional thermal resources such as coal and gas units). Before the December 19 Order, FERC had already instituted rules that set a floor on new generator bids into the PJM capacity auction. The previous rules included some exceptions to accommodate public power entities’ self-supply choices. Not only did the December 19 Order extinguish these exceptions, but FERC adopted a very broad definition of “state subsidy.” Under this definition, FERC would find a state subsidy if action by a state or local government has conferred any “financial benefit” on a new resource. The view of many in public power (and of the one FERC Commissioner who dissented from the decision of FERC’s other two sitting Commissioners) is that if it stands, it sets a destructive precedent for public power entities in PJM (and for others in public power if FERC applies this principle to other regions and markets). The principle on which the December 19 Order is based applies to mandatory capacity auctions in organized markets. Capacity auctions are not part of the California ISO Western Energy Imbalance Market and do not currently exist in Colorado. Also, FERC’s composition changes over time as presidential administrations change (because FERC Commissioners are nominated by the President), which means that a future slate of FERC Commissioners could view this issue differently. After FERC issued the December 19 Order, the American Public Power Association, as well as many states within the PJM market footprint, filed with FERC urging it to rehear its December 19 Order. On Apr. 16, 2020, FERC denied the rehearing requests. This cleared the way for appeals in federal court, and on Apr. 20, the American Public Power Association and American Municipal Power, Inc. filed notices of appeal in the United States Court of Appeals for the District of Columbia Circuit.

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Current Status: There have been no new filings or actions since our last report. We will update the board about further developments as the appeals process unfolds. Save the Colorado v. Bureau of Reclamation (D. Ariz. No. 3:19-cv-08285 MTL) Background: On Oct. 1, 2019, Save the Colorado and other environmental groups sued in the U.S. District Court for Arizona challenging the record of decision (Decision) issued by the Bureau of Reclamation (Bureau) to approve the Long-Term Experimental and Management Plan for the Glen Canyon Dam. The Glen Canyon Dam is a large hydropower dam that is part of the Colorado River Storage Project. Platte River is one of the largest offtakers of hydropower from that project, accounting for almost 13% of the Colorado River Storage Project’s output. By way of background, the Glen Canyon Dam was constructed in 1963 under the Colorado River Storage Project Act of 1956, which provided a comprehensive water resource development plan for the upper Colorado River Basin. The plan included the construction of a series of dams on the Colorado River to provide water for agricultural, domestic, and hydropower purposes. In 1992, Congress adopted the Grand Canyon Protection Act to increase protection for the fish, wildlife, and environmental resources in the Grand Canyon. The Grand Canyon Protection Act and the Endangered Species Act (which protects several endangered fish species in the Colorado River) required the Glen Canyon Dam to modify its operations. In 2009, the United States Department of Interior and the Bureau proposed to implement adaptive management programs for the Glen Canyon Dam to protect environmental resources. Under the National Environmental Protection Act (NEPA), this kind of action requires an environmental impact statement. In 2012, the Bureau studied potential adaptive management options and, in December 2016, issued its Decision on the environmental impact statement, which identified several alternatives for managing the Glen Canyon Dam, including a “no action” alternative. The Bureau’s Decision evaluated the impacts of each of the alternatives, including the impacts on hydropower production. The alternative the Bureau selected was determined to have a marginal impact on hydropower production, increasing costs by an estimated 0.17%. During the NEPA process, Save the Colorado and the other plaintiffs claim to have given the Bureau data regarding climate impacts from the proposed adaptive management program. In their lawsuit, the plaintiffs assert that the Bureau failed to consider this climate data in issuing its Decision, and that the “statement of purpose and need” in the environmental impact statement failed to include climate change considerations (although climate change was not an issue at the time Congress adopted the Colorado River Storage Project Act). The plaintiffs further claim the Bureau failed to consider alternatives, including filling Lake Mead first (Lake Meade is downstream from Lake Powell, the

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reservoir created by the Glen Canyon Dam), taking a “run of the river” management approach, and removing Glen Canyon Dam altogether. Of particular concern is the plaintiffs’ focus on the Bureau’s consideration of hydropower interests. They assert that hydropower is “subservient” to the other purposes of the Colorado River Storage Project and should not be given weight in the NEPA process. If the plaintiffs’ litigation succeeds, it would halt the adaptive management program and could force the Bureau to reopen the NEPA process, potentially leading to a program even less favorable for hydropower interests. It may also set a precedent that could endanger other hydropower projects that did not take climate change into consideration. The Bureau answered the complaint on Dec. 5, 2019. Several entities, including the state of California, the state of Nevada and the Colorado River Energy Distributors Association (of which Platte River is a member) moved to intervene. This case is in the early phases of litigation, as the parties focus on preparing the administrative record for review. Current Status: There are no new developments since our last report. We will provide further updates as additional information becomes available. Save the Colorado, et al. v. United States Bureau of Reclamation (D. Colo. No. 17-cv-2563-REB) Background: As a member of the Municipal Subdistrict of the Northern Colorado Water Conservancy District, Platte River is a participant in the Windy Gap Firming Project (the “Firming Project”), which seeks to secure delivery of water from the Western Slope to the Front Range. The centerpiece of the Firming Project is Chimney Hollow Reservoir, a 90,000-acre-foot reservoir adjacent to Carter Lake, which will store water delivered from the Colorado River and certain tributaries for future use by Platte River and the other project participants. The Firming Project was permitted by the Bureau and the Army Corps of Engineers after an extensive environmental review under NEPA. On Oct. 26, 2017, several environmental groups filed a legal action challenging the adequacy of the NEPA review for the Firming Project and seeking to invalidate the permits for the project. Unlike a typical civil lawsuit, the case will be heard by a court without pretrial discovery, and the court’s review will be limited to whether there is adequate support in the administrative record to justify the agencies’ actions on the permits for the project. The Bureau and the Army Corps of Engineers filed an answer on Jan. 16, 2018, denying the allegations of the complaint. Northern Water and several other parties moved to intervene, and those motions were granted. The administrative record has been filed and the matter has been fully briefed. The case has been assigned to U.S. District Judge William Martinez for a decision on the merits, and staff is hopeful that the court will issue its ruling in early 2020.

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The District Court recently issued an order indicating that this matter has been reassigned to Judge Tim Tymkovich, who sits on the Tenth Circuit court of appeals. The District Court may assign a case to an appellate judge to help relieve backlog. We believe it is a positive sign that this case has been reassigned and may indicate that the District Court will act soon. Because this case involves the review of an administrative record and will not involve a trial with live testimony and documentary evidence, we do not believe the reassignment will cause any delay while the new judge gets up to speed. Current Status: There are no new developments in this matter since our last report. El Paso Electric Co. vs. Federal Energy Regulatory Commission, (5th Cir. No. 18-60575) Background: FERC Order 1000, issued in 2011, 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. Although Platte River is not subject to FERC jurisdiction, Platte River participates in the Order 1000 planning process through WestConnect, a planning organization covering a region generally corresponding with boundaries of the states of Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming. Platte River is a party to the WestConnect Planning and Participation Agreement along with other FERC-jurisdictional and non-jurisdictional utilities in the planning region. The current dispute concerns the cost allocation provisions of the Planning and Participation Agreement, which allow non-FERC jurisdictional utilities (referred to as “Coordinating Transmission Owners” or “CTOs”) to opt out of cost allocation for regional transmission projects. El Paso Electric Co. and several other FERC-jurisdictional utilities filed appeals challenging FERC’s approval of the WestConnect cost allocation provisions, asserting that permitting CTOs to opt out of cost allocation would result in rates to other utilities that are unjust and unreasonable. On Aug. 8, 2016, the Fifth Circuit Court of Appeals agreed with El Paso and remanded the case to FERC. On remand, FERC reaffirmed 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 contained sufficient incentives for non-jurisdictional utilities to accept cost allocation responsibilities. FERC noted that it could resort to its authority under Section 211A of the Federal Power Act if non-jurisdictional utilities’ refusal to participate in cost allocation would result in rates that were not just and reasonable. On Aug. 17, 2018, El Paso Electric Company filed a review action with the Fifth Circuit Court of Appeals. Platte River is not a party to the action but may coordinate with other affected, non-jurisdictional utilities in filing an amicus brief. Platte River participated in settlement negotiations between the jurisdictional

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and non-jurisdictional utilities on modifications to the cost allocation and governance provisions of the Planning and Participation Agreement. The jurisdictional and non-jurisdictional utilities agreed on settlement principles. On Nov. 20, 2019, the Court granted an extension of the abeyance period to allow the utilities to incorporate the settlement principles into tariff language to be filed with FERC. The utilities are developing the tariff language. Current Status: There are no new developments in this matter since the last report. New England Ratepayers Association Petition for Declaratory Order (FERC Docket No. EL20-42-000) The New England Ratepayers Association (NERA) filed a petition for a declaratory order asking FERC to (1) declare that there is exclusive federal jurisdiction over wholesale energy sales from generation sources located on the customer side of the retail meter (often referred to as net-metered facilities), and (2) order that the rates for sales from net-metered facilities be set in accordance with the Public Utility Regulatory Policies Act of 1978 (PURPA) or the Federal Power Act. NERA argued that net-metered facilities (smaller than 1 MW, and including rooftop solar) are by definition “Qualifying Facilities” under PURPA. Sales rates under PURPA are capped at utility avoided costs which, in the case of small facilities, are almost always avoided energy (and not capacity) costs. Comments were due on June 15, 2020. Numerous parties submitted comments and protests, including many states public utility commissions and state attorneys general, as well as state and federal legislators. Additional comments and responses have continued to flow into FERC since the comment deadline. Current Status: On July 16, 2020, FERC dismissed NERA’s complaint on procedural grounds.

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ONGOING AND CURRENT MATTERS OF SIGNIFICANCE Grand Lake Clarity NEPA Process Background: The water Platte River receives from the Windy Gap Project is stored in a three-lake system, including Lake Granby, Shadow Mountain Reservoir, and Grand Lake, before it is pumped to the Front Range via the Alva Adams Tunnel. The Northern Colorado Water Conservancy District operates the system. Concerns have arisen about the impact stored water from the Windy Gap Project and the larger Colorado-Big Thompson Project have on the clarity of water in Grand Lake, largely due to the deposit of nutrients in the lakes, which contributes to algal growth. The Bureau started a NEPA process to address this water clarity issue. Platte River is a coordinating agency in the NEPA process. The outcome of the NEPA process could affect Platte River both as a participant in the Windy Gap Project and as a power customer of the Western Area Power Administration. At present the matter will proceed as an Environmental Assessment, but may convert to an Environmental Impact Statement, which entails a higher standard of review. A “visioning process” conducted by the Bureau yielded several capital projects that may address the clarity issue. The alternative capital projects currently under discussion include (1) dredging and deepening Shadow Mountain Reservoir; (2) extending the Alva Adams Tunnel to tie directly into Shadow Mountain Reservoir; or (3) installing a high-pressure piping system to bypass Shadow Mountain Reservoir. Additionally, a range of smaller-scale options that could be implemented either separately or in conjunction with one of the large-scale alternatives are being evaluated. Public scoping and outreach have not been scheduled but are anticipated to begin the summer of 2021 at the earliest. Current Status: The Bureau distributed a draft report in June with preliminary analysis for the alternative capital project, to be discussed further at the next cooperating agencies’ meeting (scheduled for August 2020). Because of the preliminary nature of the analysis and the extensive NEPA process requirements remaining, it will likely be at least a year, and could be much longer, before we know the final outcome of this NEPA process. Western Wholesale Market Activities Background: Since negotiations between the Mountain West Transmission Group and the Southwest Power Pool ended in 2018, Platte River has been focusing primarily on market operations under the JDA among Platte River, Black Hills Energy and Public Service Company of Colorado, which has been in place since June 2017.

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On June 20, 2019, FERC approved changes to the JDA Tariff necessary to authorize Colorado Springs’ participation in the JDA market. Colorado Springs Utilities is now fully integrated into the JDA market, after starting market operations on March 2, 2020. Because the JDA market lacks sufficient size to balance out the significant variable resources Platte River and other Colorado utilities will need to meet their aggressive decarbonization goals, Platte River and other members of the former Mountain West Transmission Group evaluated proposals from the California Independent System Operator (California ISO) and Southwest Power Pool to provide energy imbalance market services in the West. A significant number of utilities in the West (including Salt River Project and PacifiCorp) have joined the California ISO energy imbalance market. By 2022, this market will include approximately 77% of the electric load in the western United States. Platte River and the other participants in the JDA engaged the Brattle Group to analyze the costs and benefits of the California ISO energy imbalance market and Southwest Power Pool’s western energy imbalance service (discussed above). The results of the Brattle Group study showed significantly greater benefits for the members of the JDA market to participate in the California ISO market than for the Southwest Power Pool market. Accordingly, on Dec. 17, 2019, the JDA market participants (including Platte River) issued a joint press release announcing their intention to join the California ISO market. On Sept. 17, 2019, the Colorado Public Utilities Commission (Commission) opened a docket under the newly adopted Colorado Transmission Coordination Act (Transmission Act) to study the potential advantages and disadvantages of various market options for the West, including energy imbalance markets, regional transmission organizations, power pools, and joint tariffs. The Transmission Act directed the Commission to hold hearings for public comments on the costs and benefits of markets and to determine by Dec. 1, 2021, whether participation in a market is in the public interest. If the Commission determines that participation in a market is in the public interest, it may claim it has authority to direct jurisdictional utilities to take “appropriate actions” to pursue participation in such a market. Platte River and several other utilities, independent power producers, Southwest Power Pool, California ISO, and various non-governmental organizations have filed notices to participate and initial comments. Platte River and other interested parties filed comments on Nov. 15, 2019, and rebuttal comments were filed on Dec. 15, 2019. The Commission will likely schedule public hearings for early 2020. Current status: The Commission’s investigatory docket is ongoing, although legislation has been proposed to limit its scope, given the decision of Colorado’s largest utilities to join the California ISO’s western energy imbalance market and the Southwest Power Pool’s western energy imbalance service.

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CONTRACTUAL MATTERS: Solar and Storage Power Purchase Agreement Background: On Feb. 13, 2019, Platte River entered into a Solar Renewable Energy and Storage Power Purchase Agreement (Solar Purchase Agreement) for the construction of a 20 MW solar facility with a 2 MW battery at the Rawhide Energy Station. The term of the Solar Purchase Agreement is 20 years, with an option to extend the term to 40 years. At its meeting on June 10, 2019, the Larimer County Commission gave final approval for the “1041” land use permit required under state law (Colorado House Bill 1041, originally adopted in 1974) for the construction of the solar and battery storage facility. Platte River and DEPCOM, the project developer, entered into an interconnection agreement for the project on June 12, 2019. Because of difficulties in siting the solar facilities, in order to maintain the economics of the project without an increase in the cost of energy, Platte River and the project developer agreed to increase the capacity of the project from 20 MW to 22 MW. Platte River and the project developer signed an amendment to the Solar Purchase Agreement on Aug. 29, 2019. The developer has obtained all the necessary government permits. Current status: Construction is nearing completion. The developer and Platte River will start joint commissioning activities at the end of July. We expect project commissioning to continue through the end of August, with commercial operation expected in early September 2020. Roundhouse Energy Project Background: On Jan. 22, 2018, Platte River entered into a Renewable Energy Power Purchase Agreement with Roundhouse Renewable Energy, LLC. Platte River agreed to purchase 150 MW of wind energy from the Roundhouse wind energy project that is being constructed in southern Wyoming. The project developer will deliver the wind energy to Platte River using a 230-kV generation interconnect transmission line that is being constructed by the project developer. On July 10, 2019, Platte River and the project developer entered into a Fifth Amendment to the Power Purchase Agreement to increase the amount of energy purchased from 150 MW to 225 MW. In addition, Platte River entered into an asset purchase agreement to acquire the generator interconnection transmission line.

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13

Current status: The project began commercial operation in June. Platte River and the developer continue to work to resolve Platte River’s concerns with the property rights for certain parcels along the transmission path and to prepare for Platte River’s purchase of the generator interconnection transmission line, expected to occur sometime in July or August. ENVIRONMENTAL MATTERS: EPA Affordable Clean Energy Rule/Colorado Air Quality Statute Implementation Background: On June 19, 2019, the EPA issued its final Affordable Clean Energy (ACE) Rule, which establishes guidelines for states to use when developing plans to limit carbon dioxide (CO2) emissions at coal-fired power plants. The ACE Rule focuses on heat rate improvements or efficiency improvements as the best system of emission reduction (best reduction systems) for CO2 emissions from coal-fired power plants. The best reduction systems are determined based on technical feasibility, cost, non-air quality health and environmental impacts and energy requirements. In addition to improvements to operation and maintenance practices, the ACE Rule identifies several “candidate technologies” for best reduction systems, including neutral network/intelligent sootblowers, boiler feed pumps, air heater and leakage control, variable frequency drives, blade path upgrades, and economizer improvements. Primary responsibility for implementation of the ACE Rule is delegated to the states, and states will be expected to establish unit-specific standards of performance that reflect the emissions limitation achievable through application of the best reduction system technologies. States will have three years to submit implementation plans to EPA. At least one lawsuit has been filed challenging the ACE Rule, and staff anticipates more lawsuits will be filed in the near future. At the same time EPA was finalizing the ACE Rule, the Colorado General Assembly adopted several aggressive air quality statutes, including the following:

• SB 19-096, which established goals for the reduction and reporting of greenhouse gas emissions,

• HB 19-1261, which granted the Colorado Air Quality Commission (Air Commission) broad rulemaking authority to implement greenhouse gas reduction goals, and

• SB 19-236, which requires investor-owned utilities to submit clean energy plans that describe their commitment to reaching 80% reductions in carbon emissions by 2030. Municipal utilities such as Platte River may submit clean energy plans voluntarily.

These measures were discussed in more detail at the May 2019 board meeting. Unlike the ACE Rule, which is focused on technology-based emissions reductions, the new Colorado statutes focus on overall emissions reductions without regard to technology.

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14

The Air Commission continues to hold stakeholder meetings as it works to implement the new emissions reduction statutes. It will take many months to develop and implement new rules, but Air Commission staff made it clear that meeting the aggressive greenhouse gas emissions reduction goals will require a greater reduction of greenhouse gases from the electric utility sector than from other sectors over which it lacks effective regulatory control. Platte River staff will remain engaged in stakeholder outreach processes to advocate for Platte River’s views try to ensure new requirements align with our Resource Diversification Policy. Staff will provide further updates as more information becomes available. Current status: On May 21, 2020 the Air Commission adopted Regulation 22, which establishes new requirements for reporting greenhouse gas emissions (and will apply to Platte River). The overall goal of the new reporting requirement is to gather data for a statewide inventory and better determine the intensity of emissions associated with retail electricity. With this change electric utilities in Colorado will need to track and report more detailed emissions data, including for electricity imported into and exported from Colorado. Platte River has also been actively involved in stakeholder outreach to define the process the Air Commission will follow to evaluate clean energy plans. The Air Commission is developing a “guidance document,” which we anticipate will lay out specific criteria for plan review, accepted methodologies for emissions accounting, and other assumptions. We anticipate the stakeholder process will result in an initial guidance document for the Air Commission to consider later this year. Regional Haze Review Background:

Under the Federal Clean Air Act, the state of Colorado must evaluate regional haze in the front range every ten years to determine if reasonable progress is being made to improve visibility. As part of this process, the state requires emitters of nitrogen oxides (NOx) (a principal contributor to haze) and other emissions to analyze technologies that could be employed to reduce those emissions. Platte River received a letter from the Colorado Department of Public Health and Environment (Health Department) on May 14, 2019 asking Platte River to perform a four-factor analysis for all applicable emission units at Rawhide. Rawhide Unit 1 was the only emission unit for which a four-factor analysis was required. The four-factor analysis assesses the financial cost and technical logistics of control technologies on emission sources, including, for example, the addition of further emissions controls (such as selective catalytic reduction systems) and repowering the unit to fire natural gas. Platte River engaged Burns & McDonnell to conduct the analysis. If the Health Department determines that additional control measures are economically feasible, it may require new technologies to reduce NOx and other emissions. In the past, the Health Department used a cost threshold of $5,000 per ton of

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15

NOx reduction to determine feasibility, which was less than half of the cost of adding selective catalytic reduction systems at the time. The cost threshold for feasibility applied by the state likely will increase. Going forward, the Health Department will include new requirements in state regulations to be approved by the Air Commission. The commitment for additional reductions will also be incorporated into a new State Implementation Plan, which will be reviewed by the State Legislature and then submitted to the EPA for approval. Platte River submitted the results of its four-factor analysis to the Health Department on Oct. 14, 2019. The report addressed the technically feasible emissions controls that could be implemented at Rawhide Unit 1 to reduce NOx emissions and the associated costs. Staff is waiting for the Health Department to decide whether to require any further emissions controls. We responded on Feb. 27, 2020 to the Health Department’s request for additional information about our four-factor analysis report. The Health Department confirmed it received our response and to date has had no further questions. Current Status: Following our announcement that Rawhide Unit 1 will be retired by 2030, Platte River submitted updated cost estimates to the Health Department, reflecting a shorter useful life for additional controls and higher cost per ton of NOx reduction. Rawhide’s closure is expected to help Colorado achieve long-term visibility improvement goals and enable Platte River to avoid expensive new environmental controls to reduce Regional Haze. The Air Pollution Control Division has indicated it expects to submit a request to the Air Commission in August 2020, asking it for a rulemaking hearing in November 2020.

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Coal Combustion Residuals Regulation Background: The EPA Administrator signed the Disposal of Coal Combustion Residuals from Electric Utilities final rule (Residuals Rule) on Dec. 19, 2014, and it was published in the Federal Register on Apr. 17, 2015. This rule finalized national regulations to provide a comprehensive set of requirements for the safe disposal of combustion residuals, primarily coal ash, from coal-fired power plants. On Mar. 1, 2018 the EPA issued proposed revisions to the 2015 final Residuals Rule, which remains in litigation before the U.S. Court of Appeals for the D.C. Circuit. The proposed revisions address several provisions of the 2015 Residuals Rule that had been challenged in previous litigation, 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. For now, the state of Colorado has indicated that it intends to continue to regulate coal combustion residuals under its existing solid waste regulations rather than pursuing enforcement authority under the Residuals Rule. As previously reported, Platte River has taken steps to update its operational plan to comply with the requirements of the Residuals Rule and Colorado solid waste regulations. These steps include increased groundwater monitoring and evaluating the existing topsoil cover at the monofill where ash had previously been disposed of. Concurrently, Platte River obtained approval from the Health Department to close the reclaim pond and bottom ash ponds, which have been replaced with the installation of a concrete settling tank with two separate cells. Decommissioning activities are currently underway and are expected to be completed in the fall of 2020. Additional revisions to the Residuals Rule may modify current deadlines, allowing additional time for groundwater monitoring and analysis. However, even if these modifications are adopted, they will not alter Platte River’s chosen path to compliance. Current status: Platte River is moving forward with final plans to close the bottom ash impoundments at Rawhide. We currently expect site work to begin in July 2020. Closure activities will include removal of all waste material, liner, and other related infrastructure. We will conduct soil and groundwater sampling to confirm no residual impact. This project was delayed from May to July due to concerns about bringing contractors to Rawhide during the COVID-19 outbreak. We have since instituted measures to allow the project to move forward safely while practicing effective social distancing.

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COMPLIANCE MATTERS: Platte River received notice that the Western Electricity Coordinating Council (WECC) has completed its review of Platte River’s self-certification responses for the 2019 monitoring period. Platte River is required to self-certify (on an annual basis) compliance levels with various mandatory reliability standards. WECC would notify Platte River and follow up appropriately if it were to identify any potential instances of non-compliance. To date, Platte River has not been notified of any non-compliance from the 2019 self-certification.

Page 113

Page 114

Executive summary

Category May variance YTD variance

Municipal demand 3.2% l (5.3%) n

Municipal energy (6.6%) n (2.9%) n

Baseload generation (18.4%) n (13.5%) n

Wind generation 5.7% l (6.9%) n

Solar generation (52.3%) n (29.0%) n

Surplus sales volume 16.1% l 2.1% l

Surplus sales price (6.9%) n (4.8%) n

Purchase volume 219.2% n 125.9% n

Purchase price (25.4%) l (21.7%) l

Dispatch cost (5.8%) l (6.8%) l

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

May 2020

operating report

Municipal demand came in above budget for the month, as the result of a few days of above average

temperatures, while energy came in below budget due to the COVID-19 safer-at-home order. Demand

and energy are below budget, year to date.

The Rawhide and Craig units ran well all month long, with no unplanned outages or curtailments.

Wind generation came in above budget for the month, while solar generation came in significantly

below budget. The below budget solar generation is attributable to a scheduled transformer outage

needed to tie in the new Rawhide Prairie Solar Project as well as the Rawhide Prairie Solar Project

not yet having come online. Year to date, wind remains below budget and solar remains significantly

below budget.

Surplus sales volume came in considerably above budget for the month and surplus sales pricing

came in well below budget due to excess energy in the region with lower loads and spring runoff.

Volume is above budget, while pricing remains below budget, year to date.

Purchase volumes were significantly above budget for the month, as baseload units were dispatched

down to purchase low cost JDA energy, which resulted in below budget purchase pricing. Year to

date, purchase volumes remain significantly above budget, while pricing remains well below budget.

Dispatch costs came in well below budget for the month, due to the high volume of JDA purchases

made at below budget pricing. These below budget costs were partially offset by above budget Craig

costs and Rawhide solar costs, as Craig was dispatched lower in JDA and the Rawhide Prairie Solar

Project has not yet come online. Year to date, dispatch costs remain below budget.

Page 115

Operational overview

2020 goal

0 l 0 l 0 l

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

of May.

Peak day obligation. Peak demand for the month was 490 megawatts which occurred on May 29,

2020, at hour ending 18:00 and was 16 megawatts above budget. Platte River’s obligation at the time

of the peak totaled 567 megawatts. Demand response and voltage reduction were not called upon at

the time of the peak.

May actual YTD total

*Off-system wind RECs and associated energy have been sold to another utility and, therefore, cannot be claimed as a renewable resource by Platte River or its owner communities

Forecast demand474

0

50

100

150

200

250

300

350

400

450

500

550

600

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: May 29, 2020

Hydro Wind* Solar Rawhide Craig CTs Purchases

Total obligation567

Municipal obligation490

May 2020 operating report Page 1

Page 116

Municipal loads

May budget May actual Minimum

Coincident demand (MW) 474 490 497 3.2% l

Estes Park 14 13 13 (10.6%) n

Fort Collins 222 217 234 (2.1%) n

Longmont 125 140 137 11.9% l

Loveland 113 120 114 5.7% l

Non-coincident demand (MW) 485 498 503 2.7% l

Estes Park 19 16 20 (16.7%) n

Fort Collins 223 222 234 (0.6%) u

Longmont 128 140 137 9.2% l

Loveland 113 120 112 5.4% l

Energy sales (MWh) 252,393 235,610 (6.6%) n

Estes Park 10,206 8,738 (14.4%) n

Fort Collins 119,942 111,162 (7.3%) n

Longmont 63,677 63,050 (1.0%) u

Loveland 58,569 52,659 (10.1%) n


Municipal demand came in above budget for the month, as the result of a few days of

above average temperatures, while energy came in below budget due to the COVID-19

safer-at-home order. Demand and energy are below budget, year to date.

Actual variance

Note: The bolded values above were those billed to the owner communities, based on the maximum of either the

actual metered demand or the annual minimum rachet.

Estes Park8,738

Fort Collins111,162

Longmont63,050

Loveland52,659

Actual May energy sales = 235,610 MWh

Estes Park13

Fort Collins

217

Longmont140

Loveland120

Actual May coincident demand = 490 MW

Estes Park16

Fort Collins

222

Longmont140

Loveland120

Actual May non-coincident demand = 498 MW


Page 117

Source of supply variance

Overall resources came in below budget for the month, primarily due to below budget coal generation, as well

as below budget solar generation and purchases, which were partially offset by above budget JDA

purchases. Year to date, resources remain near budget.

May variance in production from energy resources

Year-to-date variance in production from energy resources (MWh)



Page 118

Source of delivery variance

Loads and obligations came in below budget for the month, mainly due to below budget municipal, contract

and JDA sales which were partially offset by above budget short-term sales. Year to date, loads and

obligations remain near budget.

May variance in deliveries for loads and obligations

Year-to-date variance in deliveries for loads and obligations


Page 119

Power generation - Rawhide

Rawhide ran exceptionally well all month long, with no unplanned outages or curtailments. Equivalent

availability factor came in above budget, while net capacity factor came in well below budget as the result of

having been dispatched lower through JDA. Year to date, equivalent availability factor remains well above

budget, while net capacity factor is below budget.

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

90.30% 83.60%76.00% 81.40%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

May YTD

Net capacity factor

Budget Actual

97.00% 91.67%99.97% 99.94%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

May YTD

Equivalent availability factor

Budget Actual

0.0087 0.00870.0062 0.0063

0.000

0.002

0.004

0.006

0.008

0.010

0.012

0.014

May YTD

Hg (lb/GWh)

Limit Actual

0.1450 0.14500.1130 0.1120

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

May YTD

NOx (lb/MBtu)

Limit Actual

0.0900 0.09000.0810 0.0740

0.00

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.10

May YTD

SO2 (lb/MBtu)

Limit Actual


Page 120

Power generation - Craig

Both Craig units ran exceptionally well all month long, with no unplanned outages or curtailments. Craig

equivalent availability factor came in above budget, while net capacity factor came in well below budget due

to having been dispatched lower through JDA. Year to date, equivalent availability factor remains slightly

above budget, while net capacity factor remains well below budget.

95.00% 92.07%100.00% 94.40%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

May YTD


Budget Actual

46.60% 59.70%33.80% 34.90%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

May YTD

Net capacity factor

Budget Actual


Page 121

Power generation - CTs

The combustion turbines were run for testing purposes to prepare for summer operations, during the month

of May. Year to date, CT generation remains well below budget and natural gas pricing remains below

budget.

$0.00 $2.65$2.42 $2.40

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

May YTD

$/MBtuNatural gas pricing

Budget Actual

2020 annual budgeted pricing = $2.74/MBtu

0.00 11,582.30944.00 5,003.95

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

May YTD

MWh CT generation

Budget Actual


Page 122

Power generation - renewables serving load

Wind generation came in above budget for the month, while solar generation came in significantly below

budget. The below budget generation is attributable to a scheduled transformer outage needed to tie in the

new Rawhide Prairie Solar Project as well as the Rawhide Prairie Solar Project not yet having come online.

Year to date, wind remains below budget and solar remains significantly below budget.

18.48 122.8520.12 114.15

-

20

40

60

80

100

120

140

May YTD

MWh(000s)

Wind generation

n Budget n Actual

11.71 34.125.59 24.24

-

5

10

15

20

25

30

35

40

May YTD

MWh(000s)

Solar generation

n Budget n Actual

May 2020 Operating report Page 8

Page 123

Market sales

Surplus sales volume came in considerably above budget for the month and surplus sales pricing came in

well below budget due to excess energy in the region with lower loads and spring runoff. Volume is above

budget, while pricing remains below budget, year to date.

Market purchases

Purchase volumes were significantly above budget for the month, as baseload generation units were

dispatched down in order to purchase low cost JDA energy, which resulted in below budget purchase pricing.

Year to date, purchase volumes remain significantly above budget, while pricing remains well below budget.

$14.44 $10.77

$0

$5

$10

$15

$20

$25

$30

$35

$40

Maybudget

Mayactual

$/MWh

$15.39 $12.05

$0

$5

$10

$15

$20

$25

$30

$35

$40

YTDbudget

YTDactual

$/MWh

Average purchase price

7,506 1,264

12,127

61,401

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Maybudget

Mayactual

MWh

56,704 6,504

72,792

286,074

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

YTDbudget

YTDactual

Tho

usan

ds

MWh

Energy purchases

n Budget n Actual n JDA

$23.15 $21.55

$0

$5

$10

$15

$20

$25

$30

$35

$40

Maybudget

Mayactual

$/MWh

$24.48 $23.31

$0

$5

$10

$15

$20

$25

$30

$35

$40

YTDbudget

YTDactual

$/MWhAverage sales price

n Budget n Actual

32.43 56.83

4.68

0.5440.02

32.20

-

20

40

60

80

100

120

Maybudget

Mayactual

MWh(000s)

232.47 273.86

15.15

2.41

200.28180.99

-

50

100

150

200

250

300

350

400

450

500

YTDbudget

YTDactual

MWh (000s)

Sales volume

n Budget n Actual n JDA n Contract

n Budget n Actual


Page 124

Dispatch cost

Dispatch costs came in well below budget for the month, due to the high volume of JDA purchases made at

below budget pricing. These below budget costs were partially offset by above budget Craig costs and

Rawhide solar costs, as Craig was dispatched lower in JDA and the Rawhide Prairie Solar Project has not yet

come online. Year to date, dispatch costs remain below budget.

$28.70 $36.40 $28.67 $31.08 $18.01 $12.13 $50.14 $42.75$3.00

$0.00$28.66 $52.53 $28.67 $31.08 $18.93 $10.56 $48.28 $55.05 $0.00 $49.37

$0

$10

$20

$30

$40

$50

$60

Rawhide Craig CRSP LAP Purchases JDApurchases

Wind* Rawhidesolar

Batterystorage

CTs

$/M

Wh

May resource cost

Budget Actual Blended Actual

$28.97 $32.83 $27.23 $30.74 $17.46 $13.56 $46.37 $46.82$3.00

$35.32$26.46 $44.40 $27.23 $30.74 $20.32 $11.83 $47.12 $54.58 $0.00 $38.04

$0

$10

$20

$30

$40

$50

$60

$70


Wind* Rawhidesolar

Batterystorage

CTs

$/M

Wh

YTD resource cost


Blended budget: $32.19 | Blended actual: $30.31

YTD blended budget: $30.97 | YTD blended actual: $28.86

*Off-system wind RECs and associated energy have been sold to another utility and, therefore, cannot be claimed as a renewable r esource by Platte River or its owner communities


Page 125

Power delivery

Major system operations projects benefitting the municipalities:

Estimated finish date Status Description

March 2021 98% completeHarmony circuit breaker replacements and

circuit switcher additions, T1 and T3

December 2020 50% completeCounty Line Substation, T3 transformer

addition for Longmont

June 2020 100% complete Roundhouse 230kV wind bay addition

June 2020 80% complete22 MW Rawhide Prairie Solar 34 kV feeder

breaker 302 addition

Events of significance

•

•

•

•

•

•

•

The 230-kV bay addition at Rawhide was completed for the new Roundhouse transmission line.

Rawhide Unit 1 was in continuous operation for 347 days, from June 2019 through the end of May

2020. The unit is currently performing its second longest run in its history. The longest run on record,

thus far, was for 393 days, between 2014 and 2015.

CT Unit A became available on May 29, following repairs on the 52G breaker.

The fiber optic connection from Rawhide to the Roundhouse control building was completed.

Relaying and breaker commissioning were completed between Rawhide and Roundhouse.

Longmont

Fort Collins

Inspections on the transmission lines between Rawhide and Roundhouse were completed.

Location

The semiannual tree trimming around transmission lines was completed.

Rawhide

Rawhide


Page 126

Executive summary

Category June variance YTD variance

Municipal demand (8.3%) n (6.0%) n

Municipal energy (2.0%) u (2.7%) n

Baseload generation (16.0%) n (13.9%) n

Wind generation 383.1% l 31.2% l

Solar generation (40.5%) n (31.9%) n

Surplus sales volume 50.8% l 8.3% l

Surplus sales price (8.4%) n (5.6%) n

Purchase volume 4.4% n 93.6% n

Purchase price (1.9%) u (17.8%) l

Dispatch cost (2.4%) l (6.1%) l


June 2020

operating report

Municipal demand came in below budget for the month due to weather and COVID-19 impacts, while

energy came in near budget. Municipal demand is below budget and energy is below budget, year to

date.

Rawhide ran well during the month with only one brief curtailment. Both Craig units each experienced

a forced outage, and Craig 1 had several minor curtailments due to low load testing requirements and

equipment issues.

Wind generation came in significantly above budget for the month as Roundhouse wind came online

one month earlier than budgeted. Solar generation came in considerably below budget due to

Rawhide Prairie not coming online as budgeted. Year to date, wind is well above budget and solar is

well below budget.

Surplus sales volume came in considerably above budget for the month due to unbudgeted short-

term capacity and energy sales. Overall surplus sales pricing was below budget due to excess energy

in the region. Volume is above budget while pricing remains below budget, year to date.

Purchase volumes were above budget for the month mainly due to above budget JDA purchases

while overall purchase pricing came in near budget. Year to date, purchase volumes remain

significantly above budget, while pricing remains well below budget.

Dispatch costs came in below budget for the month mainly due to wind costs coming in significantly

below budget as Roundhouse wind came online early. Year to date, dispatch costs remain below

budget.

Page 127

Operational overview

2020 goal

0 l 0 l 0 l

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

of June.

Peak day obligation. Peak demand for the month was 585 megawatts which occurred on June 29,

2020, at hour ending 18:00 and was 52 megawatts below budget. Platte River’s obligation at the time

of the peak totaled 719 megawatts. Demand response and voltage reduction were not called upon at

the time of the peak.

June actual YTD total


Forecast demand637

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

750

800

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: June 29, 2020

Hydro Wind* Solar Rawhide Craig CTs Purchases

Total obligation719

Municipal obligation585

June 2020 operating report Page 1

Page 128

Municipal loads

June budget June actual Minimum

Coincident demand (MW) 637 585 497 (8.3%) n

Estes Park 17 15 13 (10.7%) n

Fort Collins 293 261 234 (11.1%) n

Longmont 172 164 137 (5.0%) n

Loveland 155 145 114 (6.4%) n

Non-coincident demand (MW) 641 589 503 (8.2%) n

Estes Park 17 15 20 (12.7%) n

Fort Collins 294 261 234 (11.4%) n

Longmont 175 166 137 (4.7%) n

Loveland 155 147 112 (5.6%) n

Energy sales (MWh) 274,945 269,565 (2.0%) u

Estes Park 9,365 8,638 (7.8%) n

Fort Collins 129,340 125,977 (2.6%) n

Longmont 71,186 73,245 2.9% l

Loveland 65,054 61,704 (5.1%) n


Municipal demand came in below budget for the month due to weather and COVID-19

impacts, while energy came in near budget. Municipal demand is below budget and

energy is below budget, year to date.

Actual variance

Note: The bolded values above were those billed to the owner communities, based on the maximum of either the

actual metered demand or the annual minimum rachet.

Estes Park8,638

Fort Collins125,977

Longmont73,245

Loveland61,704

Actual June energy sales = 269,565 MWh

Estes Park15

Fort Collins

261

Longmont164

Loveland145

Actual June coincident demand = 585 MW

Estes Park15

Fort Collins

261

Longmont166

Loveland147

Actual June non-coincident demand = 589

MW


Page 129

Source of supply variance

Overall, resources came in above budget for the month due to above budget wind, JDA purchases and CT

generation. Year to date, resources are slightly below budget.

June variance in production from energy resources

Year-to-date variance in production from energy resources (MWh)



Page 130

Source of delivery variance

Loads and obligations came in above budget for the month due to above budget sales (short-term, contract

and JDA), partially offset by below budget municipal sales. Year to date, loads and obligations remain slightly

below budget.

June variance in deliveries for loads and obligations

Year-to-date variance in deliveries for loads and obligations


Page 131

Power generation - Rawhide

Rawhide ran well during the month with only one brief curtailment due to a coal mill issue. Equivalent

availability was above budget and net capacity factor was well below budget as a result of being dispatched

lower in JDA. Year to date, equivalent availability is well above budget and net capacity factor is below

budget.

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

85.20% 83.90%74.30% 80.20%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

June YTD

Net capacity factor

Budget Actual

97.00% 92.55%99.22% 99.82%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

June YTD


Budget Actual

0.0087 0.00870.0064 0.0064

0.000

0.002

0.004

0.006

0.008

0.010

0.012

0.014

June YTD

Hg (lb/GWh)

Limit Actual

0.1450 0.14500.1160 0.1190

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

June YTD

NOx (lb/MBtu)

Limit Actual

0.0900 0.09000.0780 0.0780

0.00

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.10

June YTD

SO2 (lb/MBtu)

Limit Actual


Page 132

Power generation - Craig

Craig 1 had a forced outage due to switchyard issues as well as several minor curtailments due to low load

testing and various equipment issues. Craig 2 had a forced outage to repair a check valve on the bearing

cooling water system. Craig equivalent availability factor came in near budget, while net capacity factor came

in well below budget for the month due to being dispatched lower through JDA. Year to date, equivalent

availability remains slightly above budget while net capacity factor remains well below budget.

95.00% 92.56%94.60% 94.40%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

June YTD


Budget Actual

49.80% 58.00%36.70% 35.20%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

June YTD

Net capacity factor

Budget Actual


Page 133

Power generation - CTs

The combustion turbines were run primarily for sales. Year to date, CT generation is above budget and

natural gas pricing remains below budget.

$2.61 $2.65$2.34 $2.36

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

June YTD

$/MBtuNatural gas pricing

Budget Actual

2020 annual budgeted pricing = $2.74/MBtu

1,470.52 13,052.829,283.00 14,286.95

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

June YTD

MWh CT generation

Budget Actual


Page 134

Power generation - renewables serving load

Wind generation came in significantly above budget for the month as Roundhouse wind came online one

month earlier than budgeted. Solar generation came in considerably below budget due to Rawhide Prairie not

coming online as budgeted. Year to date, wind is well above budget and solar is well below budget.

12.84 135.6963.00 177.15

-

20

40

60

80

100

120

140

160

180

200

June YTD

MWh(000s)

Wind generation

n Budget n Actual

12.00 46.127.15 31.38

-

5

10

15

20

25

30

35

40

45

50

June YTD

MWh(000s)

Solar generation

n Budget n Actual

June 2020 Operating report Page 8

Page 135

Market sales

Surplus sales volume came in considerably above budget for the month due to unbudgeted short-term

capacity and energy sales. Overall surplus sales pricing was below budget due to excess energy in the

region. Volume is above budget while pricing remains below budget, year to date.

Market purchases

Purchase volumes were above budget for the month mainly due to above budget JDA purchases while

overall purchase pricing came in near budget. Year to date, purchase volumes remain significantly above

budget, while pricing remains well below budget.

$13.43 $13.18

$0

$5

$10

$15

$20

$25

$30

$35

$40

Junebudget

Juneactual

$/MWh

$14.87 $12.22

$0

$5

$10

$15

$20

$25

$30

$35

$40

YTDbudget

YTDactual

$/MWh

Average purchase price

15,000 6,283

32,054 42,856

-

10,000

20,000

30,000

40,000

50,000

60,000

Junebudget

Juneactual

MWh

71,704 12,788

104,846

328,930

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

YTDbudget

YTDactual

Tho

usan

ds

MWh

Energy purchases

n Budget n Actual n JDA

$23.51 $21.53

$0

$5

$10

$15

$20

$25

$30

$35

$40

Junebudget

Juneactual

$/MWh

$24.36 $23.00

$0

$5

$10

$15

$20

$25

$30

$35

$40

YTDbudget

YTDactual

$/MWhAverage sales price

n Budget n Actual

25.62 50.06

0.83

2.5638.39

41.89

-

20

40

60

80

100

120

Junebudget

Juneactual

MWh(000s)

258.09 323.91

15.98

4.97

238.67

222.88

-

100

200

300

400

500

600

YTDbudget

YTDactual

MWh (000s)

Sales volume

n Budget n Actual n JDA n Contract

n Budget n Actual


Page 136

Dispatch cost

Dispatch costs came in below budget for the month mainly due to wind costs coming in significantly below

budget as Roundhouse wind came online early. Year to date, dispatch costs remain below budget.

$27.13 $35.90 $28.23 $29.08 $19.37 $10.48 $57.07 $42.76$3.00

$36.49$28.06 $42.70 $28.23 $29.08 $23.63 $11.65 $25.03 $55.71 $0.00 $35.61

$0

$10

$20

$30

$40

$50

$60


Wind* Rawhidesolar

Batterystorage

CTs

$/M

Wh

June resource cost


$28.66 $33.27 $27.36 $30.44 $17.86 $12.62 $47.42 $45.77$3.00

$35.45$26.71 $44.11 $27.36 $30.44 $22.21 $11.81 $39.18 $54.84 $0.00 $36.46

$0

$10

$20

$30

$40

$50

$60


Wind* Rawhidesolar

Batterystorage

CTs

$/M

Wh

YTD resource cost


Blended budget: $29.15 | Blended actual: $28.44

YTD blended budget: $30.66 | YTD blended actual: $28.79



Page 137

Power delivery

Major system operations projects benefitting the municipalities:

Estimated finish date Status Description

March 2021 98% completeHarmony circuit breaker replacements and

circuit switcher additions, T1 and T3

December 2020 60% completeCounty Line Substation, T3 transformer

addition for Longmont

July 2020 88% complete22 MW Rawhide Prairie Solar 34 kV feeder

breaker 302 addition

Events of significance

•

•

•

•

•

•

•

•

Tear down of the old HQ and EO buildings was completed along with a rough grade of the property to

prepare for final landscape work in July.

Rawhide Unit 1 was in continuous operation for 377 days, from June 2019 through the end of June

2020. The unit is currently performing its second longest run in its history. The longest run on record,

thus far, was for 393 days, between 2014 and 2015.

Transformer maintenance and testing on Loveland East transformer T3 was completed.

Transformer and switchgear maintenance was completed on transformers T1 and T2 for the town of

Estes Park at Marys Lake substation.

A one-year contract was executed to sell up to 50 MW of surplus energy to a third party which will

start in July.

Longmont

Fort Collins

The Roundhouse wind project came online June 5, 2020 and Commercial Operation was established

June 12, 2020.

Location

The generator tie outlet from Rawhide to Roundhouse was energized in early June.

Rawhide

Semi-annual battery maintenance was completed.


Page 138

Financial reportMay 2020

Page 139

Page 2 of 17

Page 140

Financial highlights year-to-date

Projecting net income is difficult at this time as the impact of COVID-19 continues to unfold. Since April 1, after normalizing for weather, owner community loads have decreased approximately 7% due to COVID-19 but it is still too early to determine the overall financial impact for 2020 and beyond.

Staff has performed financial stress tests with three different load and surplus sales reduction scenarios to assess the potential financial impact for 2020. The assumptions are outlined in the table below. The net revenues represent the results of reduced revenues offset by lower fuel costs for these assumptions. Additionally, staff has identified immediate opportunities to offset potential financial impacts of COVID-19 with new contract sales, as well as operating expense reductions and will continue to seek out additional opportunities. Capital projects of approximately $9.7 million have also been delayed. Platte River’s strategic financial plan metrics are met in all cases. Staff will continue to monitor results and the stress tests will be revisited monthly as operational and financial trends are established and as new information arises.

Platte River reported favorable results year-to-date. Net income of $7.8 million was favorable by $6.9 million compared to budget due to below-budget expenses partially offset by below-budget revenues. Of the favorable variance, $1.5 million was due to unrealized gains on investments as interest rates have moved significantly lower and $1.1 million due to re-scheduling the Rawhide Unit 1 minor outage from April to November. Other expense were also delayed and are expected to be spent by the end of the year.

Financial stress

test

Owner community

load

Surplus sales

volume and price

COVID-19 net

revenue (Jun-Dec)

Other revised

estimates (Jun-Dec)

YTD results

5/31/2020Total

impactNet

income

Variance from

budget *Case 1 -15.0% -7.5% (10.4)$ 2.0$ 6.9$ (1.5)$ 15.7$ -9%Case 2 -10.0% -5.0% (7.2)$ 2.2$ 6.9$ 1.9$ 19.1$ 11%Case 3 -5.0% -2.5% (3.7)$ 2.4$ 6.9$ 5.6$ 22.8$ 33%

*Net income budget = $17.2 million

Page 3 of 17

Page 141

Key budget variances year-to-date

Total operating expenses

Several expenses were below budget due to timing of expenses or expenses not being required at this time. The net impact was approximately $4.1 million below budget. The below-budget expenses include: 1) various contracted services and materials for the Rawhide Unit 1 minor outage, 2) software and hardware equipment and maintenance, 3) information technology outsourcing and consulting, 4) integrated resource plan studies, 5) monofill and impoundments compliance, 6) Craig units, 7) non-routine projects, 8) general consulting, 9) chemicals and 10) other smaller projects. Plant maintenance was above budget due to timing and the combustion turbine Unit F inspection project was completed above budget.

Details of the financial results year-to-date are described below.

Total revenuesSales for resale - contract were below budget $0.3 million primarily due to entities booking out power and not taking the energy. The price is reduced by Platte River's avoided generation cost.

Interest and other income was below budget $0.1 million primarily due to lower interest as debt proceeds were not received due to the delay in the Series KK bond issuance partially offset by unbudgeted tower leases.

Key financial results Annual($ millions) Budget Actual Budget Actual budget

Net income/(loss) (0.3)$ 0.6$ 0.9$ 300.0% 0.9$ 7.8$ 6.9$ 766.7% 17.2$

Fixed obligation charge coverage 1.33x 2.11x .78x 58.6% 1.61x 2.46x .85x 52.8% 2.17x

Budget results

Total revenues 17.8$ 17.2$ (0.6)$ (3.4%) 91.8$ 89.9$ (1.9)$ (2.1%) 240.5$

Sales to owner communities 15.2 14.6 (0.6) (3.9%) 76.9 75.4 (1.5) (2.0%) 198.7

Sales for resale - contract 1.0 0.9 (0.1) (10.0%) 5.2 4.9 (0.3) (5.8%) 14.4

Sales for resale - short-term 0.7 1.0 0.3 42.9% 5.8 5.8 0.0 0.0% 17.6

Wheeling 0.5 0.5 0.0 0.0% 2.4 2.4 0.0 0.0% 5.9

Interest and other income 0.4 0.2 (0.2) (50.0%) 1.5 1.4 (0.1) (6.7%) 3.9

Total operating expenses 15.3$ 14.0$ 1.3$ 8.5% 77.8$ 70.9$ 6.9$ 8.9% 190.3$

Purchased power 2.9 3.1 (0.2) (6.9%) 16.6 17.4 (0.8) (4.8%) 44.6

Fuel 3.6 3.4 0.2 5.6% 18.6 16.0 2.6 14.0% 45.9

Production 4.7 4.0 0.7 14.9% 21.4 18.8 2.6 12.1% 47.9

Transmission 1.4 1.3 0.1 7.1% 7.4 6.9 0.5 6.8% 17.3

Administrative and general 1.8 1.6 0.2 11.1% 9.6 8.4 1.2 12.5% 22.4

Distributed energy resources 0.9 0.6 0.3 33.3% 4.2 3.4 0.8 19.0% 12.2

Capital additions 6.2$ 0.6$ 5.6$ 90.3% 19.5$ 7.8$ 11.7$ 60.0% 72.8$

May Favorable(unfavorable)

Year to date Favorable(unfavorable)

>2% Favorable | 2% to -2% At or near budget | <-2% Unfavorable

Page 4 of 17

Page 142

Purchased power expenses were $0.8 million above budget. Above-budget purchases were made under the joint dispatch agreement because of favorable pricing, which replaced base load generation. Partially offsetting the above-budget variance were below-budget replacement purchases primarily for the delayed Rawhide Unit 1 scheduled minor outage. Wind generation, solar generation and reserves were also below budget and energy was provided to Tri-State under the forced outage assistance agreement.

Other financial informationAmortization expense - The closure of two ash ponds at the Rawhide Energy Station is a compliance requirement for the CCR Rule (Federal) and Section 9 Waste Regulations (State of Colorado) and is also an asset retirement obligation under GASB 83 Certain Asset Retirement Obligations. The project is expected to be completed by November 2020. As a result of unforeseen events, additional funds of approximately $0.7 million are required to complete the project. This additional expense will be reflected in depreciation and amortization as part of recognizing expense related to asset retirement obligations.

Fuel inventory - Coal from the stockpile at the Craig Station was sold for $5.4 million resulting in a $0.3 million loss recognized in May.

Fuel expenses were $2.6 million below budget.Craig units 81% of the overall variance, $2.1 million below budget. Generation was below budget due to operating at lower loads to take advantage of lower cost energy under the joint dispatch agreement and forced outages, partially offset by the cancellation of the planned outage of Craig Unit 2.Rawhide Unit 1 11% of the overall variance, $0.3 million below budget. Generation was below budget due to operating at lower loads to take advantage of lower cost energy under the joint dispatch agreement.Natural gas 8% of the overall variance, $0.2 million below budget. Generation was budgeted to replace power during the Rawhide Unit 1 scheduled minor outage.

Distributed energy resources program expenses were $0.8 million below budget due to cancellation or delay of marketing, research, and strategy development, as well as the unpredictability of the completion of customers' energy efficiency projects.

Personnel expenses were below budget $0.2 million due to lower than anticipated medical and dental claims and lower wages primarily as a result of vacant positions.

Page 5 of 17

Page 143

Project ($ in thousands) Budget Estimate

Favorable (unfavorable)

Carryover request

Below budget projectsMonofill upgrades - Rawhide - This project will be below budget due to a delay of the design approval by the Colorado Department of Public Health & Environment. The project is expected to be complete in spring 2021. The below-budget funds will be requested to be carried over into 2021. 6,556$ 560$ 5,996$ 5,996$

* Energy Engagement Center - This project is delayed and will be below budget as a result of COVID-19. The below-budget funds will be requested to be carried over into 2021. 5,186$ 426$ 4,760$ 4,760$

* Headquarters campus - This project will be below budget due to timing of costs. A portion of construction costs occurred in 2019 rather than 2020 as originally budgeted. The increased spending in 2019 reduced the estimated costs for 2020. 3,419$ 2,795$ 624$ -$

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 2020 and may not represent the total cost of the project. As a result of COVID-19, capital projects of approximately $9.7 million have been delayed or canceled. Further changes to capital projections are anticipated and staff will continue to monitor spending estimates to ensure capital projects are appropriately managed and funded.

Debt - The table below shows current debt outstanding. The remaining outstanding principal for Series II and JJ represents debt associated with the Rawhide Energy Station ($25.6 million) and transmission assets ($143.8 million). Principal and interest payments are made June 1 and interest only payments are made Dec. 1. The Series KK bond issuance scheduled for March to fund the Windy Gap Firming Project has been delayed and is currently planned to be issued in September. The delay results in a reduction of interest expense and interest income relative to budget.

Capital additions (year-end estimates as of May 2020)

Series

Debt outstanding $/thousands

Par issued $/thousands

True interest

costMaturity

dateCallable

date Purpose

Series II - February 2012 $ 25,530 65,475$ 3.2% 6/1/2037 6/1/2022

$30M new money for transmission projects & refund remaining of Series EE ($4.6M NPV/10.9%)

Series JJ - April 2016 143,895 147,230$ 2.2% 6/1/2036 6/1/2026

$60M new money for Rawhide & transmission projects & refund portion of Series HH ($13.7M NPV/12.9%)

Total par outstanding 169,425

Unamortized bond premium 20,984

Total revenue bonds outstanding

190,409

Less: due within one year (10,310)

Total long-term debt, net $ 180,099

Fixed rate bond premium costs are amortized over the terms of the related bond issues.

Page 6 of 17

Page 144

Project ($ in thousands) Budget Estimate

Favorable (unfavorable)

Carryover request

Grading and drainage improvements - Rawhide - This project is delayed and will be below budget as a result of COVID-19.The below-budget funds will be requested to be carried over into 2021. 644$ 15$ 629$ 629$ Circuit switcher (T1,T2) addition - Linden Tech Substation - This project is delayed and will be below budget as a result of COVID-19.The below-budget funds will be requested to be carried over into 2021. 597$ 78$ 519$ 519$ Fire protection system upgrade - combustion turbine Unit A - This project is delayed and will be below budget as a result of COVID-19.The below-budget funds will be requested to be carried over into 2021. 419$ 2$ 417$ 417$

* Craig units 1 and 2 projects - These projects will be below budget due to modifications to the budget after Platte River's budget was finalized. 989$ 872$ 117$ -$

Out-of-budget projects

480V switchgear replacement - combustion turbine units A-D - Funds will be used for procurement and design needs to ensure 2021 installation. This project will upgrade the 480V switchgears for combustion turbine units A-D to incorporate normal and alternative source breakers with racking capability, which will allow for better and more routine maintenance, additional safety and higher unit availability. -$ 264$ (264)$ -$

Delayed projects

Oil breaker (2082) replacement - Longs Peak Substation - This project was delayed as a result of COVID-19. The below-budget funds will be requested to be carried over into 2021. 237$ -$ 237$ 237$ Security system - Loveland Crossroads Substation - This project was delayed as a result of COVID-19. The below-budget funds will be requested to be carried over into 2021. 125$ -$ 125$ 125$ Smart key system - substations - This project was delayed as a result of COVID-19. The below-budget funds will be requested to be carried over into 2021. 107$ -$ 107$ 107$

Canceled projects

Generator step up and unit auxiliary transformer replacements - Rawhide - This project was canceled as a result of COVID-19 and will be rescheduled to coincide with Rawhide Unit 1's major outage in 2024. The funds will be re-budgeted at that time. 2,216$ (5)$ 2,221$ -$ Fuel oil unloading containment - This project was canceled as a result of COVID-19. 212$ -$ 212$ -$ Transmission line vault upgrades - Rogers Road - This project was canceled as a result of COVID-19 and will be rescheduled in 2022. 167$ -$ 167$ -$

* Project details or amounts have changed since last report.

** Project is new to the report.

Page 7 of 17

Page 145

Page 8 of 17

Page 146

Budget schedules

Page 9 of 17

Page 147

May 2020Non-GAAP budgetary basis (in thousands)

Favorable

Budget Actual (unfavorable)

Revenues

Operating revenues

Sales to owner communities 15,207$ 14,589$ (618)$

Sales for resale - contract 1,033 925 (108)

Sales for resale - short-term 752 1,005 253

Wheeling 477 473 (4)

Total operating revenues 17,469 16,992 (477)

Other revenues

Interest income(1) 367 231 (136)

Other income 2 (11) (13)

Total other revenues 369 220 (149)

Total revenues 17,838$ 17,212$ (626)$

Expenditures

Operating expenses

Purchased power 2,893$ 3,125$ (232)$

Fuel 3,596 3,364 232

Production 4,713 3,991 722

Transmission 1,375 1,279 96

Administrative and general 1,796 1,630 166

Distributed energy resources 938 605 333

Total operating expenses 15,311 13,994 1,317

Capital additions

Production 3,866 185 3,681

Transmission 644 15 629

General 1,696 373 1,323

Total capital additions 6,206 573 5,633

Debt expense

Principal 859 859 -

Interest expense 1,038 660 378

Total debt expense 1,897 1,519 378

Total expenditures 23,414$ 16,086$ 7,328$

Revenues less expenditures (5,576)$ 1,126$ 6,702$

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

Month of May

Schedule of revenues and expenditures, budget to actual

Page 10 of 17

Page 148

May 2020 year-to-dateNon-GAAP budgetary basis (in thousands)

Favorable Annual

Budget Actual (unfavorable) budget

Revenues

Operating revenues

Sales to owner communities 76,947$ 75,406$ (1,541)$ 198,688$

Sales for resale - contract 5,146 4,871 (275) 14,454

Sales for resale - short-term 5,820 5,789 (31) 17,607

Wheeling 2,401 2,390 (11) 5,918

Total operating revenues 90,314 88,456 (1,858) 236,667

Other revenues

Interest income(1) 1,518 1,310 (208) 3,825

Other income 23 141 118 38

Total other revenues 1,541 1,451 (90) 3,863

Total revenues 91,855$ 89,907$ (1,948)$ 240,530$

Expenditures

Operating expenses

Purchased power 16,579$ 17,343$ (764)$ 44,599$

Fuel 18,617 15,979 2,638 45,953

Production 21,378 18,811 2,567 47,888

Transmission 7,377 6,922 455 17,284

Administrative and general 9,622 8,405 1,217 22,446

Distributed energy resources 4,228 3,428 800 12,163

Total operating expenses 77,801 70,888 6,913 190,333

Capital additions

Production 9,033 3,439 5,594 34,089

Transmission 1,556 712 844 25,340

General 8,894 3,660 5,234 13,345

Total capital additions 19,483 7,811 11,672 72,774

Debt expense

Principal 4,296 4,296 - 11,713

Interest expense 4,432 3,299 1,133 11,397

Total debt expense 8,728 7,595 1,133 23,110

Total expenditures 106,012$ 86,294$ 19,718$ 286,217$

Contingency reserved to board - - - 26,000


Revenues less expenditures (14,157)$ 3,613$ 17,770$ (71,687)$


May year to date


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Financial statements

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Unaudited (in thousands)

2020 2019AssetsElectric utility plant, at original cost

Land and land rights 16,924$ 16,997$ Plant and equipment in service 1,376,119 1,347,108 Less: accumulated depreciation and amortization (897,161) (895,886)

Plant in service, net 495,882 468,219 Construction work in progress 88,632 103,784

Total electric utility plant 584,514 572,003

Special funds and investmentsRestricted funds and investments 26,553 26,564 Dedicated funds and investments 92,200 99,672

Total special funds and investments 118,753 126,236

Current assetsCash and cash equivalents 42,231 16,362 Other temporary investments 30,205 34,016 Accounts receivable - owner communities 14,555 13,984 Accounts receivable - other 7,176 4,300 Fuel inventory, at last-in, first-out cost 12,665 17,720 Materials and supplies inventory, at average cost 15,427 14,838 Prepayments and other assets 2,357 2,684

Total current assets 124,616 103,904

Noncurrent assetsRegulatory assets 14,591 11,178 Other long-term assets 13 -

Total noncurrent assets 14,604 11,178

Total assets 842,487 813,321 Deferred outflows of resources

Deferred loss on debt refundings 5,609 6,732

Pension deferrals 1,769 10,356 Asset retirement obligations 23,987 23,629

Total deferred outflows of resources 31,365 40,717 LiabilitiesNoncurrent liabilities

Long-term debt, net 180,099 193,711 Net pension liability 18,679 24,071 Asset retirement obligations 28,522 29,510 Other liabilities and credits 5,887 6,090

Total noncurrent liabilities 233,187 253,382 Current liabilities

Current maturities of long-term debt 10,310 10,335 Current portion of asset retirement obligations 2,541 - Accounts payable 11,969 11,914 Accrued interest 3,958 4,213 Accrued liabilities and other 2,639 1,939

Total current liabilities 31,417 28,401

Total liabilities 264,604 281,783

Deferred inflows of resourcesRegulatory credits 7,761 3,224 Pension deferrals 69 256

Total deferred inflows of resources 7,830 3,480 Net position

Net investment in capital assets 397,420 369,785 Restricted 22,594 22,350 Unrestricted 181,404 176,640

Total net position 601,418$ 568,775$

Statements of net position

May 31

Note: Certain prior year line items have changed due to the restatement of 2018 financial statements.

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Twelve months endedMonth of May 31

May 2020 2019Operating revenues

Sales to owner communities 14,589$ 199,632$ 196,038$ Sales for resale 1,930 24,828 23,827

Wheeling 473 5,887 5,454

Total operating revenues 16,992 230,347 225,319

Operating expensesPurchased power 3,125 39,336 42,302 Fuel 3,364 43,692 41,405 Operations and maintenance 5,277 61,419 56,658 Administrative and general 1,630 19,598 18,260 Distributed energy resources 609 10,132 8,608

Depreciation and amortization 2,031 23,327 22,612


Operating income 956 32,843 35,474

Nonoperating revenues (expenses)Interest income 224 3,334 3,465 Other income/(loss) (11) 395 491 Interest expense (660) (7,917) (8,427) Amortization of bond financing costs 171 2,106 2,222 Allowance for funds used during construction - - 534

Net (decrease)/increase in fair value of investments (86) 1,882 1,264

Total nonoperating revenues (expenses) (362) (200) (451)

Change in net position 594 32,643 35,023

Net position at beginning of period, as previously reported 600,824 568,775 533,752

Net position at end of period 601,418$ 601,418$ 568,775$

net positionStatements of revenues, expenses and changes in


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Month ofMay 2020 2019

Cash flows from operating activitiesReceipts from customers 16,359$ 226,479$ 228,218$ Payments for operating goods and services (4,283) (120,607) (143,151)

Payments for employee services (4,384) (41,429) (39,080)

Net cash provided by operating activities 7,692 64,443 45,987

Cash flows from capital and related financing activities

Reductions/(additions) to electric utility plant 1,719 (32,301) (69,450) Payments from accounts payable incurred for electric utility plant additions (2,449) (4,903) (1,866) Proceeds from disposal of electric utility plant - 298 37,120 Principal payments on long-term debt - (10,335) (14,580)

Interest payments on long-term debt - (8,172) (8,790)

Net cash used in capital and related financing activities (730) (55,413) (57,566)

Cash flows from investing activities

Purchases and sales of temporary and restricted investments, net 421 13,143 4,801 Interest and other income, including realized gains and losses 215 3,696 3,893

Net cash provided by investing activities 636 16,839 8,694

Increase/(decrease) in cash and cash equivalents 7,598 25,869 (2,885)

Balance at beginning of period in cash and cash equivalents 34,633 16,362 19,247

Balance at end of period in cash and cash equivalents 42,231$ 42,231$ 16,362$

Reconciliation of net operating income to net cash

provided by operating activitiesOperating income 956$ 32,843$ 35,474$

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

Depreciation and amortization 1,895 21,786 21,047 Changes in assets and liabilities which (used)/provided cash

Accounts receivable (633) (3,447) 2,283 Fuel and materials and supplies inventories 5,107 4,466 (3,025) Prepayments and other assets 1,048 (3,172) (1,329) Deferred outflows of resources 136 8,228 (25,145) Accounts payable (687) 2,665 (3,146) Net pension liability - (5,392) 10,964 Asset retirement obligations - 1,553 29,510 Other liabilities (580) 563 (10,761)

Deferred inflows of resources 450 4,350 (9,885)

Net cash provided by operating activities 7,692$ 64,443$ 45,987$


Twelve months endedMay 31

Statements of cash flows

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Twelve months endedMonth of May 31

May 2020 2019Net revenues

Operating revenues 16,992$ 230,347$ 225,319$ Operations and maintenance expenses,

excluding depreciation and amortization 14,005 174,177 167,233

Net operating revenues 2,987 56,170 58,086 Plus interest income on bond accounts

and other income (1) 220 3,762 3,959

Net revenues before rate stabilization 3,207 59,932 62,045 Rate stabilization

Deposits - - -

Withdrawals - - -

Total net revenues 3,207$ 59,932$ 62,045$

Bond servicePower revenue bonds 1,519$ 18,227$ 18,762$

Allowance for funds used during construction - - (534)

Net revenue bond service 1,519$ 18,227$ 18,228$

CoverageFixed obligation charge coverage ratio 2.11 3.29 3.40



Schedule of net revenues for debt service

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Financial reportJune 2020

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Financial highlights year-to-datePlatte River reported favorable results year-to-date. Net income of $10.8 million was favorable by $7.0 million compared to budget due to below-budget expenses partially offset by below-budget revenues. Of the favorable variance, $1.4 million was due to unrealized gains on investments as interest rates have moved significantly lower and $1.1 million due to re-scheduling the Rawhide Unit 1 minor outage from April to November. Other expenses were also delayed and are expected to be spent by the end of the year.

Projecting net income is challenging as COVID-19 continues to impact results. Since April 1, after normalizing for weather, owner community loads have decreased approximately 6% due to COVID-19, which was a 1% improvement over May.

Staff has performed financial stress tests with three different load and surplus sales reduction scenarios to assess the potential financial impact for 2020. The assumptions are outlined in the table below. The net revenues represent the results of reduced revenues offset by lower fuel costs for these assumptions. Additionally, staff has identified immediate opportunities to offset potential financial impacts of COVID-19 with new contract sales, as well as operating expense reductions and will continue to seek out additional opportunities. Capital projects of approximately $9.7 million have also been delayed due to COVID-19. Included in the estimates is accelerated depreciation and amortization for plant assets as a result of the announcement of the closure of the Rawhide Unit 1 and the Craig Unit 2 coal plants. In addition, the 2020 bond issuance planned for the Windy Gap Firming Project was canceled due to the delay in the start of construction.

Platte River’s strategic financial plan metrics are met in all cases. Staff will continue to monitor results and the stress tests will be revisited monthly as operational and financial trends are established and as new information arises.

Financial stress test

Owner community

load

Surplus sales

volume and price

COVID-19 net

revenue (Jul-Dec)

Other revised

estimates (Jul-Dec)

YTD results

6/30/2020Total

impactNet

income

Variance from

budget *Case 1 -15.0% -7.5% (8.5)$ (0.3)$ 7.0$ (1.8)$ 15.4$ -10%Case 2 -10.0% -5.0% (5.9)$ (0.1)$ 7.0$ 1.0$ 18.2$ 6%Case 3 -5.0% -2.5% (3.1)$ 0.1$ 7.0$ 4.0$ 21.2$ 23%

*Net income budget = $17.2 million

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Key budget variances year-to-date

Details of the financial results year-to-date are described below.

Total revenues

Sales for resale - long-term were below budget $0.2 million primarily due to entities booking out power and not taking the energy. The price is reduced by Platte River's avoided generation cost.

Interest and other income was below budget $0.2 million primarily due to lower interest as debt proceeds were not received due to the cancellation of the Series KK bond issuance partially offset by unbudgeted tower leases.

Sales to owner communities were below budget $2.3 million. Energy revenues were $1.7 million or 3.0% below budget and demand revenues were $0.6 million or 1.8% below budget. Of the energy revenues, renewable energy sales were $0.7 million or 14.0% below budget due to the delay of the Rawhide Prairie Solar project.

Sales for resale - short-term were above budget $0.7 million primarily due to Platte River entering into a short-term capacity contract that resulted in $0.3 million of unbudgeted revenues. Additionally, other short-term sales had above budget volume partially offset by below budget average price.

Key financial results Annual($ millions) Budget Actual Budget Actual budget

Net income/(loss) 3.0$ 3.0$ u -$ 0.0% 3.8$ 10.8$ l 7.0$ 184.2% 17.2$

Fixed obligation charge coverage 2.78x 3.69x l .91x 32.7% 1.83x 2.67x l .84x 45.9% 2.17x

Budget results

Total revenues 20.6$ 20.6$ u -$ 0.0% 112.5$ 110.5$ u (2.0)$ (1.8%) 240.5$

Sales to owner communities 18.3 17.5 n (0.8) (4.4%) 95.2 92.9 n (2.3) (2.4%) 198.7

Sales for resale - long-term 1.0 1.1 l 0.1 10.0% 6.1 5.9 n (0.2) (3.3%) 14.4

Sales for resale - short-term 0.5 1.3 l 0.8 160.0% 6.4 7.1 l 0.7 10.9% 17.6

Wheeling 0.5 0.5 u 0.0 0.0% 2.9 2.9 u 0.0 0.0% 5.9

Interest and other income 0.3 0.2 n (0.1) (33.3%) 1.9 1.7 n (0.2) (10.5%) 3.9

Total operating expenses 14.9$ 15.0$ u (0.1)$ (0.7%) 92.7$ 85.9$ l 6.8$ 7.3% 190.3$

Purchased power 3.1 4.0 n (0.9) (29.0%) 19.7 21.3 n (1.6) (8.1%) 44.6

Fuel 3.5 3.2 l 0.3 8.6% 22.1 19.2 l 2.9 13.1% 45.9

Production 3.9 3.9 u 0.0 0.0% 25.3 22.7 l 2.6 10.3% 47.9

Transmission 1.4 1.4 u 0.0 0.0% 8.8 8.3 l 0.5 5.7% 17.3

Administrative and general 2.0 1.6 l 0.4 20.0% 11.6 10.1 l 1.5 12.9% 22.4

Distributed energy resources 1.0 0.9 l 0.1 10.0% 5.2 4.3 l 0.9 17.3% 12.2

Capital additions 6.4$ 1.5$ l 4.9$ 76.6% 25.8$ 9.2$ l 16.6$ 64.3% 72.8$

June Favorable(unfavorable)

Year to date Favorable(unfavorable)

>2% l Favorable | 2% to -2% u At or near budget | <-2% n Unfavorable

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Distributed energy resources program expenses were $0.9 million below budget due to cancellation or delay of marketing, research, and strategy development, as well as the unpredictability of the completion of customers' energy efficiency projects.

Total operating expensesSeveral expenses were below budget due to timing of expenses or expenses not being required at this time. The net impact was approximately $4.3 million below budget. The below-budget expenses include: 1) various contracted services and materials for the Rawhide Unit 1 minor outage, 2) software and hardware equipment and maintenance, 3) information technology outsourcing and consulting, 4) integrated resource plan studies, 5) parking lot mill overlay, 6) travel and training, 7) Windy Gap water, 8) Craig units, 9) non-routine projects, 10) general consulting, 11) chemicals and 12) other smaller projects. The combustion turbine Unit F inspection, an energy imbalance market study and various plant repairs were completed above budget.Fuel expenses were $2.9 million below budget.

Craig units 79% of the overall variance, $2.3 million below budget. Generation was below budget due to operating at lower loads to take advantage of lower cost energy under the joint dispatch agreement and forced outages, partially offset by the cancellation of the planned outage of Craig Unit 2.Rawhide Unit 1 21% of the overall variance, $0.6 million below budget. Generation was below budget due to operating at lower loads to take advantage of lower cost energy under the joint dispatch agreement.

Personnel expenses were below budget $0.3 million due to lower than anticipated medical and dental claims and lower wages primarily as a result of vacant positions.

Purchased power expenses were $1.6 million above budget. Above-budget purchases were made under the joint dispatch agreement because of favorable pricing, which replaced base load generation. Wind generation was also above budget due to the early commercial operation date of the Roundhouse wind project. Partially offsetting the above-budget variances were below-budget replacement purchases primarily for the delayed Rawhide Unit 1 scheduled minor outage. Solar generation was also below budget due to the delay of the Rawhide Prairie solar project, which was budgeted for April and is expected to be complete in September. Lastly, energy was provided to Tri-State under the forced outage assistance agreement.

Other financial informationPlant retirement announcements - During June, Platte River announced the retirement of Rawhide Unit 1 by 2030. During July, Tri-State Generation and Transmission Association announced the retirement of Craig Unit 2 by September 2028. Both of these announcements result in acceleration of depreciation of plant assets, amortization of asset retirement obligations and recognition of deferred gains and losses. An additional net expense of approximately $2.6 million will be recognized over the remainder of 2020.

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Amortization expense - The closure of two ash ponds at the Rawhide Energy Station is a compliance requirement for the CCR Rule (Federal) and Section 9 Waste Regulations (State of Colorado) and is also an asset retirement obligation under GASB 83 Certain Asset Retirement Obligations. The project is expected to be completed by November 2020. As a result of unforeseen events, additional funds of approximately $0.7 million are required to complete the project. This additional expense will be reflected in depreciation and amortization as part of recognizing expense related to asset retirement obligations.

Fuel inventory - Coal from the stockpile at the Craig Station was sold for $5.4 million resulting in a $0.3 million loss recognized in May.

Debt - The table below shows current debt outstanding. The remaining outstanding principal for Series II and JJ represents debt associated with the Rawhide Energy Station ($24.6 million) and transmission assets ($134.5 million). Principal and interest payments are made June 1 and interest only payments are made Dec. 1. The Series KK bond issuance to fund the Windy Gap Firming Project has been canceled, resulting in a reduction of interest expense and interest income relative to budget.

Series

Debt outstanding $/thousands

Par issued $/thousands

True interest

costMaturity

dateCallable

date Purpose

Series II - February 2012 $ 24,865 65,475$ 3.2% 6/1/2037 6/1/2022

$30M new money for transmission projects & refund remaining of Series EE ($4.6M NPV/10.9%)

Series JJ - April 2016 134,250 147,230$ 2.2% 6/1/2036 6/1/2026

$60M new money for Rawhide & transmission projects & refund portion of Series HH ($13.7M NPV/12.9%)

Total par outstanding 159,115

Unamortized bond premium 20,716

Total revenue bonds outstanding

179,831

Less: due within one year (10,815)

Total long-term debt, net $ 169,016

Fixed rate bond premium costs are amortized over the terms of the related bond issues.

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Project ($ in thousands) Budget EstimateFavorable

(unfavorable) Carryover

request

Below budget projects** Windy Gap Firming Project - This project will be below

budget due to construction delays. The below-budget funds will be requested to be carried over into 2021.

17,579$ 2,162$ 15,417$ 15,417$ Monofill upgrades - Rawhide - This project will be below budget due to a delay of the design approval by the Colorado Department of Public Health & Environment. The project is expected to be complete in spring 2021. The below-budget funds will be requested to be carried over into 2021. 6,556$ 560$ 5,996$ 5,996$ Energy Engagement Center - This project is delayed and will be below budget as a result of COVID-19. The below-budget funds will be requested to be carried over into 2021. 5,186$ 426$ 4,760$ 4,760$ Headquarters campus - This project will be below budget due to timing of costs. A portion of construction costs occurred in 2019 rather than 2020 as originally budgeted. The increased spending in 2019 reduced the estimated costs for 2020. 3,419$ 2,795$ 624$ -$

* Grading and drainage improvements - Rawhide - This project is delayed and will be below budget as a result of COVID-19.The below-budget funds will be requested to be carried over into 2021. 644$ 14$ 630$ 630$ Circuit switcher (T1,T2) addition - Linden Tech Substation - This project is delayed and will be below budget as a result of COVID-19.The below-budget funds will be requested to be carried over into 2021. 597$ 78$ 519$ 519$ Fire protection system upgrade - combustion turbine Unit A - This project is delayed and will be below budget as a result of COVID-19.The below-budget funds will be requested to be carried over into 2021. 419$ 2$ 417$ 417$

Capital additions (year-end estimates as of June 2020)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 2020 and may not represent the total cost of the project. As a result of COVID-19, capital projects of approximately $9.7 million have been delayed or canceled. Further changes to capital projections are anticipated and staff will continue to monitor spending estimates to ensure capital projects are appropriately managed and funded.

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Project ($ in thousands) Budget EstimateFavorable

(unfavorable) Carryover

request

Out-of-budget projects

480V switchgear replacement - combustion turbine units A-D - Funds will be used for procurement and design needs to ensure 2021 installation. This project will upgrade the 480V switchgears for combustion turbine units A-D to incorporate normal and alternative source breakers with racking capability, which will allow for better and more routine maintenance, additional safety and higher unit availability. -$ 264$ (264)$ -$

Delayed projects

Oil breaker (2082) replacement - Longs Peak Substation - This project was delayed as a result of COVID-19. The below-budget funds will be requested to be carried over into 2021. 237$ -$ 237$ 237$ Security system - Loveland Crossroads Substation - This project was delayed as a result of COVID-19. The below-budget funds will be requested to be carried over into 2021. 125$ -$ 125$ 125$ Smart key system - substations - This project was delayed as a result of COVID-19. The below-budget funds will be requested to be carried over into 2021. 107$ -$ 107$ 107$

Canceled projects

Generator step up and unit auxiliary transformer replacements - Rawhide - This project was canceled as a result of COVID-19 and will be rescheduled to coincide with Rawhide Unit 1's major outage in 2024. The funds will be re-budgeted at that time. 2,216$ (5)$ 2,221$ -$ Fuel oil unloading containment - This project was canceled as a result of COVID-19. 212$ -$ 212$ -$ Transmission line vault upgrades - Rogers Road - This project was canceled as a result of COVID-19 and will be rescheduled in 2022. 167$ -$ 167$ -$

* Project details or amounts have changed since last report.

** Project is new to the report.

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Budget schedules

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June 2020Non-GAAP budgetary basis (in thousands)

Favorable

Budget Actual (unfavorable)

Revenues

Operating revenues

Sales to owner communities 18,294$ 17,538$ (756)$

Sales for resale - long-term 993 1,082 89

Sales for resale - short-term 531 1,283 752

Wheeling 491 494 3

Total operating revenues 20,309 20,397 88

Other revenues

Interest income(1) 339 197 (142)

Other income 4 45 41

Total other revenues 343 242 (101)

Total revenues 20,652$ 20,639$ (13)$

Expenditures

Operating expenses

Purchased power 3,128$ 3,988$ (860)$

Fuel 3,461 3,180 281

Production 3,894 3,899 (5)

Transmission 1,453 1,385 68

Administrative and general 1,994 1,655 339

Distributed energy resources 1,017 895 122

Total operating expenses 14,947 15,002 (55)

Capital additions

Production 4,831 572 4,259

Transmission 108 132 (24)

General 1,419 746 673

Total capital additions 6,358 1,450 4,908

Debt expense

Principal 1,059 901 158

Interest expense 995 618 377

Total debt expense 2,054 1,519 535

Total expenditures 23,359$ 17,971$ 5,388$

Revenues less expenditures (2,707)$ 2,668$ 5,375$


Month of June


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June 2020 year-to-dateNon-GAAP budgetary basis (in thousands)

Favorable Annual

Budget Actual (unfavorable) budget

Revenues

Operating revenues

Sales to owner communities 95,240$ 92,944$ (2,296)$ 198,688$

Sales for resale - long-term 6,138 5,952 (186) 14,454

Sales for resale - short-term 6,352 7,073 721 17,607

Wheeling 2,893 2,884 (9) 5,918

Total operating revenues 110,623 108,853 (1,770) 236,667

Other revenues

Interest income(1) 1,857 1,507 (350) 3,825

Other income 27 186 159 38

Total other revenues 1,884 1,693 (191) 3,863

Total revenues 112,507$ 110,546$ (1,961)$ 240,530$

Expenditures

Operating expenses

Purchased power 19,706$ 21,331$ (1,625)$ 44,599$

Fuel 22,078 19,159 2,919 45,953

Production 25,272 22,710 2,562 47,888

Transmission 8,830 8,307 523 17,284

Administrative and general 11,617 10,061 1,556 22,446

Distributed energy resources 5,245 4,323 922 12,163

Total operating expenses 92,748 85,891 6,857 190,333

Capital additions

Production 13,863 4,011 9,852 34,089

Transmission 1,664 844 820 25,340

General 10,314 4,406 5,908 13,345

Total capital additions 25,841 9,261 16,580 72,774

Debt expense

Principal 5,355 5,197 158 11,713

Interest expense 5,427 3,916 1,511 11,397

Total debt expense 10,782 9,113 1,669 23,110


Contingency reserved to board - - - 26,000


Revenues less expenditures (16,864)$ 6,281$ 23,145$ (71,687)$


June year to date


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Financial statements

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2020 2019AssetsElectric utility plant, at original cost

Land and land rights 16,924$ 16,997$

Plant and equipment in service 1,376,155 1,346,908

Less: accumulated depreciation and amortization (899,018) (896,946)

Plant in service, net 494,061 466,959

Construction work in progress 90,010 107,528

Total electric utility plant 584,071 574,487

Special funds and investmentsRestricted funds and investments 13,693 13,403

Dedicated funds and investments 92,183 99,981

Total special funds and investments 105,876 113,384

Current assetsCash and cash equivalents 40,993 16,824

Other temporary investments 33,863 33,355

Accounts receivable - owner communities 17,491 17,995

Accounts receivable - other 6,628 3,829

Fuel inventory, at last-in, first-out cost 13,327 17,913

Materials and supplies inventory, at average cost 15,449 14,837

Prepayments and other assets 2,052 2,621

Total current assets 129,803 107,374

Noncurrent assetsRegulatory assets 14,698 11,049

Other long-term assets 14 -

Total noncurrent assets 14,712 11,049

Total assets 834,462 806,294 Deferred outflows of resources

Deferred loss on debt refundings 5,517 6,637

Pension deferrals 1,769 10,356

Asset retirement obligations 23,851 23,580

Total deferred outflows of resources 31,137 40,573 LiabilitiesNoncurrent liabilities

Long-term debt, net 169,016 183,116

Net pension liability 18,679 24,071

Asset retirement obligations 28,522 29,509

Other liabilities and credits 5,882 6,054

Total noncurrent liabilities 222,099 242,750 Current liabilities

Current maturities of long-term debt 10,815 10,310

Current portion of asset retirement obligations 2,541 -

Accounts payable 14,237 14,386

Accrued interest 617 660

Accrued liabilities and other 2,618 1,932

Total current liabilities 30,828 27,288

Total liabilities 252,927 270,038

Deferred inflows of resourcesRegulatory credits 8,171 3,567

Pension deferrals 69 256

Total deferred inflows of resources 8,240 3,823 Net position

Net investment in capital assets 406,460 382,984

Restricted 13,076 12,743

Unrestricted 184,896 177,279

Total net position 604,432$ 573,006$

Statements of net position

June 30


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Twelve months endedMonth of June 30

June 2020 2019Operating revenues

Sales to owner communities 17,538$ 199,130$ 193,960$ Sales for resale 2,365 26,437 23,615

Wheeling 494 5,913 5,478

Total operating revenues 20,397 231,480 223,053

Operating expensesPurchased power 3,988 40,269 42,316 Fuel 3,180 44,005 40,487 Operations and maintenance 5,298 61,561 56,466 Administrative and general 1,671 19,821 18,330 Distributed energy resources 896 10,133 8,676

Depreciation and amortization 2,028 23,678 22,725


Operating income 3,336 32,013 34,053

Nonoperating revenues (expenses)Interest income 197 3,250 3,529 Other income/(loss) 45 419 481 Interest expense (618) (7,874) (8,385) Amortization of bond financing costs 171 2,093 2,218 Allowance for funds used during construction - - 470

Net (decrease)/increase in fair value of investments (117) 1,525 1,511

Total nonoperating revenues (expenses) (322) (587) (176)

Change in net position 3,014 31,426 33,877

Net position at beginning of period, as previously reported 601,418 573,006 539,129

Net position at end of period 604,432$ 604,432$ 573,006$

net positionStatements of revenues, expenses and changes in


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Month ofJune 2020 2019

Cash flows from operating activitiesReceipts from customers 18,010$ 228,868$ 226,743$ Payments for operating goods and services (9,922) (123,678) (140,563) Payments for employee services (3,951) (41,921) (38,784)

Net cash provided by operating activities 4,137 63,269 47,396

Cash flows from capital and related financing activitiesReductions/(additions) to electric utility plant 1,847 (28,583) (69,817) Payments from accounts payable incurred for electric utility plant additions (2,293) (4,714) (3,129) Proceeds from disposal of electric utility plant 1 296 31,112 Principal payments on long-term debt (10,310) (10,310) (10,335) Interest payments on long-term debt (3,958) (7,916) (8,427)

Net cash used in capital and related financing activities (14,713) (51,227) (60,596)

Cash flows from investing activitiesSales/(purchases) of temporary and restricted investments, net 9,102 8,485 (1,349) Interest and other income, including realized gains and losses 236 3,642 3,946

Net cash provided by investing activities 9,338 12,127 2,597

(Decrease)/increase in cash and cash equivalents (1,238) 24,169 (10,603) Balance at beginning of period in cash and cash equivalents 42,231 16,824 27,427

Balance at end of period in cash and cash equivalents 40,993$ 40,993$ 16,824$

Reconciliation of net operating income to net cash

provided by operating activitiesOperating income 3,336$ 32,013$ 34,053$

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

Depreciation and amortization 1,892 22,001 21,160 Changes in assets and liabilities which (used)/provided cash

Accounts receivable (2,387) (2,294) 3,179 Fuel and materials and supplies inventories (684) 3,974 (2,412) Prepayments and other assets 191 (3,165) (1,311) Deferred outflows of resources 136 8,316 (27,077) Accounts payable 1,264 1,267 (1,981) Net pension liability - (5,392) 17,252 Asset retirement obligations - 1,553 29,509 Other liabilities (21) 580 (10,086) Deferred inflows of resources 410 4,416 (14,890)

Net cash provided by operating activities 4,137$ 63,269$ 47,396$


Twelve months endedJune 30

Statements of cash flows

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Twelve months endedMonth of June 30

June 2020 2019Net revenues

Operating revenues 20,397$ 231,480$ 223,053$ Operations and maintenance expenses,excluding depreciation and amortization 15,033 175,789 166,275

Net operating revenues 5,364 55,691 56,778 Plus interest income on bond accounts

and other income (1) 242 3,708 4,011

Net revenues before rate stabilization 5,606 59,399 60,789 Rate stabilization

Deposits - - - Withdrawals - - -

Total net revenues 5,606$ 59,399$ 60,789$

Bond servicePower revenue bonds 1,519$ 18,226$ 18,717$ Allowance for funds used during construction - - (470)

Net revenue bond service 1,519$ 18,226$ 18,247$

CoverageFixed obligation charge coverage ratio 3.69 3.26 3.33



Schedule of net revenues for debt service

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MAY AND JUNE 2020 GENERAL MANAGEMENT REPORT BUSINESS STRATEGIES Communications and marketing. Communications worked with leadership to develop a news release and messaging to announce the 2030 retirement date for Rawhide Unit 1. After issuing the news release, staff coordinated or conducted interviews, made social media posts and drafted formal communications concerning the announcement. News coverage of the announcement was extensive. Staff also collaborated with NextEra Energy Resources to issue two news releases about the testing and commercial operations of the Roundhouse wind farm, both of which drew attention from regional news media. Internal communications concerning Platte River’s response to the COVID-19 pandemic continued throughout May and June by posting HR and executive communications on the password-accessible staff webpage and the staff NewsFeed. Leaders received final reports concerning the scientific survey of residential and commercial utility customers and the focus group events managed by the Center for Public Deliberation. The reports support IRP objectives concerning community outreach and engagement. The reports were delivered to board members and community communicators and were posted on the IRP microsite. Staff continued collaboration with staff from 174 Power Global and Logan Simpson to finalize communication plans and talking points as well as timetables for stakeholder outreach for the Black Hollow Solar project. Regular monthly publications were produced and distributed to Platte River staff and included recycling tips to reduce waste while working from home; a photo tour of the new headquarters campus; IT and cybersecurity updates; a showcase of employees celebrating a team member’s personal milestone; and safety tips related to the proper use of face masks and disinfectants during the COVID-19 pandemic. Community and government affairs. Staff continues to build and fortify relationships with stakeholders by expanding engagement with community partners and organizations.

• 5/5 Fort Collins city council meeting • 5/12 Longmont city council meeting • 5/12 Estes Park board of trustees meeting • 5/15 Colorado chamber call with Sen. Cory Gardner • 5/15 Colorado chamber energy & environment council meeting • 5/15 Sen. Hansen virtual town hall with Colorado Attorney General Phil Weiser • 5/19 Fort Collins city council meeting

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Platte River Power Authority 2 May and June 2020 Management Report

• 5/20 webinar: The path ahead for the energy industry & the world energy geopolitical situation webinar with Gov. Bill Richardson

• 5/20 webinar: Planning that works: using modern planning tools and techniques to achieve 100% carbon-free electricity with Colorado Partners for Clean Energy

• 5/21 AQCC May monthly meeting • 5/22 CAMU legislative meeting • 5/29 CAMU legislative meeting • 6/2 Leadership Loveland meeting • 6/10 Longmont sustainability coalition meeting • 6/11 Colorado chamber call with EPA Administrator Wheeler on workplace guidance

(COVID-19) • 6/17 Loveland utilities commission meeting • 6/23 Loveland city council work session • 6/26 CAMU legislative meeting • 6/30 Northern front range electricity task force meeting • 6/30 Longmont city council meeting

Additionally, staff participates in biweekly clean energy plan (CEP) guidance work group meetings facilitated by Colorado Department of Public Health and Environment, and attends weekly CEP small work group meetings related to the following topics:

• CEP data form • PUC process • Co-op/muni CEP process • Beneficial electrification

Human Resources. Staff progressed on return to work plans with an announcement to initiate return to work beginning Sept. 8. Staff will rotate into the office on alternating weeks in September with a planned full return of staff into the office in October. All plans are subject to change based on local and state COVID-19 cases and guidance from CDC, state and local authorities. CEO/GM announced the closure of Rawhide Unit 1 to all employees in conjunction with a press release. GM and senior leadership team conducted follow up question and answer sessions with employees by holding 4 virtual meetings. Employees appreciated the Q&A sessions with leadership and overall morale is good. Hometown Connections presented final compensation results to utility directors in May. All utility directors and human resources staff received full reports directly from Hometown Connections. Safety. There was one recordable lost time injury at Rawhide on May 29. An employee was called to work on the pyrite hopper due to a high-water alarm. When working on fixing the issue, the employee slipped and fell, straining a back muscle. The employee sought medical

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care over the weekend prior to seeing the occupational doctor and was instructed to not work the remainder of the weekend, resulting in a lost time injury. The employee was returned to work on June 1 with restrictions, was returned to work on June 8 with no restrictions and placed at maximum medical improvement with no restrictions on June 23. Safety staff has continued to partner with the organization to review safety protocols and provide recommendations for continued safe practices during the COVID-19 pandemic. Staff worked with Efficiency Works to implement safety protocols and guidelines in order to resume field service work. Injury statistics 2018

Year end 2019 Year end

YTD through June 2019

YTD through June 2020

Recordable injury rate 1.67 0.85 0.71 0.85 DART 0.00 0.00 0.00 0.85 Lost time rate 0.00 0.00 0.00 0.85

ERT. Two staff resumed fire academy training at Aims Community College and successfully completed all hazmat exams. Firefighter 1 practical exams have been successfully completed and written exams are scheduled for late July.

HQ construction project. No recordable injuries reported in May or June. During the demolition of the old headquarters building, a gas line was struck due to expired locates. Poudre Fire Authority and Xcel Energy responded within five minutes and no evacuation was needed. FCI Constructors was issued a ticket by Xcel. Energy solutions. Full report included in board packet under item 09.01. DER strategic planning. The DER strategic planning process has officially begun. The DER strategic planning committee and Smart Electric Power Alliance (SEPA) staff held a kickoff meeting on June 12, 2020 to review the project scope, schedule and workplan. The strategy will be developed using a yearlong collaborative process, driven by the DER committee with support by Platte River staff and SEPA. In the coming weeks we expect to review our current approaches to DER integration as well as approaches used by other utilities. We also expect to develop a shared vision for how to collaboratively plan for, operate and develop programs that support DER integration. In addition, we will perform a gap analysis to determine how to move from our current state to our future desired state with respect to DERs. Early in the process we will be developing our stakeholder engagement plan to ensure that customers, community members and other stakeholders have the ability to understand and contribute to the strategy we develop. We are anticipating holding the first stakeholder engagement later this year and expect it to be done virtually. We also expect to hold additional stakeholder engagements during the process, though the number and timing remains to be determined. A DER microsite is being developed by Platte River to provide information on the strategic planning process and to facilitate the stakeholder process. We are planning to launch the microsite prior to the first stakeholder engagement.

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FINANCIAL AND INFORMATION TECHNOLOGY SERVICES Continuing disclosure. Pursuant to the continuing disclosure certificates executed by Platte River in issuing its series II and JJ bonds, an annual continuing disclosure report was completed and filed with the Municipal Securities Rulemaking Board (MSRB) through the Electronic Municipal Market Access (EMMA) dataport. Per the disclosure requirements, and along with its own report, Platte River is required to file audited financial statements for the owner communities by June 30th. Platte River filed audited financial statements for two of the owner communities, but the City of Fort Collins and Town of Estes Park’s audited financial statements were not available at the time of the filing on June 30th. Platte River submitted a “Failure to provide certain financial information” notice regarding Fort Collins and Estes Park’s financials on EMMA. 2020 and 2021 budget update. Platte River’s 2021 budget process is well underway. We continually look for ways to improve the existing process and to improve work planning and budgeting by better aligning scope, schedules and available resources. In response to COVID-19, staff has been asked to reduce expenses in both capital projects and operating expenses for 2021, as well as 2020, without jeopardizing safety and reliability. A financial stress test was performed for three potential load and surplus sales revenue reductions for 2020. An update on the financial stress tests resulting in financial projections for 2020 is included in this month’s financial report. With the 2021 budget development incorporating forecasted impacts of COVID-19, the financial and wholesale rate projections will also be updated and presented at the August board meeting. Budget review sessions were held with management in June and July and the preliminary budget will be provided at the September board meeting. Below is a condensed schedule of the overall budget process.

March to May

Kickoff presentations and preparation of budget details by departments

May-June Data compilation, reporting and meetings with division managers July Senior leadership and general manager/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

Insurance renewals. The medical professional liability policy renewed with the American Casualty Company of Reading, Pennsylvania, for a policy period of June 11, 2020, to June 11, 2021. The professional liability policy has no deductible and has coverage limits of $1 million per occurrence and $3 million aggregate. The medical professional liability coverage is for emergency medical technicians and ambulance service.

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Workflow improvements. Platte River continues to expand our use of the ServiceNow platform to streamline our business operations by developing and deploying electronic workflows to replace manual processes. The organization has benefited from more effective, efficient and consistent workflow-based procedures without paper forms or email requests. A number of new service request workflows for facilities, telecom, physical access control, travel and other departments have been deployed. Services updated include inventory add/delete, travel/training request and the business expense reimbursement process. We eliminated a legacy workflow software product and the servers associated with it, eliminating the costs associated with them. Later this year we will be rolling out a new version of the “Service Portal” to greatly improve the end-user experience when using Service Now. Microsoft Teams deployment. IT successfully deployed the Microsoft Teams platform this year. This tool promotes collaboration on documents, remote meetings, compliance training, and project management. Information technology worked with human resources to develop and deploy generic Microsoft videos and custom videos tailored to our Teams environment. We continue to work with business units to better understand their needs for working with entities inside and external to our organization. We will be able to leverage security and document control by monitoring use and content. Given the circumstances revolving around the pandemic, this tool has quickly become very important for continuity of business while working remotely. Remote board meeting technology. IT is researching a board meeting solution that will allow public participation. Staff is reaching out to the owner communities’ IT departments to get input on what they use, what their experiences have been and what the technical and human requirements have been for a successful implementation. We are also working with the vendor who designed and installed the equipment in our new board room to make sure the solution we select will integrate with that technology. Enterprise resource planning (ERP) project update. Platte River has identified an actionable ERP strategy with three possible ERP software solutions. The solution selected will allow Platte River staff to gain efficiencies, automate routine manual processes and view actionable data in real-time. Existing software solutions and added features will be explored for human resources, finance and asset management. As a result of COVID-19, this project, including vendor demonstrations have been placed on hold until further notice. As a result of the delay, human resources plans on requesting funds in 2021 for a human resource solution.

OPERATIONS Fuels and water. Since May, Platte River’s water resources needs for the remainder of the 2020 water year have come into focus. As reported previously, Colorado River basin snowpack peaked in late April at 108% of average and since that time, weather in the basin has generally been warm and dry. The result has been an abbreviated spring runoff season with below-average runoff that came close to filling Lake Granby but ultimately fell short. At the same time, available storage in the reservoir was insufficient for pumping Windy Gap Project water, and current water conditions this late in the season will not allow for pumping the Windy Gap water right. For Platte River, the primary implications are that full Reuse Plan operations from June 1 through Sept. 30 will rely on C-BT rental water that is used “in lieu” of Windy Gap water and that the total quantity of rental water needed will be more than in years

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when Lake Granby spills. As a result, Platte River staff has worked to secure the additional rental water needed through a number of agreements with regional water partners, and fortunately the available supplies were adequate to meet Platte River’s needs. Looking ahead, Platte River is part of a group of stakeholders who will be impacted by the shutdown and rehabilitation of the Soldier Canyon Dam outlet works at Horsetooth Reservoir this fall. This rehabilitation project is needed to repair and replace critical infrastucture to improve reliability and efficiency, and extend the life of the structure. This project is scheduled to begin in mid-October and last for approximately six weeks. Since 2017 the group has been developing plans to provide for a temporary system that will supply water to the users during the shutdown of the outlet works. Construction of the temporary system has been ongoing this year and final preparations are now being made in advance of the shutdown. Platte River is working collaboratively with the City of Fort Collins to maintain a reliable water supply to Rawhide throughout the project. Over the past two months, Windy Gap Firming Project participants have made a significant push to complete the allotment contracts that will be signed by the participants and Northern Water. The final document, which was approved in form by the Municipal Subdistrict board in July, benefitted from significant input by the Platte River team. Final approvals and contract signatures by project participants are expected to be received this fall. Firming Project preconstruction activities have remained limited to final construction permitting efforts and submittal reviews. Upon resolution of the federal lawsuit, project financing will commence and construction will be completed in approximately four years. In addition, staff has been working towards selling 10 Windy Gap Project units in accordance with Platte River’s water policy. To date, Platte River has entered into agreements with two regional municipalities for the sale of a total of 10 units. These transactions are expected to be completed by the end of 2020. After the transactions are complete, Platte River will have an allotment of 110 Windy Gap Project units. This quantity of units will be satisfactory to meet the needs of Platte River’s participation level of 16,000 acre-feet in the Windy Gap Firming Project.

Buffalo Flats Solar Project. Permits and engineering are complete with all major procurements for the project also completed. Work supporting site prep, post installation, field wiring and electrical racking devices are complete. Electrical cabling, combiner boxes (combines the output of several solar panels together) and solar panel modules are 85% complete. Platte River equipment upgrades and trenching work is complete. Functional and performance testing has begun. The mechanical completion milestone is set for July 31, 2020 with commissioning to be complete by Aug. 28, 2020. The project is on schedule for commercial operation by Sept. 5, 2020.

NextEra generator outlet and Roundhouse wind project status. The construction of the Roundhouse wind project, including the generator outlet transmission line, was completed and released by Platte River to allow the production of test energy to begin on June 4, 2020. The 225 MW Roundhouse wind project was deemed to have met commercial operations and became fully available to Platte River operations on June 12, 2020.

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2020 solar RFP. In March, Platte River executed a non-binding term sheet with the preferred developer for a 50-150 MW utility scale solar project with an expected commercial operation date by December 2023. Platte River and the developer have exchanged multiple comments on a draft power purchase agreement (PPA) over the last few of months. We will provide more information on the solar project as we get closer to finalizing and executing the PPA. Resource planning. Resource planning staff and the finance department worked to develop a range of budget scenarios for 2021 including the impacts of COVID-19. These scenarios were based on the fuel and power prices received from our consultant, Siemens, and internally developed sensitivities for variations in load and power prices. Additionally, staff continues to work with power supply operations to improve the forecasting of wind resources to provide better integration of the Roundhouse wind. 2020 Integrated Resource Plan (IRP). Platte River staff had presented a revised timeline for completing the IRP to the board of directors during the April board meeting. This revised timeline had proposed submitting the IRP to Western Area Power Administration (WAPA) on Sept. 1, provided the board can have in-person deliberations on the IRP prior to this date. The current plan is to conduct a strategic IRP discussion with the board during the July 2020 meeting. The outcome of this discussion will help staff provide a revised timeline for the completion of the IRP. WAPA had extended the filing deadline to July 2021.

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Documents

Board of directors regular meeting *VIRTUAL MEETING ONLY* · 2020-07-07 · Board of directors regular meeting . 2000 E. Horsetooth Road, Fort Collins, CO 80525 . Thursday, July 30,

Board of directors regular meeting VIRTUAL MEETING ONLY · 2020-07-07 · Board of directors regular meeting . 2000 E. Horsetooth Road, Fort Collins, CO 80525 . Thursday, July 30,