minutes of lincoln electric system administrative …
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MINUTES OF LINCOLN ELECTRIC SYSTEM ADMINISTRATIVE BOARD Minutes of regular meeting held at 9:30 a.m., Friday, July 17, 2020, at the Lincoln Electric System
Walter A. Canney Service Center, 2620 Fairfield St, Lincoln, Nebraska. Board Members Present: Sarah Peetz, Andy Hunzeker, DaNay Kalkowski, Eliot Bostar,
David Spinar, Rebecca Lai, Lucas Sabalka Board Members Absent: Karen Griffin, Layne Sup
(These board members connected to the meeting virtually, but cannot vote virtually or be counted as present as the Nebraska Open Meetings Act does not allow virtual participation for LES board meetings.)
LES Staff Present: Kevin Wailes, Jason Fortik, Lisa Hale, Mike Murphy, Laura
Kapustka, Trish Owen, Paul Crist, Amber Tate, Taletha Kryzsko, Shelley Sahling-Zart
LES Staff Presenting Virtually: Bryan Willnerd, Marc Shkolnick, Scott Benson Others Present: None Other individuals participated virtually. News Media Present: None Chair Sarah Peetz declared a quorum present and called the meeting
to order at approximately 9:30 a.m. A safety briefing was provided. She noted that LES conducts its meetings in compliance with the Nebraska Open Meetings Act and noted that copies of the Act are located with the Board Assistant Secretary.
Due to the current public health emergency circumstances, LES implemented special measures intended to balance compliance with the Nebraska Open Meetings Act with the public health directives designed to mitigate spread of the COVID-19 coronavirus. LES made arrangements for some board members and the public to access the meeting virtually, though only board members present in person on site can be officially noted as present in compliance with the Nebraska Open Meetings Act.
Call to Order & Safety Briefing
Chair Peetz asked for approval of the minutes of the meeting of June 19, 2020. Lucas Sabalka moved their approval. Andy Hunzeker seconded the motion. The vote for approval of the minutes was:
Aye: Hunzeker, Kalkowski, Bostar, Spinar, Lai,
Sabalka
Nay: None
Absent: Griffin, Sup
Approval of Minutes
Chair Peetz opened the floor to comments from customers. There were no customers present on site at the meeting. One customer commented virtually through the web connection.
Ken Winston thanked the Board for resuming public comment at the meetings, including virtually. He also thanked LES for providing reliable service, especially through the pandemic. When the Legislature returns to session next week, Winston urged LES to support LB 283 for a climate change study as well as an amendment to the Open Meetings Act that allows public entities to meet virtually in public health emergencies. He also encouraged support for federal legislation that would provide direct assistance for public utilities. He also noted the interesting events planned online for the Sustainable Living Festival.
Comments from Customers
Lucas Sabalka, Chair of the Operations & Power Supply Committee, reported on Committee discussions which included the following: 1) LES Operations Center Construction Update; 2) Cyber Security Update; 3) Electric Vehicle Pilot study data review; 4) Community Microgrid update; 5) CO2 Goal Discussion. (Exhibit I)
Operations & Power Supply Committee Report
Layne Sup, Chair of the Finance & Audit Committee, reported on Committee discussions which included the following: 1) Cyber and physical security update; 2) semi-annual investment report; 3) 2nd quarter 2020 financial review and 2020 forecast; 4) internal audit of 1st and 2nd quarter reports; and 5) a summary of three ethics complaints submitted in the last quarter to the employee ethics line, two that were minor and resolved and one that is under further investigation regarding a personnel matter. (Exhibit II)
Finance & Audit Committee Report
Bryan Willnerd, Manager, Treasury & Risk Management, provided an overview of claims processed for the six-month period of January 1, 2020 through June 30, 2019. (Exhibit III) Only two claims totaling $2,417 were paid. Seven claims totaling $63,000 were denied. LES Policy 511 requires the Board to ratify individual claims equal to or greater than $10,000, but none of the seven claims reached this threshold.
Review of Six-Month Claims
Jason Fortik, Vice President, Power Supply, provided the second quarter 2020 Power Supply update. (Exhibit IV) Net power costs were $4.8 million under budget due to lower expenses at Laramie River Station, Terry Bundy Generating Station, and the Walter Scott Energy Center through March and April. Energy consumption for the quarter was 8.4 percent below budget largely due to the COVID-19 pandemic when schools and many business offices were closed while employees were working from home. Fortik noted that weather-normalized weekly Control Area Energy for the week ending July 4 had essentially returned to the three-year average.
2nd Quarter 2020 Power Supply Update
Laura Kapustka, Vice President & Chief Financial Officer, reported on LES’ financial performance for the second quarter. (Exhibit V) Residential energy sales were slightly higher than budget while commercial sales were significantly lower than budget, both of which are likely attributable to the COVID-19 pandemic. However, lower power costs have helped offset some of the lower energy sales.
2nd Quarter 2020 Financial Review
Kevin Wailes, Chief Executive Officer, presented the key performance indicators for the second quarter of 2020. (Exhibit VI) The performance indicators reflect areas of health in LES’ operation and performance.
2020 2nd Quarter Performance Indicators
Marc Shkolnick, Manager, Energy Services, provided the Board with an update on LES’ Sustainable Energy Program (SEP). (Exhibit VII) There is an available SEP fund balance of approximately $1 million. He noted that weatherization activity for energy-burdened customers was suspended from mid-March until the week of July 6 due to the COVID-19 pandemic and associated Directed Health Measures. Shkolnick also noted that LES will be hosting an electric vehicle (EV) webinar series on July 15, 20, 24 and August 8 to provide information about the LES EV study results as well as considerations when purchasing an EV.
Sustainable Energy Program Mid-Year Update
Shkolnick also reported that LES received a $120,000 from the Nebraska Environmental Trust that will allow LES to provide rebates for EV purchases beginning September 1.
Scott Benson, Manager, Resource & Transmission Planning,
provided an overview of microgrids and plans for a microgrid staff is pursuing that would utilize LES’s existing J Street generation and substation infrastructure. (Exhibit VIII) Benson noted that microgrids are localized electrical grids that are designed to disconnect from the traditional grid and operate autonomously in the event of a traditional grid outage. Microgrids can provide enhanced reliability to critical functions such as hospitals, police and fire stations, grocery stores, water facilities, and communication infrastructure, among others.
Benson noted that staff will be retaining a contractor to help test the J Street Generating Station to verify the unit’s ability to operate in a microgrid application. Staff is also working with the National Renewable Energy Laboratory which is helping the U.S. Department of Energy draft a publication that would highlight the J Street microgrid project and its potential to leverage existing infrastructure to provide new community benefits.
Community Microgrid Project
Kevin Wailes, CEO, noted that in October 2000 LES and the Norris Public Power District (Norris PPD) executed a Joint Planning and Service Area Adjustment Agreement that settled long-term disputes about service territory boundaries as the City of Lincoln continued to expand. The proposed amendment is necessary to reflect a change in the delivery point of the emergency service 35 kilovolt service provided by LES to Norris. Andy Hunzeker moved adoption of LES Resolution 2020-09 ratifying and approving Amendment No. 2 to the “Joint Planning and Service Area Adjustment Agreement between Lincoln Electric System & Norris Public Power District” to change the delivery point of the emergency service provided by LES. (Exhibit IX) David Spinar seconded the motion. The vote to approve LES Resolution 2020-09 was:
Aye: Hunzeker, Kalkowski, Bostar, Spinar, Lai,
Sabalka
Nay: None
Ratification and Approval of Amendment to Joint Planning and Service Area Agreement with Norris Public Power District – LES Resolution 2020-09
Absent: Griffin, Sup Jason Fortik, Vice President Power Supply, noted that the COVID-
19 pandemic had interrupted LES’s educational plan for development of a decarbonization goal. The plan is still being coordinated with the City’s ongoing development of a Climate Action Plan. To accommodate the City’s revised schedule, LES is now anticipating LES Board action on a decarbonization goal at the November 2020 board meeting.
Fortik proceeded to provide an overview on current trends in generation portfolios as had been identified on the educational plan. (Exhibit X) He provided various utility examples to illustrate the differences between decarbonization approaches such as:
• 100 percent clean energy; • Zero CO2 energy; • Net-zero CO2 energy; • CO2 reduction goals; and • Renewable energy goals.
He also noted that any goal should also be flexible enough to respond to a variety of challenges and opportunities including new generation technologies and fuel sources, regulatory changes, energy market changes, carbon capture and storage technologies, and new energy storage technologies, among others.
Current Trends in Generation Portfolio Carbon Emission Targets
The monthly Financial and Power Supply Reports were distributed to the Board and staff was available to answer questions. (Exhibit XI)
Monthly Financial & Power Supply Reports
Lisa Hale, Vice President Customer Services, provided an update on community outreach efforts being done in advance of resuming credit and collections activities in August. These efforts include:
• Hosting two virtual presentations for community
assistance and advocacy agencies on June 24; • Radio interviews that are currently running on six local
radio stations; • Delivery of materials to 50 locations around Lincoln,
including property management companies, apartment complexes, grocery stores, pharmacies, healthcare facilities and afterschool/daycare facilities; and
Miscellaneous
• Outbound calls have also been made to commercial and residential customers with unusually high balances and some have been referred to Community Action for assistance.
Hale also noted that current Low-Income Home Energy Assistance Program (LIHEAP) recipients will likely be getting a supplemental payment soon as part of the CARES Act funding. These accounts are being manually reviewed prior to issuing any disconnect notices or orders.
LES is holding its 10th annual Sustainable Living Festival July 20-24, this year in a virtual format due to the COVID-19 pandemic. A schedule of events was provided to the board. The events include a virtual coffee talk with Kevin Wailes, CEO, and Joy Ditto, CEO and President of the American Public Power Association. Board members were invited to participate as their schedules allow.
The next regular meeting of the LES Administrative Board is
tentatively scheduled for Friday, August 21, 2020, at 9:30 a.m., but subject to change due to the evolving COVID-19 public health emergency.
Next Meeting
There being no further business before the Board, Chair Peetz declared the meeting adjourned at approximately 11:56 a.m.
Adjournment
Andy Hunzeker, Secretary
BY: S/Shelley Sahling-Zart Shelley Sahling-Zart Assistant Secretary
Operations and Power Supply Committee Meeting Summary
July 6, 2020 (via MS Teams)
LES Operations Center Construction Update: The new LES Operations Center has been an ongoing project since 2013 when a facilities study was completed to determine LES’s facility needs. Since then, design and construction work have progressed to a level where the remaining building finishes and landscaping work, for phase two of the project, will be completed and allow for full occupancy in early 2021, despite some unanticipated minor schedule impacts due to COVID-19 factory closures. Over 90% of the services and materials used in the project have been locally sourced within a 250 mile radius of Lincoln. One of the last remaining construction items is the installation of an unconditioned cable reel and transformer storage building that is scheduled to begin construction in the Fall of 2021.
Cyber Security Update: Staff provided an overview of the team LES has in place to manage cyber security preparedness and threat response on its informational and operational data networks. There are several software tools installed on these networks to monitor performance and raise awareness of potential issues. LES consults with third party vendors for additional tools and performance analysis techniques. Staff also has firewall installation, VPN consolidation, and risk assessment projects underway. The COVID-19 situation has challenged several systems with regard to connectivity speeds and software patching for work-from-home employees, but a high service level has been maintained throughout the systems.
Electric Vehicle Pilot Study Data Review: Nearly ninety electric vehicle owners representing fifteen different vehicle types are currently participating in the electric vehicle pilot study. The project partners include the University of Nebraska, the American Public Power Association, the National Renewable Energy Laboratory, and the Nebraska Environmental Trust. Data collection spanning the entire calendar year of 2019 has allowed LES to trend charging location, charging time, the electrical consumption of vehicle charging events, and seasonal differences in vehicle efficiency and average daily travel distances. The study was originally scheduled to conclude at the end of 2020, but due to the vehicle usage impacts caused by COVID-19, staff is considering extending the study through 2021 to obtain additional representative data.
Community Microgrid Update: (**This item will be discussed later on today’s agenda**) Microgrids are localized electrical grids that are designed to disconnect from the traditional grid and operate autonomously in the event of a traditional grid outage. Community focused microgrids typically provide electric service to critical functions such as hospitals, police, fire stations, shelters, grocery stores, water treatment, communication infrastructure, and government buildings. LES staff is moving ahead with creating a microgrid that utilizes LES’s existing J Street generation and 8th & N Street substation infrastructure. The potential critical customers in this area include City, County, State, and Federal government buildings. Staff is planning to hire a contractor to help test the J Street Generating Station to verify the unit’s ability to operate in a microgrid application. Additionally, the National Renewable Energy Laboratory is helping the Department of Energy draft a publication that would highlight the J Street microgrid project and its potential to leverage existing infrastructure to provide new community benefits.
CO2 Goal Discussion: Staff shared a revised LES Board educational plan for development of a decarbonization goal that coordinates with the City’s ongoing development of a Climate Action Plan and the City’s revised schedule due to COVID-19 impacts. The draft educational plan includes a topic on today’s Board meeting agenda as well as topics for the August through October Board meetings, culminating in anticipated Board action on a decarbonization goal at the November 2020 LES Board meeting.
Finance & Audit Committee – meeting minutes July 16, 2020
1. Cyber/physical security update – Cyber (Dustin)
• Staff provided an overview of the team LES has in place to manage cyber securitypreparedness and threat response on its informational and operational datanetworks.
• There are several software tools installed on these networks to monitorperformance and raise awareness of potential issues.
• LES consults with third party vendors for additional tools and performance analysistechniques. Staff also has firewall installation, VPN consolidation, and riskassessment projects underway.
• The COVID-19 situation has challenged several systems with regardsto connectivity speeds and software patching for work-from-home employees, buta high service level has been maintained throughout the systems.
• Several projects are currently underway and planned in order to meet the futureneeds of the LOC and LES as a company. Risk assessments are being conducted inorder to ensure that risk is kept as low as possible relative to value gained.
• LES is part of a Cyber Mutual Agreement that in times of need, we can assist orreceive assistance from other utility cyber security teams.
2. Semi-Annual Investment Report (Bryan)• A presentation reviewed compliance with LES’ Investment Policy as of the end of June.• As of June 30, LES held approximately $199M in investments and money market
funds.• All investment portfolio allocations were in compliance with LES’ Investment Policy.
3. Second quarter 2020 financial review & 2020 forecast (Laura)
This item will also be reviewed during the board meeting.
• The committee reviewed the components of the debt service coverage projectionfor year-end.
• As of the end of June, there is a net $1.7M negative variance to the budget foroperating revenues and expenses.
2
CONTINUED ON BACK 4. Internal Audit 1st & 2nd Quarter Report (Troy)
• Internal Auditing provided the first and second quarterly reports to the Finance and Audit Committee.
• The audits covered in the first quarterly report were the: o November 2019 Purchasing Card Activity Audit o Revenue Classification Audit, and, o A report to the Committee on Audit Recommendation Implementation o Both audits received Qualified Audit Opinions where only minor findings and
recommendation were noted. o Management continues to make good progress implementing the
recommendations identified by the internal auditors. • The audits covered in the second quarterly report were the:
o Technology Services Disaster Recovery Plan Audit o Unemployment Insurance Audit o Southwest Power Pool Offer Curve Audit o Association Dues and Publications Audit o Recurring Accounts Payable Audit, and, o SAP Transport and Change Management Audit o The Unemployment Insurance Audit and the SAP Transport and Change
Management Audit received an Unqualified Audit Opinion. An Unqualified Audit Opinion is rendered when the audit is free from audit findings and recommendations.
o All other audits for the second quarter received a Qualified Audit Opinion.
5. Ethics Update • The committee is provided an update quarterly on ethics reports that have been
submitted either through the Ethics Hotline or other channels. • There were three ethics complaints submitted in the last quarter to the employee
ethics line, two that were minor and resolved and one that is under further investigation regarding a personnel matter.
LES.com
LES Semi-Annual Claims Review
Review Period: January 1 – June 30, 2020
1
Bryan WillnerdManager, Treasury & Risk Management July 17, 2020
LES.com
Only 2 claims totaling $2,417 were paid between January 1 and June 30
2
$493
$1,924
Vehicle Repairs
Third Party Utility
Claims Paid by Category
• Third Party Utility: Damage to Windstream cables
• Vehicle Repairs: Damage at LOC to LES employee’s vehicle
LES.com
There were 7 claims totaling approximately $63,000 denied during the same time period
3
$20,128
$42,568
3
4
Damage Caused by LESContractors
Property Damage
Claims Denied by Category
• Property Damage: Vehicle, private sewer line, oven/microwave unit, switchgear equipment
• Damage Caused by LES Contractor: Referred to the contractor for resolution
Total #
LES.com
Number of claims paid in this time frame was a 5-year low
$17,736
$12,780
$8,056
$27,918 $29,425
$2,417
9 9
5
13
15
2
2015(Full Year)
2016(Full Year)
2017(Full Year)
2018(Full Year)
2019(Full Year)
2020(June 30 YTD)
$ Paid # Paid
4
LES.com
Q2 2020 Net Power Costs are $4.8M (9.4%) below Budget due primarily to lower Laramie River Station,
Terry Bundy, and Walter Scott 3/4 expenses
$46.35
-$2.38
-$13.98
$18.03
-$6.72
$21.31
$30.09
$51.15
-$3.59
-$33.56
$26.46
-$9.75
$39.23
$32.35
-$50 -$40 -$30 -$20 -$10 $0 $10 $20 $30 $40 $50 $60 $70
Net
SPP Other***
SPP IM Market Revenue
SPP IM Load Purchases
Contract Sales**
Owned Asset Power
Non-Owned Asset Power*
Millions ($)
Budget ActualExpensesRevenues
*Non-Owned Asset Power does not include SPP IM Purchased**Contract Sales does not include SPP IM Revenue***SPP Other includes Over-Collected Losses and ARR’s/TCR
LES.com
2.0
2
1.9
1
1.7
9
1.7
4
1.7
5
1.6
3
2.95 2.92 2.94
2.59 2.61 2.65 2.67 2.68 2.70 2.722.83
2.91
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
($/M
MB
tu)
Actual Budget
Natural gas prices were below Budget for the first two quarters due to a combination of mild weather, consistent production, consumer demand reduction, and liquified natural gas export
demand reduction
LES.com
18
.95
16
.91
15
.31
14
.40
14
.15
17
.17
22.44
18.82 18.97 19.11 19.50
22.94
27.26
23.42
19.27
20.76
22.23
24.46
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
($/M
Wh
)
Actual Budget
Lincoln’s market electricity prices for Q2 were lower than Budget due to continued low numbers of generators on outage, wind
penetration increases, low customer energy consumption, and low natural gas prices
LES.com
January through May temperatures were relatively mild, while June cooling degree days were 62% above average
0
50
100
150
200
250
300
350
400
450
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Co
olin
g D
egre
e D
ays
Actual Average Year
0
200
400
600
800
1,000
1,200
1,400
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Hea
tin
g D
egre
e D
ays
Actual Average Year
LES.com
30
6.7
27
4.7
25
6.0
22
5.5
23
0.1
32
7.9
0.0
0.0
0.0
0.0
0.0
0.0
312.6
279.9267.2
252.6
276.0
326.3
363.6 362.4
310.0
258.0275.3
311.6
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
(GW
h)
Actual Budget
Control Area Energy consumption for Q2 was72 GWh (8.4%) below Budget
LES.com
Weather normalized weekly Control Area Energy for the week ending 7/4/2020 had essentially returned to the
three year average
LES.com
56
2
57
3
45
1
42
3
44
7
66
2
589531
499
445
588
724
773749
673
522 485566
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
(MW
)
Actual Budget
Q2’s peak load of 662 MW occurred on June 17th
2020 Peak Load Day = 662 MW, 6/17/2020
All Time System Peak = 786 MW, 8/1/2011
System Peak Load
LES.com
May and June peak loads were quite low, with June’s dropping to a level not seen since 2004 and May’s not
since 1999
LES.com
0
50
100
150
200
250
300
350
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
GW
h
Coal Oil & Gas Wind Hydro LFG
Q2 renewable energy production was 4.6% below expectations and Q2 output from our traditional resources was 52% below
Budget mostly due to economic dispatch by the market
Renewable Energy Production
Year to Date Renewable Energy Production Expressed as a Percentage of Retail Sales:
Forecast = 51.8%Actual = 53.1%
LES.com
Maintenance outages continued for Rokeby Units 1 and 3 and are expected to continue through August due to
scheduling issues with the contractors
0% 20% 40% 60% 80% 100%
J St.
LFGTE
TBGS 4
TBGS 3
TBGS 2
TBGS 1
Rok 3
Rok 2
Rok 1
LRS 1
GGS 2
GGS 1
WS 4
WS 3
Un
it
Available Limited Scheduled Outage Forced Outage
LES.com
Coal
Oil & Gas
Renewable
44% 43%
31%
4%
25%
53%
Energy offered to theSPP Integrated
Marketplace
Energy utilized by theSPP Integrated
Marketplace
2020 Market Energy Metrics (January through June)
LES.com
June 2020 Year to DateFinancial Update
Lower net power costs are helping to offset the financial challenges of the pandemic.
Together, We’re One Powerful Community
Laura L. KapustkaVice President & CFO
Administrative BoardJuly 17, 2020
LES.com
Residential customers continue to use more energy than budgeted
2
Bu
dg
et,
$5
6.8
Bu
dg
et,
$5
7.6
$1
5.1
La
st
Ye
ar,
$5
7.9
La
st
Ye
ar,
$5
2.4
$1
4.9
Actual$57.1
Actual$49.4
Actual$14.0
Actual$1.0
$0
$10
$20
$30
$40
$50
$60
Residential Commercial Industrial Streetlight
Do
lla
rs i
n M
illi
on
s
As of June 30, 2020
LES.com
June year-to-date results show that lower power costs are helping to offset the challenge of lower energy sales.
Actual YTD Budget YTD Variance
Operating Revenues $143.3M $163.3M -$20.0M
Operating Expenses $117.2M $135.5M +$18.3M
Total $26.1M $27.8M -$1.7M
3
Actual & Budget = June YTD
LES.com
Its not back to budget, but projected Debt Service Coverage has improved since last month
Lower SPP Transmission Expense
.13 Net Power Costs are below budget, primarily from lower produced power expenses (units not being operated as budgeted), partially offset by lower wholesale revenue and higher purchased power expense ($7M).
.04 Administrative and General is decreased due to lower outside services, travel and training, and vehicle depreciation ($2.3M).
4
Increases to DSC Decreases to DSC
2020 Budget = 2.04
2020 Year-end Forecast = 1.90
.31 Retail Revenue is below budget, primarily due to reduced commercial usage. ($17.3M).
LES.com
Updated construction projections estimate ~5% variance above budget at year-end
$3.0
-$0.4
$1.2
-$1.0
$0.0
$1.0
$2.0
$3.0LES Operations Center $20.2M Distribution Projects $30.2M Balance of Budget $27.7M
Overall project is expected to be on budget, however,
some 2019 planned payments were paid in
2020
Construction projects
proceeding as planned
2019 carryovers and minor projects
increases
Do
llars
in M
illio
ns
5
2020 budget = $78.1M
LES.com
Projected variances do not forecast exceeding budget authorization
6
2020 Budget Authorization
2020 Year-end Forecast
Projected Variance
Operating $269.4M $244.2M -$25.2M
Capital $78.1M $81.8M +$3.7M
Total $347.5M $326.1 -$21.4M
LES.com
Tough times tend
to breed innovation
• Things may never go back to normal…a new normal is being created
• New cash flow prediction methods show continued strength
• New revenue aging reports are providing additional transparency
• Coordination with Customer Services supports real-time revenue expectations
• Frequent & transparent communications are key
7
LES.com
Integrity & Fiscal Responsibility
2
SPP Lincoln Locational Marginal Price (LMP) ($/MWh)
Net Power Costs ($/MWh)
Financial Metrics
The projection for year-end debt service coverage has improved since last quarter, primarily due to
lower net power costs and administrative & general costs
Retail Energy Sales (YTD)Projected Debt Service
Coverage (YE)
Actual1,466 GWH 1.90
Target1,585 GWH 2.04
LES Peer Group - 2.24
31
.66
39
.74
38
.77
47
.78
34
.10
32
.27
0.0
0
0.0
0
0.0
0
0.0
0
0.0
0
0.0
0
36.6638.96 38.79
40.33
36.79 35.05
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Actual NPC ($/MWh) Budget NPC ($/MWh)
18
.95
16
.91
15
.31
14
.40
14
.15
17
.17
22.4418.82 18.97 19.11 19.50
22.94
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Actual Lincoln LMP Budget Lincoln LMP
LES.com
Integrity & Fiscal Responsibility
3
Suspicious Emails
404
Cyber Security Risk Assessments
Cyber Events ReportedReported Closed
111 111
Phishing Tests Click Rate
2nd Qtr. & YTD Industry = <5%
6
14
0
5
10
15
20
Q1 Q2
New Closed Open at Quarter end
LES.com
Sustainability & Environmental Responsibility
4
SEP YTD Demand Reduction (MW)
CO2 Metric Tons/MWh (YTD produced)
Actual Forecast2nd Qtr: .43 .65YTD: .45 .65
Sustainable Energy Program (SEP)
$1.75M Annual Budget
Obligated$721,900
Available Balance
$1,028,1003.3 3.4
0
0.5
1
1.5
2
2.5
3
3.5
Target Actual YTD
Renewable Energy(Equivalent % of Retail Sales)
Actual Forecast2nd Qtr: 57% 54%YTD: 53% 52%
LES.com
Safety & Employer of Choice
5
Days Away, Restricted, Transferred (DART)
YTD = 1.24Target <1.5
Travel restrictions continue to be in place, all safety meetings continue in on-line format.
LES.com 6
Reliability & Customer Service
Call center team members are back in the office with newly installed plexi-glass dividers to support social-distancing
Average Speed of Answer(seconds)
Call levels are starting to pick up in the call center and it is expected that they will increase more tied to the
significant outreach effort that is underway encouraging customers to call to work out payment plans.
YTD22
2nd Qtr23
Target27
Industry37
Reliability & Customer Service
7
Goal ≤ 30 minutes
July 2015 to June 2020
System Average Interruption Duration Index (SAIDI)National Average = 126 minutes (EIA 2018)
LES.com
Q2 SEP Headlines
2
Commercial/Industrial Incentives Down 25%
Residential Cooling Incentives Up 15%
EV Outreach and Incentives
On Target with Demand Reduction Target
LES.com 3
$12,889$16,422
$206,650 $178,000
$6,000$1,000
$277,262 $348,356
$140,658
$203,301$78,400
$62,900$721,859
$809,979
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
2020 2019
Insulation Air Conditioning Heat Pump WH Lighting Industrial Peak Rewards
Q2 Obligated Dollars$1.75 million budget
LES.com 4
0.53 0.60
0.40
0.70
2.411.40
3.34
2.70
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
2020 2019
Q1 Q2 Peak Rewards
Net Demand Reduction (MW)4.0 MW target
LES.com
Net Energy Savings (MWh)
5
3,230
4,409
1,528
3,473
4,758
7,882
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2020 2019
Q1 Q2
LES.com 6
Support for Energy-Burdened Customers
• All weatherization activity was suspended from mid-March until the week of July 6.
• Currently analyzing 200 households that appear to be all-electric and, therefore, likely candidates for weatherization funding.
• Develop an outreach campaign:• Provide customer energy use information.• Prompt customers to contact LES to discuss simple
energy management strategies. • Discuss applying for weatherization and LES
incentives.
LES.com 7
Peak Rewards
• Received approval to include Google-Nest thermostats in remainder of summer demand response events.
• Any future cyber-security audit will jeopardize the program’s long-term future.
• Two demand response events in June resulting in projected 0.75 MW of peak reduction for each event.
• LES currently has 1,867 customer devices enrolled.
LES.com 8
Electric VehiclesEV webinar series:
• July 15 - EV Charging at Home and Away• July 20 - LES Residential Charging Study Results• July 24 - What to Consider When Purchasing an EV• August 8 - Future Innovations in Electric Transportation
Nebraska Department of Environment and Energy: LES provided funding assistance for 15 new public charging sites:
• Russ’s Supermarkets (3 sites)• Lincoln Public Schools (7 sites)• Innovation Campus • UNL City Campus (3 sites)• HIS Auto Care
LES.com 9
Electric Vehicles
$120,000 Nebraska Environmental Trust Grant:• $4,500 rebate for first-time purchase or lease of a new
all-electric vehicle on or after September 1.• $1,500 rebate for first-time purchase or lease of a new
plug-in hybrid electric vehicle on or after September 1.
Rebate Requirements:• Limited to LES residential customers only.• One rebate per household.• Lease must be for at least 3 years.• Internet-connected charging station
required with all-electric vehicle rebate.
LES.com
LES Community Microgrid
1
Scott Benson
Manager, Resource & Transmission Planning
July 17, 2020
LES.com 2
Microgrids 101
Source: The Role of Microgrids in Helping to Advance the Nation’s Energy System, U.S. DOE, energy.gov
Although often associated with renewables, Microgrids are resource agnostic:
“Fossil-fueled technologies, namely diesel and natural gas…accounted for 88 percent of microgrid capacity installed in 2019...Those firm resources are needed to ensure multiday runtimes…”Source: US Microgrid Market Slowed in 2019 – PG&E Could Single-Handedly Reverse the Trend, Greentech Media, December, 2019
“Microgrids are localized grids that can disconnect from the traditional grid to operate autonomously. Because they are able to operate while the main grid is down, microgrids can strengthen grid resilience and help mitigate grid disturbances as well as function as a grid resource for faster system response and recovery.”
LES.com
“A system comprising sub-units is geared to survivability, and the use of distributed generators could make the power system more resilient to severe weather or even terrorist attack.”
“To enhance resiliency, microgrids can be configured to operate in tandem with the bulk supply system during normal conditions, but disconnect and operate as independent islands in the event of a bulk supply failure or emergency.”
“Microgrids could sustain service to those affected by the grid outage, then resume interconnection when the larger power system is restored.”
3
Microgrids Enhance System Resiliency
Source: Electric Power System Resiliency: Challenges and Opportunities, EPRI, February, 2016
LES.com
“A community microgrid usually serves critical facilities in a town or city and often has some government funding. Its primary purpose is to ensure power to services that people can’t live without for an extended period of time. These include hospitals, police and fire stations, shelters, grocery stores, gas stations, waste and water treatment facilities and communication infrastructure.”Source: Choosing the Type of Microgrid that is Right for Your Operation, microgridknowledge.com, January 16, 2018
4
Community Microgrid Definition
Source: Community Microgrid Diagram, bing.com
LES.com 5
LES Community Microgrid: Potential Load Targets
State Office Bldg
City/County Bldg
LPD/County Sheriff
DEC City/County
DEC W. Haymarket
Federal Bldg
PBA
State Capitol
DEC State
LES.com 6
LES Community Microgrid Area
Pharmacy
Gas Station
State Office Bldg
City/County Bldg
LPD/County Sheriff
Grocery Store
Radio Tower
DEC City/County
Gas Station
DEC W. Haymarket
Federal Bldg
PBA
State Capitol
DEC State
Gas Station
J St. Generator29 MW
Energy Storage6 hours @ 500 kW
Solar94 kW
Solar5 kW
Solar7 kW
Solar99 kW
Solar99 kW
LES.com
2016
• J St. anchored microgrid first investigated by LES; ultimately tabled because switching of power to individual, desired loads was too labor intensive and would require impractical amount of automation.
2018
• Effort revived with one important distinction; microgrid would feed nearly all load in that area, without concern for importance in disaster recovery efforts.
2020
• Microgrid concept has now been vetted and is moving forward.
• Final plan calls for load to be energized in less than 5-MW increments. Power Supply budgeted for load bank testing at J St. to verify unit’s ability to pick up a 5-MW load when operating as an island.
• “Downtown Network” load unable to be limited to 5-MW increments, so initial microgrid configuration may exclude this area.
7
LES Community Microgrid Timeline
LES.com 8
Gas Station
State Office Bldg
City/County Bldg
LPD/County Sheriff
Grocery Store
DEC City/County
Gas Station
DEC W. Haymarket
PBA
State Capitol
DEC State
Gas Station
LES Community Microgrid AreaNot including downtown network
J St. Generator29 MW
Energy Storage6 hours @ 500 kW
Solar94 kW
Solar5 kW
Solar7 kW
Solar99 kW
Solar99 kW
LES.com 9
LES Community Microgrid Area
Pharmacy
Gas Station
State Office Bldg
City/County Bldg
LPD/County Sheriff
Grocery Store
Radio Tower
DEC City/County
Gas Station
DEC W. Haymarket
Federal Bldg
PBA
State Capitol
DEC State
Gas Station
J St. Generator29 MW
Energy Storage6 hours @ 500 kW
Solar94 kW
Solar5 kW
Solar7 kW
Solar99 kW
Solar99 kW
LES.com
The DOE is developing new publications in their ongoing Voices of Experience series, including one titled Microgrids for Resiliency:
“The Voices of Experience initiative was launched by the U.S. Department of Energy’s (DOE)…to capture the experiences, insights and lessons learned from the utilities at the forefront of implementing emerging technologies.”
The National Renewable Energy Laboratory (NREL) is drafting these documents, with assistance from the Smart Electric Power Alliance (SEPA) on organizing the project and reaching potential stakeholders.
NREL is intrigued by how LES’ project leverages existing infrastructure and thinks it could be a valuable message for other utilities. They hope to publish the report in September, and indications are that LES’ project will be featured.
10
Upcoming U.S. Department of Energy (DOE) Publication
Source: Voices of Experience | MIcrogrids for Resiliency, sepa.com
JE!ÍLincotn Electric System
LES RESOLUTION 2O2O-09
WHEREAS, on October 20, 2000, Lincoln Electric System (LES) and the Norris PublicPower District (Norris) ratified and executed the "Norris Public Power District and LincolnElectric System Joint Planning and Service Area Adjustment Agreement" (Agreement) with aninitial term effective beginning October l,20001,
WHEREAS, such Agreement provides LES with a buffer between the Lincoln city limitsand the LES service area boundary to allow for orderly planning and development of electricalinfrastructure;
WHEREAS, such Agreement also requires LES and Norris to jointly plan and coordinateinstallation of future facilities and future service area adjustments as Lincoln grows;
WHEREAS, the Agreement was previously amended by the parties on April 22,2002, tocorrect a mutually-agreed upon minor error that was identified in original Section 9.3 of theAgreement;
WHEREAS, the parties desire to revise Section 1 1.1 of the Agreement to reflect a changein the delivery point of the emergency 35 kV service provided by LES to Norris and to remove therequirement in the Agreement that the 35 kV service be metered in a traditional manner.
NOW, THEREFORE, BE IT RESOLVED, that the LES Administrative Board approvesan amendment to Section 11.1 of the Agreement, attached hereto and fully incorporated byreference, to reflect a change in the delivery point of the emergency 35 kV service provided byLES to Norris, and authorizes the LES CEO to execute said amendment.
Chair
Adopted: 1 -11. ..XOeD
AMENDMENT NO.2TO
JOINT PLANNING AND SERVICE AREA ADJUSTMENT AGREEMENTBETWEEN LINCOLN ELECTRIC SYSTEM & NORRIS PUBLIC POWER DISTRICT
This Amendment No. 2 to the Joint Planning and Service Area Adjustment Agreement(this "Amendment") is entered into by and between the City of Lincoln, Nebraska doing businessas Lincoln Electric System, a municipal corporation existing pursuant to its home rule charter andunder the laws of the State of Nebraska ("LES") and Norris Public Power District, a publiccorporation and political subdivision of the State of Nebraska, existing pursuant to the provisionsof Chapter 70, Article 6 ofthe Revised Statutes ofNebraska ('1.{orris"), as of July 1,202A.
RECITALS
A. \iVHEREAS, LES and Norris entered into a Joint Planning and Service AreaAdjustment Agreement on or about January 25,2001("Agreernent') in which the parties agreedto plan jointly for the electrical infrastructure in rural Lancaster County, particularly those portionsof their respective service areas near the growing edges of the City of Lincoln
B. WHEREAS, the Agreement was previously amended by the parties on Apnl22,2002 to correct an effor in the original Section 9.3 contained in the Agreement; and
C. WHEREAS, LES and Norris desire to revise Section 11.1 of the Agreønent toreflect a change in the delivery point of the emergency 35 kV service provided by LES to Norrisand to remove the requirement in the Agreement that the 35 kV be metered in a haditional manner.
AGREEMENT
NOW', THEREFORE, in consideration of the above Recitals, the mutual promises andcovenants hereinafter set forth, and other valuable consideration, receipt of which is herebyconfirmed, LES and Norris agree as follows:
1. lntemretation. Except as amended by this Amendment, the Agreement shall remainin fuIl force and effect. In the event of a conflict between the provisions of this Amendment andthe Agreement or Amendment No. 1 to the Agreement, this Amendment shall control. Terms withinitial capital letters are defined terms which shall have the respective meanings given to them inthe Agreement, unless the context of this Amendment requires otherwise.
2. Amendment to Section 1 1.1. Section 11.1 ofthe Agreement is hereby amended bydeleting it in its entirety and replacing it with the following:
1i.1 LES will provide a 35 kV connection with Norris near 120th andAlvo Road which shall be used to provide backup service capability for twolarye customers of Norris located northeast of Waverly. Thisinterconnection will be used for backup puq)oses only, and will not be usedby Norris as the primary sources for these customers. This interconnection
L
wili be available at any time for emergency situations experienced by Norriswith their mrrmal power supply source subject to the process a¡rd conditionscontained within the attached Exhibit "G" which is incorporated herein byreference. Use of this interconnection for maintenance will be scheduledwith LES at times when LES' generation resources are adequate andavailable, i.e. off peak loading times or when critical generation resourcesare not available. No later than the month following energy being providedpursuant to this section, Norris shall provide to LES the total kWh and peakk\V over any integrated hour used by all customers sourced by the 35 kVinterconnection during any period when LES provides energy. Energysupplied under this arrangeurent will be billed to Norris at aflatrcte of 3.7cents per kWh with no demand component, which rate shall adjust fromtime to time during the Initial or Subseque,nt Terms by the same percentage
as decreases or increases are adopted by LES for its published LLP rate.
3. Termination of Amendment. In the event that the system utilized for thisarangement is reconfigured or either parly deems the configuration unsuitable for its operations,either party may terminate this Amendment upon providing 30 days' written notice of its intent toterminate this Amendment to the other party in the same manner as providing arly other noticeunder Section I 5 of the Agreement and the original Section 1 1 .1 in the Agreernent shall be restoredin its entirety in fuIl force and effect and this Amendment rendered null and void.
4. Governine Law. This Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and be governed by the laws of the State ofNebraska without grving effect to the conflict of law provisions thereof.
5. Counterpart Originals. This Amendment may be signed in counterparts, each ofwhich shall be deemed an original, but all of which constitute but one agreonent. Any counterpartmay be delivered by facsimile transmission or by elechonic communication in portable documentformat (.pdf) and the Parties agree that their electronically hansmitted signatures shall have the
same effect as manually transmitted signatures.
[Signature Page Followsl
2
IN WITNESS WHEREOF, the parties have executed this Amendment by their authorizedrepresentatives.
LES:
Cify of Lincoln, Nebraskad/b/a Lincoln Electric System
By:
Name:
Title:
Date: á¿- /7, Jca.o(/ (-
Norris:
Norris Public Power District
By: &rt t^-
Name: ßr,,", V;t"rJ^
Title: G"nr*l ff)anaç¿r * (,€O
Date: J"ir l,zo¿o
3
Norris Public Power District ("Norris")
And
Lincoln Electric System ("LES")
Joint Planning and Service Area Adjustment Agreement
Exhibit G
LES Meter Process for Backup Service to Norris SubstationTT-38 - Greenwood
Process:
. Norris will notifu LES System Control both prior to transfer and any return to normal interconnection fromalternate source. This notification should include start and stop times. Normal maintenance should bescheduled at least 7 days in advance.
¡ Norris will provide total kWh and peak kW over any integrated hour used by all customers sourced bythe 35kV interconnection during any period when LES provides energy no later than the month followingsaid usage.
. LES will apply a one (1) percent loss factor on total kWh usage (i.e. multiply by 1.01) to obtain the 3SkVpseudo meter total.
. LES will bill Norris for the 35kV pseudo meter total.¡ Norris wilf promptly remit payment for the billed amount.
h LinÊLossR¿ngÌe: o.g%{t,geÈ
LES 120th &Alvo Sr¡b r
GreenwoodSub 71-38
Del¡very Pt
Ay€ragsLors: - 1.09È torall foad coí([t¡om
Loss Factor Calculation Explanation
Example Galculation using 500 kW of load:
Estimated losses for transformer at Greenwood Sub (77-38) = 0.39% based on nameplate data.
Estimated line losses for 35kV line from 120th & Alvo Sub = 0.37o based on Synergi.
Total losses 0.69% per kWh.
Example Galculation us¡ng 3 MW of load (peak):
Estimated losses for transformer at Greenwood Sub (77-38) = 0.8S% based on nameplate data.
Estimated line losses for 35kv line from 120th & Alvo Sub = 0.48o/o based on Synergi.
Total losses 1.33o/o per kWh.
-1
II
I
slFlol
T{
ïransfomerL6s Range:0.4r 4.596
Since the losses are impacted by demand of the load, not total kWh, it is agreed upon to use 1%
across the board rather than requiring both peak demand and kWh to calculate the losses moreprecisely.
As an example, using a previous meter reading provided by Norris, 36,000 kWh were consumed atthe Norris 77-38 Greenwood Substation that was sourced by LES. With this approach, Nonis wouldprovide 36,000 kWh to LES as the metered amount. LES would add 360 kWh to the amount billed toNorris for the 1% loss factor. LES would bill Norris for 36,360 kWh at $0.0275/kwh (2020 LLPprimary rate), or $999.90. The bill includes $9.90 for losses.
LES.com
Current Trends inGeneration Portfolios
1
Jason Fortik
Vice President, Power Supply
July 17, 2020
LES.com
Several Cities, Counties, and States have adopted clean energy goals
2
Source: https://www.sierraclub.org
LES.com
Electric utilities are proposing different emissions goals and generating
resource goal types with different timeframes
3
• Utilities Claiming to Have Achieved 100% Clean Energy Today
• Utilities Targeting Zero Carbon Dioxide Energy
• Utilities Targeting Net-Zero Carbon Dioxide Energy
• Utilities Setting Carbon Dioxide Reduction Goals
• Utilities Setting Renewable Energy Goals
LES.com
Examples of Utilities Claiming to Have Achieved 100% Clean Energy Today
4
Burlington Electric Department (Vermont)
• Hydro, biomass, wind, solar, fuel oil• ~341,000 MWh/year (10% size of LES)• Class I REC sales, Class II REC purchases• Energy interchange with ISO-NE (natural gas, coal, nuclear, fuel oil)
Rock Port (Missouri)
• Wind (four wind turbines within city limits)• ~13,000 MWh/year (0.4% size of LES)• Energy interchange with SPP (natural gas, coal, nuclear)
MidAmerican Energy Company
(Iowa)
• 51.4% of retail sales in 2018, 100% of retail sales in 2020• ~6,100 MW wind (2019), 6,600 MW wind (2021)• Energy interchange with MISO (natural gas, coal, nuclear)• 2018 energy production*:
• 42% coal, 36% wind, 10% nuclear, 2% natural gas, 10% purchased
*Source: https://www.berkshirehathawayenergyco.com/assets/upload/financial-filing/BHE%2012.31.18%20Form%2010-K_vFINAL.pdf
LES.com
Examples of Utilities TargetingZero Carbon Dioxide Energy
5
Platte River Power Authority
(Colorado)
• 100% non-carbon resource mix by 2030• Resource Diversification Policy (adopted 12/2018)
• Assuming sufficient Regional Transmission Organization, battery storage advancements, transmission infrastructure, distributed generation, and demand management occur
• Must maintain reliability and financial viability
• 2019 projected energy production1: • 65% coal, 18% hydro, 8% wind, 6% purchases, 3% solar/natural gas
Arizona Public Service(Arizona)
• 100% carbon free electricity to customers by 2050• 65% clean energy and 45% renewable energy by 2030• Eliminate coal fired generation by 2031, add renewables, retain nuclear• 2018 energy production2:
• 31% nuclear, 23% coal, 23% natural gas/oil, 8% renewable, 15% purchased power
Xcel Energy(Multiple States)
• 100% carbon free by 2050• 80% CO2 reduction from 2005 levels by 2030• Retain nuclear till “at least 2040,” retire coal by 2030• 2018 energy production3:
• 33% coal, 29% natural gas, 25% renewable, 13% nuclear
LES.com
Examples of Utilities TargetingNet-Zero Carbon Dioxide Energy
6
DTE Energy(Michigan)
• 100% carbon neutrality by 2050• 50% reduction of carbon emissions by 2030, 80% by 2040• Retire three coal plants in 2022, $2B renewable investment in 2024, $800M
pumped storage upgrade• 2018 energy production4:
• 64% coal, 19% nuclear, 9% natural gas/oil, 8% wind/renewable, <1% hydro
Madison Gas & Electric
(Wisconsin)
• Net-Zero carbon by 2050• “Energy 2030 Framework” of 30% of retail sales from renewable resources
by 2030 (interim goal of 25% by 2025)• Carbon capture coupled with fossil generation could be included• 2018 energy production5:
• 52% coal, 14% natural gas, 11% renewable, 23% purchased power
Duke Energy(Multiple States)
• Net-Zero carbon emissions from electric generation by 2050 • Reduce carbon dioxide emissions by half or more from 2005 levels by 2030• Retain nuclear, double the wind/solar/renewables portfolio by 2025• Deploy low cost natural gas to speed the transition from coal• 2018 energy production6:
• 26% natural gas/oil, 26% nuclear, 24% coal, 1% hydro/solar, 22% purchased power
LES.com
Examples of Utilities SettingCarbon Dioxide Reduction Goals
7
Ameren(Missouri, Illinois)
• Reduce CO2 emissions 35% by 2030, 50% by 2040, and 80% by 2050 from 2005 levels
• Add 700 MW wind by 2020, 100 MW solar by 2027• Retire ~2,750 MW coal by 2022, other coal retirements in 2033 and 2036• Consider extending the nuclear operating license for Callaway Energy Center• 2018 energy production7:
• 68% coal, 24% nuclear, 3% hydro, 1% natural gas, 4% wind/purchased power
Evergy(Kansas, Missouri)
• Reduce carbon output by 80% below 2005 levels by 2050• Retire all coal plants at end of useful life (2040-2050) with the exception of
Iatan 2, significant investments in renewable energy and energy efficiency• Operate Wolf Creek nuclear until license expires in 2045• Add natural gas generation if additional carbon-free generation is not available• 2018 energy production8:
• 55% coal, 23% wind/hydro/LFG/solar, 17% nuclear, 5% natural gas/oil
• Reduce carbon emissions 40% by 2030 and 80% by 2050 from 2005 levels • Retire 1,800 MW coal, add natural gas generation• Invest in up to 350 MW of zero-carbon generation• 2018 energy supply as a percentage of sales9:
• 45% coal, 23% natural gas, 19% nuclear, 7% renewable, 6% PPA/market purchase
WEC Energy Group(Wisconsin, Illinois,
Michigan, Minnesota)
LES.com8
WEC Energy Group2018 Corporate Responsibility Report illustrates the planned
transition from 2005 to 2050
Source: https://www.wecenergygroup.com/csr/cr2018/wec-corporate-responsibility-report-2018.pdf
Carbon Dioxide Reduction Example
LES.com
Examples of Utilities SettingRenewable Energy Goals
9
Tucson Electric Power(Tucson, AZ)
• Generate 30% of its electricity from renewable resources by 2030• Retire two more coal generators and replace them with ten natural gas
reciprocating internal combustion engines • Add three large renewable systems in 2020• 2018 energy production10:
• 44% coal, 42% natural gas, 10% purchased power-non renewable, 4% purchase power-renewable
Tri-State Generation & Transmission
(Multiple Western States)
• 50% of energy consumed by its member cooperatives will be renewable by 2024
• Add 1,000 MW of renewables (8 new solar and wind projects)• Close all coal plants operated by Tri-State • Eliminate coal emissions in New Mexico in 2020 and Colorado by 2030• 2018 energy production11:
• 47% coal, 31% renewables, 9% Basin-non-renewable, 8% Market purchases, 4% natural gas, <1% other
LES.com
Renewable Energy Goal Example
10
Tucson Electric Power
Utility “will get to zero CO2 as fast as our customers can afford and maintain reliability.”
Slide used with permission of Tucson Electric Power
LES.com
86%
73%
69%
68%
66%
66%
65%
62%
61%
60%
51%
46%
44%
19%
24%
19%
13%
17%
26%
31%
10%
4%
8%
7%
7%
28%
11%
35%
25%
31%
23%
1%
8%
36%
10%
6%
6%
23%
8%
22%
15%
10%
Tucson Electric Power
DTE Energy
Ameren
WEC Energy Group
Platte River Power Authority
Madison Gas & Electric
Lincoln Electric System
Xcel
Tri-State
Evergy
Duke Energy
Arizona Public Service
MidAmerican Energy Company
Fossil Fuels Nuclear Renewables Purchased Power
Comparison of Energy Production Sources
11
Utility energy production data comes from 2018 data sources, with the exception of PRPA’s data coming from a 2019 source
LES.com
0.50
0.60
0.70
0.80
0.90
1.00
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Po
rtfo
lio
CO
2R
ate
(me
tric
to
ns
/ne
t M
Wh
)
12
LES’s Decarbonization Efforts
2008 Nameplate
2019 Nameplate
38% Reduction in CO2 Intensity
42% Reduction in CO2
Emissions
LES.com
LES’s Decarbonization Efforts
* = Utility from earlier in this presentation that has set either a Zero CO2 or Net-Zero CO2 goal. Results calculated using publicly available EIA and EPA data.
** = Utility from earlier in this presentation that has set either a Zero CO2 or Net-Zero CO2 goal but has seen an increase in CO2
emissions from 2010 to 2019. Results calculated using publicly available EIA and EPA data.
13
LES.com
4%
37%
8%
8%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2013 2019
Wind Hydro Landfill Gas Solar
14
12%
46%
LES Renewable Energy PortfolioRenewable resource generation expressed as an equivalent percentage of annual retail sales
LES.com
Future Considerations
15
Going forward, LES will need to continue to navigate an increasingly unknown future that includes a range of potential events, including:
• Renewable generation expansion
• New generation technologies and fuel sources
• Regulatory changes
• Energy market changes
• Decarbonization opportunities
• Carbon capture and storage technologies
• New energy storage technologies
• Potential economic development projects
LES.com 17
References
1: Source: https://www.prpa.org/generation/2: Source: https://www.sec.gov/Archives/edgar/data/7286/000076462219000019/pnw2018123110-k.htm3: Source: http://investors.xcelenergy.com/interactive/newlookandfeel/4025308/AnnualReport2018/ar/HTML1/xcel_energy-ar2018_0029.htm4: Source: https://www.sec.gov/Archives/edgar/data/936340/000093634019000086/dteenergy2018123110k.htm5: Source: https://www.mgeenergy.com/documents/sec-reports/sec-forms-10k-10q/20181231-10k.pdf6: Source: https://www.duke-energy.com/_/media/pdfs/our-company/investors/2018-duke-energy-form-10-k.pdf?la=en7: Source: http://d18rn0p25nwr6d.cloudfront.net/CIK-0001002910/23e65a57-07c8-44e1-9ab0-c101d6374363.pdf8: Source: http://www.evergyinc.com/sec-filings/sec-filing/10-k/0001711269-19-0000139: Source: https://d18rn0p25nwr6d.cloudfront.net/CIK-0000783325/21720ac3-6d05-444a-8ff3-afc53ab0280a.pdf10: Source: https://www.sec.gov/Archives/edgar/data/100122/000010012219000004/tep10k12312018.htm11: Source: https://tristate.coop/sites/tristategt/files/PDF/resourceplan/ERP%20Annual%20Progress%20Report%202019%20(121019)%20(1)%20filed.pdf12: Source: https://www.azcentral.com/story/money/business/energy/2020/01/22/arizona-public-service-to-end-all-carbon-emissions-by-2050-ceo-jeff-guldner-says/4530389002/
Revenue & Expense Statement (Condensed)JUNE 2020
2020 2020 PercentageYEAR TO DATE Actual Budget Difference Difference
1) Total Revenue $143,321 $163,324 ($20,003) -12%
Residential revenue was at budget YTD, while commercial and industrial revenues were below budget. Wholesale revenue was below budget primarily due to lower than budgeted generation and related lower sales into the SPP IM at LRS, WS3, WS4, Rokeby and TBGS.
2) Power Costs 59,207 74,764 (15,557) -21%
Produced power energy expenses were 45% below budget due to LRS, WS4, Rokeby and TBGS not being operated as budgeted. Net SPP IM expense was 145% above budget, as higher purchases were made to offset lower production at the units discussed above.
3) Other Operating Expenses 38,203 40,825 (2,622) -6%
Other Operating expenses (operation & maintenance, administrative & general) were 6% under budget. No one category accounts for a disproportionate percentage of this variance.
4) Depreciation 19,740 19,880 (140) -1%5) Total Expenses 117,150 135,469 (18,319) -14%
6) Operating Income 26,171 27,855 (1,684) -6%
7) Non-Operating Expense (Income) 19,817 19,411 406 2%
8) Change in Net Position (Net Revenue) $6,354 $8,444 ($2,090) -25%
Year End Projection Year End Budget9) Debt Service Coverage 1.90 2.04
Month End Actual Month End Budget10) Days Cash on Hand (Days) 197 138
Comments
(Dollar amounts in 000)
YTD operating revenues were 12% or $20M below budget primarily due to COVID-19 related impacts on commercial revenue and lower sales into the SPP IM, which resulted in lower wholesale revenue. However, total expenses were
down 14% or $18.3M, primarily due to lower power costs. This reduction in expenses mostly offset the decline in revenue.
INDEX
REVENUE & EXPENSE STATEMENT - CURRENT MONTH ------------------------------------------------------------- 1
REVENUE & EXPENSE STATEMENT - YEAR-TO-DATE ----------------------------------------------------------------- 2
REVENUES, ENERGY & CUSTOMERS - CURRENT MONTH ----------------------------------------------------------- 3
REVENUES, ENERGY & CUSTOMERS - YEAR-TO-DATE --------------------------------------------------------------- 4
OPERATING EXPENSE STATEMENT - CURRENT MONTH ------------------------------------------------------------- 5
OPERATING EXPENSE STATEMENT - YEAR-TO-DATE ----------------------------------------------------------------- 6
BALANCE SHEET --------------------------------------------------------------------------------------------------------------------- 7
STATEMENT OF CASH FLOWS -------------------------------------------------------------------------------------------------- 8
DEBT SERVICE COVERAGE ------------------------------------------------------------------------------------------------------ 9
NOTE: Federal Energy Regulatory Commission accounting guidance for the Southwest Power Pool Integrated Market (SPP IM) transactions (purchases, sales and other charges) requires netting together these transactions based on the time increments. If, during the time increment, sales to SPP are greater than purchases from SPP, the net amount is recorded as wholesale revenue. If, during the time increment, purchases from SPP are greater than sales to SPP, the net amount is recorded as purchased power cost. Because of this netting process, the energy (MWH’s) amounts no longer directly correlate to wholesale revenue.
REVENUE & EXPENSE STATEMENTCURRENT MONTH JUNE 2020
CURRENT CURRENT LAST YEARDESCRIPTION MONTH MONTH MONTH
ACTUAL BUDGET AMOUNT % ACTUAL AMOUNT %OPERATING REVENUES 1. Retail $25,839,045 $29,003,564 ($3,164,519) -10.9% $25,483,397 $355,648 1.4% 2. Wholesale 2,750,052 4,263,739 (1,513,687) -35.5% 2,040,771 709,281 34.8% 3. Other Revenue 818,789 810,931 7,858 1.0% 433,310 385,479 89.0% 4. City Dividend 614,611 666,417 (51,806) -7.8% 642,360 (27,749) -4.3% 5. Total Operating Revenues 30,022,497 34,744,651 (4,722,154) -13.6% 28,599,838 1,422,659 5.0%
OPERATING EXPENSES 6. Purchased Power 7,608,213 6,376,754 1,231,459 19.3% 6,646,640 961,573 14.5% 7. Produced Power 3,453,209 7,103,306 (3,650,097) -51.4% 4,189,851 (736,642) -17.6% 8. Operations 1,516,498 1,580,437 (63,939) -4.0% 1,621,575 (105,077) -6.5% 9. Maintenance 732,056 834,220 (102,164) -12.2% 749,426 (17,370) -2.3%10. Administrative & General 4,308,904 4,711,081 (402,177) -8.5% 3,973,280 335,624 8.4%11. Depreciation 3,239,899 3,331,619 (91,720) -2.8% 4,410,051 (1,170,152) -26.5%12. Total Operating Expenses 20,858,779 23,937,417 (3,078,638) -12.9% 21,590,823 (732,044) -3.4%
13. OPERATING INCOME 9,163,718 10,807,234 (1,643,516) -15.2% 7,009,015 2,154,703 30.7%
NONOPERATING EXPENSES (INCOME)14. Interest Expense 1,957,185 2,066,410 (109,225) -5.3% 2,184,704 (227,519) -10.4%15. Capitalized Interest (49,414) (125,662) 76,248 -60.7% (56,908) 7,494 -13.2%16. Payments in Lieu of Taxes 1,034,821 1,174,996 (140,175) -11.9% 995,627 39,194 3.9%17. City Dividend Expense 648,044 648,044 0 0.0% 635,337 12,707 2.0%18. Other 13 0 13 - - 59 (46) -78.0%19. Total Other Expense 3,590,649 3,763,788 (173,139) -4.6% 3,758,819 (168,170) -4.5%20. Interest Income (133,767) (379,896) 246,129 -64.8% (384,896) 251,129 -65.2%21. Total Nonoperating Expense (Income) 3,456,882 3,383,892 72,990 2.2% 3,373,923 82,959 2.5%
22. Income Before Contributions 5,706,836 7,423,342 (1,716,506) -23.1% 3,635,092 2,071,744 57.0%
CONTRIBUTED CAPITAL23. Contributed Capital Received 117,085 112,206 4,879 4.3% 66,874 50,211 75.1%24. Contributed Capital Used (117,085) (112,206) (4,879) 4.3% (66,874) (50,211) 75.1%25. Net Contributed Capital 0 0 0 - - 0 0 - -
26. CHANGE IN NET POSITION $5,706,836 $7,423,342 ($1,716,506) -23.1% $3,635,092 $2,071,744 57.0%
Page 1
VARIANCE FROMLAST YEAR
VARIANCE FROMBUDGET
REVENUE & EXPENSE STATEMENTYEAR-TO-DATE JUNE 2020
LAST YEARDESCRIPTION YEAR TO DATE YEAR TO DATE YEAR TO DATE
ACTUAL BUDGET AMOUNT % ACTUAL AMOUNT %OPERATING REVENUES 1. Retail $121,478,261 $130,408,714 ($8,930,453) -6.8% $126,249,923 ($4,771,662) -3.8% 2. Wholesale 12,894,135 23,577,612 (10,683,477) -45.3% 15,654,401 (2,760,266) -17.6% 3. Other Revenue 5,238,104 5,339,433 (101,329) -1.9% 3,885,201 1,352,903 34.8% 4. City Dividend 3,710,689 3,998,502 (287,813) -7.2% 3,764,227 (53,538) -1.4% 5. Total Operating Revenues 143,321,189 163,324,261 (20,003,072) -12.2% 149,553,752 (6,232,563) -4.2%
OPERATING EXPENSES 6. Purchased Power 37,896,870 35,537,455 2,359,415 6.6% 38,137,321 (240,451) -0.6% 7. Produced Power 21,310,526 39,226,825 (17,916,299) -45.7% 26,427,650 (5,117,124) -19.4% 8. Operations 9,399,416 9,303,595 95,821 1.0% 9,245,884 153,532 1.7% 9. Maintenance 4,082,720 4,938,112 (855,392) -17.3% 4,092,305 (9,585) -0.2%10. Administrative & General 24,720,828 26,583,442 (1,862,614) -7.0% 22,088,981 2,631,847 11.9%11. Depreciation 19,740,469 19,880,180 (139,711) -0.7% 26,202,701 (6,462,232) -24.7%12. Total Operating Expenses 117,150,829 135,469,609 (18,318,780) -13.5% 126,194,842 (9,044,013) -7.2%
13. OPERATING INCOME 26,170,360 27,854,652 (1,684,292) -6.0% 23,358,910 2,811,450 12.0%
NONOPERATING EXPENSES (INCOME)14. Interest Expense 11,515,570 12,416,610 (901,040) -7.3% 13,032,020 (1,516,450) -11.6%15. Capitalized Interest (288,584) (541,395) 252,811 -46.7% (1,041,538) 752,954 -72.3%16. Payments in Lieu of Taxes 5,731,751 5,785,350 (53,599) -0.9% 5,874,744 (142,993) -2.4%17. City Dividend Expense 3,888,264 3,888,264 0 0.0% 3,812,022 76,242 2.0%18. Other 380 0 380 - - (202) 582 288.1%19. Total Other Expense 20,847,381 21,548,829 (701,448) -3.3% 21,677,046 (829,665) -3.8%20. Interest Income (1,030,356) (2,137,608) 1,107,252 -51.8% (1,981,048) 950,692 -48.0%21. Total Nonoperating Expense (Income) 19,817,025 19,411,221 405,804 2.1% 19,695,998 121,027 0.6%
22. Income Before Contributions 6,353,335 8,443,431 (2,090,096) -24.8% 3,662,912 2,690,423 73.5%
CONTRIBUTED CAPITAL23. Contributed Capital Received 529,517 673,238 (143,721) -21.3% 596,998 (67,481) -11.3%24. Contributed Capital Used (529,517) (673,238) 143,721 -21.3% (596,998) 67,481 -11.3%25. Net Contributed Capital 0 0 0 - - 0 0 - -
26. CHANGE IN NET POSITION $6,353,335 $8,443,431 ($2,090,096) -24.8% $3,662,912 $2,690,423 73.5%
Page 2
VARIANCE FROMBUDGET
VARIANCE FROMLAST YEAR
REVENUES, ENERGY & CUSTOMERSCURRENT MONTH JUNE 2020
CURRENT CURRENT LAST YEARDESCRIPTION MONTH MONTH MONTH
ACTUAL BUDGET AMOUNT % ACTUAL AMOUNT %REVENUE 1. Residential $12,682,032 $13,493,033 ($811,001) -6.0% $11,849,149 $832,883 7.0% 2. Commercial 10,303,569 12,760,140 (2,456,571) -19.3% 10,762,808 (459,239) -4.3% 3. Industrial 2,701,841 2,586,820 115,021 4.4% 2,700,318 1,523 0.1% 4. Street Light 151,603 163,571 (11,968) -7.3% 171,122 (19,519) -11.4% 5. Total Retail 25,839,045 29,003,564 (3,164,519) -10.9% 25,483,397 355,648 1.4% 6. SPP Sales 1,414,098 2,386,008 (971,910) -40.7% 564,610 849,488 150.5% 7. Contract Sales 1,335,954 1,877,731 (541,777) -28.9% 1,476,161 (140,207) -9.5% 8. Total Wholesale 2,750,052 4,263,739 (1,513,687) -35.5% 2,040,771 709,281 34.8% 9. Total 28,589,097 33,267,303 (4,678,206) -14.1% 27,524,168 1,064,929 3.9%ENERGY (Megawatt-Hours)10. Residential 118,120 110,679 7,441 6.7% 103,897 14,223 13.7%11. Commercial 120,969 133,806 (12,837) -9.6% 123,965 (2,996) -2.4%12. Industrial 38,442 34,932 3,510 10.0% 39,598 (1,156) -2.9%13. Street Light 658 893 (235) -26.3% 938 (280) -29.9%14. Total Retail 278,189 280,310 (2,121) -0.8% 268,398 9,791 3.6%15. SPP Sales 63,095 203,063 (139,968) -68.9% 25,636 37,459 146.1%16. Contract Sales 39,352 59,648 (20,296) -34.0% 52,009 (12,657) -24.3%17. Total Wholesale 102,447 262,711 (160,264) -61.0% 77,645 24,802 31.9%18. Total 380,636 543,021 (162,385) -29.9% 346,043 34,593 10.0%CUSTOMERS19. Residential 126,272 126,049 223 0.2% 124,260 2,012 1.6%20. Commercial 17,183 17,160 23 0.1% 16,994 189 1.1%21. Industrial 175 176 (1) -0.6% 176 (1) -0.6%22. Street Light 5 5 0 0.0% 5 0 0.0%23. Total Retail 143,635 143,390 245 0.2% 141,435 2,200 1.6%24. Wholesale 10 8 2 25.0% 9 1 11.1%25. Total 143,645 143,398 247 0.2% 141,444 2,201 1.6%
Page 3
VARIANCE FROMBUDGET
VARIANCE FROMLAST YEAR
REVENUES, ENERGY & CUSTOMERSYEAR-TO-DATE JUNE 2020
LAST YEARDESCRIPTION YEAR TO DATE YEAR TO DATE YEAR TO DATE
ACTUAL BUDGET AMOUNT % ACTUAL AMOUNT %REVENUE 1. Residential $57,116,332 $56,753,431 $362,901 0.6% $57,921,380 ($805,048) -1.4% 2. Commercial 49,402,752 57,643,042 (8,240,290) -14.3% 52,372,684 (2,969,932) -5.7% 3. Industrial 14,008,765 15,121,634 (1,112,869) -7.4% 14,861,112 (852,347) -5.7% 4. Street Light 950,412 890,607 59,805 6.7% 1,094,747 (144,335) -13.2% 5. Total Retail 121,478,261 130,408,714 (8,930,453) -6.8% 126,249,923 (4,771,662) -3.8% 6. SPP Sales 6,172,186 13,830,791 (7,658,605) -55.4% 7,850,130 (1,677,944) -21.4% 7. Contract Sales 6,721,949 9,746,821 (3,024,872) -31.0% 7,804,271 (1,082,322) -13.9% 8. Total Wholesale 12,894,135 23,577,612 (10,683,477) -45.3% 15,654,401 (2,760,266) -17.6% 9. Total 134,372,396 153,986,326 (19,613,930) -12.7% 141,904,324 (7,531,928) -5.3%ENERGY (Megawatt-Hours)10. Residential 605,738 627,042 (21,304) -3.4% 618,892 (13,154) -2.1%11. Commercial 649,386 722,806 (73,420) -10.2% 701,104 (51,718) -7.4%12. Industrial 207,231 227,892 (20,661) -9.1% 218,944 (11,713) -5.3%13. Street Light 4,094 6,847 (2,753) -40.2% 6,780 (2,686) -39.6%14. Total Retail 1,466,449 1,584,587 (118,138) -7.5% 1,545,720 (79,271) -5.1%15. SPP Sales 262,521 867,935 (605,414) -69.8% 275,169 (12,648) -4.6%16. Contract Sales 182,101 309,650 (127,549) -41.2% 261,694 (79,593) -30.4%17. Total Wholesale 444,622 1,177,585 (732,963) -62.2% 536,863 (92,241) -17.2%18. Total 1,911,071 2,762,172 (851,101) -30.8% 2,082,583 (171,512) -8.2%CUSTOMERS AVERAGE19. Residential 125,806 125,809 (3) 0.0% 124,047 1,759 1.4%20. Commercial 17,146 17,133 13 0.1% 16,974 172 1.0%21. Industrial 175 176 (1) -0.6% 177 (2) -1.1%22. Street Light 5 5 0 0.0% 5 0 0.0%23. Total Retail 143,132 143,123 9 0.0% 141,203 1,929 1.4%24. Wholesale 8 8 0 0.0% 8 0 0.0%25. Total 143,140 143,131 9 0.0% 141,211 1,929 1.4%
Page 4
VARIANCE FROMBUDGET
VARIANCE FROMLAST YEAR
OPERATING EXPENSE STATEMENTCURRENT MONTH JUNE 2020
CURRENT CURRENT LAST YEARDESCRIPTION MONTH MONTH MONTH
ACTUAL BUDGET AMOUNT % ACTUAL AMOUNT %
POWER COST 1. SPP Purchased Power $2,075,351 $697,072 $1,378,279 197.7% $1,686,375 $388,976 23.1% 2. Non-Owned Asset Power 5,532,862 5,679,682 (146,820) -2.6% 4,960,265 572,597 11.5% 3. Total Purchased Power 7,608,213 6,376,754 1,231,459 19.3% 6,646,640 961,573 14.5% 4. Produced Power 3,453,209 7,103,306 (3,650,097) -51.4% 4,189,851 (736,642) -17.6% 5. Total Power Cost 11,061,422 13,480,060 (2,418,638) -17.9% 10,836,491 224,931 2.1%
OPERATION & MAINTENANCE (O&M) 6. Energy Delivery 1,758,771 1,973,831 (215,060) -10.9% 1,870,888 (112,117) -6.0% 7. Transmission 489,783 440,826 48,957 11.1% 500,113 (10,330) -2.1% 8. Total O & M Expense 2,248,554 2,414,657 (166,103) -6.9% 2,371,001 (122,447) -5.2%
ADMINISTRATIVE & GENERAL (A&G) 9. Administration 222,365 203,072 19,293 9.5% 184,090 38,275 20.8%10. Communication & Corporate Records 154,840 279,190 (124,350) -44.5% 227,121 (72,281) -31.8%11. Corporate Operations 971,950 772,455 199,495 25.8% 595,609 376,341 63.2%12. Customer Services 882,158 973,503 (91,345) -9.4% 850,623 31,535 3.7%13. Financial Services 372,298 385,466 (13,168) -3.4% 333,454 38,844 11.6%14. Power Supply 452,625 491,034 (38,409) -7.8% 393,671 58,954 15.0%15. Technology Services 1,252,668 1,606,361 (353,693) -22.0% 1,388,712 (136,044) -9.8%16. Total A & G Expense 4,308,904 4,711,081 (402,177) -8.5% 3,973,280 335,624 8.4%
17. DEPRECIATION 3,239,899 3,331,619 (91,720) -2.8% 4,410,051 (1,170,152) -26.5%
18. TOTAL OPERATING EXPENSE $20,858,779 $23,937,417 ($3,078,638) -12.9% $21,590,823 ($732,044) -3.4%
Page 5
VARIANCE FROMBUDGET
VARIANCE FROMLAST YEAR
OPERATING EXPENSE STATEMENTYEAR-TO-DATE JUNE 2020
LAST YEARDESCRIPTION YEAR TO DATE YEAR TO DATE YEAR TO DATE
ACTUAL BUDGET AMOUNT % ACTUAL AMOUNT %
POWER COST 1. SPP Purchased Power $7,808,381 $3,186,343 $4,622,038 145.1% $9,556,096 ($1,747,715) -18.3% 2. Non-Owned Asset Power 30,088,489 32,351,112 (2,262,623) -7.0% 28,581,225 1,507,264 5.3% 3. Total Purchased Power 37,896,870 35,537,455 2,359,415 6.6% 38,137,321 (240,451) -0.6% 4. Produced Power 21,310,526 39,226,825 (17,916,299) -45.7% 26,427,650 (5,117,124) -19.4% 5. Total Power Cost 59,207,396 74,764,280 (15,556,884) -20.8% 64,564,971 (5,357,575) -8.3%
OPERATION & MAINTENANCE (O&M) 6. Energy Delivery 10,735,616 11,609,805 (874,189) -7.5% 10,452,720 282,896 2.7% 7. Transmission 2,746,520 2,631,902 114,618 4.4% 2,885,469 (138,949) -4.8% 8. Total O & M Expense 13,482,136 14,241,707 (759,571) -5.3% 13,338,189 143,947 1.1%
ADMINISTRATIVE & GENERAL (A&G) 9. Administration 1,239,622 1,347,734 (108,112) -8.0% 1,243,533 (3,911) -0.3%10. Communication & Corporate Records 982,820 1,377,135 (394,315) -28.6% 962,595 20,225 2.1%11. Corporate Operations 5,246,865 4,964,850 282,015 5.7% 3,936,763 1,310,102 33.3%12. Customer Services 4,978,750 5,428,679 (449,929) -8.3% 4,988,390 (9,640) -0.2%13. Financial Services 2,110,094 2,185,255 (75,161) -3.4% 1,938,756 171,338 8.8%14. Power Supply 2,783,861 2,966,657 (182,796) -6.2% 2,254,257 529,604 23.5%15. Technology Services 7,378,816 8,313,132 (934,316) -11.2% 6,764,687 614,129 9.1%16. Total A & G Expense 24,720,828 26,583,442 (1,862,614) -7.0% 22,088,981 2,631,847 11.9%
17. DEPRECIATION 19,740,469 19,880,180 (139,711) -0.7% 26,202,701 (6,462,232) -24.7%
18. TOTAL OPERATING EXPENSE $117,150,829 $135,469,609 ($18,318,780) -13.5% $126,194,842 ($9,044,013) -7.2%
Page 6
VARIANCE FROMLAST YEAR
VARIANCE FROMBUDGET
BALANCE SHEETJUNE 2020
ASSETS & DEFERRED OUTFLOWS OF RESOURCES LIABILITIES AND NET POSITION END OF VARIANCE END OF VARIANCE
DESCRIPTION MONTH SINCE DESCRIPTION MONTH SINCEBALANCE JANUARY 1 BALANCE JANUARY 1
CURRENT ASSETS: CURRENT LIABILITIES: 1. Revenue Fund (including CDFUO) $109,874,198 $3,923,781 OTHER LIABILITIES 2. Payments in Lieu of Taxes Fund $4,619,495 ($7,304,066) 1. Accounts Payable $19,909,398 ($3,548,934) 3. Rate Stabilization Fund 36,995,498 331,691 2. Accrued Payments in Lieu of Taxes 5,654,316 (7,155,521) 4. Bond Principal & Interest Funds 33,209,690 14,262,568 3. City Dividend for Utility Ownership Payable 2,592,176 0 5. Other Restricted/Designated Funds 3,635,632 1,025,869 4. Commercial Paper Notes 30,500,000 (35,000,000) 6. Restricted/Designated Funds Total 73,840,820 15,620,128 5. Accrued Liabilities 16,407,154 122,753 7. Total Current Asset Funds 188,334,513 12,239,843 6. Total Other Liabilities 75,063,044 (45,581,702) 8. Receivables Less Uncollectible Allowance 21,833,810 2,361,642 CURRENT LIABILITIES - RESTRICTED ASSETS 9. Unbilled Revenue 18,317,959 3,418,546 7. Current Portion of Long-Term Debt 28,615,000 010. Accrued Interest Receivable 456,111 (639,349) 8. Accrued Interest 9,191,765 (265,561) 11. Materials, Supplies & Fuel Inventory 17,200,830 381,421 9. Other Current Liabilities 1,158,900 (142,349) 12. Plant Operation Assets 17,065,612 2,082,582 10. Total Current Liabilities - Restricted Assets 38,965,665 (407,910) 13. Other Current Assets 4,474,179 1,189,667 11. Total Current Liabilities 114,028,709 (45,989,612)14. Total Current Assets 267,683,014 21,034,352
NONCURRENT LIABILITIES:NONCURRENT ASSETS: 12. 2003 Bonds 1,150,000 015. Bond Reserve Funds 18,947,757 (31,942) 13. 2012-A Bonds 150,655,000 (66,365,000)16. Self-Funded Benefits Reserve Fund (IBNP) 625,413 834 14. 2013 Bonds 75,525,000 017. Segregated Funds 900,490 0 15. 2015-A Bonds 144,075,000 (15,110,000) 18. Restricted Fund Total 20,473,660 (31,108) 16. 2016 Bonds 65,960,000 0 19. Unamortized Debt Expense 2,721,149 117,909 17. 2018 Bonds 121,205,000 0 20. Other Noncurrent Assets 3,384,844 137,422 18. 2020 Bonds 72,200,000 72,200,000 21. Total Noncurrent Assets 26,579,653 224,223 19. Total Revenue Bonds 630,770,000 (9,275,000)
20. Less Current Maturities 28,615,000 0CAPITAL ASSETS: 21. Less Unamortized Discounts/Premiums (68,506,485) (8,006,698) 22. Utility Plant in Service 1,696,180,418 12,303,579 22. Note Purchase Agreement 36,500,000 35,000,000 23. Accumulated Depreciation & Amortization (840,685,804) (14,897,336) 23. Revolving Credit Agreement 35,000,000 35,000,000 24. Construction Work in Progress 101,803,314 12,530,761 24. Net Long Term Debt 742,161,485 68,731,69825. Total Capital Assets 957,297,928 9,937,004 25. Liabilities Payable from Segregated Funds (e) 896,137 0
26. Asset Retirement Obligation 3,210,559 3,210,559 DEFERRED OUTFLOWS OF RESOURCES: 27. Other Noncurrent Liabilities 622,326 0 26. Deferred Loss on Refunded Debt 9,589,302 (2,100,158) 28. Total Liabilities 860,919,216 25,952,64527. Deferred Costs for Asset Retirement Obligations 3,210,559 3,210,559 28. Total Deferred Outflows of Resources 12,799,861 1,110,401 NET POSITION:
29. Net Investment in Capital Assets 258,981,468 47,529,85030. Restricted for Debt Service 23,893,478 14,020,81431. Restricted for Employee Health Insurance Claims 1,241,379 56,88832. Unrestricted 119,324,915 (55,254,217) 33. Total Net Position 403,441,240 6,353,335
29. TOTAL ASSETS & DEFERRED OUTFLOWS OF RESOURCES $1,264,360,456 $32,305,980 34. TOTAL LIABILITIES & NET POSITION $1,264,360,456 $32,305,980
Page 7
STATEMENT OF CASH FLOWSJUNE 2020
CURRENT MONTH YEAR-TO-DATECASH FLOW FROM OPERATING ACTIVITIES: 1. Received from Sales to Customers and Users $23,899,598 $145,702,606 2. Paid to Suppliers for Goods & Services (12,181,432) (94,026,821) 3. Paid to Employees for Services (3,172,269) (18,455,388) 4. Cash Flow from Operating Activities (a) 8,545,897 33,220,397
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: 5. Payments in Lieu of Taxes 0 (12,887,273) 6. City Dividend for Utility Ownership Payments 0 (3,888,264) 7. Other 0 0 8. Cash Flow from (used for) Non-capital Financing Activities 0 (16,775,537)
CASH FLOWS FROM INVESTING ACTIVITIES: 9. Net (Purchases) Sales of Investments 1,504,369 347,21610. Interest Income 226,549 1,646,205 11. Cash Flow from (used for) Investing Activities 1,730,918 1,993,421
CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES:12. Acquisition and Construction of Capital Assets (7,142,309) (28,774,744)13. Salvage on Retirement of Plant 0 43,51914. Cost of Removal of Property Retired (24,198) (1,853,161)15. Debt Issuance Cost Paid 0 21,146,21916. Debt Premiums Collected 0 (9,803,413)17. Net Capital Contributions 117,085 529,51618. Net Proceeds form Issuance of Long-Term Debt 0 142,200,00019. Principal Payments on Long-Term Debt 0 (116,475,000)20. Interest Payments on Long-Term Debt (154,814) (12,918,769) 21. Cash Flow from (used for) Capital Financing Activities (7,204,236) (5,905,833)
22. Net Increase (Decrease) in Cash and Cash Equivalents 3,072,579 12,532,44823. Cash and Cash Equivalent Beginning of Period 40,091,751 30,631,882 24. Cash and Cash Equivalent End of Period (b) $43,164,330 $43,164,330
STATEMENT OF CASH FLOW FOOTNOTES(a) Reconciliation of operating income to cash flows from operating activities 1. Net Operating Revenue $9,163,718 $26,170,360 2. Noncash items included in operating income 3,293,450 20,060,639 3. Changes in Assets & Liabilities Increase/(Decrease) (3,911,271) (13,010,602) 4. Net cash flows from operating activities $8,545,897 $33,220,397
(b) Cash and cash equivalents are defined as cash and investments with original maturities of three months or less.
Page 8
DEBT SERVICE COVERAGEJUNE 2020
DESCRIPTION ACTUAL BUDGET ACTUAL ACTUAL BUDGET ACTUALTHIS YEAR THIS YEAR LAST YEAR THIS YEAR THIS YEAR LAST YEAR
1. Total Operating Revenues $30,022,497 $34,744,651 $28,599,838 $143,321,189 $163,324,261 $149,553,752
2. Total Operating Expenses 20,858,779 23,937,417 21,590,823 117,150,829 135,469,609 126,194,842 3. Less Depreciation (3,239,899) (3,331,619) (4,410,051) (19,740,469) (19,880,180) (26,202,701) 4. Operating Expense Net of Depreciation 17,618,880 20,605,798 17,180,772 97,410,360 115,589,429 99,992,141
5. Net Operating Revenue for Debt Service 12,403,617 14,138,853 11,419,066 45,910,829 47,734,832 49,561,611 6. Interest Income (a) 138,151 318,403 320,107 757,187 1,767,723 1,458,000 7. Other Income 0 0 0 0 0 0 8. Rate Stabilization Fund 0 0 0 0 0 0
9. AVAILABLE FOR DEBT SERVICE 12,541,768 14,457,256 11,739,173 46,668,016 49,502,555 51,019,611
10. DEBT SERVICE (b) 4,682,526 4,721,171 4,324,651 27,860,928 28,327,026 25,947,904
11. DEBT SERVICE COVERAGE 2.68 3.06 2.71 1.68 1.75 1.97
(a) Excludes interest from Rate Stabilization Fund.(b) Includes Bond Principal & Interest only. Page 9
---------- YEAR-TO-DATE ------------------ CURRENT MONTH ----------
LES.com
Monthly Actual vs. Budget
2
$8.33
-$0.44
-$3.13
$4.25
-$1.34
$3.45
$5.53
$9.22
-$0.46
-$6.61
$5.39
-$1.88
$7.10
$5.68
-$9 -$7 -$5 -$3 -$1 $1 $3 $5 $7 $9 $11
Net
SPP Other***
SPP IM Market Revenue
SPP IM Load Purchases
Contract Sales**
Owned Asset Power
Non-Owned Asset Power*
Millions ($)
Budget Actual
Revenues Expenses
*Non-Owned Asset Power does not include SPP IM Purchased**Contract Sales does not include SPP IM Revenue***SPP Other includes Over-Collected Losses and ARR’s/TCR
LES.com
Daily Temperature Range
3
Monthly Low 53°F
Monthly High 96°F
0
10
20
30
40
50
60
70
80
90
100
6/0
1
6/0
2
6/0
3
6/0
4
6/0
5
6/0
6
6/0
7
6/0
8
6/0
9
6/1
0
6/1
1
6/1
2
6/1
3
6/1
4
6/1
5
6/1
6
6/1
7
6/1
8
6/1
9
6/2
0
6/2
1
6/2
2
6/2
3
6/2
4
6/2
5
6/2
6
6/2
7
6/2
8
6/2
9
6/3
0
De
gre
es
in F
ah
ren
he
it
Daily Range Normal Low Normal High
LES.com
Loads
4
0
100
200
300
400
500
600
700
800
MW
Loads Forecast Weekends
Actual = 662 MW Forecasted = 724 MW
LES.com
Customer Energy Consumption
5
326.3 327.9
0
50
100
150
200
250
300
350
2020 Budget 2020 Actual
GW
H
LES.com
Unit Equivalent Availability
6
0% 20% 40% 60% 80% 100%
J St.
LFGTE
TBGS 4
TBGS 3
TBGS 2
TBGS 1
Rok 3
Rok 2
Rok 1
LRS 1
GGS 2
GGS 1
WS 4
WS 3U
nit
Available Limited Scheduled Outage Forced Outage
LES.com
Resource Energy
7
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000M
Wh
Coal Oil & Gas Wind Hydro LFG
LES.com
Peak Load Day – June 17, 2020
8
0
100
200
300
400
500
600
700
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
GGS_1 GGS_2 LRS WSEC 3 WSEC 4TB_1 TB_2 TB_3 TB_4 LFGTEROK 1 ROK 2 ROK 3 J_St. Wind PSAWind PPA WAPA Firm WAPA Peaking Peak Day Load
Actual = 662 MW
LES.com 9
Coal
Oil & Gas
Renewable
43% 45%
32% 8%
25%47%
Offered UtilizedNote: Total percentage may not add up to 100% due to rounding
Energy Offered and Utilized by the SPP Integrated Marketplace (Fuel Type)
LES.com
Energy Utilized by the SPP Integrated Marketplace
10
WAPA (25 GWh)9%
Gentleman Station (70 GWh)24%
Laramie Station (30 GWh)
10%
Walter Scott (33 GWh)11%
Terry Bundy (21 GWh)7%
Rokeby (1 GWh)0%
Wind PSA's (9 GWh)3%
Landfill Gas (3 GWh)1%
Wind PPA's (101 GWh)35%
Note: Total percentage may not add up to 100% due to rounding