quarterly financial review - chelan pud · ost per avg kwh better than budget. ytd ¢/kwh result:...
TRANSCRIPT
Chelan County PUD Quarterly Financial ReviewFor the Year Ended December 31 2017
(Note results are preliminary pending annual audit)
Board PresentationFebruary 20 2018
What we will cover today
2
Financial highlightsFirst quarter resultsFive-year look aheadKey messages
Update only no action required
Appendix Additional detailed information not covered today
Q1 2018 Key Highlights
3
Bottom-line results better than budget
Financial metrics meeting targets
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
OverviewRevenue Expense
bull Service Revenue better than budget year-to-date (YTD) due to more usage from the colder than average temperatures in Feb and Mar +$500000
bull Net Wholesale Revenue better than budget YTD as more surplus to sell from above average generation + $12M
bull Hydro Long-Term Contract Revenue below budget YTD with lower hydro costs for the cost-based contracts ($16M)
bull Other Operating Revenue better than budget YTD from FEMA proceeds and hydro contract charges + $11M
Total Revenues forecasted to be better than budget for the year +$2M
bull Operating Expenses below budget YTD but expected to catch up ($41M)
bull Non-Operating Net Expense better than budget YTD with higher customer contributions for construction and more interest earnings from the higher cash balances ($11M)
Total Net Expenses forecasted to be below budget for the year ($41M)
4
bull Combination of higher revenues and lower expenses result in a better Bottom Line YTD + $58M
Better bottom line forecast for the year of $778M +$6M
Bottom Line
OverviewCapital Cash
bull Capital expenditures overall are lagging the planned pace and below budget YTD ($56M)
bull Spending is ahead of pace YTD for Distribution and Rocky Reach and expected to be just under budget by year end
bull The Rock Island modernization timeline is under review with some projects likely to shift to 2019 partially offset by accelerations to 2018
Total Capital forecasted to hit $1338M which is below budget for
the year ($6M)
bull Positive bottom line and lower capital spending has increased cash and investments YTD by $178M
Total cash balance forecasted to be better than budget at
year end $4662M
5
Debtbull Total debt is the same as budget YTD
Total debt forecasted to equal budgeted $24M reduction with balance at year end $5135M
5162018 6
Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
Electric delivered cost per avg kWh better than budgetYTD centkWh result 483cent vs 532cent (actual vs budget)
Power production costs- 200cent vs 229cent (actual vs budget)Power distribution costs- 283cent vs 303cent (actual vs budget)
(Note Fully loaded cost is not a cost of service analysis which includes offsets)
Hydro production cost per avg MWh better than budgetYTD $MWh result $169 vs $178 (actual vs budget)
Actual vs Budget Rocky Reach $127 vs $129 (operating expense ~88 YTD)Rock Island $253 vs $273 (operating expense ~89 YTD) Lake Chelan $182 vs $223 (operating expense ~76 YTD)
5162018 7
Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
Water cost per 1000 gallons better than budgetYTD $1k gallons result $692 vs $705 (actual vs budget)
YTD operating expense 99 of budget
Wastewater cost per ERU better than budgetYTD $ERU result $194 vs $226 (actual vs budget)
YTD operating expense 86 of budget
Fiber cost per active premise higher than budgetYTD $premise result $121 vs $107 (actual vs budget)
YTD operating expense 113 of budget due to timing of core system support contract payment
8
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Service Revenue 66795 64693 103
Net Wholesale Revenue 108312 108001 100
Hydro LT Contract RevOther PP 118788 119795 99
Other Operating Revenue 21669 21129 103
Other Operating Expense (171097) (173846) 98
Depreciation amp Tax Expense (51828) (52016) 100
Operating Income(Loss) 92639 87755 106
Non-Operating Activity (14790) (15913) 93Bottom Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
2018 Bottom-Line Results
8
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Sheet1
9
Business Line ldquoBottom-Linerdquo Results
5162018
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Cost-Based Activity 35918 35569 101
Market-Based Activity 47332 47081 101
Retail Activity (20702) (25986) 80
Other Activity 11280 11014 102
Integrated Electric 73827 67679 109Fiber amp Telecom 3820 3839 100Water 559 696 80Wastewater (358) (372) 96Combined Bottom-Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
10
Capital Expenditures
5162018
(in 000s)2018 YTD Current
2018 YTD Budget
of budget
2018 Current Forecast
2018 Budget
of Budget
Electric Distribution 2241 1920 117 14000 14293 98
Network Transmission 288 736 39 2663 2929 91
Rocky Reach 814 558 146 7966 8111 98
Rock Island 4274 7577 56 79660 83778 95
Lake Chelan 123 132 93 1740 1404 124
Internal Services 999 3120 32 19710 21047 94
Fiber amp Telecom 786 904 87 5158 5547 93
Water 50 76 65 1299 1236 105
Wastewater 46 206 22 1609 1339 120
Total Expenditures 9621 15231 63 133805 139685 96
Contributions (1716) (907) 189 (3821) (3797) 101
Capital net of CIAC 7904 14324 55 129984 135887 96
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
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24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
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25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
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Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
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Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
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Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
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Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
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Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
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31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
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36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
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37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
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38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Cost-Based Activity | 35918 | 35569 | 101 | 35017 | 3 | ||||||
Market-Based Activity | 47332 | 47081 | 101 | 45560 | 4 | ||||||
Retail Activity | (20702) | (25986) | 80 | (25933) | 20 | ||||||
Other Activity | 11280 | 11014 | 102 | 11835 | -5 | ||||||
Integrated Electric | 73827 | 67679 | 109 | 66480 | 11 | ||||||
Fiber amp Telecom | 3820 | 3839 | 100 | 3834 | -0 | ||||||
Water | 559 | 696 | 80 | 701 | -20 | ||||||
Wastewater | (358) | (372) | 96 | (370) | 3 | ||||||
Combined Bottom-Line | 77849 | 71842 | 108 | 70645 | 10 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Service Revenue | 66795 | 64693 | 103 | 64693 | 3 | ||||||
Net Wholesale Revenue | 108312 | 108001 | 100 | 106638 | 2 | ||||||
Hydro LT Contract RevOther PP | 118788 | 119795 | 99 | 119256 | -0 | ||||||
Other Operating Revenue | 21669 | 21129 | 103 | 21129 | 3 | ||||||
Other Operating Expense | (171097) | (173846) | 98 | (173846) | 2 | ||||||
Depreciation amp Tax Expense | (51828) | (52016) | 100 | (52326) | 1 | ||||||
Operating Income(Loss) | 92639 | 87755 | 106 | 85544 | 8 | ||||||
Non-Operating Activity | (14790) | (15913) | 93 | (14898) | 1 | ||||||
Bottom Line | 77849 | 71842 | 108 | 70645 | 10 |
What we will cover today
2
Financial highlightsFirst quarter resultsFive-year look aheadKey messages
Update only no action required
Appendix Additional detailed information not covered today
Q1 2018 Key Highlights
3
Bottom-line results better than budget
Financial metrics meeting targets
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
OverviewRevenue Expense
bull Service Revenue better than budget year-to-date (YTD) due to more usage from the colder than average temperatures in Feb and Mar +$500000
bull Net Wholesale Revenue better than budget YTD as more surplus to sell from above average generation + $12M
bull Hydro Long-Term Contract Revenue below budget YTD with lower hydro costs for the cost-based contracts ($16M)
bull Other Operating Revenue better than budget YTD from FEMA proceeds and hydro contract charges + $11M
Total Revenues forecasted to be better than budget for the year +$2M
bull Operating Expenses below budget YTD but expected to catch up ($41M)
bull Non-Operating Net Expense better than budget YTD with higher customer contributions for construction and more interest earnings from the higher cash balances ($11M)
Total Net Expenses forecasted to be below budget for the year ($41M)
4
bull Combination of higher revenues and lower expenses result in a better Bottom Line YTD + $58M
Better bottom line forecast for the year of $778M +$6M
Bottom Line
OverviewCapital Cash
bull Capital expenditures overall are lagging the planned pace and below budget YTD ($56M)
bull Spending is ahead of pace YTD for Distribution and Rocky Reach and expected to be just under budget by year end
bull The Rock Island modernization timeline is under review with some projects likely to shift to 2019 partially offset by accelerations to 2018
Total Capital forecasted to hit $1338M which is below budget for
the year ($6M)
bull Positive bottom line and lower capital spending has increased cash and investments YTD by $178M
Total cash balance forecasted to be better than budget at
year end $4662M
5
Debtbull Total debt is the same as budget YTD
Total debt forecasted to equal budgeted $24M reduction with balance at year end $5135M
5162018 6
Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
Electric delivered cost per avg kWh better than budgetYTD centkWh result 483cent vs 532cent (actual vs budget)
Power production costs- 200cent vs 229cent (actual vs budget)Power distribution costs- 283cent vs 303cent (actual vs budget)
(Note Fully loaded cost is not a cost of service analysis which includes offsets)
Hydro production cost per avg MWh better than budgetYTD $MWh result $169 vs $178 (actual vs budget)
Actual vs Budget Rocky Reach $127 vs $129 (operating expense ~88 YTD)Rock Island $253 vs $273 (operating expense ~89 YTD) Lake Chelan $182 vs $223 (operating expense ~76 YTD)
5162018 7
Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
Water cost per 1000 gallons better than budgetYTD $1k gallons result $692 vs $705 (actual vs budget)
YTD operating expense 99 of budget
Wastewater cost per ERU better than budgetYTD $ERU result $194 vs $226 (actual vs budget)
YTD operating expense 86 of budget
Fiber cost per active premise higher than budgetYTD $premise result $121 vs $107 (actual vs budget)
YTD operating expense 113 of budget due to timing of core system support contract payment
8
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Service Revenue 66795 64693 103
Net Wholesale Revenue 108312 108001 100
Hydro LT Contract RevOther PP 118788 119795 99
Other Operating Revenue 21669 21129 103
Other Operating Expense (171097) (173846) 98
Depreciation amp Tax Expense (51828) (52016) 100
Operating Income(Loss) 92639 87755 106
Non-Operating Activity (14790) (15913) 93Bottom Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
2018 Bottom-Line Results
8
Cognos_Office_Connection_Cache
Sheet1
9
Business Line ldquoBottom-Linerdquo Results
5162018
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Cost-Based Activity 35918 35569 101
Market-Based Activity 47332 47081 101
Retail Activity (20702) (25986) 80
Other Activity 11280 11014 102
Integrated Electric 73827 67679 109Fiber amp Telecom 3820 3839 100Water 559 696 80Wastewater (358) (372) 96Combined Bottom-Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
10
Capital Expenditures
5162018
(in 000s)2018 YTD Current
2018 YTD Budget
of budget
2018 Current Forecast
2018 Budget
of Budget
Electric Distribution 2241 1920 117 14000 14293 98
Network Transmission 288 736 39 2663 2929 91
Rocky Reach 814 558 146 7966 8111 98
Rock Island 4274 7577 56 79660 83778 95
Lake Chelan 123 132 93 1740 1404 124
Internal Services 999 3120 32 19710 21047 94
Fiber amp Telecom 786 904 87 5158 5547 93
Water 50 76 65 1299 1236 105
Wastewater 46 206 22 1609 1339 120
Total Expenditures 9621 15231 63 133805 139685 96
Contributions (1716) (907) 189 (3821) (3797) 101
Capital net of CIAC 7904 14324 55 129984 135887 96
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Cost-Based Activity | 35918 | 35569 | 101 | 35017 | 3 | ||||||
Market-Based Activity | 47332 | 47081 | 101 | 45560 | 4 | ||||||
Retail Activity | (20702) | (25986) | 80 | (25933) | 20 | ||||||
Other Activity | 11280 | 11014 | 102 | 11835 | -5 | ||||||
Integrated Electric | 73827 | 67679 | 109 | 66480 | 11 | ||||||
Fiber amp Telecom | 3820 | 3839 | 100 | 3834 | -0 | ||||||
Water | 559 | 696 | 80 | 701 | -20 | ||||||
Wastewater | (358) | (372) | 96 | (370) | 3 | ||||||
Combined Bottom-Line | 77849 | 71842 | 108 | 70645 | 10 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Service Revenue | 66795 | 64693 | 103 | 64693 | 3 | ||||||
Net Wholesale Revenue | 108312 | 108001 | 100 | 106638 | 2 | ||||||
Hydro LT Contract RevOther PP | 118788 | 119795 | 99 | 119256 | -0 | ||||||
Other Operating Revenue | 21669 | 21129 | 103 | 21129 | 3 | ||||||
Other Operating Expense | (171097) | (173846) | 98 | (173846) | 2 | ||||||
Depreciation amp Tax Expense | (51828) | (52016) | 100 | (52326) | 1 | ||||||
Operating Income(Loss) | 92639 | 87755 | 106 | 85544 | 8 | ||||||
Non-Operating Activity | (14790) | (15913) | 93 | (14898) | 1 | ||||||
Bottom Line | 77849 | 71842 | 108 | 70645 | 10 |
Q1 2018 Key Highlights
3
Bottom-line results better than budget
Financial metrics meeting targets
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
OverviewRevenue Expense
bull Service Revenue better than budget year-to-date (YTD) due to more usage from the colder than average temperatures in Feb and Mar +$500000
bull Net Wholesale Revenue better than budget YTD as more surplus to sell from above average generation + $12M
bull Hydro Long-Term Contract Revenue below budget YTD with lower hydro costs for the cost-based contracts ($16M)
bull Other Operating Revenue better than budget YTD from FEMA proceeds and hydro contract charges + $11M
Total Revenues forecasted to be better than budget for the year +$2M
bull Operating Expenses below budget YTD but expected to catch up ($41M)
bull Non-Operating Net Expense better than budget YTD with higher customer contributions for construction and more interest earnings from the higher cash balances ($11M)
Total Net Expenses forecasted to be below budget for the year ($41M)
4
bull Combination of higher revenues and lower expenses result in a better Bottom Line YTD + $58M
Better bottom line forecast for the year of $778M +$6M
Bottom Line
OverviewCapital Cash
bull Capital expenditures overall are lagging the planned pace and below budget YTD ($56M)
bull Spending is ahead of pace YTD for Distribution and Rocky Reach and expected to be just under budget by year end
bull The Rock Island modernization timeline is under review with some projects likely to shift to 2019 partially offset by accelerations to 2018
Total Capital forecasted to hit $1338M which is below budget for
the year ($6M)
bull Positive bottom line and lower capital spending has increased cash and investments YTD by $178M
Total cash balance forecasted to be better than budget at
year end $4662M
5
Debtbull Total debt is the same as budget YTD
Total debt forecasted to equal budgeted $24M reduction with balance at year end $5135M
5162018 6
Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
Electric delivered cost per avg kWh better than budgetYTD centkWh result 483cent vs 532cent (actual vs budget)
Power production costs- 200cent vs 229cent (actual vs budget)Power distribution costs- 283cent vs 303cent (actual vs budget)
(Note Fully loaded cost is not a cost of service analysis which includes offsets)
Hydro production cost per avg MWh better than budgetYTD $MWh result $169 vs $178 (actual vs budget)
Actual vs Budget Rocky Reach $127 vs $129 (operating expense ~88 YTD)Rock Island $253 vs $273 (operating expense ~89 YTD) Lake Chelan $182 vs $223 (operating expense ~76 YTD)
5162018 7
Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
Water cost per 1000 gallons better than budgetYTD $1k gallons result $692 vs $705 (actual vs budget)
YTD operating expense 99 of budget
Wastewater cost per ERU better than budgetYTD $ERU result $194 vs $226 (actual vs budget)
YTD operating expense 86 of budget
Fiber cost per active premise higher than budgetYTD $premise result $121 vs $107 (actual vs budget)
YTD operating expense 113 of budget due to timing of core system support contract payment
8
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Service Revenue 66795 64693 103
Net Wholesale Revenue 108312 108001 100
Hydro LT Contract RevOther PP 118788 119795 99
Other Operating Revenue 21669 21129 103
Other Operating Expense (171097) (173846) 98
Depreciation amp Tax Expense (51828) (52016) 100
Operating Income(Loss) 92639 87755 106
Non-Operating Activity (14790) (15913) 93Bottom Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
2018 Bottom-Line Results
8
Cognos_Office_Connection_Cache
Sheet1
9
Business Line ldquoBottom-Linerdquo Results
5162018
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Cost-Based Activity 35918 35569 101
Market-Based Activity 47332 47081 101
Retail Activity (20702) (25986) 80
Other Activity 11280 11014 102
Integrated Electric 73827 67679 109Fiber amp Telecom 3820 3839 100Water 559 696 80Wastewater (358) (372) 96Combined Bottom-Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
10
Capital Expenditures
5162018
(in 000s)2018 YTD Current
2018 YTD Budget
of budget
2018 Current Forecast
2018 Budget
of Budget
Electric Distribution 2241 1920 117 14000 14293 98
Network Transmission 288 736 39 2663 2929 91
Rocky Reach 814 558 146 7966 8111 98
Rock Island 4274 7577 56 79660 83778 95
Lake Chelan 123 132 93 1740 1404 124
Internal Services 999 3120 32 19710 21047 94
Fiber amp Telecom 786 904 87 5158 5547 93
Water 50 76 65 1299 1236 105
Wastewater 46 206 22 1609 1339 120
Total Expenditures 9621 15231 63 133805 139685 96
Contributions (1716) (907) 189 (3821) (3797) 101
Capital net of CIAC 7904 14324 55 129984 135887 96
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Cost-Based Activity | 35918 | 35569 | 101 | 35017 | 3 | ||||||
Market-Based Activity | 47332 | 47081 | 101 | 45560 | 4 | ||||||
Retail Activity | (20702) | (25986) | 80 | (25933) | 20 | ||||||
Other Activity | 11280 | 11014 | 102 | 11835 | -5 | ||||||
Integrated Electric | 73827 | 67679 | 109 | 66480 | 11 | ||||||
Fiber amp Telecom | 3820 | 3839 | 100 | 3834 | -0 | ||||||
Water | 559 | 696 | 80 | 701 | -20 | ||||||
Wastewater | (358) | (372) | 96 | (370) | 3 | ||||||
Combined Bottom-Line | 77849 | 71842 | 108 | 70645 | 10 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Service Revenue | 66795 | 64693 | 103 | 64693 | 3 | ||||||
Net Wholesale Revenue | 108312 | 108001 | 100 | 106638 | 2 | ||||||
Hydro LT Contract RevOther PP | 118788 | 119795 | 99 | 119256 | -0 | ||||||
Other Operating Revenue | 21669 | 21129 | 103 | 21129 | 3 | ||||||
Other Operating Expense | (171097) | (173846) | 98 | (173846) | 2 | ||||||
Depreciation amp Tax Expense | (51828) | (52016) | 100 | (52326) | 1 | ||||||
Operating Income(Loss) | 92639 | 87755 | 106 | 85544 | 8 | ||||||
Non-Operating Activity | (14790) | (15913) | 93 | (14898) | 1 | ||||||
Bottom Line | 77849 | 71842 | 108 | 70645 | 10 |
OverviewRevenue Expense
bull Service Revenue better than budget year-to-date (YTD) due to more usage from the colder than average temperatures in Feb and Mar +$500000
bull Net Wholesale Revenue better than budget YTD as more surplus to sell from above average generation + $12M
bull Hydro Long-Term Contract Revenue below budget YTD with lower hydro costs for the cost-based contracts ($16M)
bull Other Operating Revenue better than budget YTD from FEMA proceeds and hydro contract charges + $11M
Total Revenues forecasted to be better than budget for the year +$2M
bull Operating Expenses below budget YTD but expected to catch up ($41M)
bull Non-Operating Net Expense better than budget YTD with higher customer contributions for construction and more interest earnings from the higher cash balances ($11M)
Total Net Expenses forecasted to be below budget for the year ($41M)
4
bull Combination of higher revenues and lower expenses result in a better Bottom Line YTD + $58M
Better bottom line forecast for the year of $778M +$6M
Bottom Line
OverviewCapital Cash
bull Capital expenditures overall are lagging the planned pace and below budget YTD ($56M)
bull Spending is ahead of pace YTD for Distribution and Rocky Reach and expected to be just under budget by year end
bull The Rock Island modernization timeline is under review with some projects likely to shift to 2019 partially offset by accelerations to 2018
Total Capital forecasted to hit $1338M which is below budget for
the year ($6M)
bull Positive bottom line and lower capital spending has increased cash and investments YTD by $178M
Total cash balance forecasted to be better than budget at
year end $4662M
5
Debtbull Total debt is the same as budget YTD
Total debt forecasted to equal budgeted $24M reduction with balance at year end $5135M
5162018 6
Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
Electric delivered cost per avg kWh better than budgetYTD centkWh result 483cent vs 532cent (actual vs budget)
Power production costs- 200cent vs 229cent (actual vs budget)Power distribution costs- 283cent vs 303cent (actual vs budget)
(Note Fully loaded cost is not a cost of service analysis which includes offsets)
Hydro production cost per avg MWh better than budgetYTD $MWh result $169 vs $178 (actual vs budget)
Actual vs Budget Rocky Reach $127 vs $129 (operating expense ~88 YTD)Rock Island $253 vs $273 (operating expense ~89 YTD) Lake Chelan $182 vs $223 (operating expense ~76 YTD)
5162018 7
Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
Water cost per 1000 gallons better than budgetYTD $1k gallons result $692 vs $705 (actual vs budget)
YTD operating expense 99 of budget
Wastewater cost per ERU better than budgetYTD $ERU result $194 vs $226 (actual vs budget)
YTD operating expense 86 of budget
Fiber cost per active premise higher than budgetYTD $premise result $121 vs $107 (actual vs budget)
YTD operating expense 113 of budget due to timing of core system support contract payment
8
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Service Revenue 66795 64693 103
Net Wholesale Revenue 108312 108001 100
Hydro LT Contract RevOther PP 118788 119795 99
Other Operating Revenue 21669 21129 103
Other Operating Expense (171097) (173846) 98
Depreciation amp Tax Expense (51828) (52016) 100
Operating Income(Loss) 92639 87755 106
Non-Operating Activity (14790) (15913) 93Bottom Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
2018 Bottom-Line Results
8
Cognos_Office_Connection_Cache
Sheet1
9
Business Line ldquoBottom-Linerdquo Results
5162018
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Cost-Based Activity 35918 35569 101
Market-Based Activity 47332 47081 101
Retail Activity (20702) (25986) 80
Other Activity 11280 11014 102
Integrated Electric 73827 67679 109Fiber amp Telecom 3820 3839 100Water 559 696 80Wastewater (358) (372) 96Combined Bottom-Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
10
Capital Expenditures
5162018
(in 000s)2018 YTD Current
2018 YTD Budget
of budget
2018 Current Forecast
2018 Budget
of Budget
Electric Distribution 2241 1920 117 14000 14293 98
Network Transmission 288 736 39 2663 2929 91
Rocky Reach 814 558 146 7966 8111 98
Rock Island 4274 7577 56 79660 83778 95
Lake Chelan 123 132 93 1740 1404 124
Internal Services 999 3120 32 19710 21047 94
Fiber amp Telecom 786 904 87 5158 5547 93
Water 50 76 65 1299 1236 105
Wastewater 46 206 22 1609 1339 120
Total Expenditures 9621 15231 63 133805 139685 96
Contributions (1716) (907) 189 (3821) (3797) 101
Capital net of CIAC 7904 14324 55 129984 135887 96
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Cost-Based Activity | 35918 | 35569 | 101 | 35017 | 3 | ||||||
Market-Based Activity | 47332 | 47081 | 101 | 45560 | 4 | ||||||
Retail Activity | (20702) | (25986) | 80 | (25933) | 20 | ||||||
Other Activity | 11280 | 11014 | 102 | 11835 | -5 | ||||||
Integrated Electric | 73827 | 67679 | 109 | 66480 | 11 | ||||||
Fiber amp Telecom | 3820 | 3839 | 100 | 3834 | -0 | ||||||
Water | 559 | 696 | 80 | 701 | -20 | ||||||
Wastewater | (358) | (372) | 96 | (370) | 3 | ||||||
Combined Bottom-Line | 77849 | 71842 | 108 | 70645 | 10 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Service Revenue | 66795 | 64693 | 103 | 64693 | 3 | ||||||
Net Wholesale Revenue | 108312 | 108001 | 100 | 106638 | 2 | ||||||
Hydro LT Contract RevOther PP | 118788 | 119795 | 99 | 119256 | -0 | ||||||
Other Operating Revenue | 21669 | 21129 | 103 | 21129 | 3 | ||||||
Other Operating Expense | (171097) | (173846) | 98 | (173846) | 2 | ||||||
Depreciation amp Tax Expense | (51828) | (52016) | 100 | (52326) | 1 | ||||||
Operating Income(Loss) | 92639 | 87755 | 106 | 85544 | 8 | ||||||
Non-Operating Activity | (14790) | (15913) | 93 | (14898) | 1 | ||||||
Bottom Line | 77849 | 71842 | 108 | 70645 | 10 |
OverviewCapital Cash
bull Capital expenditures overall are lagging the planned pace and below budget YTD ($56M)
bull Spending is ahead of pace YTD for Distribution and Rocky Reach and expected to be just under budget by year end
bull The Rock Island modernization timeline is under review with some projects likely to shift to 2019 partially offset by accelerations to 2018
Total Capital forecasted to hit $1338M which is below budget for
the year ($6M)
bull Positive bottom line and lower capital spending has increased cash and investments YTD by $178M
Total cash balance forecasted to be better than budget at
year end $4662M
5
Debtbull Total debt is the same as budget YTD
Total debt forecasted to equal budgeted $24M reduction with balance at year end $5135M
5162018 6
Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
Electric delivered cost per avg kWh better than budgetYTD centkWh result 483cent vs 532cent (actual vs budget)
Power production costs- 200cent vs 229cent (actual vs budget)Power distribution costs- 283cent vs 303cent (actual vs budget)
(Note Fully loaded cost is not a cost of service analysis which includes offsets)
Hydro production cost per avg MWh better than budgetYTD $MWh result $169 vs $178 (actual vs budget)
Actual vs Budget Rocky Reach $127 vs $129 (operating expense ~88 YTD)Rock Island $253 vs $273 (operating expense ~89 YTD) Lake Chelan $182 vs $223 (operating expense ~76 YTD)
5162018 7
Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
Water cost per 1000 gallons better than budgetYTD $1k gallons result $692 vs $705 (actual vs budget)
YTD operating expense 99 of budget
Wastewater cost per ERU better than budgetYTD $ERU result $194 vs $226 (actual vs budget)
YTD operating expense 86 of budget
Fiber cost per active premise higher than budgetYTD $premise result $121 vs $107 (actual vs budget)
YTD operating expense 113 of budget due to timing of core system support contract payment
8
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Service Revenue 66795 64693 103
Net Wholesale Revenue 108312 108001 100
Hydro LT Contract RevOther PP 118788 119795 99
Other Operating Revenue 21669 21129 103
Other Operating Expense (171097) (173846) 98
Depreciation amp Tax Expense (51828) (52016) 100
Operating Income(Loss) 92639 87755 106
Non-Operating Activity (14790) (15913) 93Bottom Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
2018 Bottom-Line Results
8
Cognos_Office_Connection_Cache
Sheet1
9
Business Line ldquoBottom-Linerdquo Results
5162018
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Cost-Based Activity 35918 35569 101
Market-Based Activity 47332 47081 101
Retail Activity (20702) (25986) 80
Other Activity 11280 11014 102
Integrated Electric 73827 67679 109Fiber amp Telecom 3820 3839 100Water 559 696 80Wastewater (358) (372) 96Combined Bottom-Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
10
Capital Expenditures
5162018
(in 000s)2018 YTD Current
2018 YTD Budget
of budget
2018 Current Forecast
2018 Budget
of Budget
Electric Distribution 2241 1920 117 14000 14293 98
Network Transmission 288 736 39 2663 2929 91
Rocky Reach 814 558 146 7966 8111 98
Rock Island 4274 7577 56 79660 83778 95
Lake Chelan 123 132 93 1740 1404 124
Internal Services 999 3120 32 19710 21047 94
Fiber amp Telecom 786 904 87 5158 5547 93
Water 50 76 65 1299 1236 105
Wastewater 46 206 22 1609 1339 120
Total Expenditures 9621 15231 63 133805 139685 96
Contributions (1716) (907) 189 (3821) (3797) 101
Capital net of CIAC 7904 14324 55 129984 135887 96
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Cost-Based Activity | 35918 | 35569 | 101 | 35017 | 3 | ||||||
Market-Based Activity | 47332 | 47081 | 101 | 45560 | 4 | ||||||
Retail Activity | (20702) | (25986) | 80 | (25933) | 20 | ||||||
Other Activity | 11280 | 11014 | 102 | 11835 | -5 | ||||||
Integrated Electric | 73827 | 67679 | 109 | 66480 | 11 | ||||||
Fiber amp Telecom | 3820 | 3839 | 100 | 3834 | -0 | ||||||
Water | 559 | 696 | 80 | 701 | -20 | ||||||
Wastewater | (358) | (372) | 96 | (370) | 3 | ||||||
Combined Bottom-Line | 77849 | 71842 | 108 | 70645 | 10 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Service Revenue | 66795 | 64693 | 103 | 64693 | 3 | ||||||
Net Wholesale Revenue | 108312 | 108001 | 100 | 106638 | 2 | ||||||
Hydro LT Contract RevOther PP | 118788 | 119795 | 99 | 119256 | -0 | ||||||
Other Operating Revenue | 21669 | 21129 | 103 | 21129 | 3 | ||||||
Other Operating Expense | (171097) | (173846) | 98 | (173846) | 2 | ||||||
Depreciation amp Tax Expense | (51828) | (52016) | 100 | (52326) | 1 | ||||||
Operating Income(Loss) | 92639 | 87755 | 106 | 85544 | 8 | ||||||
Non-Operating Activity | (14790) | (15913) | 93 | (14898) | 1 | ||||||
Bottom Line | 77849 | 71842 | 108 | 70645 | 10 |
5162018 6
Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
Electric delivered cost per avg kWh better than budgetYTD centkWh result 483cent vs 532cent (actual vs budget)
Power production costs- 200cent vs 229cent (actual vs budget)Power distribution costs- 283cent vs 303cent (actual vs budget)
(Note Fully loaded cost is not a cost of service analysis which includes offsets)
Hydro production cost per avg MWh better than budgetYTD $MWh result $169 vs $178 (actual vs budget)
Actual vs Budget Rocky Reach $127 vs $129 (operating expense ~88 YTD)Rock Island $253 vs $273 (operating expense ~89 YTD) Lake Chelan $182 vs $223 (operating expense ~76 YTD)
5162018 7
Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
Water cost per 1000 gallons better than budgetYTD $1k gallons result $692 vs $705 (actual vs budget)
YTD operating expense 99 of budget
Wastewater cost per ERU better than budgetYTD $ERU result $194 vs $226 (actual vs budget)
YTD operating expense 86 of budget
Fiber cost per active premise higher than budgetYTD $premise result $121 vs $107 (actual vs budget)
YTD operating expense 113 of budget due to timing of core system support contract payment
8
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Service Revenue 66795 64693 103
Net Wholesale Revenue 108312 108001 100
Hydro LT Contract RevOther PP 118788 119795 99
Other Operating Revenue 21669 21129 103
Other Operating Expense (171097) (173846) 98
Depreciation amp Tax Expense (51828) (52016) 100
Operating Income(Loss) 92639 87755 106
Non-Operating Activity (14790) (15913) 93Bottom Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
2018 Bottom-Line Results
8
Cognos_Office_Connection_Cache
Sheet1
9
Business Line ldquoBottom-Linerdquo Results
5162018
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Cost-Based Activity 35918 35569 101
Market-Based Activity 47332 47081 101
Retail Activity (20702) (25986) 80
Other Activity 11280 11014 102
Integrated Electric 73827 67679 109Fiber amp Telecom 3820 3839 100Water 559 696 80Wastewater (358) (372) 96Combined Bottom-Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
10
Capital Expenditures
5162018
(in 000s)2018 YTD Current
2018 YTD Budget
of budget
2018 Current Forecast
2018 Budget
of Budget
Electric Distribution 2241 1920 117 14000 14293 98
Network Transmission 288 736 39 2663 2929 91
Rocky Reach 814 558 146 7966 8111 98
Rock Island 4274 7577 56 79660 83778 95
Lake Chelan 123 132 93 1740 1404 124
Internal Services 999 3120 32 19710 21047 94
Fiber amp Telecom 786 904 87 5158 5547 93
Water 50 76 65 1299 1236 105
Wastewater 46 206 22 1609 1339 120
Total Expenditures 9621 15231 63 133805 139685 96
Contributions (1716) (907) 189 (3821) (3797) 101
Capital net of CIAC 7904 14324 55 129984 135887 96
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Cost-Based Activity | 35918 | 35569 | 101 | 35017 | 3 | ||||||
Market-Based Activity | 47332 | 47081 | 101 | 45560 | 4 | ||||||
Retail Activity | (20702) | (25986) | 80 | (25933) | 20 | ||||||
Other Activity | 11280 | 11014 | 102 | 11835 | -5 | ||||||
Integrated Electric | 73827 | 67679 | 109 | 66480 | 11 | ||||||
Fiber amp Telecom | 3820 | 3839 | 100 | 3834 | -0 | ||||||
Water | 559 | 696 | 80 | 701 | -20 | ||||||
Wastewater | (358) | (372) | 96 | (370) | 3 | ||||||
Combined Bottom-Line | 77849 | 71842 | 108 | 70645 | 10 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Service Revenue | 66795 | 64693 | 103 | 64693 | 3 | ||||||
Net Wholesale Revenue | 108312 | 108001 | 100 | 106638 | 2 | ||||||
Hydro LT Contract RevOther PP | 118788 | 119795 | 99 | 119256 | -0 | ||||||
Other Operating Revenue | 21669 | 21129 | 103 | 21129 | 3 | ||||||
Other Operating Expense | (171097) | (173846) | 98 | (173846) | 2 | ||||||
Depreciation amp Tax Expense | (51828) | (52016) | 100 | (52326) | 1 | ||||||
Operating Income(Loss) | 92639 | 87755 | 106 | 85544 | 8 | ||||||
Non-Operating Activity | (14790) | (15913) | 93 | (14898) | 1 | ||||||
Bottom Line | 77849 | 71842 | 108 | 70645 | 10 |
5162018 7
Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
Water cost per 1000 gallons better than budgetYTD $1k gallons result $692 vs $705 (actual vs budget)
YTD operating expense 99 of budget
Wastewater cost per ERU better than budgetYTD $ERU result $194 vs $226 (actual vs budget)
YTD operating expense 86 of budget
Fiber cost per active premise higher than budgetYTD $premise result $121 vs $107 (actual vs budget)
YTD operating expense 113 of budget due to timing of core system support contract payment
8
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Service Revenue 66795 64693 103
Net Wholesale Revenue 108312 108001 100
Hydro LT Contract RevOther PP 118788 119795 99
Other Operating Revenue 21669 21129 103
Other Operating Expense (171097) (173846) 98
Depreciation amp Tax Expense (51828) (52016) 100
Operating Income(Loss) 92639 87755 106
Non-Operating Activity (14790) (15913) 93Bottom Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
2018 Bottom-Line Results
8
Cognos_Office_Connection_Cache
Sheet1
9
Business Line ldquoBottom-Linerdquo Results
5162018
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Cost-Based Activity 35918 35569 101
Market-Based Activity 47332 47081 101
Retail Activity (20702) (25986) 80
Other Activity 11280 11014 102
Integrated Electric 73827 67679 109Fiber amp Telecom 3820 3839 100Water 559 696 80Wastewater (358) (372) 96Combined Bottom-Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
10
Capital Expenditures
5162018
(in 000s)2018 YTD Current
2018 YTD Budget
of budget
2018 Current Forecast
2018 Budget
of Budget
Electric Distribution 2241 1920 117 14000 14293 98
Network Transmission 288 736 39 2663 2929 91
Rocky Reach 814 558 146 7966 8111 98
Rock Island 4274 7577 56 79660 83778 95
Lake Chelan 123 132 93 1740 1404 124
Internal Services 999 3120 32 19710 21047 94
Fiber amp Telecom 786 904 87 5158 5547 93
Water 50 76 65 1299 1236 105
Wastewater 46 206 22 1609 1339 120
Total Expenditures 9621 15231 63 133805 139685 96
Contributions (1716) (907) 189 (3821) (3797) 101
Capital net of CIAC 7904 14324 55 129984 135887 96
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Cost-Based Activity | 35918 | 35569 | 101 | 35017 | 3 | ||||||
Market-Based Activity | 47332 | 47081 | 101 | 45560 | 4 | ||||||
Retail Activity | (20702) | (25986) | 80 | (25933) | 20 | ||||||
Other Activity | 11280 | 11014 | 102 | 11835 | -5 | ||||||
Integrated Electric | 73827 | 67679 | 109 | 66480 | 11 | ||||||
Fiber amp Telecom | 3820 | 3839 | 100 | 3834 | -0 | ||||||
Water | 559 | 696 | 80 | 701 | -20 | ||||||
Wastewater | (358) | (372) | 96 | (370) | 3 | ||||||
Combined Bottom-Line | 77849 | 71842 | 108 | 70645 | 10 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Service Revenue | 66795 | 64693 | 103 | 64693 | 3 | ||||||
Net Wholesale Revenue | 108312 | 108001 | 100 | 106638 | 2 | ||||||
Hydro LT Contract RevOther PP | 118788 | 119795 | 99 | 119256 | -0 | ||||||
Other Operating Revenue | 21669 | 21129 | 103 | 21129 | 3 | ||||||
Other Operating Expense | (171097) | (173846) | 98 | (173846) | 2 | ||||||
Depreciation amp Tax Expense | (51828) | (52016) | 100 | (52326) | 1 | ||||||
Operating Income(Loss) | 92639 | 87755 | 106 | 85544 | 8 | ||||||
Non-Operating Activity | (14790) | (15913) | 93 | (14898) | 1 | ||||||
Bottom Line | 77849 | 71842 | 108 | 70645 | 10 |
8
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Service Revenue 66795 64693 103
Net Wholesale Revenue 108312 108001 100
Hydro LT Contract RevOther PP 118788 119795 99
Other Operating Revenue 21669 21129 103
Other Operating Expense (171097) (173846) 98
Depreciation amp Tax Expense (51828) (52016) 100
Operating Income(Loss) 92639 87755 106
Non-Operating Activity (14790) (15913) 93Bottom Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
2018 Bottom-Line Results
8
Cognos_Office_Connection_Cache
Sheet1
9
Business Line ldquoBottom-Linerdquo Results
5162018
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Cost-Based Activity 35918 35569 101
Market-Based Activity 47332 47081 101
Retail Activity (20702) (25986) 80
Other Activity 11280 11014 102
Integrated Electric 73827 67679 109Fiber amp Telecom 3820 3839 100Water 559 696 80Wastewater (358) (372) 96Combined Bottom-Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
10
Capital Expenditures
5162018
(in 000s)2018 YTD Current
2018 YTD Budget
of budget
2018 Current Forecast
2018 Budget
of Budget
Electric Distribution 2241 1920 117 14000 14293 98
Network Transmission 288 736 39 2663 2929 91
Rocky Reach 814 558 146 7966 8111 98
Rock Island 4274 7577 56 79660 83778 95
Lake Chelan 123 132 93 1740 1404 124
Internal Services 999 3120 32 19710 21047 94
Fiber amp Telecom 786 904 87 5158 5547 93
Water 50 76 65 1299 1236 105
Wastewater 46 206 22 1609 1339 120
Total Expenditures 9621 15231 63 133805 139685 96
Contributions (1716) (907) 189 (3821) (3797) 101
Capital net of CIAC 7904 14324 55 129984 135887 96
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Cost-Based Activity | 35918 | 35569 | 101 | 35017 | 3 | ||||||
Market-Based Activity | 47332 | 47081 | 101 | 45560 | 4 | ||||||
Retail Activity | (20702) | (25986) | 80 | (25933) | 20 | ||||||
Other Activity | 11280 | 11014 | 102 | 11835 | -5 | ||||||
Integrated Electric | 73827 | 67679 | 109 | 66480 | 11 | ||||||
Fiber amp Telecom | 3820 | 3839 | 100 | 3834 | -0 | ||||||
Water | 559 | 696 | 80 | 701 | -20 | ||||||
Wastewater | (358) | (372) | 96 | (370) | 3 | ||||||
Combined Bottom-Line | 77849 | 71842 | 108 | 70645 | 10 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Service Revenue | 66795 | 64693 | 103 | 64693 | 3 | ||||||
Net Wholesale Revenue | 108312 | 108001 | 100 | 106638 | 2 | ||||||
Hydro LT Contract RevOther PP | 118788 | 119795 | 99 | 119256 | -0 | ||||||
Other Operating Revenue | 21669 | 21129 | 103 | 21129 | 3 | ||||||
Other Operating Expense | (171097) | (173846) | 98 | (173846) | 2 | ||||||
Depreciation amp Tax Expense | (51828) | (52016) | 100 | (52326) | 1 | ||||||
Operating Income(Loss) | 92639 | 87755 | 106 | 85544 | 8 | ||||||
Non-Operating Activity | (14790) | (15913) | 93 | (14898) | 1 | ||||||
Bottom Line | 77849 | 71842 | 108 | 70645 | 10 |
Cognos_Office_Connection_Cache
Sheet1
9
Business Line ldquoBottom-Linerdquo Results
5162018
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Cost-Based Activity 35918 35569 101
Market-Based Activity 47332 47081 101
Retail Activity (20702) (25986) 80
Other Activity 11280 11014 102
Integrated Electric 73827 67679 109Fiber amp Telecom 3820 3839 100Water 559 696 80Wastewater (358) (372) 96Combined Bottom-Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
10
Capital Expenditures
5162018
(in 000s)2018 YTD Current
2018 YTD Budget
of budget
2018 Current Forecast
2018 Budget
of Budget
Electric Distribution 2241 1920 117 14000 14293 98
Network Transmission 288 736 39 2663 2929 91
Rocky Reach 814 558 146 7966 8111 98
Rock Island 4274 7577 56 79660 83778 95
Lake Chelan 123 132 93 1740 1404 124
Internal Services 999 3120 32 19710 21047 94
Fiber amp Telecom 786 904 87 5158 5547 93
Water 50 76 65 1299 1236 105
Wastewater 46 206 22 1609 1339 120
Total Expenditures 9621 15231 63 133805 139685 96
Contributions (1716) (907) 189 (3821) (3797) 101
Capital net of CIAC 7904 14324 55 129984 135887 96
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Cost-Based Activity | 35918 | 35569 | 101 | 35017 | 3 | ||||||
Market-Based Activity | 47332 | 47081 | 101 | 45560 | 4 | ||||||
Retail Activity | (20702) | (25986) | 80 | (25933) | 20 | ||||||
Other Activity | 11280 | 11014 | 102 | 11835 | -5 | ||||||
Integrated Electric | 73827 | 67679 | 109 | 66480 | 11 | ||||||
Fiber amp Telecom | 3820 | 3839 | 100 | 3834 | -0 | ||||||
Water | 559 | 696 | 80 | 701 | -20 | ||||||
Wastewater | (358) | (372) | 96 | (370) | 3 | ||||||
Combined Bottom-Line | 77849 | 71842 | 108 | 70645 | 10 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Service Revenue | 66795 | 64693 | 103 | 64693 | 3 | ||||||
Net Wholesale Revenue | 108312 | 108001 | 100 | 106638 | 2 | ||||||
Hydro LT Contract RevOther PP | 118788 | 119795 | 99 | 119256 | -0 | ||||||
Other Operating Revenue | 21669 | 21129 | 103 | 21129 | 3 | ||||||
Other Operating Expense | (171097) | (173846) | 98 | (173846) | 2 | ||||||
Depreciation amp Tax Expense | (51828) | (52016) | 100 | (52326) | 1 | ||||||
Operating Income(Loss) | 92639 | 87755 | 106 | 85544 | 8 | ||||||
Non-Operating Activity | (14790) | (15913) | 93 | (14898) | 1 | ||||||
Bottom Line | 77849 | 71842 | 108 | 70645 | 10 |
Sheet1
9
Business Line ldquoBottom-Linerdquo Results
5162018
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Cost-Based Activity 35918 35569 101
Market-Based Activity 47332 47081 101
Retail Activity (20702) (25986) 80
Other Activity 11280 11014 102
Integrated Electric 73827 67679 109Fiber amp Telecom 3820 3839 100Water 559 696 80Wastewater (358) (372) 96Combined Bottom-Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
10
Capital Expenditures
5162018
(in 000s)2018 YTD Current
2018 YTD Budget
of budget
2018 Current Forecast
2018 Budget
of Budget
Electric Distribution 2241 1920 117 14000 14293 98
Network Transmission 288 736 39 2663 2929 91
Rocky Reach 814 558 146 7966 8111 98
Rock Island 4274 7577 56 79660 83778 95
Lake Chelan 123 132 93 1740 1404 124
Internal Services 999 3120 32 19710 21047 94
Fiber amp Telecom 786 904 87 5158 5547 93
Water 50 76 65 1299 1236 105
Wastewater 46 206 22 1609 1339 120
Total Expenditures 9621 15231 63 133805 139685 96
Contributions (1716) (907) 189 (3821) (3797) 101
Capital net of CIAC 7904 14324 55 129984 135887 96
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Cost-Based Activity | 35918 | 35569 | 101 | 35017 | 3 | ||||||
Market-Based Activity | 47332 | 47081 | 101 | 45560 | 4 | ||||||
Retail Activity | (20702) | (25986) | 80 | (25933) | 20 | ||||||
Other Activity | 11280 | 11014 | 102 | 11835 | -5 | ||||||
Integrated Electric | 73827 | 67679 | 109 | 66480 | 11 | ||||||
Fiber amp Telecom | 3820 | 3839 | 100 | 3834 | -0 | ||||||
Water | 559 | 696 | 80 | 701 | -20 | ||||||
Wastewater | (358) | (372) | 96 | (370) | 3 | ||||||
Combined Bottom-Line | 77849 | 71842 | 108 | 70645 | 10 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Service Revenue | 66795 | 64693 | 103 | 64693 | 3 | ||||||
Net Wholesale Revenue | 108312 | 108001 | 100 | 106638 | 2 | ||||||
Hydro LT Contract RevOther PP | 118788 | 119795 | 99 | 119256 | -0 | ||||||
Other Operating Revenue | 21669 | 21129 | 103 | 21129 | 3 | ||||||
Other Operating Expense | (171097) | (173846) | 98 | (173846) | 2 | ||||||
Depreciation amp Tax Expense | (51828) | (52016) | 100 | (52326) | 1 | ||||||
Operating Income(Loss) | 92639 | 87755 | 106 | 85544 | 8 | ||||||
Non-Operating Activity | (14790) | (15913) | 93 | (14898) | 1 | ||||||
Bottom Line | 77849 | 71842 | 108 | 70645 | 10 |
9
Business Line ldquoBottom-Linerdquo Results
5162018
(in 000s)
2018 Current Forecast
2018 Budget
of budget
Cost-Based Activity 35918 35569 101
Market-Based Activity 47332 47081 101
Retail Activity (20702) (25986) 80
Other Activity 11280 11014 102
Integrated Electric 73827 67679 109Fiber amp Telecom 3820 3839 100Water 559 696 80Wastewater (358) (372) 96Combined Bottom-Line 77849 71842 108
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
10
Capital Expenditures
5162018
(in 000s)2018 YTD Current
2018 YTD Budget
of budget
2018 Current Forecast
2018 Budget
of Budget
Electric Distribution 2241 1920 117 14000 14293 98
Network Transmission 288 736 39 2663 2929 91
Rocky Reach 814 558 146 7966 8111 98
Rock Island 4274 7577 56 79660 83778 95
Lake Chelan 123 132 93 1740 1404 124
Internal Services 999 3120 32 19710 21047 94
Fiber amp Telecom 786 904 87 5158 5547 93
Water 50 76 65 1299 1236 105
Wastewater 46 206 22 1609 1339 120
Total Expenditures 9621 15231 63 133805 139685 96
Contributions (1716) (907) 189 (3821) (3797) 101
Capital net of CIAC 7904 14324 55 129984 135887 96
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Cost-Based Activity | 35918 | 35569 | 101 | 35017 | 3 | ||||||
Market-Based Activity | 47332 | 47081 | 101 | 45560 | 4 | ||||||
Retail Activity | (20702) | (25986) | 80 | (25933) | 20 | ||||||
Other Activity | 11280 | 11014 | 102 | 11835 | -5 | ||||||
Integrated Electric | 73827 | 67679 | 109 | 66480 | 11 | ||||||
Fiber amp Telecom | 3820 | 3839 | 100 | 3834 | -0 | ||||||
Water | 559 | 696 | 80 | 701 | -20 | ||||||
Wastewater | (358) | (372) | 96 | (370) | 3 | ||||||
Combined Bottom-Line | 77849 | 71842 | 108 | 70645 | 10 |
Cognos_Office_Connection_Cache
Sheet1
10
Capital Expenditures
5162018
(in 000s)2018 YTD Current
2018 YTD Budget
of budget
2018 Current Forecast
2018 Budget
of Budget
Electric Distribution 2241 1920 117 14000 14293 98
Network Transmission 288 736 39 2663 2929 91
Rocky Reach 814 558 146 7966 8111 98
Rock Island 4274 7577 56 79660 83778 95
Lake Chelan 123 132 93 1740 1404 124
Internal Services 999 3120 32 19710 21047 94
Fiber amp Telecom 786 904 87 5158 5547 93
Water 50 76 65 1299 1236 105
Wastewater 46 206 22 1609 1339 120
Total Expenditures 9621 15231 63 133805 139685 96
Contributions (1716) (907) 189 (3821) (3797) 101
Capital net of CIAC 7904 14324 55 129984 135887 96
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Cost-Based Activity | 35918 | 35569 | 101 | 35017 | 3 | ||||||
Market-Based Activity | 47332 | 47081 | 101 | 45560 | 4 | ||||||
Retail Activity | (20702) | (25986) | 80 | (25933) | 20 | ||||||
Other Activity | 11280 | 11014 | 102 | 11835 | -5 | ||||||
Integrated Electric | 73827 | 67679 | 109 | 66480 | 11 | ||||||
Fiber amp Telecom | 3820 | 3839 | 100 | 3834 | -0 | ||||||
Water | 559 | 696 | 80 | 701 | -20 | ||||||
Wastewater | (358) | (372) | 96 | (370) | 3 | ||||||
Combined Bottom-Line | 77849 | 71842 | 108 | 70645 | 10 |
Sheet1
10
Capital Expenditures
5162018
(in 000s)2018 YTD Current
2018 YTD Budget
of budget
2018 Current Forecast
2018 Budget
of Budget
Electric Distribution 2241 1920 117 14000 14293 98
Network Transmission 288 736 39 2663 2929 91
Rocky Reach 814 558 146 7966 8111 98
Rock Island 4274 7577 56 79660 83778 95
Lake Chelan 123 132 93 1740 1404 124
Internal Services 999 3120 32 19710 21047 94
Fiber amp Telecom 786 904 87 5158 5547 93
Water 50 76 65 1299 1236 105
Wastewater 46 206 22 1609 1339 120
Total Expenditures 9621 15231 63 133805 139685 96
Contributions (1716) (907) 189 (3821) (3797) 101
Capital net of CIAC 7904 14324 55 129984 135887 96
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
(in 000s) | 2018 Current Forecast | 2018 Budget | of budget | 2018 Prior Forecast | change from prior | ||||||
Cost-Based Activity | 35918 | 35569 | 101 | 35017 | 3 | ||||||
Market-Based Activity | 47332 | 47081 | 101 | 45560 | 4 | ||||||
Retail Activity | (20702) | (25986) | 80 | (25933) | 20 | ||||||
Other Activity | 11280 | 11014 | 102 | 11835 | -5 | ||||||
Integrated Electric | 73827 | 67679 | 109 | 66480 | 11 | ||||||
Fiber amp Telecom | 3820 | 3839 | 100 | 3834 | -0 | ||||||
Water | 559 | 696 | 80 | 701 | -20 | ||||||
Wastewater | (358) | (372) | 96 | (370) | 3 | ||||||
Combined Bottom-Line | 77849 | 71842 | 108 | 70645 | 10 |
10
Capital Expenditures
5162018
(in 000s)2018 YTD Current
2018 YTD Budget
of budget
2018 Current Forecast
2018 Budget
of Budget
Electric Distribution 2241 1920 117 14000 14293 98
Network Transmission 288 736 39 2663 2929 91
Rocky Reach 814 558 146 7966 8111 98
Rock Island 4274 7577 56 79660 83778 95
Lake Chelan 123 132 93 1740 1404 124
Internal Services 999 3120 32 19710 21047 94
Fiber amp Telecom 786 904 87 5158 5547 93
Water 50 76 65 1299 1236 105
Wastewater 46 206 22 1609 1339 120
Total Expenditures 9621 15231 63 133805 139685 96
Contributions (1716) (907) 189 (3821) (3797) 101
Capital net of CIAC 7904 14324 55 129984 135887 96
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
Cognos_Office_Connection_Cache
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
Sheet1
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
(in 000s) | 2018 YTD Current | 2018 YTD Budget | of budget | 0 | 2018 Current Forecast | 2018 Budget | of Budget | ||||||||
Electric Distribution | 2241 | 1920 | 117 | - 0 | 14000 | 14293 | 98 | ||||||||
Network Transmission | 288 | 736 | 39 | - 0 | 2663 | 2929 | 91 | ||||||||
Rocky Reach | 814 | 558 | 146 | - 0 | 7966 | 8111 | 98 | ||||||||
Rock Island | 4274 | 7577 | 56 | - 0 | 79660 | 83778 | 95 | ||||||||
Lake Chelan | 123 | 132 | 93 | - 0 | 1740 | 1404 | 124 | ||||||||
Internal Services | 999 | 3120 | 32 | - 0 | 19710 | 21047 | 94 | ||||||||
Fiber amp Telecom | 786 | 904 | 87 | - 0 | 5158 | 5547 | 93 | ||||||||
Water | 50 | 76 | 65 | - 0 | 1299 | 1236 | 105 | ||||||||
Wastewater | 46 | 206 | 22 | - 0 | 1609 | 1339 | 120 | ||||||||
Total Expenditures | 9621 | 15231 | 63 | - 0 | 133805 | 139685 | 96 | ||||||||
Contributions | (1716) | (907) | 189 | - 0 | (3821) | (3797) | 101 | ||||||||
Capital net of CIAC | 7904 | 14324 | 55 | - 0 | 129984 | 135887 | 96 |
Overview of YTD - 2018 Cash Flow$ Million
Bottomndashline result (YTD - 2018) $ 25Add back non-cash related items (depreciation) $ 12
Estimated earned funds from operations $ 37
Capital Project Expenditures $ 10Net Debt Reductions $ ---Other Misc Impacts (change in AR AP Inventory Etc) $ 9 Added to cash reserves $ 18
Estimated use of funds $37
5162018 11
Cash and investments beginning of year $ 511Added to cash reserves $18Cash and investments end of Q1 $ 529
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
Cash amp Investments Balance
5162018 12
($ Millions) 33118 123117
Unrestricted funds $338 $327
Board Designated
HeadquartersService Center Strategic Facilities Fund 20 20
Unrestricted funds 358 347
Restricted ndash DRC amp CRC funds for Hydro capitaldebt 78 78
Total Liquidity (policy minimum $175M) $436 $425
Restricted - bond reserve funds 61 53Restricted - power contract deposits 23 21Restricted - self insurance and other funds 9 12
Total Cash and Investments $529 $511
Board Designated Funds qualify as unrestricted for liquidity and external reporting purposes Additional $30M designated by Board subsequent to 33118
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
Quarterly Reporting Requirement - Financial PoliciesDistrict Combined 2018 2019 2020 2021 2022
Liquidity - $175M Min (Expected) $378M $320M $278M $221M $180M
Liquidity - $175M Min (Unusual) $313M $266M $200M $178M
Debt Ratio (Expected lt35 by 2019) 346 314 286 257 232
Debt Ratio (Unusual lt35 by 2019) 315 288 261 252
Days Cash on Hand (Expected gt250) 603 513 436 352 281
Days Cash on Hand (Unusual gt 250) 502 417 319 279
Combined Debt Cover (Expected gt 200x) 290 274 246 241 237
Combined Debt Cover (Unusual gt125x) 264 235 225 207
Rate of Return (Expected gt 4 thru 2019) 65 52Sunset
Rate of Return (Unusual gt 2 thru 2019) 48
Bottom Line Results (Expected) $78M $66M $52M $50M $46M
Bottom Line Results (Unusual) $61M $46M $42M $35M
Outstanding Debt (Expected) $514M $474M $435M $394M $358M
Outstanding Debt (Unusual) $474M $435M $394M $388M
The information in this schedule contains forward-looking information and projections Such projections are necessarily subject to various risks and uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in making such projections and actual outcomes and certain other risks 13
Assumed issuance of debt to maintain liquidity
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022WATER Business Line
Operating Expense Coverage (target gt120) 134 133 137 133 135
Cash Reserves (target gt $125 million) $36M $33M $25M $13M $14M
Debt Ratio (target lt35) 11 9 7 5 4
WASTEWATER Business Line
Operating Expense Coverage (target gt100 by 2019) 81 102 101 100 99
Cash Reserves (target gt $200K) $23M $27M $29M $27M $27M
Debt Ratio (target lt35) --- 18 17 24 23
FIBER Business Line
Operating Expense Coverage (target gt120) 166 147 155 149 144
Cash Reserves (target gt $20 million) $130M $121M $120M $135M $148M
Debt Ratio (target lt35) --- --- --- --- ---
14
Corrective actions will be determined through the business planning process
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
Quarterly Reporting RequirementIndividual Business Line Financial Policies
Business Lines 2018 2019 2020 2021 2022
Integrated Electric Business Line
Retail Total Cost Ratio (target) gt65 gt65 gt65 gt65 gt65
Retail Total Cost Ratio 72 70 68 70 67
Retail OMampT Cost Ratio (target) gt 90 gt 90 gt 90 gt 90 gt 90
Retail OMampT Cost Ratio 94 93 90 95 92
Retail Rate Support Limit (target) $256M $263M $269M $276M $283M
Retail Rate Support $207M $229M $265M $251M $289M
Market Based Margin Limit (target) $250M $250M $250M $250M $250M
Market Based Margin $473M $430M $310M $273M $267M
15
These are ldquotestrdquo metrics developed during 2018-2022 business planningMonitoring during
test period
Metrics indicating that our electric revenues may not be keeping up with our costs as we continue to make significant investments in our assets
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
Quarterly Investment ReportIn compliance with District Banking and Investment Policy 16-14094
bull Q1 2018 yield increased slightly to 188 due to improving market interest rates
bull March 21 2018 Federal Open Market Committee meeting reportndash Labor market has continued to strengthen unemployment has stayed
lowndash Inflation rate is running below 2 longer-run objective continue to
monitor and near term outlook appears stablendash Federal funds rate target changed from 150 to 175ndash Gradually increasing although continued relatively low rates are
anticipated through 2018bull Uncertainty around changes in the political climate can influence financial
markets which may impact the Districtbull Laddered investment structure continues to be our strategy to support
safety of principal and liquidity and mitigate interest rate volatility
Q2 2017 Q3 2017 Q4 2017 Q1 2018 YTD 2018 WAM
Average Invested Book Value ($M) $499 $471 $498 $517 $517
District Yield 166 174 176 188 188 792
Benchmarks
3 Month T-Bill 092 106 123 158 158 90
SampP US Treasury 1-3 Year Index 131 138 113 129 129 683
Prior Barclays index replaced Q4 2017 with SampP index and rolling 2 year average to align duration and improve comparability
Full report is in the Appendix
Policy Objectives amp Compliance Safety Liquidity Return on Investment DiversificationMaturity Length
16
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
Q1 Key Messages
17
Early forecasts are a little better than budget
Long-term financial metrics policies on track
Stay the course with our strategic goalsReinvest in assets and peopleReduce debt Continue public power benefit program
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
18
Appendix
The information in the appendix contains forward-looking information and projections Such projections are necessarily subject to various risks and
uncertainties Actual results could and likely will differ materially from those projected in part as a result of differences between assumptions utilized in
making such projections and actual outcomes and certain other risks
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
Net Wholesale Revenue
YTD result $12 million above budget ($255M vs $243M)
Annual forecast higher than budget ($1083M vs $1080)
Drivers+ Generation 112 of budget YTD- Retail energy use 107 of budget YTD - Hedging program minimizes impact of 2018 flat price $188 vs $228 budget
Hydro Long-Term Contract Revenue
YTD result $16 million below budget ($281M vs $297M)
Annual forecast slightly lower than Budget ($1201M vs $1211M)
Drivers- Combined hydro ldquocost basedrdquo operating expenses below budget (88 YTD)- ldquoPlusrdquo contract charges slightly less than budgeted levels (96 YTD)
Financial Highlights - Revenue
5162018 19
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
Service RevenueYTD result $05 million above budget
($199M vs $194M)
Forecast results better than budget ($668M vs $647M)
Drivers+ Retail energy use at 107 of budget (Residential ~110 Industrial ~115 Commercial ~102)+ New retail energy load forecast implemented for Q1 reporting
Other Operating Revenue
YTD result $09 million above budget ($64M vs $55M)
Forecast results better than budget ($217M vs $211M)
Drivers + FEMA proceeds ~$05M YTD (Fire-2015)+ Hydro Contract Revenue ~$05M YTD
Financial Highlights - Revenue
5162018 20
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
Operating Expense
YTD result $41 million below budget ($374 vs $415M)
Forecast results below budget ($1711M vs $1738M)
Drivers - Hydro operations and maintenance at 79 of budget (expected to catch up by year end)- Fish and Wildlife at 82 of budget (expected to catch up by year end)- Parks and Recreation at 78 of budget (expected to catch up by year end)
Non-OperatingNet Expense
YTD result $11M better than budget ($29M vs $40M)
Forecast results better than budget ($148M vs $159M)
Drivers + Higher contributions in aid of construction YTD ($19M vs $11M) + Increased forecasted interest earnings on higher cash reserves
Financial Highlights - Expenses
5162018 21
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
22
Financial Highlights ndash Balance SheetCapital expenditures below budget
bull YTD - 2018 $96 million vs budget of $152 millionbull 2018 Forecast results below 2018 Budget ($1338M vs $1397M)
Individual project adjustments
bull Bavarian Substation (~$1M shifted to 2019 2020)bull LMR Network Replacement (~$1M shifted to 2019) bull RI B7 Modernization (~$3M shifted to 2019)bull RI B1 Modernization (~$2M shifted to 2019)bull RI B8 Modernization (~$1M accelerated to 2018)
Cash remains strong Debt reduction strategy on track
bull Cash balance forecasted to decrease ~$45 million in 2018 bull Debt balance to decrease ~$24 million in 2018
5162018
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
23
Service Revenue
5162018
Note Excludes internal intersystem revenues
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Residential Electric 10092 9723 104 Colder than average Feb and Mar
Commercial Electric 4836 4784 101 In line with budget
Industrial Electric 1250 1080 116
High Density Load 449 557 81
Other Electric 79 83 95 Small dollar variance
Electric Service 16707 16227 103
Water Service 1227 1235 99 In line with budget
Wastewater Service 174 172 101 In line with budget
Fiber amp Telecom 1783 1795 99 In line with budget
Service Revenue 19891 19429 102
Industrial amp HDL in aggregate at 103 of budget
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
Cognos_Office_Connection_Cache
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
Sheet1
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Residential Electric | 10092 | 9723 | 104 | Colder than average Feb and Mar | |||||
Commercial Electric | 4836 | 4784 | 101 | In line with budget | |||||
Industrial Electric | 1250 | 1080 | 116 | Industrial amp HDL in aggregate at 103 of budget | |||||
High Density Load | 449 | 557 | 81 | ||||||
Other Electric | 79 | 83 | 95 | Small dollar variance | |||||
Electric Service | 16707 | 16227 | 103 | ||||||
Water Service | 1227 | 1235 | 99 | In line with budget | |||||
Wastewater Service | 174 | 172 | 101 | In line with budget | |||||
Fiber amp Telecom | 1783 | 1795 | 99 | In line with budget | |||||
Service Revenue | 19891 | 19429 | 102 |
24
Net Surplus Energy Revenue
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceSlice Contracts 20337 18787 108 Additional 3 slice executed post budget
Net Block Trades 3951 4441 89Other Net Wholesale 1197 1115 107Net Wholesale Revenue 25485 24343 105LT Hydro Contracts 28052 29728 94 Operating costs 88 YTD adders 94 YTD
Less Other Purchased Power (330) (330) 100 In line with budget
Hydro LT Contract RevOther PP 27722 29398 94
Surplus Energy Revenue 53207 53741 99
High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
Cognos_Office_Connection_Cache
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
Sheet1
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Slice Contracts | 20337 | 18787 | 108 | Additional 3 slice executed post budget | |||||
Net Block Trades | 3951 | 4441 | 89 | High retail usage (107 of budget YTD) - (Aggregate 93 of Budget YTD) | |||||
Other Net Wholesale | 1197 | 1115 | 107 | ||||||
Net Wholesale Revenue | 25485 | 24343 | 105 | ||||||
LT Hydro Contracts | 28052 | 29728 | 94 | Operating costs 88 YTD adders 94 YTD | |||||
Less Other Purchased Power | (330) | (330) | 100 | In line with budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | ||||||
Surplus Energy Revenue | 53207 | 53741 | 99 |
25
Operating Expense
5162018
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Hydro Operations amp Maintenance 11017 13880 79 RR C9 Turbine Repairs
Hydro Fish amp Wildlife 2701 3307 82 Predator control Fishway Ops
Hydro Parks amp Recreation 1308 1675 78 Various maintenance projects timing
Electric Distribution 3309 3561 93 Small dollar variance
Electric Transmission 2555 3484 73 Legal amp consulting support OATT
Misc Power Supply Expenses 942 1365 69 Legal amp consulting support EPampT
Water amp Wastewater 679 738 92 Small dollar variance
Fiber Network 1260 1099 115 Core system support contract payment
Customer Accounts amp Service 872 896 97 Small dollar variance
Conservation amp Customer Assist 641 850 75 Regulatory asset Amortization
Insurance amp FERC Fees 2702 2083 130 Increased claims experience
Other Admin amp General 9424 8528 110 Vacancy rate adjustmentTotal 37410 41467 90
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
Cognos_Office_Connection_Cache
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
Sheet1
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Hydro Operations amp Maintenance | 11017 | 13880 | 79 | RR C9 Turbine Repairs | |||||
Hydro Fish amp Wildlife | 2701 | 3307 | 82 | Predator control Fishway Ops | |||||
Hydro Parks amp Recreation | 1308 | 1675 | 78 | Various maintenance projects timing | |||||
Electric Distribution | 3309 | 3561 | 93 | Small dollar variance | |||||
Electric Transmission | 2555 | 3484 | 73 | Legal amp consulting support OATT | |||||
Misc Power Supply Expenses | 942 | 1365 | 69 | Legal amp consulting support EPampT | |||||
Water amp Wastewater | 679 | 738 | 92 | Small dollar variance | |||||
Fiber Network | 1260 | 1099 | 115 | Core system support contract payment | |||||
Customer Accounts amp Service | 872 | 896 | 97 | Small dollar variance | |||||
Conservation amp Customer Assist | 641 | 850 | 75 | Regulatory asset Amortization | |||||
Insurance amp FERC Fees | 2702 | 2083 | 130 | Increased claims experience | |||||
Other Admin amp General | 9424 | 8528 | 110 | Vacancy rate adjustment | |||||
Total | 37410 | 41467 | 90 |
Non-Operating Activity
5162018 26
(in 000s)Actuals YTD
2018Budget YTD
2018 VarianceInterest Earnings 2367 2312 102 In line with budget
Capital Contributions 1893 1091 173 High volume of line extensions
Interest Expense (6421) (6351) 101 In line with budget
Other Inc(Exp) (735) (1018) 72 Non Op hydro revenue transfers
Non Operating Activity (2897) (3966) 73
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
Cognos_Office_Connection_Cache
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
Sheet1
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Interest Earnings | 2367 | 2312 | 102 | In line with budget | |||||
Capital Contributions | 1893 | 1091 | 173 | High volume of line extensions | |||||
Interest Expense | (6421) | (6351) | 101 | In line with budget | |||||
Other Inc(Exp) | (735) | (1018) | 72 | Non Op hydro revenue transfers | |||||
Non Operating Activity | (2897) | (3966) | 73 |
Integrated Electric
5162018 27
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 16727 16248 103 Higher retail load usage
Net Wholesale Revenue 25485 24343 105 Executed additional 3 slice post budget
Hydro LT Contract RevOther PP 27722 29398 94 Lower operating costs amp contract adders
Other Operating Revenue 6795 5825 117 FEMA proceeds (fire 2015)
Other Operating Expense (35804) (39981) 90 Hydro Ops and Maint (79 of budget YTD)
Depreciation amp Tax Expense (13292) (13101) 101 In line with budget
Operating Income(Loss) 27634 22732 122
Non-Operating Activity (5937) (6689) 89 Higher contributions in aid of construction
Bottom Line 21696 16043
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
Cognos_Office_Connection_Cache
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
Sheet1
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 16727 | 16248 | 103 | Higher retail load usage | |||||
Net Wholesale Revenue | 25485 | 24343 | 105 | Executed additional 3 slice post budget | |||||
Hydro LT Contract RevOther PP | 27722 | 29398 | 94 | Lower operating costs amp contract adders | |||||
Other Operating Revenue | 6795 | 5825 | 117 | FEMA proceeds (fire 2015) | |||||
Other Operating Expense | (35804) | (39981) | 90 | Hydro Ops and Maint (79 of budget YTD) | |||||
Depreciation amp Tax Expense | (13292) | (13101) | 101 | In line with budget | |||||
Operating Income(Loss) | 27634 | 22732 | 122 | ||||||
Non-Operating Activity | (5937) | (6689) | 89 | Higher contributions in aid of construction | |||||
Bottom Line | 21696 | 16043 |
Fiber amp Telecom
5162018 28
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 2656 2697 98 In line with budget
Other Operating Revenue 9 0 2917 Small dollar variance
Other Operating Expense (1849) (1642) 113 Core system support contract payment
Depreciation amp Tax Expense (761) (783) 97 In line with budget
Operating Income(Loss) 55 272 20
Non-Operating Activity 2579 2576 100 In line with budget
Bottom Line 2634 2848 Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
Cognos_Office_Connection_Cache
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
Sheet1
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 2656 | 2697 | 98 | In line with budget | |||||
Other Operating Revenue | 9 | 0 | 2917 | Small dollar variance | |||||
Other Operating Expense | (1849) | (1642) | 113 | Core system support contract payment | |||||
Depreciation amp Tax Expense | (761) | (783) | 97 | In line with budget | |||||
Operating Income(Loss) | 55 | 272 | 20 | ||||||
Non-Operating Activity | 2579 | 2576 | 100 | In line with budget | |||||
Bottom Line | 2634 | 2848 |
Water
5162018 29
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
(in 000s)Actuals
YTD 2018Budget
YTD 2018 Variance
Service Revenue 1237 1256 98 In line with budget
Other Operating Revenue 17 16 108 Small dollar variance
Other Operating Expense (921) (933) 99 In line with budget
Depreciation amp Tax Expense (543) (561) 97 Small dollar variance
Operating Income(Loss) (210) (223) 95
Non-Operating Activity 444 127 350 Customer contributions
Bottom Line 233 (96)
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
Cognos_Office_Connection_Cache
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
Sheet1
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 1237 | 1256 | 98 | In line with budget | |||||
Other Operating Revenue | 17 | 16 | 108 | Small dollar variance | |||||
Other Operating Expense | (921) | (933) | 99 | In line with budget | |||||
Depreciation amp Tax Expense | (543) | (561) | 97 | Small dollar variance | |||||
Operating Income(Loss) | (210) | (223) | 95 | ||||||
Non-Operating Activity | 444 | 127 | 350 | Customer contributions | |||||
Bottom Line | 233 | (96) |
Wastewater
5162018 30
(in 000s)Actuals YTD
2018Budget YTD
2018 Variance
Service Revenue 174 172 101 In line with budget
Other Operating Revenue 0 0 83 Small dollar variance
Other Operating Expense (162) (189) 86 Small dollar variance
Depreciation amp Tax Expense (70) (72) 98 In line with budget
Operating Income(Loss) (58) (88) 66
Non-Operating Activity 17 20 89 Small dollar variance
Bottom Line (41) (69)
Revenues gt 100 of budget positive for District Expenses lt 100 of budget positive for District
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
Cognos_Office_Connection_Cache
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
Sheet1
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
(in 000s) | Actuals YTD 2018 | Budget YTD 2018 | Variance | ||||||
Service Revenue | 174 | 172 | 101 | In line with budget | |||||
Other Operating Revenue | 0 | 0 | 83 | Small dollar variance | |||||
Other Operating Expense | (162) | (189) | 86 | Small dollar variance | |||||
Depreciation amp Tax Expense | (70) | (72) | 98 | In line with budget | |||||
Operating Income(Loss) | (58) | (88) | 66 | ||||||
Non-Operating Activity | 17 | 20 | 89 | Small dollar variance | |||||
Bottom Line | (41) | (69) |
31
Actual Cash Balance Comparison to Budget
(millions) 2018
Total Cash ndash Budgeted year-end balance $ 436
Key changes in cash forecast
Decrease in capital projects $ 6
Improvement in operating activity $ 6
Other changes in AR AP inventory etc $18
Total Cash ndash Current forecast year-end balance $ 466
Prior quarter ndash 2018 year-end forecasted balance $ 454
5162018
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
Key modeling assumptionsbull Past water history and current forward price curvebull Water amp Wastewater rate increase placeholdersbull Planned expenditures from 5-year business plansbull Debt reduction plan based on 5-year business plansbull Hydro contract terms set at maximum rates
- Debt Reduction Charge (DRC) - 3 (2018-22)- Capital Recovery Charge (CRC) - 50 (2018-22)
bull Investment earning ratebull (2018-22 198 221 240 265 293)
5162018 32
Five-year outlook
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
33
Cash and Debt Funding CapacityForecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Cash Funding Capacity $203M $145M $103M $46M $5M
ldquoliquidity in excess of minimum $175M targetrdquo
Debt Funding Capacity $9M $84M $151M $219M $280M
ldquofinancing capability up to maximum debt ratio target of 35rdquo
Total Funding Capacity $212M $229M $254M $265M $285M
Purpose of Slide To show Districtrsquos ability to handle increased expenditures or decreases in revenues while achieving established financial targets (liquidity and debt ratio) We will continue to refine our methodology including incorporating the potential impact on Debt Service Coverage
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
34
Combined Five-Year Forecast
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Service Revenue 66795 69648 72490 74820 75950
Net Wholesale Revenue 108312 100428 88801 83524 83919
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Other Operating Revenue 21669 22980 22674 24226 23412
Other Operating Expense (171097) (175890) (180713) (175888) (180385)
Depreciation amp Tax Expense (51828) (55637) (59696) (62044) (65203)
Operating Income(Loss) 92639 82006 65929 62660 58140
Non-Operating Activity (14790) (15564) (13695) (12659) (11962)
Bottom Line 77849 66442 52234 50000 46178
Prior Quarter Reported Forecast 70645 63213 50454 48142 43134
Forecast at 2018 Budget 72238 61167 49336 45912 40391
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
Sheet1
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Other Operating Revenue | 21669 | 22980 | 22674 | 24226 | 23412 | ||||||
Other Operating Expense | (171097) | (175890) | (180713) | (175888) | (180385) | ||||||
Depreciation amp Tax Expense | (51828) | (55637) | (59696) | (62044) | (65203) | ||||||
Operating Income(Loss) | 92639 | 82006 | 65929 | 62660 | 58140 | ||||||
Non-Operating Activity | (14790) | (15564) | (13695) | (12659) | (11962) | ||||||
Bottom Line | 77849 | 66442 | 52234 | 50000 | 46178 | ||||||
Prior Quarter Reported Forecast | 70645 | 63213 | 50454 | 48142 | 43134 | ||||||
Forecast at 2018 Budget | 72238 | 61167 | 49336 | 45912 | 40391 |
35
Service Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Residential Electric 27381 27656 27981 27989 27907
Commercial Electric 16990 17186 17439 17497 17490
Industrial Electric 5011 5425 5809 6307 6253
High Density Load 1909 3256 4627 6132 7109
Other Electric 1548 1541 1547 1550 1527
Electric Service 52839 55064 57403 59475 60287
Water Service 5922 6162 6410 6669 6939
Wastewater Service 684 725 747 770 793
Fiber amp Telecom 7350 7697 7929 7905 7932
Service Revenue 66795 69648 72490 74820 75950
Prior Quarter Reported Forecast 64693 66840 69003 70957 72605
Forecast at 2018 Budget 64693 66840 69003 70957 72605
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
Cognos_Office_Connection_Cache
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
Sheet1
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Residential Electric | 27381 | 27656 | 27981 | 27989 | 27907 | ||||||
Commercial Electric | 16990 | 17186 | 17439 | 17497 | 17490 | ||||||
Industrial Electric | 5011 | 5425 | 5809 | 6307 | 6253 | ||||||
High Density Load | 1909 | 3256 | 4627 | 6132 | 7109 | ||||||
Other Electric | 1548 | 1541 | 1547 | 1550 | 1527 | ||||||
Electric Service | 52839 | 55064 | 57403 | 59475 | 60287 | ||||||
Water Service | 5922 | 6162 | 6410 | 6669 | 6939 | ||||||
Wastewater Service | 684 | 725 | 747 | 770 | 793 | ||||||
Fiber amp Telecom | 7350 | 7697 | 7929 | 7905 | 7932 | ||||||
Service Revenue | 66795 | 69648 | 72490 | 74820 | 75950 | ||||||
Prior Quarter Reported Forecast | 64693 | 66840 | 69003 | 70957 | 72605 | ||||||
Forecast at 2018 Budget | 64693 | 66840 | 69003 | 70957 | 72605 |
36
Net Surplus Energy Revenue
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022
Slice Contracts 81347 70241 55181 55552 42393
Net Block Trades 23804 23006 24614 14357 15221
Other Net Wholesale 3161 7181 9006 13614 26306
Net Wholesale Revenue 108312 100428 88801 83524 83919
LT Hydro Contracts 120108 121796 123693 119343 121766
Less Other Purchased Power (1320) (1320) (1320) (1320) (1320)
Hydro LT Contract RevOther PP 118788 120476 122373 118023 120446
Surplus Energy Revenue 227100 220904 211174 201546 204365
Prior Quarter Reported Forecast 225893 224310 214194 205156 208059
Forecast at 2018 Budget 228094 225395 214123 205621 207544
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
Cognos_Office_Connection_Cache
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
Sheet1
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Slice Contracts | 81347 | 70241 | 55181 | 55552 | 42393 | ||||||
Net Block Trades | 23804 | 23006 | 24614 | 14357 | 15221 | ||||||
Other Net Wholesale | 3161 | 7181 | 9006 | 13614 | 26306 | ||||||
Net Wholesale Revenue | 108312 | 100428 | 88801 | 83524 | 83919 | ||||||
LT Hydro Contracts | 120108 | 121796 | 123693 | 119343 | 121766 | ||||||
Less Other Purchased Power | (1320) | (1320) | (1320) | (1320) | (1320) | ||||||
Hydro LT Contract RevOther PP | 118788 | 120476 | 122373 | 118023 | 120446 | ||||||
Surplus Energy Revenue | 227100 | 220904 | 211174 | 201546 | 204365 | ||||||
Prior Quarter Reported Forecast | 225893 | 224310 | 214194 | 205156 | 208059 | ||||||
Forecast at 2018 Budget | 228094 | 225395 | 214123 | 205621 | 207544 |
37
Operating Expense
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Hydro Operations amp Maintenance 59045 58655 59635 50993 53198 Hydro Fish amp Wildlife 16613 17774 19193 19535 18424 Hydro Parks amp Recreation 7700 8707 8074 7889 7896 Electric Distribution 15164 15501 16191 16933 17544 Electric Transmission 12993 12620 13014 13265 13705 Misc Power Supply Expenses 5368 6035 6259 6290 6534 Water amp Wastewater 3063 3072 3070 3330 3441 Fiber Network 4573 5314 5042 5164 5373 Customer Accounts amp Service 4245 4548 4694 4853 4995 Conservation amp Customer Assist 3142 3610 3889 4377 4657 Insurance amp FERC Fees 7890 7796 8224 8522 8795 Other Admin amp General 31302 32257 33428 34737 35823
Total 171097 175890 180713 175888 180385
Prior Quarter Reported Forecast 173846 177900 180002 175600 181003
Forecast at 2018 Budget 173846 177987 179203 175644 180961
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
Cognos_Office_Connection_Cache
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
Sheet1
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Hydro Operations amp Maintenance | 59045 | 58655 | 59635 | 50993 | 53198 | ||||||
Hydro Fish amp Wildlife | 16613 | 17774 | 19193 | 19535 | 18424 | ||||||
Hydro Parks amp Recreation | 7700 | 8707 | 8074 | 7889 | 7896 | ||||||
Electric Distribution | 15164 | 15501 | 16191 | 16933 | 17544 | ||||||
Electric Transmission | 12993 | 12620 | 13014 | 13265 | 13705 | ||||||
Misc Power Supply Expenses | 5368 | 6035 | 6259 | 6290 | 6534 | ||||||
Water amp Wastewater | 3063 | 3072 | 3070 | 3330 | 3441 | ||||||
Fiber Network | 4573 | 5314 | 5042 | 5164 | 5373 | ||||||
Customer Accounts amp Service | 4245 | 4548 | 4694 | 4853 | 4995 | ||||||
Conservation amp Customer Assist | 3142 | 3610 | 3889 | 4377 | 4657 | ||||||
Insurance amp FERC Fees | 7890 | 7796 | 8224 | 8522 | 8795 | ||||||
Other Admin amp General | 31302 | 32257 | 33428 | 34737 | 35823 | ||||||
Total | 171097 | 175890 | 180713 | 175888 | 180385 | ||||||
Prior Quarter Reported Forecast | 173846 | 177900 | 180002 | 175600 | 181003 | ||||||
Forecast at 2018 Budget | 173846 | 177987 | 179203 | 175644 | 180961 |
38
Capital Projects
5162018
(in 000s)Forecast
2018Forecast
2019Forecast
2020Forecast
2021Forecast
2022Electric Distribution 14000 24584 20770 20991 21653 Network Transmission 2663 7714 5595 7631 5403 Rocky Reach 7966 6417 7314 3029 6581 Rock Island 79660 47824 21208 46584 40759 Lake Chelan 1740 416 908 225 435 Internal Services 19710 30671 34598 26075 19200 Fiber amp Telecom 5158 5277 6857 4685 4590 Water 1299 1149 2293 2472 1427 Wastewater 1609 1944 1030 927 27 Total 133805 125995 100572 112619 100074
Prior Quarter Reported Forecast 140204 123781 98213 112311 103151
Forecast at 2018 Budget 139685 121762 98011 111697 102456
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
Cognos_Office_Connection_Cache
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
Sheet1
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
(in 000s) | Forecast 2018 | Forecast 2019 | Forecast 2020 | Forecast 2021 | Forecast 2022 | ||||||
Electric Distribution | 14000 | 24584 | 20770 | 20991 | 21653 | ||||||
Network Transmission | 2663 | 7714 | 5595 | 7631 | 5403 | ||||||
Rocky Reach | 7966 | 6417 | 7314 | 3029 | 6581 | ||||||
Rock Island | 79660 | 47824 | 21208 | 46584 | 40759 | ||||||
Lake Chelan | 1740 | 416 | 908 | 225 | 435 | ||||||
Internal Services | 19710 | 30671 | 34598 | 26075 | 19200 | ||||||
Fiber amp Telecom | 5158 | 5277 | 6857 | 4685 | 4590 | ||||||
Water | 1299 | 1149 | 2293 | 2472 | 1427 | ||||||
Wastewater | 1609 | 1944 | 1030 | 927 | 27 | ||||||
Total | 133805 | 125995 | 100572 | 112619 | 100074 | ||||||
Prior Quarter Reported Forecast | 140204 | 123781 | 98213 | 112311 | 103151 | ||||||
Forecast at 2018 Budget | 139685 | 121762 | 98011 | 111697 | 102456 |
Financial Policy ndash Financial Liquidity amp DaysCash on HandMethodology Per Resolution 17-14124
COMBINED 2018 2019 2020 2021 2022
District Total Liquidity Targets $175 $175 $175 $175 $175
Base Case ndash expected (50 probability) $378 $320 $278 $221 $180
Base Case ndash unusual (10 prob cumulative) $313 $266 $200 $178
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs $304 $247 $180 $176
Days Cash on Hand Target gt250 gt250 gt250 gt250 gt250
Base Case ndash expected (50 probability) 603 513 436 352 281
Base Case ndash unusual (10 prob cumulative) 502 417 319 279
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 466 370 273 264
5162018 39 Assumes external debt financing to maintain liquidity targets
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
Financial Policy ndash Debt Ratio(Debt(Debt + Equity))
COMBINED 2018 2019 2020 2021 2022
District Targets lt40 lt35 lt35 lt35 lt35
Outstanding Debt Balance - YE(million) $514 $474 $435 $394 $358Scheduled Debt Retirements (million) $24 $25 $28 $30 $32
Planned Debt Accelerations (million) $ - $16 $11 $12 $12
Forecasted Debt Issuance - expected (million) $ - $ - $ - $ - $8
Base Case ndash expected 348 314 285 257 232
Base Case ndash unusual 315 288 261 252
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 316 289 267 275
5162018 40 Assumed debt issuance to maintain adequate liquidity levels
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
Financial Policy ndash Debt Service Coverage(Net Funds from OperationsComputed Debt Service)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) 200 200 200 200 200
District Targets (unusual) 125 125 125 125 125
Base Case ndash expected 290 274 246 241 237
Base Case ndash unusual 264 235 225 207
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs 256 226 215 188
5162018 41
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
Financial Policy ndash Rate of Return(Change in Net PositionNet Plant)
COMBINED 2018 2019 2020 2021 2022
District Targets (expected) gt4 gt4Sunset
District Targets (unusual) gt2 gt2
Base Case ndash expected (50 probability)Bottom-line expectation
65$78M
52$66M
-$52M
-$50M
-$46M
Base Case ndash unusual (5 probability)Bottom-line expectation
48$61M
-$46M
-$42M
-$35M
ldquoWhat-Ifrdquo ndash $20 flat market 82 water (1 in 5 water year) and increased costs Bottom-line expectation
45$57M
-$42M
-$37M
-$26M
5162018 42
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
5162018 43
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
- Slide Number 30
- Slide Number 31
- Slide Number 32
- Slide Number 33
- Slide Number 34
- Slide Number 35
- Slide Number 36
- Slide Number 37
- Slide Number 38
- Slide Number 39
- Slide Number 40
- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
-
5162018 44
5162018 45
465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
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- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
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- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
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- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
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465162018
475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
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- Slide Number 41
- Slide Number 42
- Slide Number 43
- Slide Number 44
- Slide Number 45
- Slide Number 46
- Slide Number 47
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475162018
- Slide Number 1
- What we will cover today
- Q1 2018 Key Highlights
- Overview
- Overview
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Financial HighlightsFocus on Year-to-Date (YTD) cost per unit
- Slide Number 8
- Slide Number 9
- Slide Number 10
- Slide Number 11
- Slide Number 12
- Slide Number 13
- Slide Number 14
- Slide Number 15
- Slide Number 16
- Q1 Key Messages
- Slide Number 18
- Financial Highlights - Revenue
- Financial Highlights - Revenue
- Financial Highlights - Expenses
- Financial Highlights ndash Balance Sheet
- Slide Number 23
- Slide Number 24
- Slide Number 25
- Slide Number 26
- Slide Number 27
- Slide Number 28
- Slide Number 29
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