January 9, 2018 Board Book - Welcome BEC Members! Board Book... · BEC Board Book | January 9 ... The board requested edits and double checks to be included in the final ... The review

Julie Lindgren, President District 3 — Roberts, Bearcreek

Dave Peterson, Vice President

Arleen Boyd, Secretary/Treasurer District 5 — Fishtail

District 1 — Bridger, MT, Clark, WY

District 2 - Boyd, Joliet

District 4— Red Lodge

Bill Pascoe

Kevin P. Owens, PE

PO Box 1110 1306 N Broadway Ave [email protected]

Beartooth Electric Cooperative Board of Trustees Meeting

January 9, 2018

BEC Board Book | January 9, 2018 | Page 1

mailto:[email protected]








Beartooth Electric Cooperative Regular Board Meeting

Tuesday, January 9, 2018 12:00 Noon | Beartooth Electric Office

Agenda

1. Call Meeting to Order

2. Pledge

3. Visitors Comments

4. Approve Agenda

5. Approve Minutes

• November 28, 2017 Regular Board Meeting

6. Committee/Trustee/Attorney Reports

• Risk Management Committee (Arleen Boyd)• Finance Committee (Julie Lindgren)• Bylaw Committee (Arleen Boyd)• Policy Committee (Roxie Melton)• Communication Committee (Richard Nolan)

CONSENT AGENDA (Items 7-9, shown in blue)

7. Membership Connections and Cancellations, Capital Credit to Estates, Registers, Reports and Summary of Disbursements

8. 2017 – November Financial Statements

9. Staff Reports

• General Manager Report – Kevin Owens• Communications & Member Services Report – Kaaren Robbins• Line Superintendent Report – Eric Elton

10. New Business

• Estate Retirement Ratificaton-Approval• 2017 Goal Objectives/Measurements/Results-Approval• NRECA 2018 Annual Meeting Voting Delegate and Alternate Delegate Certification• 2018 BEC Washington D.C. Youth Tour Candidate Selection• BEC Board Fiduciary Communication Responsibilities

11. Old Business

• 2018 Budget-Approval• 2018-2020 Goal Objectives/Measurements-Discussion


12. Upcoming Meetings

• BEC Risk Management Committee Meeting | Guest Presenter: Henry Dykema, SundanceSolar, BEC Office | January 23, 2018-Noon

• BEC Communication Committee Meeting, BEC Office | January 24, 2018-Noon• BEC Regular Board Meeting, BEC Office | January 30, 2018-Noon

13. Visitor Comments

14. Executive Session

• General Manager’s Informal Six-month Review

15. Executive Action

16. Adjourn


Beartooth Electric Cooperative, Inc.

Minutes of the Board of Trustees’ Meeting, November 28, 2017

Held at the offices of Beartooth Electric Cooperative

Beartooth Electric Cooperative will be referred to as BEC herein. The Glossary of Terms and Acronyms website link is http://www.BeartoothElectric.com/content/glossary.

Call to Order: Board President, Julie Lindgren, called the meeting to order at 12:01 p.m.

Present: Presiding: Julie Lindgren, Arleen Boyd, Dan Dutton, Roxie Melton, Dick Nolan, and Bill Pascoe

Kevin P. Owens, General Manager Eric Elton, Line Superintendent Brad Prophet, Accountant Kaaren Robbins, Communication & Member Services

Via telephone: Larry Martin, Legal Counsel David Peterson, District 7 Trustee

Guest: Frank Willett, Finance Committee Eleanor Guerrero, Carbon County News

Approval of agenda:

A motion was made by Dan Dutton and seconded by Roxie Melton, to approve the agenda with edits. Motion carried. Voting was unanimous.

Approval of minutes:

A motion was made by Bill Pascoe and seconded by Dick Nolan, to approve the October 31, 2017, regular board meeting minutes as edited. Motion carried. Voting was unanimous.

Presentation: Marty Tomlin and Markus Urbanik shared their experience as Operation Second Chance hunting guides.

Committee/Trustee/Attorney Reports:

Risk Management Committee:

The Risk Management/Finance Committees met and went over what we are essentially going to do today with more input. The committee’s response to the budget approach was extremely positive--noting the approach of having a period


http://www.beartoothelectric.com/content/glossary

long enough for everybody to dig into the numbers and give feedback was appreciated and starting with a zero-based budget is a good business practice.

The committee noted they would like to see more detail after the accelerated investment of plant which follows the pole replacement plan.

The cooperative’s cyber risk was looked at by the committees and will be covered later in the meeting with Kevin and Larry.

Comments and questions were provided to Kevin. Kevin will cover during the Budget discussion.

Finance Committee:

The Risk Management and Finance Committees met in a combined meeting. The Finance Committee report is the budget portion of the Risk Management Committee report.

Bylaw Committee:

There was no Bylaw Committee activity this month. The only bylaw matter for this coming year is to possibly change the annual meeting date to the spring versus the fall.

Policy Committee:

There was no Policy Committee activity this month. The Policy Committee will resume reviews in January 2018.

Communication Committee:

The Communications Committee hosted a guest, Ryan Hall, editor, Rural Montana magazine and communication director at Montana Electric Cooperatives’ Association (MECA). Ryan presented the Rural Montana reader survey results for both MECA and BEC. It was an interesting meeting, and we discussed communication items we had not previously considered:

• Very few co-ops have a president’s column in their Rural Montananewsletter.

• BEC’s communications needs have changed after Southern.• Readers are interested in the “human” factor.• There was redundancy with three reports reporting on the same topic.

BEC has the open invitation from Ryan Hall to return in six or so months to review our communication progress.

Arleen Boyd asked to have a board discussion about board fiduciary responsibilities for communications added to the next board meeting agenda and the chair agreed.


2018 Budget Discussion:

The presented budget sits within the board set parameters: cash reserve of $500,000 (budget: $682,388) and debt service coverage ratio of no less than 1.25 (budget: 1.42).

The board requested edits and double checks to be included in the final Budget.

Consent Agenda:

The board reviewed the consent agenda and requested staff to take the next step in cleaning reports.

Brad Prophet presented the October and 3rd quarter financials.

Staff Reports:

Kevin P. Owens reviewed the General Manager Report.

• BEC was invoiced for its first payment to Morgan Stanley for power supplycharges incurred in October. The power supply transition from Twin Eagleto Morgan Stanley wen incredibly smooth.

• The 2018 Budget Process continues. Final approval is scheduled for theJanuary 9, 2018, board meeting.

• BEC conducted a two-day long-term Strategic Plan Workshop. It was a veryconstructive two-day event that achieved its primary goals: A new Missionstatement, Pledge, and key performance measures, etc. were developed andagreed upon. Primary goals and objectives for the next three years willprovide a clear focus for BEC.

• Transformer banks on irrigation loads have been de-energized for theseason to reduce transformer losses.

• Following the October board meeting staff was directed to proceed with asecond loan ($1,057,787) from CoBank at 3.47% to fund the RUS Cushion ofCredit account with a 5% return. An additional $500,000 from BEC cashreserves was deposited into the RUS Cushion of Credit account with a 5%return.

• Capital Credit refunds for 1991-1992 in the amount of $437,000 will bemailed out to members on November 30, 2017.

• Coinciding with the issuance of the 1991-1992 Capital Credit refunds willbe notifications to members of unclaimed capital credit checks issued inNovember 2016 for periods of late 1987 and all of 1989 and 1990.Notifications will be seen on BEC’s website, Facebook and the office.

• The application process for the 2018 Washington D.C. Youth Tour,Beartooth Electric Scholarship, and MECA Memorial Scholarship wasannounced this month and distributed to all high schools in the BECservice territory.

Kaaren Robbins reviewed the Communication report.

Eric Elton provided the Line Superintendent report.


New Business:

The 2018-2020 Strategic Plan was discussed. Updates with measurable goals will be reviewed and approved during the January 9, 2018, board meeting.

The 2018 BEC 80th Annual Member Meeting is planned for September 29, 2018, at the ANIPRO Event Center.

Old Business:

BEC Financial Policy No. 307 Purchase of Materials and Equipment.

A motion was made by Dick Nolan and seconded by Roxie Melton, to approve the Financial Policy 307 as amended by general manager and attorney. Motion carried. Voting was unanimous.

BEC Financial Policy No. 306 Retirement of Capital Credits.

A motion was made by Bill Pascoe and seconded by Richard Nolan, to delete section 3.2.1.2 from Financial Policy 306. Motion carried. Voting was unanimous.

A motion was made by Bill Pascoe and seconded by Richard Nolan, to retroactively look at the capital credit retirements from November 2016 and pay any member who did not get paid due to the section 3.2.1.2. Motion carried. Voting was unanimous.

The TWACS Meter RFP was discussed. The schedule is to forward the RFP draft to the attorney for review, distribute the RFP and obtain a signed document by mid-January.

Julie discussed Kevin’s request for a six-month informal performance review. The review is scheduled during the January 30 board meeting.

Upcoming Meetings:

• MECA Winter Committee and Board Meetings, Great Falls, MT | November 28-29, 2017

• BEC Christmas Gathering, Bridgecreek | December 8, 6:00 p.m.• BEC Finance/Risk Management Combined Committee Meeting, BEC Office |

December 14, 2017, Noon• BEC Regular Board Meeting, BEC Office | January 9, 2018-Noon• BEC Regular Board Meeting, BEC Office | January 30, 2018-Noon

Visitor Comments: None.

Executive Session: None required.


Executive Action: None required.

The next regularly scheduled meeting of the BEC Board of Trustees is Tuesday, January 9, 2018.

A motion was made by Richard Nolan and seconded by Dan Dutton, to adjourn the meeting at 4:16 p.m. Motion carried. Voting was unanimous.

President, Julie Lindgren adjourned the meeting.

ATTEST:

_____________________________________

Arleen Boyd, Secretary


Risk Management/Finance Committee report Combined Risk Management and Finance Committee, Meeting December 16, 2017 Red Lodge BEC Office Attending: Frank Willett, Judith Gregory, Bill Pascoe, Julie Lindgren, Dan Dutton, Dick Nolan, Roxie Melton, Gil Boyer, Arleen Boyd, Kevin Owens Present on phone: Attorney Larry Martin Staff attending: Kaaren Robbins, Brad Prophet The primary meeting objective was to review and recommend action to the board on the 2018 proposed Budget. General Manager, Kevin Owens answered many questions from the committee and reviewed updated projected budget numbers addressing questions and suggested changes from the October risk management meeting. There is an addition to the budget for a temporary, part-time employee for work order processing. The employee will report to Brad Prophet. Kevin is confident that a person with an accounting background can be hired as budgeted. Payroll in 2018 will increase 2% and benefits 7%. The discussion highlighted the difficulty of tracking employee expense because their time (required by FERC) is assigned to the various accounts they serve. Judith Gregory suggested that the simplified cash flow statement could show employee expense collectively, not just across accounts. Discussion of rate classes and the definition of the classes clarified the kVA requirements for small business, large (50-1000 kVA) and industrial (1001 and up). Dan Dutton suggested that the actual definition of residential and small business and kVA requirements could usefully be highlighted for the board. Kevin summarized current Cushion of Credit deposits and recommends an annual evaluation of potential additional deposits based on available cash and interest rates from BEC lenders. The Cushion of Credit deposit generates 5% interest. The impact of 5% interest will change based on the cost of borrowing money to fund the deposit. Recommendations. Board budget approval. The budget provides for the long-discussed improvements at the Pine Crest subdivision for which the committee endorses. Also recommended: approval of the income statement, cash flow and balance sheets adjusted to match end-of-year numbers. The committee recommends engaging Kim Mikkelson to update the seven-year (possibly 10-year) financial model following 2018 budget approval. Larry Martin noted for consideration by the committee and board two cyber security issues his firm’s clients have encountered recently. Email addresses for board members may not be secure. Many organizations provide addresses and


connections to the board. The Americans with Disabilities Act is addressing rights for access to facilities, programs and services including communications. Companies are being required to look at how websites and other information platforms provide access for clients and the public with hearing or sight disabilities. Kevin agreed that the security issues demand attention and that there is a risk for the co-op to examine electronic access to information. The group discussed examples of attempts to take advantage of internet-based information and financial transactions. Kevin reported an increase in the Cyber Security Liability Coverage to . Bill Pascoe outlined some current power supply developments and how the availability of renewable resources that do not carry fuel costs (like solar and wind and hydro) can impact operating costs (marginal costs) for power generation plants. He briefly described current impacts on power costs resulting from the availability of power generated by renewables in California. Bill will continue the report /discussion at the January 23 risk management meeting. Next risk management meeting set for January 23 at noon with a presentation from Henry Dykema whose local company, Sundance Solar, provides solar and wind power systems design and installation


MEMBERSHIPS JANUARY 9, 2018

NEW MEMBERSHIPS: 31

CANCELLED MEMBERSHIPS: 31

TOTAL MEMBERSHIPS: 4497

CAPITAL CREDITS Capital Credit Discounted Retained by Co-Op Allocated Refund to Member

CUSTOMER #768 $2,416.77 $1,503.80 $ 912.97 CUSTOMER #2875 $2,600.43 $2,479.71 $ 120.72 CUSTOMER #80604 $1,263.55 $1,105.10 $ 158.45

TOTALS $6,280.75 $5,088.61 $1,192.14


Beartooth Electric Co-Op.,Inc. Revision: 16477

12/06/2017 2:35:12 am OPEN BALANCE REGISTER Page: 865

Account Prov Status Hold Class Total Total Current ------ Current Total

Name Bill Amt Bill Amt Bill Past ARAmt ARAmt 30 Day 60 Day 90 Day

Grand Totals: 748,728.47 647,615.47 101,113.00 740,304.34 639,697.21 66,350.91 16,160.24 18,095.98

GRAND TOTAL SUM MARY TNFORMATJON

Tot Active Active Tot Inactive Inactive Active Active Inactive Inactive Active Active Inactive Inactive Dollars Accts Dollars Accts Credit$ Credit Accts Credit$ Credit Accts Debit$ Debit Accts Debit$ Debit Accts

JO Day 65,528.81 630 822. IO 18 0.00 0 0.00 0 65,528.81 630 822.10 18

60Day 14,980.74 173 1,179.50 12 0.00 0 0.00 0 14,980.74 173 1,179.50 12

90Day 8,931.31 50 9,164.67 20 0.00 0 0.00 0 8,931.31 50 9,164.67 20

Current 638,910.69 5991 786.52 19 -28,746.08 142 -234.70 3 667,656.77 5849 1,021.22 16

Total AR Amt 728,351.55 6000 11,952.79 43 -28,746.08 142 -234.70 3 757,097.63 5858 12,187.49 40

Budget Amt Due 7,375.55 52 0 00 0 -1,223.87 2 0.00 0 8,599.42 50 0.00 0

Accumulated provisions set aside for Uncollectable Write-Off Accounts to November 30, 2017 is $38,415.53. Capital Credits to be applied with General Retirements if not paid.

28019 /pro/rpttemplate/cis/2.40.1/OPEN _ BALANCE.xml.rpt cteachout


DECEMBER 2017 DISCONNECTED NON PAY RED LODGE(RDL)COLUMBUS (CMB)

DATE CITY SERVICE LOC# LOCATION ACCOUNT DISCONNECTED RECONNECTEDFEBRUARY 9,2017 BRIDGER 6S 23E 27 661 C 490205 RDL INSTALLED 20/20/ METERFEBRUARY 28, 2017 GREYCLIFF 1S 16E 17 1376 O 562706 CMB NEW JUNE 5, 2017

MARCH 2017 - NONE

APRIL 2017 JOLIET 4S 23E 07 547 A 377202 RDL APRIL 5, 2017 SAME APRIL 6, 2017JOLIET 4S 23E 07 547 71902 RDL APRIL 5, 2017 SAME APRIL 6, 2017BRIDGER 6S 23 E 27 661 C 490205 RDL APRIL 5, 2017RED LODGE 6S 19E 28 849 D 634400 RDL APRIL 5, 2017 SAME NOVEMBER 28, 2017ROBERTS 4S 20E 35 901 C 432101 RDL APRIL 5, 2017 SAME JUNE 9, 2017ROBERTS 4S 21E 35 901 D 436801 RDL APRIL 5, 2017 SAME JUNE 9, 2017RAPELJE 3N 20E RJ 1454 C 454703 CMB APRIL 13, 2017

MAY 2017 - NONE

JUNE 7, 2017 COLUMBUS 3S 21E 23 517 R 97515 CMB JUNE 7, 2017 OWNER JUNE 26, 2017 JOLIET 3S 21E 13 523 SI 70803 RDL JUNE 7, 2017 SAME JUNE 7, 20167BELFRY 9S 21E 14 753-4 744000 RDL JUNE 7, 2017

JULY 6, 2017 NYE 4S 15E 17 059 A 617600 CMB JULY 6, 2017ROBERTS 5S 21E RBTS 290 55816 RDL JULY 6, 2017 SAME JULY 6, 2017ROBERTS 6S 20E 35 406 E 638300 RDL JULY 6, 2017 SAME JULY 6, 2017RED LODGE 7S 20E 08 1026 278604 RDL JULY 6, 2017 SAME JULY 6, 2017RED LODGE 8S 20E MB 1043 D 441602 RDL JULY 6, 2017 SAME JULY 12, 2017ALPINE 7S 17E 00 1633 266901 RDL JULY 6, 2017 SAME JULY 19, 2017

JULY 13, 2017 COLUMBUS 2S 19E-CC 1307-83 640905 CMB JULY 13, 2017 NEW NOVEMBER 9, 2017

AUGUST 8, 2017 RED LODGE 6S 20E 25 440 D 411514 RDL AUGUST 8, 2017 NEW AUGUST 14, 2017REED POINT 2S 15E 25 1392 281209 CMB AUGUST 8, 2017 NEW AUGUST 9, 2017

SEPTEMBER 7, 2017 COLUMBUS 2S 203 32 247-2 755800 CMB SEPTEMBER 7, 2017 SAME SEPTEMBER 7, 2107FISHTAIL 4S 18E FT 35 D 203101 CMB SEPTEMBER 7, 2017 SAME SEPTEMBER 26, 2017

OCTOBER 11, 2017 RED LODGE 8S 20E 30 1060 A1 238102 RDL OCTOBER 11, 2017 SAME OCTOBER 12, 2017

NOVEMBER 3, 2017 CLARK 57N 101W 06 783 A2 761100 RDL NOVEMBER 3, 2017CLARK 58N 101W 06 783 B1 729300 RDL NOVEMBER 3, 2017

DECEMBER 6, 2017 BOYD 4S 20E 36 972-13 447104 RDL DECEMBER 6, 2017COLUMBUS 2S 20E 19 1301-12A 648500 CMB DECEMBER 6, 2017

Notices went out with Past Due Balances due 12/29/2017. 25 = 2017 DISCONNECTSDelinquent accounts will be due 01/03/2018 and Disconnecting Accounts 60-90 days in arrearas 01/11/2018. 17 = 2017 RECONNECTS

8 = 2017 ACCOUNTS STILL OFF

Page 1 of 1


According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid OMB

control number. The valid OMB control number for this information collection is 0572-0032. The time required to complete this information collection is estimated to average 15 hours per

response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

BORROWER DESIGNATION

MT0019

PERIOD ENDED

FINANCIAL AND OPERATING REPORT November 30, 2017

BORROWER NAME

INSTRUCTIONS-See help in the online application BEARTOOTH ELEC COOP INC

This information is analyzed and used to determine the submitter's financial situation and feasibility for loans and guarantees. You are required by contract

and applicable regulations to provide the information. The information is subject to the Freedom of Information Act (5 U.S.C. 552)

CERTIFICATION

We recognize that statements contained herein concern a matter within the jurisdiction of an agency of the United States and the making

of a false, fictitious or fraudulent statement may render the maker subject to prosecution under Title 18, United States Code Section 1001.

___X___ All of the obligations under the RUS loan documents have been fulfilled in all material respects.

_________ There has been a default in the fulfillment of the obligations under the RUS loan documents. Said default(s) is/are

specifically described in Part D of this report.

1/3/2018

DATE

1/3/2018

DATE

YEAR-TO-DATE

ITEM LAST YEAR THIS YEAR BUDGET THIS MONTH

(a) (b) (c) (d)

1. Operating Revenue and Patronage Capital................................... 8,004,586 7,867,325 7,566,248 688,809

2. Power Production Expense............................................................... 0 0 0 0

3. Cost of Purchased Power............................................................... 2,671,521 2,821,011 2,706,666 267,098

4. Transmission Expense..................................................................... 8,169 6,107 7,407 471

5. Regional Marketing Expense………………………………………….. 0 0 0 0

6. Distribution Expense-Operation...................................................... 830,309 931,461 799,490 106,842

7. Distribution Expense-Maintenance................................................. 498,941 690,489 493,533 46,473

8. Consumer Accounts Expense.......................................................... 254,020 269,109 237,594 23,676

9. Customer Service and Informational Expense............................... 76,521 73,808 44,517 8,825

10. Sales Expense................................................................................. 15,174 10,636 12,650 0

11. Administrative and General Expense........................................... 1,134,677 1,166,029 1,157,638 96,457

12. Total Operation and Maintenance Expense (2 thru 11)................. 5,489,332 5,968,650 5,459,495 549,842

13. Depreciation and Amortization Expense........................................ 886,204 904,837 933,937 82,382

14. Tax Expense - Property and Gross Receipts.................................. 0 0 0 0

15. Tax Expense - Other......................................................................... 2,047 1,944 2,577 205

16. Interest on Long-Term Debt............................................................ 546,485 504,955 501,805 46,310

17. Interest Charged to Construction - Credit...................................... 0 0 0 0

18. Interest Expense - Other.................................................................... 3,992 964 1,100 82

19. Other Deductions............................................................................. 1,650 1,650 1,650 150

20. Total Cost of Electric Service (12 thru 19).................................... 6,929,710 7,383,000 6,900,564 678,971

21. Patronage Capital and Operating Margins (1 minus 20)............... 1,074,876 484,325 665,684 9,838

22. Non Operating Margins - Interest................................................... 13,461 32,195 11,917 7,125

23. Allowance for Funds Used During Construction.............................. 0 0 0 0

24. Income (Loss) from Equity Investments........................................ 0 0 0 0

25. Non Operating Margins - Other................................................... 99,892 6,893 (1,200) (1,439)

26. Generation and Transmission Capital Credits............................. 0 0 0 0

27. Other Capital Credits and Patronage Dividends............................. 44,428 35,353 45,400 0

28. Extraordinary Items.......................................................................... 0 0 0 0

29. Patronage Capital or Margins (21 thru 28)..................................... 1,232,657 558,766 721,801 15,524

Rev 2010

BRAD PROPHET, ACCOUNTANT

Kevin P. Owens - Final

KEVIN P. OWENS, GENERAL MANAGER

PART A. STATEMENT OF OPERATIONS

RUS Financial and Operating Report Electric Distribution

PERIOD AND RENEWALS HAVE BEEN OBTAINED FOR ALL POLICIES.

DURING THE PERIOD COVERED BY THIS REPORT PURSUANT TO PART 1718 OF 7 CFR CHAPTER XVII

(check one of the following)

Brad Prophet - Final

UNITED STATES DEPARTMENT OF AGRICULTURE

RURAL UTILITIES SERVICE

ELECTRIC DISTRIBUTION

We hereby certify that the entries in this report are in accordance with the accounts and other records of the

system and reflect the status of the system to the best of our knowledge and belief.

ALL INSURANCE REQUIRED BY PART 1788 OF 7 CFR CHAPTER XVII, RUS, WAS IN FORCE DURING THE REPORTING


USDA - RUS BORROWER DESIGNATION

MT0019

FINANCIAL AND OPERATING REPORT PERIOD ENDED

PART B. DATA ON TRANSMISSION AND DISTRIBUTION PLANT

YEAR-TO-DATE YEAR-TO-DATE

ITEM LAST YEAR THIS YEAR ITEM LAST YEAR THIS YEAR

(a) (b) (a) (b)

1. New Services Connected 75 82 5. Miles Transmission 15.21 15.21

6. Miles Distribution-

2. Services Retired 13 23 Overhead 1,313.22 1,310.78

7. Miles Distribution-

3. Total Services in Place 6,412 6,581 Underground 484.53 490.72

4. Idle Services 8.Total Miles Energized

(Exclude Seasonal) 460 456 (5 + 6 + 7) 1,812.96 1,816.71

PART C. BALANCE SHEET

ASSETS AND OTHER DEBITS LIABILITIES AND OTHER CREDITS

1. Total Utility Plant in Service.................................................31,408,105 30. Memberships................................................................... 0

2. Construction Work in Progress........................................... 237,531 31. Patronage Capital............................................................. 6,447,202

3. Total Utility Plant (1 + 2).......................................................31,645,636 32. Operating Margins - Prior Years...................................... 0

4. Accum. Provision for Depreciation and Amort.................. 15,193,758 33. Operating Margins - Current Year..................................... 484,325

5. Net Utility Plant (3 - 4)...........................................................16,451,878 34. Non-Operating Margins................................................... 363,450

6. Non-Utility Property - Net.................................................... 0 35. Other Margins and Equities............................................. 153,235

7. Investments In Subsidiary Companies............................... 0 36. Total Margins and Equities (30 thru 35)............................. 7,448,212

8. Invest. In Assoc. Org. - Patronage Capital....................... 426,153 37. Long-Term Debt - RUS (Net).......................................... 454,765

9. Invest. In Assoc. Org. - Other - General Funds................. 0 38. Long-Term Debt - FFB - RUS Guaranteed......................... 5,356,998

10. Invest. In Assoc. Org. - Other -Nongeneral Funds.......... 289,007 39. Long-Term Debt - Other - RUS Guaranteed....................... 0

11. Investments In Economic Development Projects............ 0 40. Long-Term Debt - Other (Net).............................................5,772,822

12. Other Investments.............................................................. 0 41. Long-Term Debt - RUS - Econ. Devel. (Net)........................ 0

13. Special Funds.................................................................... 0 42. Payments-Unapplied 0

14. Total Other Property and Investments (6 thru 13)........ 715,160 43. Total Long-Term Debt (37 thru 41-42)...................................11,584,585

15. Cash - General Funds....................................................... 1,314,415 44. Obligations Under Capital Leases-Noncurrent.................................... 0

16. Cash - Construction Fund - Trustee.................................. 1 45. Accumulated Operating Provisions................................... 0

17. Special Deposits................................................................ 0 and Asset Retirement Obligations

18. Temporary Investments.................................................... 415,144 46. Total Other Noncurrent Liabilities (44+45)......................... 0

19. Notes Receivable (Net)...................................................... 0 47. Notes Payable.................................................................. 0

20. Accounts Receivable - Sales of Energy (Net).................. 769,597 48. Accounts Payable........................................................... 395,893

21. Accounts Receivable - Other (Net)................................... 10,138 49. Consumers Deposits........................................................ 49,694

22. Renewable Energy Credits.......................................... 0 50. Current Maturities Long-Term Debt................................... 0

23. Materials and Supplies - Electric and Other.................... 469,163 51. Current Maturities Long-Term Debt-Ec.Dev...................... 0

24. Prepayments....................................................................... 42,682 52. Current Maturities Capital Leases..................................... 0

25. Other Current and Accrued Assets................................... 2,317 53. Other Current and Accrued Liabilities................................ 392,231

26. Total Current and Accrued Assets (15 thru 25)............... 3,023,457 54. Total Current and Accrued Liabilities (47 thru 53)................ 837,818

27. Regulatory Assets.............................................................. 717,009 55. Regulatory Liabilities...................................................... 0

28. Other Deferred Debits......................................................... 104,159 56. Other Deferred Credits................................................... 1,141,048

29. Total Assets and Other Debits (5+14+26 thru 28)............21,011,663 57. Total Liabilities and Other Credits

(36+43+46+54 thru 56).......................................................21,011,663

PART D. NOTES TO FINANCIAL STATEMENTS

THIS SPACE IS PROVIDED FOR IMPORTANT DISCLOSURE NOTES TO THE FINANCIAL STATEMENT CONTAINED IN THIS REPORT.

(A SEPARATE SHEET MAY BE USED IF ADDITIONAL SPACE IS NEEDED.)

RUS Financial and Operating Report Electric Distribution Rev 2010

ELECTRIC DISTRIBUTION November 30, 2017

CFC Line of Credit Balance as of 11/30/2017 = $0

Contributions-In-Aid of Construction received through 11/30/17 totaled approximately $17,000,182


BORROWER DESIGNATION BORROWER DESIGNATION

MT019

PERIOD ENDED RUS USE ONLY PERIOD ENDED RUS USE ONLY

INSTRUCTIONS - See RUS Bulletin 1717B-2 INSTRUCTIONS - See RUS Bulletin 1717B-2

CONSUMER

CLASSIFICATION SALES JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL

AND

REVENUE DATA (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (Contains a thru l)

a. No.Consumers Served 5,572 5,570 5,574 5,591 5,585 5,522 a.#Consumers 5,524 5,529 5,546 5,551 5,543 0

1. Residential Sales b. kWh Sold 6,906,243 5,021,794 4,509,820 3,692,236 3,353,829 3,364,883 1. Residential Salesb. kWh Sold 4,283,565 3,736,880 3,475,645 3,708,373 4,611,840 0 46,665,108

(excluding seasonal) c. Revenue 847,808.10$ 667,234.05$ 618,321.78$ 540,075.46$ 507,818.84$ 506,294.65$ (excluding seasonal) c. Revenue 564,517.79$ 517,087.00$ 492,798.06$ 514,259.68$ 594,654.10$ -$ 6,370,869.51$

a. No.Consumers Served a.#Consumers

2. Residential Sales - b. kWh Sold 2. Residential Sales -b. kWh Sold 0

Seasonal c. Revenue Seasonal c. Revenue -$

a. No.Consumers Served 0 0 0 111 111 115 a.#Consumers 113 113 113 0 0 0

3. Irrigation Sales b. kWh Sold 0 0 0 50,405 269,170 929,163 3. Irrigation Salesb. kWh Sold 1,194,477 923,487 300,728 0 0 0 3,667,430

c. Revenue -$ -$ -$ 20,401.92$ 49,151.10$ 100,090.58$ c. Revenue 115,190.77$ 99,384.63$ 58,714.60$ -$ -$ -$ 442,933.60$


4. Comm. And Ind. b. kWh Sold 923,574 739,024 690,687 648,275 603,122 669,103 4. Comm. And Ind.b. kWh Sold 749,060 694,902 655,037 693,551 805,252 0 7,871,587

1000 kVa or Less c. Revenue 97,713.89$ 82,805.97$ 78,622.93$ 75,380.95$ 71,501.03$ 80,532.58$ 1000 kVa or Lessc. Revenue 82,099.10$ 78,063.59$ 74,666.89$ 76,915.76$ 86,075.07$ -$ 884,377.76$


5. Comm. And Ind. b. kWh Sold 117,000 98,400 117,900 94,800 146,100 151,500 5. Comm. And Ind.b. kWh Sold 156,000 138,900 141,900 110,400 81,900 0 1,354,800

Over 10000 kVa c. Revenue 10,101.38$ 9,066.75$ 10,341.94$ 10,987.50$ 15,213.56$ 15,447.94$ Over 10000 kVac. Revenue 14,959.31$ 13,913.09$ 13,987.32$ 11,766.39$ 6,550.68$ -$ 132,335.86$


6. Public Street and b. kWh Sold 6. Public Street andb. kWh Sold 0

Highway Lighting c. Revenue Highway Lightingc. Revenue -$


7. Other Sales to b. kWh Sold 7. Other Sales tob. kWh Sold 0

Public Auth. c. Revenue Public Auth. c. Revenue -$


8. Sales for Resale - b. kWh Sold 8. Sales for Resale -b. kWh Sold 0

RUS Borrowers c. Revenue RUS Borrowersc. Revenue -$


9. Sales for Resale - b. kWh Sold 9. Sales for Resale -b. kWh Sold 0

Others c. Revenue Others c. Revenue -$

10. TOTAL No. Consumers (lines 1a - 9a) 5,952 5,951 5,957 6,084 6,078 6,106 10. TOTAL No. Consumers (lines 1a - 9a) 6,106 6,111 6,128 6,025 6,014 0

11. TOTAL kWh Sold (lines 1b - 9b) 7,946,817 5,859,218 5,318,407 4,485,716 4,372,221 5,114,649 11. TOTAL kWh Sold (lines 1b - 9b) 6,383,102 5,494,169 4,573,310 4,512,324 5,498,992 0 59,558,925

12. TOTAL Revenue Received From Sales of 12. TOTAL Revenue Received From Sales of

Electric Energy (lines 1c - 9c) 955,623.37$ 759,106.77$ 707,286.65$ 646,845.83$ 643,684.53$ 702,365.75$ Electric Energy (lines 1c - 9c) 776,766.97$ 708,448.31$ 640,166.87$ 602,941.83$ 687,279.85$ -$ 7,830,516.73$

13. Transmission Revenue 13. Transmission Revenue -$

14. Other Electric Revenue 14. Other Electric Revenue -$

15. kWh - Own Use 52,927 35,261 39,369 21,917 13,980 10,693 15. kWh - Own Use 10,375 10,624 16,037 23,097 42,471 0 276,751

16. TOTAL kWh Purchased 9,053,228 6,845,289 6,131,434 5,204,536 5,110,577 5,764,683 16. TOTAL kWh Purchased 7,362,402 6,339,666 5,338,440 5,281,021 6,484,624 0 68,915,900

17. TOTAL kWh Generated 0 0 0 0 0 0 17. TOTAL kWh Generated 0 0 0 0 0 0 0

18. Cost of Purchases and Generation 349,687.87$ 276,745.47$ 253,734.04$ 219,580.13$ 221,320.63$ 225,886.10$ 18. Cost of Purchases and Generation 288,662.29$ 264,453.83$ 226,270.44$ 227,572.73$ 267,097.78$ -$ 2,821,011.31$

19. Interchange - kWh - Net 0 0 0 0 0 0 19. Interchange - kWh - Net 0 0 0 0 0 0 0

20. Peak - Sum All kWh Input (Metered) 20. Peak - Sum All kWh Input (Metered)

o Coincident x Non-Coincident 17,572 16,252 12,844 10,306 10,480 12,416 o Coincident x Non-Coincident 14,854 13,455 12,865 10,676 13,143 0 17,572

RUS Form 7 (Rev. 6-94)

Line Losses 7.34% 9.71% 8.37% 9.18% 10.00% 6.76% 8.93% 8.95% 9.85% 9.95% 10.40% #DIV/0! 8.95%

Line Losses plus Transmission Losses 11.64% 13.89% 12.62% 13.39% 14.17% 11.09% 13.16% 13.17% 14.03% 14.12% 14.54% #DIV/0! 13.18%

Red Lodge Heating Degree Days 1,502 951 689 618 380 107 - 31 313 613 877 6,081

Red Lodge Heating Degree Days History (2016) 1,123 772 786 551 410 27 20 57 239 550 689 1,463 6,687

Red Lodge Heating Degree Days History (15 Yr. Ave.) 1,152 1,025 833 618 395 128 13 40 194 565 888 1,213 7,064

December 31, 2017

PART R. POWER REQUIREMENTS DATA BASE

LINE

ITEM

NUMBER

USDA - RUS USDA - RUS

FINANCIAL AND STATISTICAL REPORT MT019 FINANCIAL AND STATISTICAL REPORT

December 31, 2017


BEARTOOTH ELECTRIC COOPERATIVE, INC.

COMPARATIVE BALANCE SHEET

November 30, 2017

CURRENT YEAR LAST YEAR DIFFERENCE

ASSETS AND OTHER DEBITS

-----------------------

TOTAL UTILITY PLANT IN SERVICE $31,408,105.35 $31,124,642.12 $283,463.23

CONSTRUCTION WORK IN PROGRESS 237,531.08 4,900.43 232,630.65

TOTAL UTILITY PLANT $31,645,636.43 $31,129,542.55 $516,093.88

-------------------- -------------------- --------------------

ACCUMULATED PROVISION FOR DEPRECIATION -$15,193,758.00 -$14,463,393.97 -$730,364.03

-------------------- -------------------- --------------------

NET UTILITY PLANT $16,451,878.43 $16,666,148.58 -$214,270.15

-------------------- -------------------- --------------------

INVEST. IN ASSOC. ORG.-PATRONAGE CAPITAL $426,153.50 $389,010.93 $37,142.57

INVEST. IN ASSOC. ORG. NON-GENERAL FUNDS 289,006.88 290,643.21 -1,636.33

-------------------- -------------------- --------------------

TOTAL OTHER PROPERTY & INVESTMENTS $715,160.38 $679,654.14 $35,506.24

-------------------- -------------------- --------------------

CASH - GENERAL FUNDS $1,314,415.54 $259,218.71 $1,055,196.83

CASH - CONSTRUCTION FUND - TRUSTEE 1.00 1.00 0.00

TEMPORARY INVESTMENTS 415,143.63 1,062,314.05 -647,170.42

-------------------- -------------------- --------------------

TOTAL CASH ON HAND $1,729,560.17 $1,321,533.76 $408,026.41

NOTES RECEIVABLE $0.00 $0.00 $0.00

ACCOUNTS RECEIVABLE SALES OF ENERGY (NET 769,596.86 756,255.09 13,341.77

ACCOUNTS RECEIVABLE - OTHER (NET) 10,137.81 101,389.66 -91,251.85

MATERIAL AND SUPPLIES - ELECTRIC & OTHER 469,163.43 426,339.62 42,823.81

PREPAYMENTS 42,681.78 56,644.95 -13,963.17

OTHER CURRRENT AND ACCRUED ASSETS 2,316.69 2,183.82 132.87

-------------------- -------------------- --------------------

TOTAL CURRENT AND ACCRUED ASSETS $3,023,456.74 $2,664,346.90 $359,109.84

-------------------- -------------------- --------------------

OTHER DEFERRED DEBITS $821,167.90 $973,257.03 -$152,089.13

-------------------- -------------------- --------------------

TOTAL ASSETS AND OTHER DEBITS $21,011,663.45 $20,983,406.65 $28,256.80

==================== ==================== ====================

LIABILITIES AND OTHER CREDITS

-----------------------------

MEMBERSHIPS $0.00 $0.00 $0.00

PATRONAGE CAPITAL 6,447,202.16 5,673,368.46 773,833.70

OPERATING MARGINS- PRIOR YEAR 0.00 0.00 0.00

OPERATING MARGINS- CURRENT YEAR 484,324.52 1,074,875.82 -590,551.30

NON-OPERATING MARGINS 363,450.17 267,751.28 95,698.89

OTHER MARGINS AND EQUITIES 153,234.91 142,837.12 10,397.79

-------------------- -------------------- --------------------

TOTAL MARGINS AND EQUITIES $7,448,211.76 $7,158,832.68 $289,379.08

-------------------- -------------------- --------------------

LONG-TERM DEBT -RUS (NET) $454,765.39 $479,079.55 -$24,314.16

LONG-TERM DEBT-FFB-RUS GUARANTEED 6,773,216.95 6,952,144.70 -178,927.75

ADVANCE PAYMENTS UNAPPLIED-RUS LOANS -1,416,219.05 0.00 -1,416,219.05

OTHER LONG-TERM DEBT (NET) 5,772,821.75 4,239,714.19 1,533,107.56

-------------------- -------------------- --------------------

TOTAL LONG-TERM DEBT $11,584,585.04 $11,670,938.44 -$86,353.40

-------------------- -------------------- --------------------

NOTES PAYABLE $0.00 $0.00 $0.00

ACCOUNTS PAYABLE 395,893.02 721,719.54 -325,826.52

CONSUMERS DEPOSITS 49,693.80 56,975.00 -7,281.20

OTHER CURRENT AND ACCRUED LIABILITIES 392,231.11 233,111.92 159,119.19

-------------------- -------------------- --------------------

TOTAL CURRENT AND ACCRUED LIABILITIES $837,817.93 $1,011,806.46 -$173,988.53

-------------------- -------------------- --------------------

OTHER DEFERRED CREDITS $1,141,048.72 $1,141,829.07 -$780.35

-------------------- -------------------- --------------------

TOTAL LIABILITIES AND OTHER CREDITS $21,011,663.45 $20,983,406.65 $28,256.80

==================== ==================== ====================


Financial Information November 2017

Actual Budget 2016 Actual Budget 2016

Operating Revenue $7,867,325 $7,566,248 $8,004,586 $688,809 $671,413 $643,253

Cost of Power $2,821,011 $2,706,666 $2,671,521 $267,098 $250,972 $232,418

$-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

Revenue & Cost of Power - 2017

YTD

NOVEMBER

Actual Budget 2016 Actual Budget 2016

Admin. & Gen. $1,166,028 $1,157,638 $1,134,677 $96,457 $93,202 $104,158

Cust. Serv. $353,553 $294,761 $345,715 $32,501 $24,442 $33,688

Oper & Maint $1,628,057 $1,300,430 $1,337,419 $153,787 $104,732 $107,330

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

Operating Expenses - 2017

YTD

NOVEMBER

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

YTD Cumulative Margins - 2017

2016 Budget Actual

$(50,000)

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000


Monthly Margins - 2017

2016 Budget Actual


Financial Information Through November 2017

change date in header

Ratios: December 31, 2016 and November 30, 2016 & 2017YE

2016 11/30/16 11/30/17

Quick Ratio * 2.70 2.15 3.00

Current Ratio 3.24 2.63 3.61

Equity as a % of Net Utility Plant 44.14% 42.95% 45.27%

Equity as a % of Total Assets** 35.10% 34.12% 35.45%

Net TIER *** (YTD) 3.37 3.26 2.11

Jan-Sept 15Oct 14-Dec14 DSC **** 2.28 2.30 1.74

719257.7 234820.8 Cash & Investments 995,971 1,321,534 1,729,560

Receivables 1,195,937 857,645 779,735

437917.9 150497.7 2,191,908 2,179,179 2,509,295

579696.8 Less Payables (485,868) (721,720) (395,893)

582413.5 176335.9 Liquidity 1,706,040 1,457,459 2,113,402

1037024 Other Payments Due: Due $

2.33 RUS Loan Payment 12/31/2017 4,126 (from COC account)

2.79 906045 FFB Loan Payment 12/31/2017 116,449 (from COC account)

CFC Loan Payment 1/31/2018 163,376

CoBank Loan Payment 1/20/2018 44,343

* Quick ratio=measures the ability of a company to use its cash and short-term/demand deposits to extinguish current liabilities immediately

** Equity Target - 40%*** Net TIER=Times Interest Earned Ratio (TIER) means the ratio of a

borrower’s net income (after taxes) plus interest expense,all divided by interest expenseNet TIER Target = RUS Covenant = 1.25 (met 2 of 3 years)

**** DSC=Debt Service Coverage is a measurement to generate sufficient fundsto cover principal and interest of long-term debt on an annual basisDSC Target = 1.5 (RUS Covenant = 1.25, met 2 of 3 years)

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

6,000,000

6,500,000

7,000,000

7,500,000

8,000,000

8,500,000


Monthly kWh Sales

2017 Budget 2016 2015

$-

$20,000.00

$40,000.00

$60,000.00

$80,000.00

$100,000.00

$120,000.00

30 Days 60 Days 90 Days Total Past Due

November Aged Past Due Accounts Receivable

2017 2016

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Jan 2017 Feb Mar Apr May June July Aug Sept Nov Dec

Delinquent Listing - Payments received thru 12/15/2017 - Over 30 Days

Customer Information System Payments Received Balance Due



SIMPLIFIED CASH FLOW

As of November 30, 2017

Black = creates cash

Red = uses cash

Thousands (000s) Actual Budget

CASH FROM OPERATIONS

Margins 558.8$ -$

Add back Depreciation 904.8 -

Add back Regulatory Asset 129.3

Cost from retirement of assets (poles, etc.) (254.0) -

Cash from Operations 1,338.9 -

Uses of Cash in Operations

Change in Ending Receivable Balance 416.2 -

Change in Ending Inventory Balance (69.8) -

Change in Ending Prepaid Expense Balance (28.1) -

Reduction of (payment for) other Current Assets 8.3 -

Change in Ending Accounts Payable Balance (90.0) -

Accrual/(payment) of other Current Liabilities 124.1 -

Cash created by (used in) operations 360.7 -

Capital Spending

Utility Plant (264.4) -

Construction Work in Progress (183.4) -

Other Property & Investments (21.1) -

Cash (used in) Capital Spending (468.9) -

Increase of debt (borrowing) - -

Pay down of debt - Early Exit Loan - -

Pay down of debt (42.6) -

Payment of Short-Term Line of Credit - -

Other creation (use of) cash (General Retirement) (460.5) -

Other Deferred Credit 6.0 -

Change in cash from all activities 733.6 -

Cash and Investments beginning 996.0 996.0

Change in cash 733.6 -

Cash and Investments ending 1,729.6 996.0

Payroll 1,239.7 1,024.1

Benefits 765.9 749.9

Total 2,005.6 1,774.0

*Note: Cash Flow Budget was forecasted on a quarterly basis. November 2017 is the second month of fourth quarter (December 2017).


First Interstate Bank - Checking

1/1/2017 2/1/2017 3/1/2017 4/1/2017 5/1/2017 6/1/2017 7/1/2017 8/1/2017 9/1/2017 10/1/2017 11/1/2017 12/1/2017 Totals

Beginning Balance 133,263 146,974 452,071 345,259 136,574 150,633 103,588 251,004 211,044 141,561 156,489 1,301,370 133,263

Transfers In 770,000 390,000 600,000 350,000 445,000 715,000 532,882 1,030,177 120,000 700,000 1,957,787 - 7,610,846

Transfers Out (300,000) - (450,000) (250,000) (200,000) (300,000) (350,000) (1,181,177) (200,000) (700,000) (800,000) (1,057,787) (5,788,964)

Receipts 600,666 542,543 526,861 512,248 472,016 434,023 770,837 816,933 716,341 743,700 612,458 666,700 7,415,325

- - - - - - - - - - - -

Payment

Payroll

Employees (75,184) (56,490) (83,379) (56,187) (72,072) (81,522) (59,887) (99,216) (74,459) (68,016) (63,652) (72,000) (786,880)

Taxes (30,365) (28,482) (41,020) (30,077) (35,454) (38,303) (30,250) (47,376) (45,468) (35,413) (33,032) (36,000) (400,874)

R&S/401k (49,596) (55,783) (55,331) (46,544) (46,386) (46,981) (48,428) (57,583) (33,108) (18,370) (18,580) (15,000) (442,093)

Loans

RUS* (4,126) (4,126) (4,126) (4,126) (4,126) (4,126) (4,126) (4,126) - - - - (28,884)

CFC (170,269) - - (170,245) - - (163,363) - - (163,376) - - (496,984)

FFB* - - (116,374) - - (116,453) - - - - - - (232,827)

CoBank - - - - - - - - (42,518) (44,343) (44,343) (44,343) (175,546)

Insurance

Group (43,290) (13,168) (13,168) (43,002) (13,168) (13,168) (46,459) (13,168) (13,400) (55,432) (13,400) (13,168) (250,703)

General (77,764) - - - - - - - - - - - -

WC (29,947) - - - - - - - - - - - -

A/P (127,544) (77,589) (140,668) (104,522) (143,784) (314,096) (175,566) (193,723) (179,534) (120,077) (134,656) (178,519) (1,762,735)

Power (351,200) (348,044) (278,316) (253,739) (219,560) (221,317) (225,895) (288,708) (264,480) (221,744) (180,506) (299,858) (2,802,166)

Property Taxes - - - (9,146) (116,499) - - - - - (135,487) - (261,132)

New ATV/Trailer/Truck (43,177) - - (53,402) - (8,827) - - - - - - (62,229)

LVE Mgmt (49,210) (45,139) (48,293) (48,135) (50,237) (49,488) (50,410) - (50,976) - - (342,678)

Other (5,282) 1,375.41 (2,997) (1,809) (1,670) (1,787) (1,919) (1,993) (1,880) (2,001) (1,708) (2,000) (18,389)

Total Payments (1,056,954) (627,447) (783,673) (820,932) (702,957) (896,068) (806,303) (705,893) (705,823) (728,772) (625,364) (660,888) (8,064,121)

Ending Balance 146,974 452,071 345,259 136,574 150,633 103,588 251,004 211,044 141,561 156,489 1,301,370 249,395 1,306,349

*Beg Sept Pd thru COC 1/31/2017 2/28/2017 3/31/2017 4/30/2017 5/31/2017 6/30/2017 7/31/2017 8/31/2017 9/30/2017 10/31/2017 11/30/2017 12/31/2017

1st Bank

Beginning Balance 97,158 99,409 282,265 19,803 48,314 94,281 127,952 - - - - - 97,158

Transfers Out (395,000) (190,000) (600,000) (250,000) (245,000) (215,000) (182,882) - - - - - (2,077,882)

Receipts 397,251 372,856 337,538 278,510 290,968 248,671 54,930 - - - - - 1,980,724

Ending Balance 99,409 282,265 19,803 48,314 94,281 127,952 - - - - - - -

First Interstate Bank - Savings

Beginning Balance 361,449 219,704 220,643 386,284 449,812 415,168 248,117 267,300 435,604 945,323 612,387 113,002 361,449

Transfers In 200,000 200,000 150,000 150,000 150,000 300,000 350,000 151,000 600,000 350,000 400,000 - 3,001,000

Transfers Out (375,000) (200,000) - (100,000) (200,000) (500,000) (350,000) - (120,000) (700,000) (900,000) - (3,445,000)

Receipts 33,255 939 15,641 13,527 15,357 32,949 19,183 17,304 29,719 17,064 615 9,200 204,753

Total Payments - - - - - - - - - - - - -

Ending Balance 219,704 220,643 386,284 449,812 415,168 248,117 267,300 435,604 945,323 612,387 113,002 122,202 122,202

All Other Accounts

Beginning Balance 404,101 504,340 304,667 606,561 706,977 757,106 757,191 757,191 757,151 357,151 707,151 315,189 404,101

Transfers In 300,000 - 450,000 250,000 200,000 300,000 350,000 150,000 200,000 700,000 300,000 - 3,200,000

Transfers Out (200,000) (200,000) (150,000) (150,000) (150,000) (300,000) (350,000) (150,000) (600,000) (350,000) (400,000) - (3,000,000)

Receipts 239 328 1,894 416 130 84 0 (40) 0 0 134,849 0 137,899

Total Payments/Gen.Retire - - - - - - - - - - (426,811) - (426,811)

Ending Balance 504,340 304,667 606,561 706,977 757,106 757,191 757,191 757,151 357,151 707,151 315,189 315,189 315,189

TOTAL ALL ACCOUNTS 970,427$ 1,259,647$ 1,357,908$ 1,341,676$ 1,417,189$ 1,236,848$ 1,275,495 1,403,798$ 1,444,035$ 1,476,027$ 1,729,560$ 686,785$

1/31/2017 2/28/2017 3/31/2017 4/30/2017 5/31/2017 6/30/2017 7/31/2017 8/31/2017 9/30/2017 10/31/2017 11/30/2017 12/31/2017



CFC SELECT NOTES INVESTMENTS

1/31/2017 2/28/2017 3/31/2017 4/30/2017 5/31/2017 6/30/2017 7/31/2017 8/31/2017 9/30/2017 10/31/2017 11/30/2017 12/31/2017 1/31/2018

970,427$ 1,259,647$ 1,357,908$ 1,341,676$ 1,417,189$ 1,236,848$ 1,275,495$ 1,403,798$ 1,444,035$ 1,476,027$ 1,729,560$ 686,785$

CFC Select Notes Strategy: CFC Select Notes Strategy:

180-209 day investments - Current interest 1.37% 180-209 day investments - Current interest 1.45%






11/29/2016

1/31/2017 200,000 maturity

11/29/2016

2/28/2017 200,000 maturity

1/31/2017 (150,000) invest - 58 days

3/30/2017 150,000 maturity

1/31/2017 (150,000) invest - 86 days

4/27/2017 150,000 maturity

3/1/2017 (300,000) invest - 121 days

6/29/2017 300,000 maturity

3/28/2017 (150,000) invest - 63 days

5/30/2017 150,000 maturity

4/10/2017 (100,000) invest - 150 days

9/7/2017 100,000 maturity

4/28/2017 (150,000) invest - 91 days

7/28/2017 150,000 maturity

5/30/2017 (200,000) invest - 59 days

7/28/2017 200,000 maturity

6/30/2017 (300,000) invest - 91 days

9/28/2017 300,000 maturity

7/28/2017 (150,000) invest - 33 days

8/30/2017 150,000 maturity

7/28/2017 (200,000) invest - 62 days

9/28/2017 200,000 maturity

8/30/2017 (150,000) invest - 61 days

10/30/2017 150,000 maturity

9/7/2017 (200,000) invest - 46 days

10/23/2017 200,000 maturity

10/11/2017 (400,000) invest - 30 days

11/10/2017 400,000 maturity

10/23/2017 (300,000) invest - 90 days

1/21/2018 300,000

Invested (500,000) (300,000) (600,000) (700,000) (750,000) (750,000) (750,000) (750,000) (350,000) (700,000) (300,000) (300,000)

WORKING CASH AVAILABLE 470,427$ 959,647$ 757,908$ 641,676$ 667,189$ 486,848$ 525,495$ 653,798$ 1,094,035$ 776,027$ 1,429,560$ 386,785$

4/6/20171/27/2017



Accounts Payable

Check Register

11/16/2017 To 12/15/2017

Bank Account: 1 - GENERAL FUND

Check / Date Pmt Vendor Name Reference Amount

Tran Listed Type

1497 11/17/2017 WIRE NATIONAL RURAL ELEC COOP ASSOC R & S PLAN 635.92

1498 11/20/2017 WIRE MORGAN STANLEY CAPITAL GROUP INC. POWER BILL 169,400.50

1499 11/20/2017 WIRE DEPARTMENT OF ENERGY POWER BILL 11,105.06

1500 11/20/2017 WIRE COBANK PRINCIPAL & INTEREST 44,342.91

1501 11/22/2017 WIRE PAYROLL PAYROLL 30,741.31

1502 11/22/2017 WIRE NRECA 401k PENSION PLAN 6,753.84

1503 11/22/2017 WIRE NRECA 401k PENSION PLAN LOAN REPAYMENT 1,259.46

1504 11/22/2017 WIRE HOMESTEAD FUNDS DEFERRED COMPENSATION 1,183.85

1505 11/22/2017 WIRE INTERNAL REVENUE SERVICE FEDERAL TAX WITHHELD & FICA 13,559.14

1506 11/22/2017 WIRE NATIONAL RURAL ELEC COOP ASSOC CBA FLEX PAYMENT TO EMPLOYEE 272.65

1507 11/24/2017 WIRE NATIONAL RURAL ELEC COOP ASSOC CBA FLEX PAYMENT TO EMPLOYEE 558.38

1508 11/24/2017 WIRE NEOPOST USA INC POSTAGE 500.00

1509 12/1/2017 WIRE USDA RURAL DEVELOPMENT FIB CHECKING TO USDA/RUS CUSHION OF CR 1,057,787.00

1510 12/1/2017 WIRE NORTHWESTERN ENERGY TRANSMISSION BILL 45,967.17

1511 12/6/2017 WIRE PAYROLL PAYROLL 33,585.93

1512 12/6/2017 WIRE NRECA 401k PENSION PLAN 6,303.84

1513 12/6/2017 WIRE NRECA 401k PENSION PLAN LOAN REPAYMENT 1,259.46

1514 12/6/2017 WIRE HOMESTEAD FUNDS DEFERRED COMPENSATION 1,183.85

1515 12/8/2017 WIRE INTERNAL REVENUE SERVICE FEDERAL WITHHELD TAXES & FICA 14,896.24

1516 12/10/2017 WIRE US BANK MONTHLY CORP CC STATEMENT 18,770.99

1517 12/13/2017 WIRE NATL RURAL ELECTRIC COOP ASSC GROUP BENEFITS 4TH QTR ADJUSTMENT 33.00

1518 12/13/2017 WIRE NATIONAL RURAL ELEC COOP ASSOC R & S PLAN 635.92

58338 11/17/2017 CHK A Y SUPPLY FORKLIFT PROPANE 56.35

58339 11/17/2017 CHK BORDER STATES ELECTRIC SUPPLY TOOL/SHOP SUPPLY 1,149.12

58340 11/17/2017 CHK CARBON COUNTY TREASURER 1ST HALF 2017 PROPERTY TAX 70,734.97

58341 11/17/2017 CHK CHARTER COMMUNICATIONS RL INTERNET SERVICE 159.97

58342 11/17/2017 CHK CIERRACOM SYSTEMS INCOMING 800 CALLS 373.47

58343 11/17/2017 CHK CSV FUEL 1,398.39

58344 11/17/2017 CHK ECOLAB PEST ELIM DIV RL PEST CONTROL 176.22

58345 11/17/2017 CHK MICHAEL P FERGUSON REIMBURSEMENT ON PURCHASES 113.11

58346 11/17/2017 CHK JACK HENRY & ASSOCIATES ACH PROCESSING FEES 72.60

58347 11/17/2017 CHK LUECAL CONSULTING BOARD STRATEGIC PLANNING 6,986.39

58348 11/17/2017 CHK MAID IN COLUMBUS LLC CLEANING COLUMBUS SHOP 200.00

58349 11/17/2017 CHK MAILING SYSTEMS PLUS MORE MAILING SYSTEM SUPPLIES 22.20

58350 11/17/2017 CHK MONTANA MOBILE MONTHLY OFFICE SHREDDING SERVICE 45.00

58351 11/17/2017 CHK MORRISON MAIERLE SYSTEMS CORP NETWORK MAINTENANCE & HOSTED EMAIL 1,271.00

58352 11/17/2017 CHK MOUNTAIN VIEW COLONY, INC. EMPLOYEE THANKSGIVING TURKEYS 565.93

58353 11/17/2017 CHK NATL RURAL ELECTRIC COOP ASSN LEGAL REPORTING SERVICE 170.00

58354 11/17/2017 CHK ONE SMART CONFERENCE, INC. CONFERENCE CALLING 11.50

58355 11/17/2017 CHK ONLINE INFORMATION SERVICES MONTHLY EXCHANGE SERVICE 5.40

58356 11/17/2017 CHK CUSTOMER OVER PAYMENT REFUND 217.27

58357 11/17/2017 CHK STILLWATER COUNTY TREASURER 1ST HALF 2017 PROPERTY TAX 50,377.85

58358 11/17/2017 CHK SWEET GRASS COUNTY TREASURER 1ST HALF 2017 PROPERTY TAX 4,783.52

58359 11/17/2017 CHK TESTING WITH INTEGRITY/TRAINING LLC DOT TEST 320.00

58360 11/17/2017 CHK MARTY TOMLIN REFUND OF PAYROLL ACH RETURNED 150.00

58361 11/17/2017 CHK UTILITIES UNDERGROUND LOCATE BILLABLE TICKETS 263.76

58362 11/28/2017 CHK ANIXTER INC WIRE 39,335.08

58363 11/28/2017 CHK BANIK COMMUNICATIONS INC. COMMUNICATION SERVICES 1,907.15

58364 11/28/2017 CHK ELECTRO TEST & MAINTENANCE INC ANNUAL VOLTAGE REG MAINT SERVICE 11,131.95

58365 11/28/2017 CHK FELT, MARTIN, FRAZIER & WELDON, P.C. ATTORNEY STATEMENT 1,060.00

58366 11/28/2017 CHK I-STATE TRUCK CENTER UNIT #6 PART 32.13

58367 11/28/2017 CHK IRBY TOOL & SAFETY GLOVE TESTING 197.68

58368 11/28/2017 CHK LOCAL UNION 44 UNION DUES 1,058.44

58369 11/28/2017 CHK MONTANA DEPT OF REVENUE MT WITHHELD TAXES 2,405.00

58370 11/28/2017 CHK MONTANA ELECTRIC COOP ASSN., INC. GENERAL DUES, SAFETY, RM INSERT & N.BROADCSTNG 8,699.30

58371 11/28/2017 CHK NISC ASP & H/W SUPPORT, AMS & MISC 7,105.41

58372 11/28/2017 CHK ONE CALL LOCATORS, LTD BILLABLE TICKETS - MT & WY 4,897.93

58373 11/28/2017 CHK QUILL CORPORATION OFFICE SUPPLIES 111.25

58374 11/28/2017 CHK TERRELL'S OFFICE MACHINES, INC. KYOCERA MAINTENANCE 154.12

58375 11/28/2017 CHK WYOMING DEPT OF REVENUE WY SALES & USE TAX 2,170.60

58376 12/1/2017 CHK AMERICA FAMILY LIFE INSURANCE CO PAYROLL DEDUCTION INSURANCE 358.98

58377 12/1/2017 CHK KW CONSULTING FORECAST CONSULTING 2,875.00

58378 12/1/2017 CHK METLIFE PAYROLL DEDUCTION INSURANCE 25.00

58379 12/1/2017 CHK NORTHWEST PUBLIC POWER ASSOC 2018 ANNUAL MEMBERSHIP RENEWAL 4,975.14

58380 12/1/2017 CHK KEVIN P OWENS MOVING, MILEAGE & OTHER REIMBURSEMENTS 1,308.35

58381 12/1/2017 CHK DONALD W PARKS COLUMBUS SHOP TABLE 80.00

58382 12/1/2017 CHK CUSTOMER GEN RET CK REWRITE-MARK 50.56

58383 12/1/2017 CHK CUSTOMER CC REG RET CK REWRITE 119.18

58384 12/8/2017 CHK BEARTOOTH BILLINGS CLINIC FOUNDATION TRAUMA SERVICES, STOP THE BLEED 250.00

58385 12/8/2017 CHK BIG SKY LINEN SUPPLY RL & COLUMBUS RUG CLEANING 115.17

58386 12/8/2017 CHK BORDER STATES ELECTRIC SUPPLY FR CLOTHING - VARIOUS LINEMAN 495.83

58387 12/8/2017 CHK CARBON COUNTY NEWS TEMP WORK ORDER AD 84.00

58388 12/8/2017 CHK CENEX FUEL 1,343.84

58389 12/8/2017 CHK CENTURYLINK LONG DISTANCE 25.25

58390 12/8/2017 CHK CENTURYLINK RL, COLUMBUS SHOP & SUBSTATIONS 1,160.98

58391 12/8/2017 CHK CITY OF RED LODGE MONTHLY WATER & SEWER 72.58

58392 12/8/2017 CHK COLUMBUS TIRE & SERVICE CENTER UNIT #63 FOUR TIRES 1,020.00

58393 12/8/2017 CHK CSV FUEL 1,415.60

58394 12/8/2017 CHK FARMER BROS CO COFFEE 134.58

58395 12/8/2017 CHK HDR ENGINEERING INC ENGINEERING CONSULTING 839.50

58396 12/8/2017 CHK HORIZON COMMUNICATIONS CALL CENTER 1,275.71

58397 12/8/2017 CHK JACO ANALYTICAL, INC. ONE (1) OIL SAMPLE 11.00

58398 12/8/2017 CHK KEN'S I-90 UNIT #7 R & R SWITCH & UNIT #9 OIL CHANGE 307.48

58399 12/8/2017 CHK LANDIS+GYR TECHNOLOGIES LLC LONG DISTANCE FEES & HOSTING FEE 1,089.70

58400 12/8/2017 CHK MAID IN COLUMBUS LLC CLEANING COLUMBUS SHOP 200.00

58401 12/8/2017 CHK MONTANA DEPT OF REVENUE MT WITHHELD TAXES 2,640.00

58402 12/8/2017 CHK MONTANA MOBILE MONTHLY OFFICE SHREDDING SERVICE 45.00

58403 12/8/2017 CHK MORRISON MAIERLE SYSTEMS CORP NETWORK MAINTENANCE & HOSTED EMAIL 1,271.00


Check Register

11/16/2017 To 12/15/2017

Bank Account: 1 - GENERAL FUND

Check / Date Pmt Vendor Name Reference Amount

Tran Listed Type

58404 12/8/2017 CHK NEMONT FOUR SUBSTATIONS 259.36

58405 12/8/2017 CHK NRECA ANNUAL REM SUBSCRIPTIONS 429.00

58406 12/8/2017 CHK PAPE MATERIAL HANDLING EXCHANGE FORKLIFT ANNUAL MAINTENANCE 196.67

58407 12/8/2017 CHK POM, AN ITILIAN EATERY CHRISTMAS PARTY 2,082.11

58408 12/8/2017 CHK QUILL CORPORATION COPY PAPER & OFFICE SUPPLIES 115.94

58409 12/8/2017 CHK RED LODGE TRUE VALUE SHOP SUPPLIES 72.76

58410 12/8/2017 CHK REPUBLIC SERVICES #892 GARBAGE DISPOSAL 190.31

58411 12/8/2017 CHK SPRINGLINE CONSTRUCTION, INC. WORK ORDER BORE 10,000.00

58412 12/8/2017 CHK TERRELL'S OFFICE MACHINES, INC. KYOCERA MAINT 259.54

58413 12/8/2017 CHK TITAN MACHINERY INC. UNIT #90 PARTS 289.22

58414 12/8/2017 CHK UTILITIES UNDERGROUND LOCATE BILLABLE TICKETS 246.49

58415 12/8/2017 CHK VERIZON WIRELESS CELL PHONES, COLUMBUS & GPS INTERNET 274.56

58416 12/8/2017 CHK CUSTOMER GENERAL RETIREMENT CHECK REWRITE 74.34



58419 12/8/2017 CHK CUSTOMER ESTATE RETIREMENTS 343.69







58426 12/15/2017 CHK AMERICA FAMILY LIFE INSURANCE CO PAYROLL DEDUCTION INSURANCE 358.98

58427 12/15/2017 CHK ARLEEN M BOYD BOARD FEE, MILEAGE & OTHER MEETINGS 1,128.40

58428 12/15/2017 CHK CHARTER COMMUNICATIONS RL INTERNET 159.97

58429 12/15/2017 CHK CIERRACOM SYSTEMS INCOMING 800 CALLS 453.55

58430 12/15/2017 CHK DANIEL DUTTON BOARD FEE & OTHER MEETINGS 1,250.00

58431 12/15/2017 CHK CUSTOMER OVER PAYMENT REFUND 224.11

58432 12/15/2017 CHK JULIE A LINDGREN BOARD FEE & OTHER MEETINGS 1,250.00

58433 12/15/2017 CHK LINECO RETIREE COVERAGE 1,429.00

58434 12/15/2017 CHK LINECO LINEMAN INSURANCE 13,015.20

58435 12/15/2017 CHK ROXIE S MELTON BOARD FEE, MILEAGE, EXP REIMB & OTHER MG 1,261.10

58436 12/15/2017 CHK MONTANA ELECTRIC COOP ASSN., INC. RED CROSS CERTIFICATION COURSE 11,865.29

58437 12/15/2017 CHK RICHARD T NOLAN BOARD FEE, MILEAGE & OTHER MEETINGS 1,613.54

58438 12/15/2017 CHK ONE SMART CONFERENCE, INC. CONFERENCE CALLING 57.37

58439 12/15/2017 CHK ONLINE INFORMATION SERVICES MONTHLY EXCHANGE SERVICE 5.40

58440 12/15/2017 CHK WILLIAM A PASCOE BOARD FEE, MILEAGE & OTHER MEETINGS 1,154.08

58441 12/15/2017 CHK DAVID PETERSON OCTOBER BOARD FEE & OTHER MEETING 2,632.79

58442 12/15/2017 CHK RONNING AUTO TRUCK TRACTOR SERVICE UNIT #60 TIRES 1,399.00

58443 12/15/2017 CHK WYOMING DEPT OF REVENUE WY DOR 2017 PENALTY 1,800.00

58444 12/15/2017 CHK CUSTOMER 2016 ESTATE RETIREMENT 7.11






58450 12/15/2017 CHK CUSTOMER ESTATE RETIREMENT 2,094.06

58451 12/15/2017 CHK CUSTOMER INACTIVE REFUND 210.07


58453 12/15/2017 CHK CUSTOMER INACTIVE REFUND 22.63






Total Payments for Bank Account - 1 : (143) 1,766,801.47

Total Voids for Bank Account - 1 : (0) -

Total for Bank Account - 1 : (143) 1,766,801.47


December GM Report

Power Supply

Month/Year Energy WAPA Morgan Stanley

Twin Eagle Imbalance Transmission Total Cost Cost per mwh

16-Nov 5,427 $16,076 $180,411 ($7,202) $43,134 $232,419 $42.83

16-Dec 9,083 $18,422 $239,048 $46,227 $47,435 $351,132 $38.66

17-Jan 9,053 $15,269 $240,144 $44,719 $49,555 $349,688 $38.63

17-Feb 6,845 $16,028 $202,680 $11,268 $46,770 $276,745 $40.43

17-Mar 6,131 $12,896 $188,461 $5,915 $46,462 $253,734 $41.39

17-Apr 5,205 $13,837 $157,177 $1,503 $47,064 $219,580 $42.19

17-May 5,111 $11,189 $162,694 ($166) $47,603 $221,321 $43.30

17-Jun 5,765 $12,759 $157,753 $7,772 $47,602 $225,886 $39.18

17-Jul 7,362 $13,971 $201,274 $24,849 $48,569 $288,662 $39.21

17-Aug 6,340 $14,456 $177,957 $23,683 $48,356 $264,453 $41.71

17-Sep 5,338 $12,234 $157,192 $10,916 $45,928 $226,270 $42.39

17-Oct 5,281 $11,105 $170,501 ($1,091) $47,058 $227,573 $43.09

17-Nov 6,485 $13,585 $195,842 $8,917 $48,754 $267,098 $41.19

Total 83,426 $181,827 $366,342 $2,064,792 $177,311 $614,291 $3,404,562 $40.81

TWACS The TWACS project remains on track to meet the deadline of having a Proposal ready for Board approval at their January 30 Meeting. A final staff DRAFT will be presented to BEC’s General Counsel the week of January 8. It is hopeful that the actual bid solicitation will follow the next week. Staff will evaluate bids beginning January 24.

Trump Signs Tax Reform Package; Senate Introduces Energy Tax Bill Congress wrapped up business for the year after passing tax reform legislation and a short-term spending bill to keep the government funded until January 19. The president signed both bills Friday morning. The tax bill maintains the tax-exempt status of co-ops as not-for-profits, but did not include several energy tax provisions. The final bill limits the ability of businesses to deduct interest payments


on their taxes, but preserves the full interest deductibility for taxable G&T co-ops. The bill eliminates the use of Clean Renewable Energy Bonds beginning in January, but retains the wind production tax credit at current levels.

The bill does not renew the tax provisions for geothermal heat systems, nor does it modify the existing tax credits for new nuclear power plants or carbon capture utilization and storage projects. However, Senate Finance Committee Republicans introduced an energy tax bill (S. 2126) to address those three electric co-op priorities. NRECA will continue to advocate for Congress to pass this legislation early in 2018.

The tax reform law will impact how employers manage payroll withholdings. The IRS will provide guidance in January and likely give employers time to comply with new individual income tax withholding.

Solar Tariffs In a 400 page report, the U.S. International Trade Coimmission (ITC) has sent President Trump three proposed trade duties aimed at protecting domestic solar panel manufacturers. The White House must determine by January 26 whether to adopt one of ITC’s remedies, devise an alternative, or do nothing. The ITC trio of recommendations varies, although all would remain in place for four years. The highest tariff put forward would add roughly 6 cents per watt on imported solar cells and 10-15 cents per watt on solar modules, declining over four years.

NISC NISC’s Board of Directors unanimously authorized the retirement of 30% of the organizations patronage capital. BEC will be receiving their patronage capital retirement check in the first quarter of 2018. Following is a breakdown of BEC’s status:

Beginning Balance: $25,108.86 2017 Allocation: $6,959.33 Ending Balance as of 12/31/17: $32,068.19

CFC The CFC Board of Directors has ratified the withdrawal of Southern Montana Electric G&T, Inc. from Class B membership in CFC. In connection with the withdrawal from CFC, BEC has received a check in the amount of $175.21 which represents a portion of its membership fee paid by SME G&T, that it has requested be refunded to its member, BEC.

Strategic Vendor Relationships Kevin Owens, Eric Elton and Markus Urbanik met with Border States on December 12 to complete discussions with potential vendors who have the potential to supply material to Beartooth Electric over the course of a budget year. BEC has previously met with Anixter and RESCO to discuss the benefits of aligning business interests to provide the greatest level of cost management, service and value to the utility. BEC is currently under a strategic business alliance with Anixter that expires April 1, 2018. BEC


will make a decision in the first quarter of 2018 as to whom material purchases will be made going forward.

Federated Rural Electric Insurance Exchange Kevin Owens met with David Reher, Account Executive for Federated this month to review BEC’c overall insurance coverage. BEC’s past record on insurance claims and lost time accidents was viewed very favorable. David offered up an additional coverage for BEC’s consideration; Capital Credit Litigation. Her also suggested that the Board should consider adding a Policy to accommodate Arbitration and Mediation as a means to resolve Litigation. Both of these issues have been brought forward to General Counsel for further discussion.

CFC Eric Anderson met with Kevin Owens to conduct an annual review of BEC operations and financials. Owens also briefed him on the 2018-2022 Work Plan and recent financial model forecasts. Eric has apparently done a lot of past work with BEC regarding financial planning. Based upon our discussion, Eric was extremely impressed with the level of effort that has been undertaken by the Board to get BEC’s financial house in order. Eric conveyed a message from CFC to all Cooperatives that they needed to be focused and reporting the Distribution Equity, absent any equity on their books being transferred to them from their G&T power supplier. This message did not apply to BEC because of our current load following contract with Morgan Stanley.

NITS • A new Network Integration Transmission Service Agreement (NITS) between Northwestern Energy

and BEC was filed with FERC on December 27, 2018. WECC reliability Standard BAL-002-WECC-2became effective on October 1, 2014. This standard requires Contingency Reserves to be 3% ofgeneration and 3% of load.

• Morgan Stanley is providing Contingency Reserves for 3% of load under their current load-following power contract.

• Once again, BEC reached out to Northwestern Energy to provide Contingency Reserves for 3% of generation; i.e. .54 MW. Northwestern has gone to the market to procure this service from a third-party for the period March 1, 2018 to March 1, 2019. For the upcoming year, Seattle City Light will be providing the required 3% Contingency Reserve for generation to Beartooth through Northwestern Energy. There is no markup for this service provided by Northwestern. This year’s NITS Agreement is approximately 20% less than the previous year’s NITS.


BEC Communications Board Report January 9, 2018

1. January Rural Montana (content due January 11)• Kevin Owens: RFP• Kaaren Robbins: Feature: Generators, Generator Safety, BEC Members with Generators List, 2018 Budget

Approval, Energy Efficiency, Calendar

2. Event: BEC’s Carnegie Library Christmas Tree Lighting Ceremony (12/21/2017)• Planned Tree trimming/light string installation• Designed sign: Beartooth Electric Cooperative logo, “Let all your days be merry and bright “ message, date

December 21, 2017• Arranged for Santa• Coordinated ribbon cutting with the RL Chamber• Arranged Hot cocoa and carolling• Arranged press coverage• This event generated incredible goodwill and publicity across print, personal contacts and social media.

3. 2018 Washington D.C. Youth Tour Program• Closed: December 15.• One candidate to be selected today to represent BEC.

4. 2018 BEC $1,000 Scholarship• Deadline: January 26

5. 2018 MECA Memorial Scholarship• Deadline: January 26

6. Operation Round Up• Operation Round Up Contributions $92.34, billed 12/07/2017 for a balance of $1,361.98. Total number of accounts

176 and customers 163. I have received three applications for Operation Round Up and the ORUboard approved two and denied one at their last meeting. Richard Sederburg has resigned as President ofthe ORU Board to retire. The 2018 Board is as follows: Meg Hatch-President, Judy Strobbe-Vice President,Karen Reiner-Secretary, Janet Luloff will be joining the group as Member-at-large.

7. LISD/LIDDLISC/LIDD Discounted Accounts for November billed 12/06/2017. WY: $20.20 and MT: $146.70. TOTAL =$167.10. Total number of accounts is 24. To meet the MCA Universal system benefits program requirement of 2.4% of retail sales, a $200 credit will be applied to each LISC/LIDD program member’s account.


8. News Releases• “Beartooth Electric Invites All to the Carnegie Library Christmas Tree Lighting Ceremony,” distributed December 20,

2017• ”Beartooth Electric Cooperative Transparency,” distributed December 14, 2017• “Do rural electric cooperatives pay taxes?” distributed December 8, 2017• “Beartooth Electric Cooperative Scholarship Opportunities Open for Application,” distributed December 1, 2017

9. Emails to Member List• Post-Board meeting email sent December 9, 2017• Pre-Board meeting email sent January 6, 2018

10. Website Updates• Updated History• Update Employee Directory• Update Next Board Meeting• 2018 Washington D.C. Youth Tour (Closed)• 2018 MECA Memorial Scholarship• 2018 Beartooth Electric Scholarship• RM Newsletter January• Billing Insert January• January Board Book• October Financials• Calendar• RFP Page (in development)• News/Events “Beartooth Electric Invites All to the Carnegie Library Christmas Tree Lighting Ceremony.”• News/Events ”Beartooth Electric Cooperative Transparency.”• News/Events “Do rural electric cooperatives pay taxes?”• News/Events “Beartooth Electric Cooperative Scholarship Opportunities Open for Application.”


Low Income Assistance

2017 $ Participants $ Participants $ Participants $ Participants

January 333.77 30 91.74 6 425.51 36 425.51 36

February 236.23 32 62.27 6 298.50 38 724.01 74

March 225.72 36 56.39 6 282.11 42 1,006.12 116

April 140.44 32 32.58 5 173.02 37 1,179.14 153

May 130.64 31 29.02 5 159.66 36 1,338.80 189

June 116.45 31 29.24 5 145.69 36 1,484.49 225

July 124.18 31 35.43 5 159.61 36 1,644.10 261

August 101.94 30 23.23 5 125.17 35 1,769.27 296

September 100.37 29 19.93 4 120.30 33 1,889.57 329

October 111.34 29 17.04 4 128.38 33 2,017.95 362

November 146.90 28 20.20 4 167.10 32 2,185.05 394

December 0.00 - 2,185.05 394

Note: One MT member from November is a pending disconnect, property sold

YTD 1,767.98 339 417.07 55 2,185.05 394

0.00 - 0.00 - 0.00 - 0.00

1,767.98 417.07 2,185.05

Rate schedule 14 for MT

Rate schedule 15 for WY

Estimate Dec 215.00

YTD + Estimated Dec 2,400.05

Annual Goal 7,200.00

Short -4,799.95

Divided by 24 current Dec accounts 200.00

24 accounts @ $200 credit 4,800.00

12/7/17, If our annual goal is $7,200, I would recommend we do the $160 credit to the 31 accounts to achieve the goal. Brad

Note: In 2014, 42 accounts were credited with $50 each to achieve the annual goal

MT WY Monthly YTD

C:\Users\bradp\Documents\Low Income Assistance.xlsx




BOARD REPORT By: Eric Elton, Line Superintendent

January 9, 2018

CONSTRUCTION, OPERATIONS & MAINTENANCE

• Red Lodge crew is changing out poles in the Roberts area. (We will start polechange out on the Absarokee sub next).

• Columbus crew has finished the pole inspections for Absarokee Sub. (Wehave a total of 3,547 poles on this substation and 100 are marked for changeout in 2018).

• I lost the bet, we didn’t get the Pinecrest Tie line done in 2017. Absenteeowners have agreed to sign easements and then left town for the Holidayswithout getting easements signed and notarized. We will be ready to getgoing on this project when the weather breaks this spring.

• A 24KW Solar Array project which started in September 2017 hasencountered numerous complications due to the project’s lack ofengineering and design resulting in countless BEC crew hours totroubleshoot and the enlistment of HDR to resolve the overcurrent anddisconnection of panels due to improperly sized conductors from the arrayto the service.

• We spent a day with Big Horn Electric looking at their TWACS meteringsystem. We were surprised at how simple the equipment was to install.

• There was a hit-n-run on our line east of Columbus and broke two poles off.I reported the damage to the sheriff’s department, still no luck on who itwas.

• We installed 4 new services in the month of November.• There was a total of 17 outages system wide in the month of November.

(Please see attached breakdown sheet).• We had 578 individual consumers out of power at some point in the month

of November having duration of 1795 minutes. (Please see attachedbreakdown sheet).


EDUCATION, SAFETY & LOSS

• We held a MECA safety meeting on November 29. (Please see attachedsheet)

• The next MECA safety meeting is scheduled for January 4th.• There are no Lost Time Accidents to report for the month of November.

TRUCK, TOOLS & EQUIPMENT

• The backhoe trailer had a problem with the tilting mechanism and had tobe replaced. (Not sure on price yet but I’m guessing around 3500 dollars,it’s still at the machine shop).


NOVEMBER 2017 OUTAGE SUMMARYD

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Cause of Service Interruption (RUS Designation

1730A-119)

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11/01/17 115 25 090 Snow loading Columbus OH 2875

11/03/17 135 5 090 Snow loading Nye OH 675

11/06/17 105 4 090 Snow loading Red Lodge OH 420

11/06/17 125 10 090 Snow loading Edg/From OH 1250

11/07/17 30 3 090 Broken jumper/wind Columbus OH 90

11/14/17 25 20 110 Planned outage/pulled elbow Columbus OH 500

11/20/17 100 2 090 Broken URD terminator/wind Belfry OH 200

11/20/17 120 2 unknown Fuse blown Columbus OH 240

11/20/17 150 20 490 Tree on line Nye OH 3000

11/27/17 100 4 unknown Broken jumper Columbus OH 400

11/27/17 75 470 unknown Fuse blown Belfry OH 35250

11/27/17 285 1 090 Broken jumper/wind Nye OH/URD 285

11/27/17 75 1 090 Broken jumper/wind Nye OH 75

11/28/17 40 4 110 Planned outage/change cutout Belfry OH 160

11/29/17 90 5 unknown Re-fused cutout Reed Point OH 450

11/30/17 180 1 500 Replaced bad transformer Belfry OH 180

11/30/17 45 1 690 Turkeys flew into line Columbus OH 45

TOTALS 1795 578 46095

RUS CODE KEY November YTD Substations

000 Transmission 0 17 4 Belfry

090 Weather 8 57 6 Columbus

110 Planned Outage 2 17 1 Edg/From

300 Equipment 0 53 4 Nye

490 Trees 1 19 1 Red Lodge

500 Transformer 1 6 1 Reed Point

690 Animals 1 44

790 Public Caused 0 12

Unknown 3 35


BEAR TOOTH ELECTRIC COOPERATIVE

RED LODGE, MONTANA Kevin Owens, Manager

11-29-17

1. TOPICS. POLE TOP/BUCKET RESCUE, Electrical burns

2. VIDEO AIDS USED: Power Point Presentation

3. REPORT OF ACCIDENTS: We discussed accidents and near accidents thathave occurred within the state and industry.

4. RECOMMENDATIONS AND Comments. For the first topic Chris Benton hada presentation on proper first aid procedures for life treating bleedingsituations. We then went to the yards and the men demonstrated their ability to perform pole top and bucket rescue procedures. For our last topic we returned to the office and reviewed the effects and care concerns for electrical burns and contact injuries.

# of Class Hours: 4 # of Field Hours:

# of Personnel Present: 10 # of guests present:

Thanks for your help and involvement.

Gordon McConkey MECA SL/C


EMPLOYEE NAME ATTENDANCE KEVIN OWENS

LINDA DUKART

TRAVIS BARKER X

JAKE WRIGHT X

JIM AVENT X

JAMES PIHL X

SAM WALKOWIAK X CONNI TEACHOUT

ERIC ELTON X

MARTY TOMLIN

MARKUS URBANIK X

MIKE FERGUSON X

GUS BEHRENT X

BILL COLGROVE

KAAREN ROBINS

LEE HAUGE X



Delivery Point Analysis

Final November 2017 Days in month 30

Load Factor Line Loss

Demand Energy Demand Energy Purchased Demand Energy Energy Energy Demand Energy Transmission Less

kW kWh kW kWh % kWh kWh kW kWh Losses Trans Losses Line Loss

2017 2016 Nov 2017 Nov 2017 Nov 2017

Absarokee 2,005 996,147 1,738 837,586 69.0% 15.3% 18.9% 858,324 728,408 47,797 9.5% 13.8%

Belfry 1,919 901,446 1,666 776,945 65.3% 15.2% 16.0% 706,931 656,979 43,253 17.6% 21.6%

Columbus 2,325 1,145,042 1,966 945,183 68.4% 18.3% 21.1% 972,629 797,375 33.60 13,040 44,041 10.5% 13.9%

E. Rosebud 52 21,645 60 21,778 57.4% -12.5% -0.6% 17,582 17,793 1,039 14.7% 18.8%

Edgar 1,094 523,416 939 424,377 66.5% 16.4% 23.3% 453,316 362,331 25,114 9.0% 13.4%

Luther 679 324,229 619 277,682 66.4% 9.6% 16.8% 284,108 246,984 15,557 8.0% 12.4%

Nye 1,057 560,788 928 454,108 73.7% 13.8% 23.5% 486,788 364,740 26,908 8.8% 13.2%

Red Lodge 1,922 969,780 1,826 840,671 70.1% 5.3% 15.4% 793,111 723,667 106.50 29,431 46,532 10.9% 15.2%

Reed Point 636 314,511 478 247,415 68.6% 33.2% 27.1% 271,127 213,391 15,091 9.4% 13.8%

Roberts 1,455 727,621 1,299 600,682 69.5% 12.0% 21.1% 655,076 518,648 34,912 5.4% 10.0%

Totals 13,143 6,484,624 11,519 5,426,427 68.5% 14.1% 19.5% 5,498,992 4,630,316 140.10 42,471 300,243 10.40% 14.54%

2 Months Ago 3 Months Ago Last Year Last Month Last Month

Less Trans

Line Loss Line Loss Line Loss Line Loss Line Loss

Sept 2017 August 2017 Nov 2016 Oct 2017 Oct 2017

Absarokee 12.8% 13.1% 13.0% 6.3% 10.8%

Belfry 16.9% 12.3% 15.4% 14.1% 18.2%

Columbus 15.7% 15.1% 14.6% 11.1% 14.5%

E. Rosebud 17.0% 18.3% 18.3% 14.6% 18.7%

Edgar 15.2% 12.5% 14.6% 10.8% 15.1%

Luther 11.7% 14.5% 11.1% 8.7% 13.1%

Nye 12.5% 12.9% 19.7% 10.9% 15.2%

Red Lodge 12.5% 12.0% 11.6% 7.8% 12.2%

Reed Point 13.5% 15.0% 13.8% 9.4% 13.7%

Roberts 12.0% 12.6% 13.7% 10.4% 14.7%

14.0% 13.2% 14.1% 9.9% 14.1%

Comparisons

Load Factor = It can be derived from the load profile of the specific device or system of devices. Its value is always less than one because maximum demand is always more than average demand. A high load factor means power

usage is relatively constant. Low load factor shows that occasionally a high demand is set. To service that peak, capacity is sitting idle for long periods, thereby imposing higher costs on the system. Electrical rates are designed so

that customers with high load factor are charged less overall per kWh. This process along with others is called load balancing or peak shaving.

Purchased Sold Own Use

2017 2016 2017 vs. 2016 2017


TOTALS YTD

Feb Apr May Jul Sep Dec

Light & Heavy Duty Trucks 28,413.80 29,477.56 27,174.63 23,089.96 23,202.35 21,820.89 23,935.52 24,053.09 25,768.14 25,286.03 0.00

10,867 14,718 12,644 14,120 21,259 10,883 12,831 18,840 14,227 9,991 0

2.61 2.00 2.15 1.64 1.09 2.01 1.87 1.28 1.81 2.53

1,194.25 1,433.05 1,771.23 1,633.08 1,882.09 1,130.48 2,061.00 1,311.88 1,880.60 972.36 0.00

9.10 10.27 7.14 8.65 11.30 9.63 6.23 14.36 7.57 10.28

Backhoes, Trailers & Chipper 3,756.00 4,174.86 3,744.72 3,999.72 3,456.05 3,009.68 3,123.16 2,810.77 3,174.35 3,379.24 0.00

53 76 29 75 1,754 29 69 68 30 65 0

70.87 54.93 129.13 53.40 1.97 103.78 45.26 41.33 105.81 51.99

17.03 62.79 65.21 60.73 25.83 0.00 62.50 110.62 85.31 48.36 0.00

3.11 1.21 0.44 1.23 67.91 0.00 1.10 0.61 0.35 1.34

2017 FLEET TOTALS

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

32,169.80 33,652.42 30,919.35 27,089.68 26,658.40 24,830.57 27,058.68 26,863.86 28,942.49 28,665.27 0.00

2016 FLEET TOTALS

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

26,493.38 27,255.83 24,638.52 24,153.51 23,895.98 27,515.98 26,876.66 25,866.10 23,663.54 29,800.86 33,963.97

YTD

Jan Total

Total: 24,995.29 319,119.62

YTD

Jan Total

Total: 32,539.98 319,390.50

Gallons of Gas 119.97 658.35

HPG 0.38 3.48

Hours 46 2,294

Cost Per Hour 143.61 17.98

MPG 8.63 9.15

Total: 6,606.24 41,234.79

Cost Per Mile 2.55 1.85

Gallons of Gas 1,179.63 16,449.65

Total

Total: 25,933.74 278,155.71

Miles 10,181 150,561


Fleet Management

Expense Totals

NOVEMBER 2017

Jan Mar Jun Aug Oct Nov


Estate Retirement Ratification

In the normal course of business, estate retirements are approved by the Board of Trustees as part of the CONSENT AGENDA section of the meeting. We were approached by a customer to please expedite the process. The next review/approval by the Board of Trustees would have been the January 30, 2018 meeting and the estate retirement check would be issued shortly thereafter. This customer explained to us that they were in a current financial hardship. The General Manager conferred with the Board President, Secretary and Legal Counsel and the consensus was to proceed and release the estate retirement payment (December 15, 2017) to the member prior to its formal approval by the Board of Trustees with ratification to take place at the January 9th Board Meeting.

CAPITAL CREDITS (Estate Retirement)

Capital Credit Discounted Retained by Allocated Refund to Cooperative

Member

Member #80604 $1,263.55 $1,105.10 $158.45

Action needed: Ratification of the above transaction


2017 System Goal Accomplishment

70% of 2017 Goals were Accomplished

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD %

No Lost Time

Accidents0 0 0 0 0 0 0 0 0 0 0 0 100%

Score 90% or

Better on 3

Random

Inspections

0 0 0 1 0 0 2 0 0 0 0 0 100%

At Least 2 Hazard

Reports by

Employees

X X X X X X X x x x x x 100%

70% of Members

Rates BEC a 8 or

Better

Member

survey later

in year

Member

survey later

in year

Member

survey later

in year

Member

survey later

in year

Member

survey later

in year

Member

survey later

in year

Member

survey later

in year

Member

survey later

in year

72.07%

Goal

Achieved

72.07%

Goal

Achieved

72.07%

Goal

Achieved

72.07%

Goal

Achieved

100%

Total # of

Outages will be

less than 3 year

average

11 15 14 26 31 33 25 29 26 23 17Goal

not met0%

Year End

Expenses less

than 105% of

Budget

Will track

after each

quarter

Will track

after each

quarter

Over Budget

more than

5% Q1

Will track

after each

quarter

Will track

after each

quarter

Over Budget

10.86%

Will track

after each

quarter

Will track

after each

quarter

Over Budget

14.60%

Will track

after each

quarter

Will track

after each

quarter

Goal

not met0%

Will Complete

100% of System

Maintenance

Plan

Completed

January

Tasks

Completed

February

Tasks

Comlpeted

March Tasks

Completed

April Tasks

Completed

May Tasks

Completed

June

Tasks

Completed

July Tasks

Completed

Aug Tasks

Completed

Sept Tasks

Completed

Oct Tasks

Completed

Nov Tasks

Completed

Dec Tasks100%

Overtime will be

less than past 3

year average

21 hrs 103 hrs 86.5 hrs 55.5 hrs 328.5 hrs 454 88.5 hrs 137 282 119.5 40.5Goal

not met0%

We will sign up

an additional 50

members to

Operation

Roundup

10/132 4/136 -2/134 29/163 8/171 2/173 2/175 9/184

3/187 Ended

with 187,

2017

signups = 65

100%

Implement, train

all office

employees to use

SmartHub and

sign up 75

members

Cannot track

until Smart

Hub is

installed

Cannot track

until Smart

Hub is

installed

Cannot track

until Smart

Hub is

installed

Employee

training

began in

April

Training

Completed23 22 100 100 100 141 141 100%

ORU started year w/122BEC Board Book | January 9, 2018 | Page 42

NRECA 2018 Annual and Regional Meeting Voting Delegate Certification and Credentialing Process

NRECA VOTING DELEGATE CERTIFICATION NRECA Bylaws Article V, Section 2(B) and 2(C) provide that "…each voting member shall be entitled to select, either by vote of its membership or its board of directors, one of its members, directors, or employees to act as the voting delegate, and one such person to act as the alternate delegate, at the meeting…each voting delegate must submit a certification signed by the director who is president of the member or is chair of the member’s board of directors, and by the director who is secretary of the member, stating that such delegate is duly authorized to cast the vote of the member.”

Please indicate below who will be your delegate at the 2018 NRECA Annual Meeting. Only those delegates who have been properly documented as authorized by their cooperatives shall be credentialed to act during the NRECA Annual and Regional Meeting Business Session. This form must be dated, signed by the board President and board Secretary (board of directors/trustees), and returned to NRECA by January 5, 2018. You will have an opportunity to select new delegates for the 2018 Regional Meetings.

The following are hereby certified as official voting delegate and alternate and are duly authorized to cast the vote of this member.

Signed Board President (of Member System) DATE Board Secretary (of Member System) DATE

If you have any questions concerning the above procedure, please contact the Membership Department at (703) 907-5868.

(The Alternate is certified to act only in the absence of the Delegate)

Signed

2018 Voting Delegate

2018 Alternate Delegate

Name Title

Name Title

Please fill out the form below. Indicate who will be your Voting Delegate for 2018 and an Alternate in case the Delegate is unable to attend the Business Meeting. You will have an opportunity to select a new delegate for the 2018 Regional Meetings. Please return this form to NRECA by email: [email protected] or by fax: (703) 907-5512

1 Please return signed, dated and completed formto [email protected] by January 5th, 2018.

2 Delegates must be registered for the meeting in advance and should pick up their badge before checking in as a delegate.

3 At the meeting the delegate must then proceed tothe Voting Delegate registration Desk which will be located near the general NRECA Meeting Registration area.

4 At the NRECA Voting Delegate Registration Desk, the delegate’s certification information will be reviewed and the delegate will receive the official delegate ribbon, which will be attached to the name badge, as well as the assigned credential card for the meeting. 5 The delegate must bring the credential card and ribbonto the NRECA Business Meeting and present it in order to vote. Each voting member is permitted one vote on each of the resolutions and other business properly brought before the Annual and Regional Business Sessions. No individual may represent more than one voting member system and proxy voting is prohibited.

NRECA VOTING DELEGATE CERTIFCATION

MEETING AND REGISTRATION PROCEDURES

Org Name

CEO/GM:

State:


Beanooth Electric Cooperative. Inc ..•

'. : .. , .. ,, ... ,.,,,·�·�··.;·. ' ......... ····: � ...

2018 BEARTOOTH ELECTRIC COOPERATIVE

WASHINGTON D.C. YOUTH TOUR

APPLICATION

PARENT/GUARDIAN MUST BE A MEMBER OF BEARTOOTH ELECTRIC COOPERATIVE TO APPLY

Please complete this application and return with your essay to Beartooth Electric Cooperative by December 15, 2017.

APPLICANT NAME [l,ane �fl\DU>lV'.\BEARTOOTH ELECTRICACCOUNTNUMBER_] ........ 7 .... 3_l_,,_a .... o _________________ _

PARENT/GUARDIAN NAME �Y\,) ( £ a V)o\ 'lt ,\f\Y) \ £e V , )aca�n .. MAILING ADDREss ___ 7_� .............. L ...... o,_.� ...... e. ...... x ...... j ___ L,=..a=-'-Y\ ..... <.. ___ B_e\_£:v'i ____ �_T __ ..... S ..... q....,l)_0 ........... 'o...__ __

Add,.. city ttate zip

TELEPHONE (40lD�L\-2,_\p -4D(?:J\ E-MAIL ADDRESS

SCHOOL NAME �6\ \...Mr� ,e. \1":\°)Y\ $( ,\/lQ{)\

scHooL MAILINGAooRess �DO t \J\um'OevS /WePERSONAL STATEMENT: DESCRIBE IN A FEW SENTENCES WHY YOU SHOULD BE SELECTED AS THE COOPERATIVE'S YOUTH TOUR REPRESENTATIVE. (Your personal statement will be consldeAKI In the judging).

\ l).t\\f \).e }¾\OJ \ 'i)Q\\lt y'.Y\QV\u, \W\ �Oct CAV\:t C\ \)ll\i:ht� ::W\l\:\ \lJC\\�0.

�\�� fZt �<�� i

�::��: 0

C,�)�6)�. , w.\w,,n ::MM \ aV)ll o V\Q:bWQ.\ ,eaAev ·w) OOA�1, � srb,£\t\o'O�. \ C\\�o am\\t� W't\\)� o.,()t\ {XV\t>f"'.itvl) WY\\t.V\ wO\l\d. 'ol ?lvttL-\- fly{ fttlL �o\J\\rl �?·

LIST YOUR PRIMARY SCHOOL, COMMUNITY, VOLUNTEER AND EMPLOYMENT ACTMTIES IN WHICH YOU ARE CURRENTLY INVOLVED.

• RU\� �:tvc\e\1-t c l\vYJo\ • ,N<>v:¥,{)� :fu,r rou -fo.ill<v: � �l\\o �Y<iYJ +mvn • \JCi\)nte='t wJ irru:\,\f\c� ,V) <,:e.w:m.:'1 �c..,V\C)(::)\ .

• f-2..\ t\1} ,nH.X"Q\_-t" C..\\J\:::, rff#,\ bf1(,..t 5?yd)) �4 \:\ • RuyW})O� Clu'a

LIST MEMBERS OF YOUR FAMILY (PARENTS, GUARDIANS, SIBLINGS).

I authorize Beartooth Electric Coopemlve. Inc. to use the above information along 'Mlh photos of me for publicity purposes of the sponsoringMontana Electric Cooperatives' Association.

APPLICATION AND ESSAY DEADLINE: DECEMBER 15, 2017

Beartoodl Electrlc Cooperative - PO Box 1110 -1306 N Broadway Ave - Red Lodge, MT 59068 Questions? Contact: Kaaran Robbins 406-446-2310 or [email protected]

ATE

12/5/17


The Future is in Our Hands

By Katie Jacobsen

Why is it so challenging to stay in contact with students and children? I think that many

students need consistent and interactive activities and updates in order to stay “in the loop.”

believe that in any good relationship there must be consistent communication.There are many

ways that I believe will work and that will encourage a positive response from high school

students. A few ideas that I have are, a representative coming to the different schools, improving

social media outreach and gear posts more toward youth, and finally, monthly newsletters geared

towards youth.

If the rest of high school students and children are like me, then they don’t know a lot

about what goes into helping our power work. Coming into schools and becoming engaged in

class activities and curriculum could provide the publicity needed in order to engage kids, like

me. Representatives can come into elementary and middle school classrooms and present what

the local electrical cooperation is, what it does, and the hard work that goes into electricity. They

could create interactive activities and engaging presentations by having parents who are

employed with the Beartooth Electric Cooperative visit classes. In my experience when

somebody that I know is leading an activity I am more engaged in what is being presented. They

could present on various topics. Such as, who the Cooperative is, what the coop does, and why

they do what they do. In the high school classroom, leaders within the Cooperative could visit

classes anywhere from basic classes such as Earth Science and computer sciences to advanced

classes, like Chemistry and Calculus. I think that engaging in lessons that kids are actually

learning about will create a fun and engaging atmosphere for learning. If information about the

Electrical Cooperative is properly presented and taught, then students at all levels will be able to


reap the benefits of that knowledge. Engaging within schools and local classrooms can lead to a

wide range of youth who will learn and absorb information about the Electric Cooperative.

Since it is 2017 and almost every child has a cellular device, social media is a very

impactful tool that, if properly used, can be a wonderful tool for spreading knowledge and

information. Creating fun, informational, and interactive videos and sharing them on social

media websites could attract the attention of youth and kids surfing social media. Personally,

when looking through my Instagram or Facebook feed, I rarely stop and look at photos. I almost

always will watch a video if it looks intriguing. After looking at the Beartooth Electric

Cooperative Inc. facebook page, I can see that there are not many of videos that have been made

that are informative. There are also not many engaging and informative photos. I know that it

sounds silly, but in many companies, there is a full-time media support individual or team for a

company. They manage all publicity and media for the company. Having someone who creates

and directs creative posts for the company could really reach many teens on the web. Social

media is an extremely valuable tool if it is used properly. If the Beartooth Electric Cooperative

could take advantage of this modern tool, kids everywhere would be able to have access to

information about the Cooperative.

One way to reach children could be mailing or emailing monthly newsletters, which

contain interactive and challenging competitions. Creating an interactive monthly newsletter

could be extremely useful in trying to engage the youth. For younger kids, you could include fun

informative coloring pages. An incentive for the kids to actually do the coloring pages could be

displaying a few in the next month’s newsletter. For older students, there could be photo

competitions, art competitions, and writing competitions. An incentive for older kids can be gift

cards to a gas station, or any gift card to anywhere. Another interesting prize could be


scholarship money or maybe even a job shadow. I think that having an incentive encourages

youth to challenge themselves.

In short, I believe that there are many ways that the Beartooth Electric Cooperative can

connect with the youth within the various communities. Through developing an exciting and

engaging newsletter, bringing a representative into classrooms, and using social media to target

and improve the connection between the youth and the Cooperative. There is always room for

improvement these creative techniques; improvement is not far off.


At the November board meeting Dick Nolan confirmed that his statement in the October minutes meant that in his opinion all BEC communications were the responsibility of management/operations. My opinion, based on fiduciary and ethical requirements and our stated commitments to members, is that the board has a responsibility to communicate directly with members as well as set strategy and provide oversight for BEC communications. The duty to honestly communicate material information ends with the board, not operations.

Having operations responsible for the communications plan, which has been reviewed with the communications committee and board and represents the bulk of BEC communications, is a good path. Having the board and management share responsibilities as outlined in BEC bylaws and policies is necessary. I am concerned about statements made at the board meeting advocating for the board to defer all communications to operations. At the last communications committee meeting there was general consensus to include additional operations information in the monthly Rural Montana BEC insert and reduce the length and frequency of the board contributions as appropriate, based on developing issues and board and committee activities. There was no indication of a proposal to discontinue direct board communications or reduce oversight; either of those actions would violate requirements in our bylaws and policies.

The board is accountable to members and must report directly to them. That means that, in addition to management’s planned increase in communications related to operations, members are entitled to communications from the board. The board is responsible for the strategy and content of those communications.

The board’s five-year history of direct conversation with members has worked. Reports from the annual meeting show that members place a high value on how they have been well informed by the board. There is no justification for abandoning that process as we deliver on a plan to increase communications. BEC bylaws were amended with a primary focus on member rights, including the right to information. The Board is responsible for protecting those rights. Policies have been updated to clearly state how the board and management should address member involvement and communications.

Primary fiduciary duties are care (due diligence) and loyalty to the organization. Care includes understanding the legal framework that governs us, including our bylaws and policies. Loyalty to the co-op requires us to support our recently defined mission/vision/pledge within that framework. Loyalty to our commitment to members requires open and active board communication.

Below is a list of bylaw and policy provisions that relate to board and staff responsibilities to communicate with members and enlist member involvement. My synopsis comment is at the end of each list in italics.

BEC BOARD FIDUCIARY COMMUNICATION RESPONSIBILITIESArleen Boyd


BEC AMENDED BYLAWS Article IV Board Trustees Section I A The business and affairs of the Cooperative shall be managed by a Board of seven (7) Trustees, which shall exercise all of the powers of the Cooperative required bylaw, by the Articles of Incorporation, by these Bylaws, or conferred upon the boardby these bylaws.Section I CThe Board shall ensure that the Cooperative members have access to informationrelevant to the business of the Cooperative with the exception of information that isdeemed proprietary or confidential by law, contract, policy, and these Bylaws.Article VI Section 8 ManagerThe board may appoint a Manager who shall perform such duties and exercise suchauthority as the Board may assign.

The board is responsible – a manager may be hired and assigned duties. Fiduciary responsibility is called out, in the context of financial transactions, in Article X.

COOPERATIVE POLICIES

Policy 202 Functions of the Board of Trustees Section 2.1 Objective: To explain the functions and responsibilities delegated to the Board of Trustees by the membership Section 3.2.1 Conduct meetings to inform the membership of BEC news and information, using such meetings to obtain their understanding and acceptance of BEC’s objectives, goals, policies, plans and programs. Section 3.2.6 Provide information and obtain understanding and acceptance of BEC’s objectives, viewpoints, policies, plans and programs Section 3.2.7 Keep the membership informed of problems faced by BEC which require their support and involve them in the planning and implementation of programs which affect them. Section 4.1 The Board of Trustees and the General Manager shall ensure that the provisions of this policy are followed.

Policy 202 lists requirements for the board to address legal responsibilities, trusteeship, planning and budgeting, providing for operating requirements and establishing controls.


Trustee Policy 209 Section 3.1 This Code of Ethics is intended to be a statement of how the board will conduct itself on a daily basis. It identifies the Board’s values and the procedures that will be followed to ensure that these values are upheld. Trustees are expected to know and understand the standards and expectations that are contained herein. The Code of Ethics provides guidance to Trustees in how they are expected to carry out their duties. Because the Code cannot address every possible situation, Trustees are expected to consult with the Board president if in doubt about the standards that apply in any situation. Section 3.2 The BEC Board believes that ethical standards are achieved not just through publication and dissemination of this document, but through open, objective and ongoing discussion about the ethical issues related to the business and activities of BEC. Section 7 Member Communications Section 7.1 In communicating with members BEC shall: 7.1.1 Provide all information that is not deemed legally confidential 7.1.2 Provide information that is accurate and understandable 7.2.3 Not knowingly make false or misleading statements Section 13 The Board President shall ensure that the provisions of this policy are followed.

Policy 209 specifically addresses board responsibilities and ethical conduct and makes the board president solely responsible for seeing that it is followed. The requirements for member communications in Section 7 are board responsibilities.

Policy 404 Member Relations Communications Section 3: It is the policy of BEC to: 3.6. Survey members regularly to identify attitudes, needs and views about BEC. 3.7. Encourage members to join committees and to actively participate in BEC. Section 4 It is the responsibility of the Board to: 4.1.1. Adopt a process to develop and approve annually a strategic plan for BEC that provides a proactive, comprehensive communications plan that includes: 4.1.1.1. Objectives and methods for communicating BEC's strategy and business performance effectively to members, employees and other individuals and organizations with an interest in BEC. 4.1.1.2. Procedures to receive feedback from members and other stakeholders of BEC. 4.1.1.3. Processes and criteria for measuring the accuracy and effectiveness of all BEC communications. 4.1.1.4. Plan for and promote trustee participation in communications programs.

Policy 404 holds the board responsible for a process to develop and approve a strategic, comprehensive communications plan that features trustee participation and encourages member involvement. The manager supports and manages a communications effort (section 4.2)



2018 Budget


Table of Contents

Narrative Summary…………………………………………………………….………………..……. 3

Operating Budget with Comparison to Prior Year……………….………...….……….. 10

Cash Budget ………………………………………………………………………….…….…………… 15

Projected Balance Sheet ……………………………………………………….………...……….. 17

Revenue…………………………………………………………………….……………………………. 19

Cost of Power …………………………………………...……….……………………………………. 25

Payroll …………………………………………………………………………..………………………… 28

Capital Budgets ………………………………………………………………….….……………….. 31

Depreciation ……………………………………………………….……………….………………….. 37

Debt Service/Interest ……………………………………….………………….………………….. 39

2018 System Goals ......................................................................................................................... 42


Narrative Summary


2018 Budget

Narrative

Introduction:

2018 is the first year of a multi-year Work Plan. Financial thresholds have been established by the

Board to maintain $500,000 in cash reserves and maintain a Debt Service Coverage Ratio (DSCR)

of 1.25 throughout the period of the Work Plan 2018-2022. The Cooperative maintains a $2 million

line of credit for extreme unforeseen emergencies with both CFC and CoBank.

There are several areas of primary focus that are driving the 2018 Budget Submittal Process. These

include:

Deployment of TWACS digital meter replacement. Based upon long delivery schedules for

digital meters, 50% of the meters will be delivered in August 2018, with the balance in

March 2019. The first digital meter is scheduled to be installed in Belfry, September 2018.

TWACS related work on 5 substations will be completed during the Spring and Summer of

2018. The remaining 5 substations will be completed in 2019.

BEC will pursue a 15 year loan (approximately $1.5 million) to finance the installation of the

TWACS project. To stay in compliance with BEC Bylaws, the Cooperative must allow a 60

day comment period prior to acquiring any long term debt. The Board will be presented with

a final bid to approve at their January 30, 2018 Board Meeting. Consequently, the 60 day

notification period will begin in February. During the 60 Day notification period, discussion

will take place regarding loan options, timelines and details. The first payment to the vendor

will take place upon delivery of the TWACS substation transformers in April; approximately

$250,000.

Initiate a Vegetation Management Program that provides a 5 year rotation throughout BEC’s

service territory. The initial two years are funded at $220K with year 3 and beyond funded

at $150K. Current tree trimming practices target areas of greatest need and customer outages

from year to year. The proposed Vegetation Management Plan will divide the service

territory into 5 geographic areas and trim trees within the rights of way of one geographic

area per year. After the 5th year, natural tree growth in the first area will require trimming

again and the cycle repeats. Members can expect fewer outages and reduced operating costs

from less overtime callouts from tree related outages. Budget $220,000.

The driving force behind the need for replacing our existing staking/mapping software is the

age of the staking program, lack of support and vulnerability to loss of 17 years of data. The

utility industry has made significant progress in this area over the years to fully integrate

Mapping, Staking and GIS systems. BEC’s existing staking and mapping software is 17

years old and no longer supported and contains none of the integration requirements of GIS,

Mapping and Staking functions. Seventeen years of engineering records from the staking

program reside on one tower computer with no backup. 17 years of staking sheets will be

migrated over to a new cloud-based Mapping, Staking and GIS system. Budget $56,824.

100 poles will be changed out in 2018 due to age and condition. Reduced availability of

man-hours because of the TWACS deployment in 2018 & 2019 necessitates the reduction in

pole replacements in those years, $115,000.

Pole testing and inspection will include 4 summer interns to expedite this process. Testing

and inspection prior to 2018 was performed by line personnel with the goal of completing

one substation per year. Consequently, only two of 10 substations have been completed.


This work needs to be completed in 4-5 years to fully support a 2020 Pole Replacement

Program, accurate property records and deployment of the GIS system.

The 2018-2019 Construction Work Plan is being completed by HDR in 2017. This is a plan

required by RUS to make sure our system is reliable. $65,000 in the 2018 budget is

designated for completion of the Pine Crest Subdivision primary line extension. HDR is also

in the process of updating our system model in 2017 that hasn’t been done since 2005. In

2019, HDR will prepare the two year work plan for 2020 and 2021. This will also include

the environmental report required by RUS.

2018 will be year one of a 5 year replacement of substation oil circuit breakers. New

electronic circuit breakers are fully compatible with the new TWACS system and allow more

individual circuit information that is not available with the existing oil circuit breakers.

Removing the oil circuit breakers will reduce line crew maintenance and negate liability and

cleanup costs associated with oil-filled equipment, $58,500.

Increased communication to maintain a high degree of transparency to members and fully

support the deployments of the TWACS system, community solar initiative and exploration

of interest in Community Solar among members. Budget $133,135.

Initiate market research and member interest in a Community Solar Project with possible

construction in 2019 based upon member financial commitment.

Continue work on possible alternative rate designs that offer fair and equitable cost recovery

among members within and across all rate classes. The electric industry is being driven by

new technology, distributed generation and customer choice. The BEC Board has chosen to

deploy new meter reading technology and support customer choice without jeopardizing the

Cooperative’s financial stability, system safety and reliability. Rate designs that support

customer choice and meet the Cooperative’s objectives will be explored with member input

in 2018 and 2019. Implementation targeted for late 2019 following a full scale Cost of

Service Study.

Increased training for employees to improve skills and certifications where necessary.

Increased investment in facilities. These include:

The HVAC system in the main office is original equipment from the late 1970’s. The

original design incorporates baseboard heat and a 5 ton air conditioner. The current

design provides absolutely no fresh air ventilation when the air conditioning system

is turned off for the summer, approximately 9 months. This provides an

unsatisfactory and unhealthy work environment for employees. The 2018 budget

includes a 5-ton high efficiency 2 stage heat-pump with an economizer to provide

free outside air cooling below 55 degrees and fresh air throughout the year. Budget

$15,000.

The existing computer hardware and network will be replaced and upgraded in 2018.

The current system utilizes tower computers or laptops with docking stations at each

workstation. Upgrading all existing hardware and software over 5 years old would

require in excess of $12,500. Systems Technology Consultants (STC) in Billings is

BEC’s network administrator and charges approximately $1,200 per month to support

all hardware, software and the network. The hardware, software and network will be

upgraded in 2018 to a “thin client” network architecture that utilizes a single

backroom server with adequate storage and processing capability to support all BEC

workstations. This new architecture will forego the perpetual replacement of

individual workstation tower computers and software. Next year all hardware,

software and security measures will be installed, maintained and upgraded on a single

back-office server. The only piece of hardware at each workstation will be a “thin

client” box the size of a typical paperback. This serves as the portal for monitors,


keyboards and mice at each workstation. Consequently, savings should also be

realized from STC with only providing network, hardware and software support to

only one server. Budget $28,000.

Four employee workstations will be upgraded with modular furniture. An additional

closed office will be constructed for the Member Services/ Communication employee

displaced by the addition of a part-time work-order employee. Budget $5,500.

Continued use of outside consultants and technical expertise for:

System Engineering

Financial Projections and Modeling

Rate Design

Communications

Board/ Risk Management Research & Analysis

2018 Controllable Expenditures

Capital Budget Total: $1,298,589

A. Electric Distribution Extensions- $2,265

Electric meters- Meters will need to be purchased for new construction in the state of

Wyoming. Montana meters are paid by the member as a contribution in aid of

construction. 8 new service meters x $105= $840 plus 3 irrigation/poly-phase x $475=

$1,425

B. Electric Conversions and Line Upgrades- $65,000

Pine Crest Subdivision Loop

C. Miscellaneous Electric Distribution- $248,500

Replacement Transformers- To be used for replacement of faulty or damaged

transformers. Any given variety, $20,000

Sectionalizing Equipment- Equipment to replace outdated line oil circuit breakers.

The new breakers will be “one shot” capable, whereas the old ones are not. This is

a safety measure for working on the power lines and during dry conditions to

prevent range fires. $15,000

Electronic OCR’s- This is the first year of a multi-year replacement program.

Oil- filled substation circuit breakers will be replaced with new electronic circuit

breakers that will be compatible with the TWACS system and provide individual

circuit information. The new electronic breakers require minimal maintenance and

negate the exposure of an oil spill. $58,500

Pole Replacements – 100 poles will be changed out due to age and condition.

Reduced availability of man-hours because of the TWACS deployment necessitates

the reduction in pole replacements in 2018 and 2019. 100 poles x $1,500= $115,000

Ordinary Replacements – Replace underground cable or overhead conductor as

needed. Underground cable is replaced after three faults. $40,000

D. Construction Work Plan- $1,000

The 2018-2019 Work Plan is being completed by HDR in 2017. The $1,000 is a

placeholder in the event that the Plan is not completed in 2017. This is a plan required by

RUS to make sure our system is reliable. HDR is also in the process of updating our

system model in 2017 that hasn’t been done since 2005. In 2019, HDR will prepare the


two year work plan for 2020 and 2021. This will also include the environmental report

required by RUS.

E. General Plant Total: $926,824

Facility Upgrades $58,500

HVAC Upgrade $15,000 Office Furniture $5,500

General Facilities Improvements $10,000

Computer Network, Hardware, Software Upgrade $28,000

TWACS Total: $751,000 The TWACS system will replace our existing outdated AMR system. The new

TWACS technology offers significant operating efficiencies, system information and

improved customer service to members. Replacement meters are no longer available

and need to be acquired from other utilities going through a similar upgrade to digital

meters. Our existing Turtle TS1 system will no longer be supported by the

manufacturer at the conclusion of 2018.

NISC Upgrades- Total: $117,324 Staking/Mapping Software- The driving force behind the need for the

staking/mapping program is the age of the staking program, lack of support and

vulnerability to loss of 17 years of data. The utility industry has made significant

progress in this area over the years to fully integrate Mapping, Staking and GIS

systems. BEC’s staking and mapping software is 17 years old and no longer

supported and contains none of the integration requirements of GIS, Mapping and

Staking functions. Seventeen years of engineering records from the staking program

reside on one tower computer with no backup. 17 years of staking sheets will be

migrated over to a new cloud-based Mapping, Staking and GIS system. $56,824

NISC Modules- These modules are necessary for the new metering system to

communicate with billing software. $50,000

TWACS Upgrade– NISC costs associated with migrating our old billing system to

the new TWACS billing software. $8,000

Document Vault- NISC software to allow a shift from paper to all electronic files

and documents. $2,500

F. Transportation General Plant- Total: $55,000

Mini Trackhoe- Replace the 1998 small backhoe on the skid steer in Columbus with a

mini-trackhoe. The mini-trackhoe in Red Lodge has proven to be a vital piece of

equipment for BEC. The tracked mini was the only equipment that could operate in the

snow and mud last May.


Professional Services

Rate Design Consultant- $15,000

Total: $99,000

Communications Consultant- $15,000

System Engineering $7,500

Financial Consultant- $15,000

Legal- $40,000

Audit/Tax Preparation- $6,500

Vegetation Management $220,000

2018 will mark a significant change in the how the Cooperative trims trees throughout its service

territory. Approximately $100,000 has been budgeted annually to trim trees. The annual focus

for trimming has been those areas that have experienced the greatest number of outages the

previous winter and past year. Unfortunately, this approach never allows the Co-op to get ahead

of the curve in managing tree growth. In many respects, it’s the “tail wagging the dog” from

year to year.

2018 will mark the first year of a 5-year Vegetation Management Plan. The service territory will

be divided into 5 geographic areas on a 5-year rotation. 2018 and 2019 will need to be funded at

$220,000 to get ahead of the curve on needed areas of trimming. Going forward tree trimming

will need to be funded at $150,000 per year to maintain a 5-year growth cycle.

This Plan will reduce customer outages from trees throughout the year and even more so during

periods of heavy wet snow. Savings will be achieved through reduced overtime.

2018 Communication & Member Services Total: $133,135

2018 will be a most exciting year for member communication and member services. This is a

budget increase from previous years to maintain the level of transparency to members and fully

support the deployment of the TWACS system and digital meters followed by Rate Design and

Community Solar. New and different communication channels will be tested. More detailed

communication plans will be completed in the Spring of 2018.

The communication strategy is to lead monthly with the Rural Montana newsletter content, tie

storylines and new content across all media including billing statement notice, billing statement

insert, website, Facebook, articles and press releases.

2018 New Initiatives

1. Monthly theme across all media.

2. Direct mail– Quarterly (a top contender in the member annual meeting survey results).

3. Town Hall meetings scheduled across the service area for both Digital Meter and

Irrigator presentations. Town Hall meeting for Community Solar.

4. New member package (welcome letter, BEC bylaws).

5. Member Follow-up survey to insure we are meeting expectations

6. Internal communications (our top ambassadors (employees) will always receive a pre-

release of all communication).

7. Local tie-ins with coupons, special offers, find an icon to win, etc.


8. Adherence to the 7 C’s of communication (clear, concise, concrete, correct, coherent,

complete and courteous).

Defined Communication Channels

Rural Montana Magazine 12 issues $23,910

Billing statement notice 12 statements $0

Billing statement inserts 12 statements $12,000

Website (Go Daddy) Annual Hosting $15

Website Template (Touchstone) Annual Hosting $0

Facebook Annual Hosting $0

Articles/Press releases as necessary $0

Direct mail Quarterly report, Town Halls and $40,000

Irrigators, new initiatives

Town Hall meetings Fourteen Total $12,000

Annual Member Meeting September 29-Anipro Event Center $27,410

(includes labor)

New Member Welcome Package All new members $1,000

Adobe systems and graphic images Monthly subscriptions $1,800

Banik Communications Communication support $15,000


Operating Budgetwith Comparison to Prior Year


Operating Statement Compared to Prior Year

Line Description 2017 Budget

2017

Pro Forma 2018 Budget 2019 Forecast 2020 Forecast 2021 Forecast

1 Operating Revenue and Patronage Capital 8,407,963$ 8,689,060$ 8,393,700$ 8,446,136$ 8,498,899$ 8,551,992$

2 Power Production Expense - - - - - -

3 Cost of Purchased Power 3,031,755 3,124,313 3,134,994 3,154,579 3,174,286 3,194,116

4 Transmission Expense 7,799 6,340 7,458 7,533 7,608 7,684

5 Regional Market Expense - - - - - -

6 Distribution Expense - Operation 864,414 929,488 915,491 928,399 941,490 954,765

7 Distribution Expense - Maintenance 521,710 734,466 629,649 638,527 577,530 585,673

8 Customer Accounts Expense 257,815 288,032 349,788 354,929 360,147 365,441

9 Customer Service and Informational Expense 48,381 68,028 149,042 151,263 153,517 155,804

10 Sales Expense 13,800 13,101 5,145 5,248 5,353 5,460

11 Administrative and General Expense 1,292,112 1,299,077 1,083,103 1,134,025 1,150,695 1,167,610

12 Total Operation & Maintenance Expense (2 thru 11) 6,037,787 6,462,845 6,274,670 6,374,503 6,370,625 6,436,553

13 Depreciation & Amortization Expense 1,020,000 997,400 1,014,390 1,023,863 1,033,424 1,043,075

14 Tax Expense - Property & Gross Receipts - - - - - -

15 Tax Expense - Other 2,811 2,237 2,811 2,839 2,868 2,896

16 Interest on Long-Term Debt 546,594 545,487 572,334 578,057 583,838 589,676

17 Interest Charged to Construction - Credit - - - - - -

18 Interest Expense - Other 1,200 1,098 1,200 1,200 1,200 1,200

19 Other Deductions 1,800 1,800 1,800 1,800 1,800 1,800

20 Total Cost of Electric Service (12 thru 19) 7,610,193 8,010,867 7,867,205 7,982,262 7,993,754 8,075,200

21 Patronage Capital & Operating Margins (1 minus 20) 797,770 678,193 526,495 463,874 505,145 476,792

22 Non Operating Margins - Interest 13,000 22,716 118,065 92,287 66,509 41,076

23 Allowance for Funds Used During Construction - - - - - -

24 Income (Loss) from Equity Investments - - - - - -

25 Non Operating Margins - Other (1,186) 7,825 1,967 1,986 2,006 2,026

26 Generation and Transmission Capital Credits - - - - - -

27 Other Capital Credits and Patronage Dividends 52,000 41,953 46,200 46,662 47,129 47,600

28 Extraordinary Items - - - - - -

29 Patronage Capital or Margins (21 thru 28) 861,584$ 750,687$ 692,726$ 604,809$ 620,789$ 567,494$

30 Operating - Margin 797,770$ 678,193$ 526,495$ 463,874$ 505,145$ 476,792$

31 Non Operating - Margin 63,814$ 72,494$ 166,231$ 140,935$ 115,644$ 90,702$

32 Times Interest Earned Ratio - Operating 2.46 2.24 1.92 1.80 1.87 1.81

33 Times Interest Earned Ratio - Net 2.58 2.38 2.21 2.05 2.06 1.96


2018 Budget


Account Description 2017 Budget

2017

Pro Forma 2018 Budget

440.1 REVENUE - RESIDENTIAL 6,896,253$ 7,075,668$ 6,771,800$

440.11 REVENUE-RES. NET METERED 46,000 49,931 46,000

440.2 REVENUE - SEASONAL - - -

441 REVENUE - IRRIGATION 405,853 442,934 406,200

442.1 REVENUE - SM.COMM - 50 KVA OR LESS 611,238 650,714 734,600

442.105 REVENUE - SM.COMM NET METERED 3,600 4,842 3,600

442.11 REVENUE - LG. COMM - >50 & < 1,000 KVA 255,635 252,805 237,500

442.15 REVENUE - LRG.COMM NET METERED 21,600 27,391 21,600

442.2 REVENUE - INDUSTRIAL 1,000 KVA OR MORE 133,085 145,084 134,500

447 REVENUE - SALES FOR RESALE - - -

450 FORFEITED DISCOUNTS 21,600 22,616 21,500

454 REVENUE - POLE RENTAL 9,400 12,031 12,000

456 REVENUE - OTHER 3,700 5,045 4,400

1 Operating Revenue and Patronage Capital 8,407,963 8,689,060 8,393,700

555 PURCHASED POWER 3,031,755 3,124,313 3,134,994

555.1 PURCHASED POWER-ACCRUED - - -

555.2 SOUTHERN A&G - - -

555.3 SOUTHERN EXIT AMORTIZATION - - -

3 Cost of Purchased Power 3,031,755 3,124,313 3,134,994

570.3 TRANS - PROPERTY TAXES 3,765 3,708 4,308

570.4 TRANS - INSURANCE ALLOCATION 938 869 835

571.1 TRANS - MAINT - LABOR 3,096 1,763 2,314

4 Transmission Expense 7,799 6,340 7,458

580.1 DISTR-OPERATIONS-SUPERVISION 107,875 112,678 116,285

580.11 DIST OPERATIONS SUPERVISION - WY - - 177

582.1 STATION EXPENSE-LABOR 69,590 69,975 69,147

582.11 STATION EXPENSE-WY - 861 432

583.1 DIST - OPERATIONS - LABOR 183,699 238,170 169,162

583.11 DIST - OPERATIONS -WY 4,770 4,569 7,964

583.9 DIST. OPERATIONS-POLE INSPECTIONS - - -

583.91 DIST. OPERATIONS-POLE INSPECTIONS-WY - - -

584.1 URD LINE EXPENSE-LABOR 14,425 9,700 11,886

584.11 URD LINE EXPENSE - WY - 5,904 4,235

584.5 OPERATIONS-UG LINE LOCATES 43,000 42,689 48,782

584.51 OPERATIONS-UG LINE LOCATES-WY 4,900 4,505 5,556

586.1 METER EXPENSE - LABOR 111,268 72,588 62,517

586.11 METER EXPENSE - WY 4,791 4,318 4,696

587.1 CUSTOMER PREMISES - MT 2,153 9,425 5,097

587.11 CONSUMER PREMISES - WY - 227 158

588.1 DIST - OPERATIONS - PROPERTY TAXES 230,418 230,856 263,679

588.2 DIST - OPERATIONS - INSURANCE ALLOCATION 59,941 54,596 53,399

588.3 DIST - OPERATIONS - MAPPING 22,404 38,354 38,321

588.4 DIST. OPERATIONS-POLE GPS 3,799 28,692 52,617

588.41 DIST. OPERATIONS-POLE GPS-WY - - -

589 DIST - OPERATIONS - RENT 1,380 1,380 1,380

6 Distribution Expense - Operation 864,414 929,488 915,491

590.1 DISTR-MAINTENANCE-SUPERVISION - - -

590.11 DIST-MAINT- SUPERVISION-WY - - -

592.1 DIST - MAINT - SUBSTATIONS - LABOR 12,140 11,931 10,130

592.2 DIST. MAINT - PORTABLE SUBSTATION - 114 72

593.1 DIST - O/H MAINT- LABOR 257,386 416,392 226,535

593.11 DIST - O/H MAINT- WY 28,820 39,594 31,549

593.2 DIST - O/H MAINT - TREE TRIMMING 130,189 172,944 254,253

593.21 DIST - O/H MAINT - WY TREE TRIMMING 191 276 232

594.1 DIST - MAINT - U/G - LABOR 67,159 61,097 65,864

594.11 DIST - URD MAINT - WY 2,368 3,611 2,719

595.1 DIST - MAINT - TRANSFORMERS - LABOR 23,019 27,886 37,959

595.11 DIST - TRANSFORMERS - WY 439 619 337

597.1 DIST - MAINT - METERS - LABOR - - -

597.11 DIST-METER MAINT-WY - - -

598.1 MAINTENANCE-CONSUMER PREMISE - - -

598.11 MAINTENANCE-CONSUMER PREMISE/WY - - -

7 Distribution Expense - Maintenance 521,710 734,466 629,649



2017


901 CUSTOMER ACCTS OPERATIONS-SUPERVISION - - -

902.1 METER READING EXP - LABOR 28,426 34,031 32,988

902.11 METER READING EXPENSE - WY 3,013 4,003 3,505

903.1 CONSUMERS RECORD & COLLECTION EXP 197,021 218,705 261,895

903.11 CONSUMER RECORD & COLLECTION EXP-WY 16,156 18,093 38,200

903.2 CONSMR RCRD EXP-NET METER MT - - -

903.21 CONSMR RCRD EXP-NET METER WY - - -

904 UNCOLLECTIBLE ACCOUNTS 13,200 13,200 13,200

8 Customer Accounts Expense 257,815 288,032 349,788

907 CUSTOMER SERVICE & INFO.-SUPERVISION - - -

908.1 CONSUMER ASSISTANCE - LABOR 5,853 3,540 3,747

908.11 CUSTOMER ASSISTANCE - WY 128 231 247

908.2 CUSTOMER ASSIST-RENEWABLES - - -

908.21 CUSTOMER ASSIST-RENEWABLES-WY - - -

909.1 INFORMATIONAL ADVERTISING 42,400 64,257 145,049

909.2 MERGER INFORMATIONAL ADVERTISING - - -

9 Customer Service and Informational Expense 48,381 68,028 149,042

912 ECONOMIC DEVELOPMENT - KEY ACCOUNTS - - -

912.1 DEMO & SELLING EXPENSE - LABOR 13,800 13,101 5,145

912.11 DEMO & SELLING EXPENSE-LABOR-WY - - -

10 Sales Expense 13,800 13,101 5,145

920.1 ADMIN & GENERAL LABOR 87,039 95,870 102,830

920.11 ADMIN & GENERAL LABOR - WY - - -

920.12 ADMIN & GENERAL ADMIN LEAVE OF ABSENCE - - -

920.2 ADMIN & GENERAL - GENERAL MANAGER - 54,600 181,571

920.3 PAYROLL SALARIED EMPLOYEE HOURLY ADJUSTM - - -

920.31 MANAGER SUPERVISION - - -

920.4 ADMIN & GENERAL - BOARD MEETINGS & PREP 10,527 15,234 29,079

920.5 ADMIN & GENERAL - FORECASTING&REPORTING - - -

920.6 ADMIN & GENERAL - BUDGETING - 98 1,014

920.7 ADMIN & GEN - ADMIN MEETINGS GM OUT 1,132 1,298 6,000

920.8 INSIDE EMPLOYEE BONUSES 7,000 5,500 7,000

920.9 EMPLOYEE GOAL BONUSES 30,000 30,000 34,000

921 OFFICE SUPPLIES & EXPENSE 55,000 56,394 47,591

921.11 OFFICE SUPPLIES & EXPENSE-WYOMING - - -

921.31 RATE & COST OF SERVICE STUDY 4,700 1,796 -

921.32 RATE & COST OF SERVICE STUDY-WY 300 115 -

921.4 DEPT HEADS - STAFF MEETINGS 564 244 24

921.5 EMPLOYEE MEETINGS 10,391 13,861 22,850

923.1 OUTSIDE SERVICES - ATTORNEY 48,000 48,665 38,800

923.11 OUTSIDE SERVICES-WY ATTORNEY 2,000 500 1,200

923.2 OUTSIDE SERVICES - ENGINEERING 5,000 3,736 15,000

923.21 OUTSIDE SERVICES - PLANT APPRAISAL - - -

923.3 OUTSIDE SERVICES - AUDITOR 11,000 10,800 6,500

923.4 OUTSIDE SERVICES - OTHER 82,500 75,605 22,500

924 PROPERTY INSURANCE 16,497 15,067 15,386

925 INJURIES & DAMAGES INSURANCE 11,774 8,817 9,180

926 EMPLOYEES PENSIONS & BENEFITS 10,200 10,160 10,620

926.2 EMPLOYEE BENEFITS-EDUCATION 3,920 3,116 44,991

926.7 SERVICE ORGANIZATIONS - - -

926.8 COMMUNITY SUPPORT - - -

930.1 MISC GENERAL EXPENSE - LABOR - - -

930.2 MISC GENERAL EXPENSE - DUES & ADVERT 65,925 69,583 72,143

930.3 MISC GENERAL EXPENSE - DIRECTORS 75,000 86,997 100,000

930.4 MISC GENERAL EXPENSE - OTHER 4,780 7,314 5,250

930.41 MISC. GENERAL EXP-DONATIONS 2,500 675 11,000

930.42 MISC. GENERAL EXP - DONATED LABOR 1,459 1,914 6,255

930.43 MISC GENERAL EXPENSE - LVE MGMT 447,428 375,987 -

930.5 ADMIN - PROPERTY TAXES 16,817 16,654 19,245

930.6 MONTHLY NEWSLETTER 12,000 13,519 10,290

930.7 ANNUAL MEETING 34,286 23,847 27,410

930.8 A & G - SOUTHERN EXIT AMORTIZATION 141,051 141,051 141,051

935.1 MAINT OF GENERAL PLANT 93,321 110,060 94,323

11 Administrative and General Expense 1,292,112 1,299,077 1,083,103



2017


403.5 DEPRECIATION - TRANSMISSION - - -

403.6 DEPRECIATION - DISTRIBUTION 864,960 847,891 864,960

403.61 DEPRECIATION-DISTRIBUTION-WY 86,700 84,169 84,660

403.7 DEPRECIATION - GENERAL 68,340 65,340 64,770

13 Depreciation & Amortization Expense 1,020,000 997,400 1,014,390

408.1 PROPERTY TAX EXPENSE - - -

14 Tax Expense - Property & Gross Receipts - - -

408.2 TAX - FEDERAL UNEMPLOYMENT - - -

408.3 TAX - FICA - - -

408.4 TAX - STATE UNEMPLOYMENT - - -

408.7 TAX - OTHER 2,811 2,237 2,811

15 Tax Expense - Other 2,811 2,237 2,811

427.1 INTEREST EXPENSE - REA 25,101 25,167 23,756

427.2 INTEREST EXPENSE - CFC 237,798 234,055 215,690

427.4 INTEREST EXPENSE - FFB 283,695 282,914 276,061

427.5 INTEREST EXPENSE - CoBank - 3,351 56,826

16 Interest on Long-Term Debt 546,594 545,487 572,334

427.3 INTEREST EXPENSE - PAST SERVICE - - -

431 INTEREST EXPENSE - OTHER 1,200 1,098 1,200

18 Interest Expense - Other 1,200 1,098 1,200

428 AMORTIZATION OF DEBT DISCOUNT 1,800 1,800 1,800

19 Other Deductions 1,800 1,800 1,800

419 INTEREST & DIVIDEND INCOME 13,000 22,716 118,065

22 Non Operating Margins - Interest 13,000 22,716 118,065

415 REVENUE FROM MERCHANDISING 13,000 16,374 13,000

415.11 REVENUE FROM MERCHANDISING-WY - 50 -

416 COSTS FROM MERCHANDISING (13,660) (10,441) (10,523)

416.11 COST FROM MERCHANDISING - WY (526) (860) (511)

421.1 GAIN ON DISPOSITION OF PROPERTY - 2,702 -

421.2 LOSS ON DISPOSITION OF PROPERTY - - -

25 Non Operating Margins - Other (1,186) 7,825 1,967

423 G & T COOP CAPITAL CREDITS - - -

26 Generation and Transmission Capital Credits - - -

424 OTHER CAPITAL PATRONAGE 52,000 41,953 46,200

27 Other Capital Credits and Patronage Dividends 52,000$ 41,953$ 46,200$


Cash Budget


Cash Budget by Quarter

Description Q1 Q2 Q3 Q4 Total

Cash from Operations

Margins 386,200 2,249 145,763 158,515 692,726

Depreciation 251,062 252,964 254,231 256,133 1,014,390

Non-cash patronage allocations (15,000) - (24,600) (6,600) (46,200)

Southern exit amortization 35,263 35,263 35,263 35,263 141,051

Total change in cash from operations 657,524 290,475 410,657 443,311 1,801,967

Cash fron Investing Activities

Capital outlay (274,316) (197,640) (411,066) (415,566) (1,298,589)

Loss from retirement of assets (20,484) (25,267) (14,414) (14,625) (74,789)

Total change in cash from investing activities (294,800) (222,907) (425,480) (430,191) (1,373,378)

Cash from Financing Activities

Debt principal repayment (276,033) (277,954) (280,015) (282,942) (1,116,944)

Debt payment from COC Account 53,975 53,733 53,500 54,069 215,277

COC Interest Income into COC Account (28,903) (27,292) (25,681) (24,070) (105,947)

General Retirement (5% of Equity) - - - (324,653) (324,653)

Capital credit retirement (estates) (7,500) (7,500) (7,500) (7,500) (30,000)

New LDT - - 375,000 375,000 750,000

Total change in cash from financing activities (258,462) (259,013) 115,304 (210,096) (612,266)

Total change in cash 104,263 (191,445) 100,481 (196,976) (183,677)

Beginning cash 685,000 789,263 597,818 698,299 685,000

Ending cash 789,263 597,818 698,299 501,323 501,323


2018 Budget


Projected Balance Sheet


Projected Summary Balance Sheet

Utility Plant Patronage Capital and Other Equities

Utility Plant 32,788,588 Patronage Capital 6,493,055

Accum. Depreciation (16,323,001) Deferred Credit from NW Energy Settlement 1,112,068

Net Utility Plant 16,465,587 Current Year margins 692,726

Other Property & Investments Other Margins and Equities 153,771

Investments in Assoc. Org. - Patronage Capital 449,268 Total Patronage Capital and Other Equities 8,451,620

Investments in Assoc. Org. - Non-General Funds 289,006 Long-Term Debt

Total Other Property & Investments 738,274 Long-Term Debt 12,544,127

Current Assets Advance Payments Unapplied/COC (1,949,762)

Cash 501,323 Total Long-Term Debt 10,594,365

Temporary Investments - Curent Liabilities

Accounts Receivable 921,495 Notes Payable -

Material & Supplies 451,077 Accounts Payable 422,896

Prepayments 86,021 Consumer Deposits 53,083

Other Current Assets 6,003 Other Current & Accrued Liabilities 294,932

Total Current Assets 1,965,919 Total Current Liabilities 770,911

Other Debits Other Credits

Regulatory Assets 564,203 Other Deferred Credits 26,967

Other Deferred Debits 109,880

Total Other Debits 674,083

Total Assets & Other Debits 19,843,864 Total Liabilities and Other Credits 19,843,864

Equity as a % of Assets 43%


2018 Budget

Assets and Other Debits Liabilities and Other Credits


Revenue


2018 Budget

2015 Normalized 2016 Normalized

2017 Pro Forma

Normalized Low Projection

Median

Projection High Projection

Residential

Number of customers 5,476 5,546 5,554 5,530 5,586 5,641

Average kWh per customer 751 750 805 761 768 776

Annual kWh sold 49,337,838 49,885,215 53,660,856 50,484,700 51,509,700 52,545,100

Irrigation

Number of customers 110 110 113 112 113 114

Average kWh per customer 4,277 5,276 5,425 4,661 4,708 4,755

Annual kWh sold 2,831,416 3,487,554 3,667,430 3,128,700 3,192,200 3,256,300

Small Commercial



Annual kWh sold 5,479,904 5,444,169 5,730,648 6,556,100 6,689,300 6,823,700

Large Commercial



Annual kWh sold 2,336,706 2,420,222 2,708,336 2,560,000 2,612,000 2,664,500

Industrial



Annual kWh sold 1,349,700 1,367,100 1,502,000 1,392,200 1,406,300 1,420,300

Total Average Customers 5,957 6,031 6,099 6,105 6,167 6,228

Annual Power Requirements

Total kWh sold 61,335,564 62,604,260 67,269,270 64,121,700 65,409,500 66,709,900

BEC system use 294,169 309,134 356,527 339,845 346,670 353,562

NW Transmission loss charge 2,723,299 2,779,629 2,986,756 3,090,666 3,152,738 3,215,417

System losses 6,001,258 6,813,741 6,659,658 6,604,535 6,737,179 6,871,120

Total kWh requirements 70,354,290 72,506,764 77,272,210 74,156,746 75,646,087 77,149,999

Percent change -3.92% 3.06% 6.57% -4.03% -2.10% -0.16%

kW demand 17,500 17,500 17,500 17,800 18,100 18,500

Load factor 45.9% 47.3% 50.4% 47.6% 47.6% 47.6%


Projections of Electric Sales by Customer Class

2018 Projection


Beartooth Electric Cooperative, Inc. 2018 Budget

Electric Revenue by Month

Month Residential Irrigation

Small

Commercial

Large

Commercial Industrial

Total Billed

Revenue

Other

Electric

Revenue Total Revenue

January 802,600 - 78,400 24,100 10,500 915,600 2,200 917,800

February 631,600 - 63,600 22,800 8,800 726,800 2,200 729,000

March 585,300 - 60,100 21,900 10,600 677,900 14,200 692,100

April 511,300 18,100 57,400 21,200 8,500 616,500 2,400 618,900

May 480,700 43,700 54,800 19,800 13,100 612,100 2,300 614,400

June 479,300 88,900 66,200 18,600 13,600 666,600 2,300 668,900

July 562,500 107,700 70,600 20,300 14,000 775,100 2,300 777,400

August 515,300 92,900 65,100 20,900 12,400 706,600 2,300 708,900

September 491,100 54,900 61,000 21,100 12,700 640,800 1,900 642,700

October 496,500 - 47,600 23,000 9,900 577,000 1,900 578,900

November 559,900 - 51,400 21,400 8,800 641,500 1,900 643,400

December 701,700 - 62,000 24,000 11,600 799,300 2,000 801,300

Total 6,817,800$ 406,200$ 738,200$ 259,100$ 134,500$ 8,355,800$ 37,900$ 8,393,700$

GL Acct 440.100/440.200 441.000 442.100 442.110 442.200


2018 Budget

Month Residential Irrigation

Small

Commercial

Large

Commercial Industrial Total Billed

January 6,716,800 - 770,300 264,600 109,500 7,861,200

February 5,398,700 - 659,900 248,100 92,100 6,398,800

March 4,398,600 - 556,100 217,700 110,400 5,282,800

April 3,583,700 43,900 530,700 203,200 88,800 4,450,300

May 3,219,400 234,300 484,800 181,100 136,800 4,256,400

June 3,230,000 808,800 580,300 165,900 141,800 4,926,800

July 4,111,800 1,039,700 644,000 190,300 146,100 6,131,900

August 3,587,100 803,800 579,300 191,500 130,000 5,291,700

September 3,310,400 261,700 498,200 195,100 132,900 4,398,300

October 3,627,500 - 391,900 255,900 103,600 4,378,900

November 4,352,500 - 435,300 222,100 91,600 5,101,500

December 5,973,200 - 558,500 276,500 122,700 6,930,900

Total 51,509,700 3,192,200 6,689,300 2,612,000 1,406,300 65,409,500

32,233,200


Elecric kWh Sales by Month



2018 Budget

Projections of Electric Revenue by Customer Class

2017 Pro Forma

Normalized Low Projection Median Projection High Projection

Residential

kWh sold 53,660,856 50,484,700 51,509,700 52,545,100

Average revenue per kWh 0.12890 0.13236 0.13236 0.13236

Total revenue $6,916,954 $6,682,100 $6,817,800 $6,954,800

Irrigation

kWh sold 3,667,430 3,128,700 3,192,200 3,256,300


Total revenue $434,451 $398,100 $406,200 $414,400

Small Commercial

kWh sold 5,730,648 6,556,100 6,689,300 6,823,700


Total revenue $644,295 $723,500 $738,200 $753,000

Large Commercial

kWh sold 2,708,336 2,560,000 2,612,000 2,664,500


Total revenue $270,881 $253,900 $259,100 $264,300

Industrial

kWh sold 1,502,000 1,392,200 1,406,300 1,420,300


Total revenue $143,425 $133,200 $134,500 $135,800

Total Electric Revenue

Total revenue from sales $8,410,006 $8,190,800 $8,355,800 $8,522,300

Other operating revenue 35,000 37,900 37,900 37,900

Total operating revenue $8,445,006 $8,228,700 $8,393,700 $8,560,200

Revenue growth -2.56% -0.61% 1.36%

2018 Projection



2018 Budget

Other Electric Revenues by Month

Month

Forfeited

Discounts 450

Pole

Rental 454 Other 456 Total

January 2,000 - 200 2,200

February 2,000 - 200 2,200

March 2,000 12,000 200 14,200

April 1,800 - 600 2,400

May 1,700 - 600 2,300

June 1,700 - 600 2,300

July 1,700 - 600 2,300

August 1,700 - 600 2,300

September 1,700 - 200 1,900

October 1,700 - 200 1,900

November 1,700 - 200 1,900

December 1,800 - 200 2,000

Total 21,500 12,000 4,400 37,900


Cost of Power


2018 Budget

Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Summary

Energy Load (MWh) 75,646 8,271 6,570 6,237 5,578 5,537 6,028 7,006 6,389 5,792 5,217 5,798 7,222

Power Costs

WAPA 162,897$ 15,269$ 16,028$ 12,896$ 13,837$ 11,189$ 12,759$ 13,971$ 14,456$ 12,234$ 11,105$ 13,585$ 15,568$

Morgan Stanley 2,394,900$ 264,494$ 205,121$ 198,218$ 173,808$ 176,734$ 191,878$ 223,280$ 201,040$ 183,860$ 165,263$ 182,363$ 228,842$

Total Power Costs 2,557,797$ 279,763$ 221,149$ 211,113$ 187,644$ 187,924$ 204,637$ 237,251$ 215,496$ 196,094$ 176,368$ 195,948$ 244,410$

Avg. Cost ($/MWh) 33.81$ 33.82$ 33.66$ 33.85$ 33.64$ 33.94$ 33.95$ 33.86$ 33.73$ 33.86$ 33.81$ 33.79$ 33.84$

Transmission Costs

NWC Transmission 458,630$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$

NWC Schedule 1 24,673$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$

NWC Schedule 3 40,638$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$

NWC Schedule 5&6 53,256$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$

Total Transmission Costs 577,198$ 48,100$ 48,100$ 48,100$ 48,100$ 48,100$ 48,100$ 48,100$ 48,100$ 48,100$ 48,100$ 48,100$ 48,100$

Avg. Cost ($/MWh) 7.63$ 5.82$ 7.32$ 7.71$ 8.62$ 8.69$ 7.98$ 6.87$ 7.53$ 8.30$ 9.22$ 8.30$ 6.66$

Total Supply Costs 3,134,994$ 327,863$ 269,249$ 259,213$ 235,744$ 236,023$ 252,737$ 285,350$ 263,596$ 244,194$ 224,468$ 244,048$ 292,510$

Avg. Supply Cost ($/MWh) 41.44$ 39.64$ 40.98$ 41.56$ 42.27$ 42.63$ 41.93$ 40.73$ 41.26$ 42.16$ 43.02$ 42.09$ 40.51$

WAPA Power

Peak (kw) 11,698 1,067 1,109 933 954 841 968 1,012 1,012 892 793 983 1,134

Energy (MWh) 5,722 549 581 450 503 377 426 487 519 424 392 474 540

Peak Rate ($/kw-mo) 6.50$ 6.50$ 6.50$ 6.50$ 6.50$ 6.50$ 6.50$ 6.50$ 6.50$ 6.50$ 6.50$ 6.50$

Energy Rate ($/Mwh) 16.18$ 16.18$ 16.18$ 16.18$ 16.18$ 16.18$ 16.18$ 16.18$ 16.18$ 16.18$ 16.18$ 16.18$

Peak Cost ($) 76,037$ 6,936$ 7,209$ 6,065$ 6,201$ 5,467$ 6,292$ 6,578$ 6,578$ 5,798$ 5,155$ 6,390$ 7,371$

Energy Cost ($) 92,582$ 8,883$ 9,401$ 7,281$ 8,139$ 6,100$ 6,893$ 7,880$ 8,397$ 6,860$ 6,343$ 7,669$ 8,737$

Transmission discount -$ (549)$ (581)$ (450)$ (503)$ (377)$ (426)$ (487)$ (519)$ (424)$ (392)$ (474)$ (540)$

Total Cost ($) 162,897$ 15,269$ 16,028$ 12,896$ 13,837$ 11,189$ 12,759$ 13,971$ 14,456$ 12,234$ 11,105$ 13,585$ 15,568$

Morgan Stanley Power

Total Energy (MWh) 69,924 7,722 5,989 5,787 5,075 5,160 5,602 6,519 5,870 5,368 4,825 5,324 6,682

Price ($/MWh) 34.25$ 34.25$ 34.25$ 34.25$ 34.25$ 34.25$ 34.25$ 34.25$ 34.25$ 34.25$ 34.25$ 34.25$


Power Cost by Month


Total Cost ($) 2,394,900$ 264,494$ 205,121$ 198,218$ 173,808$ 176,734$ 191,878$ 223,280$ 201,040$ 183,860$ 165,263$ 182,363$ 228,842$

NWC Transmission

Nov13-Oct14 CP (kw) 142,251 15,359 17,437 16,758 10,418 7,797 7,192 11,036 10,639 7,852 8,987 12,223 16,553

Nov13-Oct14 Energy (MWh) 73,189 7,374 7,723 6,903 5,273 4,882 4,872 6,483 5,903 4,704 4,734 5,972 8,366

2018 Est. Coincident Peak (kw) 145,136 17,228 14,834 15,142 11,020 8,843 8,899 11,927 11,515 9,668 9,904 11,868 14,289

Transmission Rate ($/kw-mo) 3.16$ 3.16$ 3.16$ 3.16$ 3.16$ 3.16$ 3.16$ 3.16$ 3.16$ 3.16$ 3.16$ 3.16$

Schedule 1 Rate ($/kw-mo) 0.17$ 0.17$ 0.17$ 0.17$ 0.17$ 0.17$ 0.17$ 0.17$ 0.17$ 0.17$ 0.17$ 0.17$

Schedule 3 Rate ($/kw-mo) 0.28$ 0.28$ 0.28$ 0.28$ 0.28$ 0.28$ 0.28$ 0.28$ 0.28$ 0.28$ 0.28$ 0.28$

Transmission Cost ($) /3 458,630$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$ 38,219$

Schedule 1 Cost ($) /3 24,673$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$ 2,056$

Schedule 3 Cost ($) /3 40,638$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$ 3,387$

Schedule 5&6 Capacity (kw) /4 560 560 560 560 560 560 560 560 560 560 560 560

Schedule 5&6 Rate ($/kw-mo) /5 7.93$ 7.93$ 7.93$ 7.93$ 7.93$ 7.93$ 7.93$ 7.93$ 7.93$ 7.93$ 7.93$ 7.93$

Schedule 5&6 Cost ($) 53,256$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$ 4,438$

/3 - Billed on 12 CP basis

/4 - 2017 requirement from NWC (3% of estimated annual transmission peak)

/5 - Avg of current Sch 5 ($8.50) and Sch 6 ($7.35) rates


Payroll

Full-time employees are as follows:

Name Position Kevin OwensEric Elton Jim Avent Travis Barker Guy Behrent Bill Colgrove Linda Dukart Mike FergusonLee Hauge James PihlBrad ProphetKaaren RobbinsConnie TeachoutMarty Tomlin Markus Urbanik Sam Walkowiak Jake Wright TBD

General ManagerLine SuperintendentMeter Tech/Journeyman LinemanJourneyman LinemanLine Sub-ForemanLine Foreman Customer Service RepresentativeJourneyman LinemanLine Sub-Foreman Journeyman LinemanAccountantMember Services/Communications and Marketing Billing Clerk/CashierStaking TechnicianWarehousemanLine ForemanJourneyman LinemanTemporary - Work Order Clerk


BEARTOOTH ELECTRIC COOPERATIVE, INC. Revision: 78151

BUDGETCFC BUDGET PRO - PAYROLL/LABOR

12/07/2017 2:50:10 pm Page: 1

Draft: 2018 BUDGETSummary

FebruaryJanuary March April May June July August September October November DecemberDescription Total

HoursBase Hours 3,214.67 2,806.67 3,078.67 2,942.67 3,214.67 3,116.67 3,252.67 3,388.67 2,806.67 3,214.67 3,078.67 2,942.6737,058.04Overtime Hours 97.75 97.75 97.75 97.75 97.75 97.75 97.75 97.75 97.75 97.75 97.75 97.751,173.00

3,312.42 2,904.42 3,176.42 3,040.42 3,312.42 3,214.42 3,350.42 3,486.42 2,904.42 3,312.42 3,176.42 3,040.42Total Hours: 38,231.04

Base Pay Per Base Hour: 36.07 35.99 36.09 36.12 36.62 36.76 36.78 36.83 36.61 36.69 36.67 36.6436.50

PaysBase Pay 115,949.91 101,018.19 111,121.74 106,302.53 117,733.61 114,584.02 119,638.81 124,808.61 102,759.79 117,952.75 112,888.43 107,824.111,352,582.50Overtime Pay 5,443.41 5,443.41 5,443.73 5,443.73 5,550.58 5,550.58 5,550.58 5,550.58 5,552.28 5,552.28 5,552.28 5,552.2866,185.72Bonus Pay 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.000.00

121,393.32 106,461.60 116,565.47 111,746.26 123,284.19 120,134.60 125,189.39 130,359.19 108,312.07 123,505.03 118,440.71 113,376.39Total Pays: 1,418,768.22

DeductionsNRECA MEDICAL PREMIUM 1,573.80 1,573.80 1,573.80 1,573.80 1,573.80 1,573.80 1,573.80 1,573.80 1,573.80 1,573.80 1,573.80 1,573.6718,885.47401K EMPLOYEECONTRIBUTION

5,025.57 4,964.50 5,005.21 4,984.85 5,034.93 4,993.40 5,014.17 5,034.93 4,972.64 5,034.93 5,014.17 4,993.3260,072.62

AFLAC PRE TAX 304.53 304.53 304.53 304.53 304.53 304.53 304.53 304.53 304.53 304.53 304.53 304.493,654.32AFLAC POST TAX 46.12 46.12 46.12 46.12 46.12 46.12 46.12 46.12 46.12 46.12 46.12 46.12553.44401K LOAN PAYMENT 1,348.35 1,348.35 1,348.35 1,348.35 1,348.35 1,348.35 1,348.35 1,348.35 1,348.35 1,348.35 1,348.35 1,348.2116,180.06MEDICAL 125 390.00 390.00 390.00 390.00 390.00 390.00 390.00 390.00 390.00 390.00 390.00 390.004,680.00MET LIFE 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00300.00EMPLOYEE & DEPENDENTLIFE

431.12 431.12 431.12 431.12 431.12 431.12 431.12 431.12 431.12 431.12 431.12 431.035,173.35

SHORT TERM DISABILITY 386.38 335.98 370.50 354.72 393.39 359.18 376.26 394.11 342.71 394.11 376.95 359.844,444.13UNION DUES 1,058.44 1,058.44 1,058.44 1,058.44 1,058.44 1,058.44 1,058.44 1,058.44 1,058.44 1,058.44 1,058.44 1,058.4412,701.28457 DEFERRAL ELECTION 1,433.08 1,246.16 1,370.78 1,308.47 1,433.08 1,308.47 1,370.78 1,433.08 1,246.16 1,433.08 1,370.78 1,308.4716,262.39401K LOAN PAYMENT 2 1,152.88 1,152.88 1,152.88 1,152.88 1,152.88 1,152.88 1,152.88 1,152.88 1,152.88 1,152.88 1,152.88 1,152.9213,834.60ROTH 401(k) ELECTION 866.67 866.67 866.67 866.67 866.67 866.67 866.67 866.67 866.67 866.67 866.67 866.6310,400.00

14,041.94 13,743.55 13,943.40 13,844.95 14,058.31 13,857.96 13,958.12 14,059.03 13,758.42 14,059.03 13,958.81 13,858.14Total Deductions: 167,141.66

Total Pay Less Deductions: 107,351.38 92,718.05 102,622.07 97,901.31 109,225.88 106,276.64 111,231.27 116,300.16 94,553.65 109,446.00 104,481.90 99,518.251,251,626.56

Taxable BenefitsGROUP TERM LIFE INS OVER50K

108.75 108.75 108.75 108.75 108.75 108.75 108.75 108.75 108.75 108.75 108.75 108.751,305.00

108.75 108.75 108.75 108.75 108.75 108.75 108.75 108.75 108.75 108.75 108.75 108.75Total Taxable Benefits: 1,305.00

TaxesFEDERAL UNEMPLOYMENT 641.97 88.96 9.59 8.84 6.64 41.76 0.24 0.00 0.00 0.00 0.00 0.00798.00STATE UNEMPLOYEMENT 971.13 851.70 852.53 761.99 392.64 207.06 117.65 70.80 28.61 11.79 11.79 11.794,289.48

/pro/rpttemplate/acct/2.40.1/bu/BU_CFC_PAYROLL_DTL.xml.rpt bprophet28019BEC Board Book | January 9, 2018 | Page 79

BEARTOOTH ELECTRIC COOPERATIVE, INC. Revision: 78151

BUDGETCFC BUDGET PRO - PAYROLL/LABOR

12/07/2017 2:50:10 pm Page: 2

Draft: 2018 BUDGETSummary

FebruaryJanuary March April May June July August September October November DecemberDescription TotalWORKERS COMP INSIDEEMPLOYEES

121.27 105.45 116.54 111.26 122.18 111.56 116.86 122.61 106.62 122.61 117.27 111.961,386.19

WORKERS COMP OUTSIDEEMPLOYEES

3,284.41 2,882.48 3,150.44 3,022.68 3,346.11 3,334.17 3,470.62 3,607.11 2,940.12 3,350.08 3,213.42 3,076.8038,678.44

FICA 7,392.50 6,466.73 7,093.15 6,794.37 7,509.73 7,314.44 7,627.86 7,948.38 6,468.21 6,643.00 6,367.65 6,092.2783,718.29MEDICARE 1,728.89 1,512.37 1,658.89 1,589.02 1,756.32 1,710.66 1,783.93 1,858.91 1,539.21 1,759.53 1,686.07 1,612.6620,196.46

14,140.17 11,907.69 12,881.14 12,288.16 13,133.62 12,719.65 13,117.16 13,607.81 11,082.77 11,887.01 11,396.20 10,905.48Total Taxes: 149,066.86

Benefits401K EMPLOYERCONTRIBUTION

8,037.28 6,988.93 7,698.27 7,359.87 8,169.62 7,459.23 7,814.42 8,179.97 7,119.39 8,187.26 7,831.29 7,475.3492,320.87

MEDICAL INSURANCE 21,933.34 21,933.34 21,933.34 21,933.34 21,933.34 21,933.34 21,933.34 21,933.34 21,933.34 21,933.34 21,933.34 21,933.47263,200.21BASIC LIFE 263.29 228.98 252.22 241.10 267.41 244.16 255.78 267.67 232.95 267.91 256.26 244.623,022.35LTD 880.34 765.51 843.19 806.16 894.04 816.30 855.16 894.92 778.88 895.72 856.76 817.8310,104.81RETIREMENT 25,301.96 22,001.69 24,250.77 23,202.57 25,773.81 23,532.61 24,653.19 25,773.81 22,441.71 25,807.98 24,685.89 23,563.82290,989.81MEDICAL HSA DEPOSIT 1,575.00 1,575.00 1,575.00 1,575.00 1,575.00 1,575.00 1,575.00 1,575.00 1,575.00 1,575.00 1,575.00 1,575.0018,900.00401K EMPLOYER MATCH 1,525.10 1,326.17 1,458.79 1,392.49 1,543.84 1,409.59 1,476.70 1,549.59 1,347.46 1,549.59 1,482.20 1,414.8417,476.36VACATION 7,853.12 6,828.79 7,521.85 7,191.29 7,975.47 7,281.94 7,628.71 7,983.36 6,948.23 7,990.51 7,643.09 7,295.6690,142.02457B EMPLOYERCONTRIBUTION

752.37 654.23 719.66 686.95 752.37 686.95 719.66 752.37 654.23 752.37 719.66 686.958,537.77

68,121.80 62,302.64 66,253.09 64,388.77 68,884.90 64,939.12 66,911.96 68,910.03 63,031.19 68,959.68 66,983.49 65,007.53Total Benefits: 794,694.20

Base Pay 115,949.91 101,018.19 111,121.74 106,302.53 117,733.61 114,584.02 119,638.81 124,808.61 102,759.79 117,952.75 112,888.43 107,824.111,352,582.50Total Pay 121,393.32 106,461.60 116,565.47 111,746.26 123,284.19 120,134.60 125,189.39 130,359.19 108,312.07 123,505.03 118,440.71 113,376.391,418,768.22Total Overhead 82,261.97 74,210.33 79,134.23 76,676.93 82,018.52 77,658.77 80,029.12 82,517.84 74,113.96 80,846.69 78,379.69 75,913.01943,761.06Total Pay and Overhead 203,655.29 180,671.93 195,699.70 188,423.19 205,302.71 197,793.37 205,218.51 212,877.03 182,426.03 204,351.72 196,820.40 189,289.402,362,529.28

Total Pay Per Hour: 36.65 36.66 36.70 36.75 37.22 37.37 37.37 37.39 37.29 37.29 37.29 37.2937.11Total Pay and Ovhd Per Hour: 61.48 62.21 61.61 61.97 61.98 61.53 61.25 61.06 62.81 61.69 61.96 62.2661.80

Overhead % of Base Pay 70.95 73.46 71.21 72.13 69.66 67.77 66.89 66.12 72.12 68.54 69.43 70.40% % % % % % % % % % % % %69.77Overhead % of Total Pay 67.76 69.71 67.89 68.62 66.53 64.64 63.93 63.30 68.43 65.46 66.18 66.96% % % % % % % % % % % % %66.52Overhead % of Total Pay & Ovhd 40.39 41.07 40.44 40.69 39.95 39.26 39.00 38.76 40.63 39.56 39.82 40.10% % % % % % % % % % % % %39.95

/pro/rpttemplate/acct/2.40.1/bu/BU_CFC_PAYROLL_DTL.xml.rpt bprophet28019BEC Board Book | January 9, 2018 | Page 80

Capital Budgets


Beartooth Electric

2018 CAPITAL BUDGET

I. DISTRIBUTION FACILITIES:A. ELECTRIC DISTRIBUTION EXTENSIONS

Budget

100-16 LINE EXTENSION FOR 75 NEW ELECTRIC CUSTOMERS -$

115-16 SUBDIVISION LINE EXTENSIONS 0

660-18 ELECTRIC METERS NEW CONSTRUCTION (75) 2,265

Subtotal - Electric Distribution 2,265$

B. ELECTRIC CONVERSIONS AND LINE UPGRADESBudget

301-16 PINE CREST SUBDIVISION LOOP - Material Only, Labor already in budget 65,000$

302-16 MDOT ROSCOE NORTH 0

303-16 MDOT ROBERTS 0

Subtotal - Electric Conversions and Line Upgrades 65,000$

C. MISCELLANEOUS ELECTRIC DISTRIBUTIONBudget

601-18 REPLACEMENT TRANSFORMERS 20,000$

602-18 INCREASE SERVICE CAPACITY 0

603-18 SECTIONALIZING EQUIPMENT 15,000

603-18a NOVA OCR's 58,500

604-18 VOLTAGE REGULATORS 0

605-18 CAPACITORS 0

606-18 POLE REPLACEMENTS (100) 115,000

608-18 ORDINARY REPLACEMENTS 40,000

Subtotal - Miscellaneous Electric Distribution 248,500$

D. CONSTRUCTION WORK PLAN Budget

2018-2019 Two Year Construction Work Plan 1,000$

0

Subtotal - Construction Work Plan 1,000$

E. GENERAL PLANT Budget

HVAC 15,000$

Office Furniture 5,500

General Facilities Improvement 10,000

IT Thin Client 28,000

Subtotal - General Plant 58,500$

TWACS Budget

TWACS 750,000$

`=`` Five (5) Substation Poly Pads 1,000

0


NISC UPGRADES Budget

Mapping 56,824$

Modules 50,000

TWACS upgrade 8,000

Document Vault 2,500


F. TRANSPORTATION GENERAL PLANT Budget

MINI TRACKHOE 55,000

0

Subtotal - Transportation General Plant 55,000$

TOTAL CAPITAL BUDGET 1,298,589$

IV. CASH FLOW ANALYSIS


NET MARGINS 692,726$

PLUS DEPRECIATION 1,014,390

LESS PATRONAGE CAPITAL (324,653)

LESS PRINCIPLE PAYMENTS (1,007,614)

CASH AVAILABLE FOR CAPITAL BUDGET ITEMS 374,850

PLUS WORKING CAPITAL AND OTHER ITEMS 0

NEW LONG-TERM DEBT 750,000

FUNDS AVAILABLE FOR CAPITAL BUDGET ITEMS 1,124,850$


Beartooth Electric

2019 CAPITAL BUDGET


Budget






-$

302-18 LINE UPGRADE 0

0

Subtotal - Electric Conversions and Line Upgrades -$





603-19a NOVA OCR's 58,500


605-19 CAPACITORS 0




D. CONSTRUCTION WORK PLANBudget


0


E. GENERAL PLANTBudget

HVAC -$


Office Furniture 0

0


TWACSBudget

TWACS 750,000$

Five (5) Substation Concrete Pads 1,000

0


NISC UPGRADESBudget

Mapping -$

Modules 0

TWACS upgrade 0

Document Vault 0

Subtotal - General Plant -$

F. TRANSPORTATION GENERAL PLANTBudget

TRUCKS 0

0

Subtotal - Transportation General Plant -$





PLUS DEPRECIATION 1,023,863$

LESS PATRONAGE CAPITAL TBD - 5% of Equity

LESS PRINCIPLE PAYMENTS TBD

CASH AVAILABLE FOR CAPITAL BUDGET ITEMS TBD

PLUS WORKING CAPITAL AND OTHER ITEMS

NEW LONG-TERM DEBT 750,000

FUNDS AVAILABLE FOR CAPITAL BUDGET ITEMS TBD


Beartooth Electric

2020 CAPITAL BUDGET


Budget






-$

302-XX LINE UPGRADE 0

General Work Plan Improvements/Upgrades 300,000






603-16a NOVA OCR's 58,500


605-16 CAPACITORS 0





Construction Work Plan -$

0

Subtotal - Construction Work Plan -$


HVAC -$


Office Furniture 0

0


TWACSBudget

TWACS -$

0

0


NISC UPGRADESBudget

Mapping -$

Modules 0

TWACS upgrade 0

Document Vault 0



# 9 Replacement 70,000

0


TOTAL CAPITAL BUDGET 810,765$









NEW LONG-TERM DEBT 0



Beartooth Electric

2021 CAPITAL BUDGET


Budget






-$


General Work Plan Improvements/Upgrades 0

300,000






603-16a NOVA OCR's 58,500


605-16 CAPACITORS 0




D. CONSTRUCTION WORK PLAN Budget


0


E. GENERAL PLANT Budget

HVAC -$


Office Furniture 0

0


TWACS Budget

TWACS -$

0

0


NISC UPGRADES Budget

Mapping -$

Modules 0

TWACS upgrade 0

Document Vault 0


F. TRANSPORTATION GENERAL PLANT Budget

Used Dump Truck 30,000

0











NEW LONG-TERM DEBT 0



Beartooth Electric

2022 CAPITAL BUDGET


Budget






-$


General Work Plan Improvements/Upgrades 300,000






603-16a NOVA OCR's 58,500


605-16 CAPACITORS 0





Construction Work Plan -$

0

Subtotal - Construction Work Plan -$


HVAC -$


0


TWACSBudget

TWACS -$

0

0


NISC UPGRADESBudget

Mapping -$

Modules 0

TWACS upgrade 0

Document Vault 0



Unit #7 Replacement 70,000

0





NET MARGINS TBD

PLUS DEPRECIATION TBD





NEW LONG-TERM DEBT TBD



Depreciation


Total

Allocation

Accoun

t Total January February March April May June July August September October November December

Depreciation 1,014,390 403.50 - - - - - - - - - - - - -

403.60 864,960.00 71,179.00 71,359.20 71,539.40 71,719.60 71,899.80 72,080.00 72,080.00 72,260.20 72,440.40 72,620.60 72,800.80 72,981.00

403.61 84,660.00 6,966.81 6,984.45 7,002.09 7,019.73 7,037.36 7,055.00 7,055.00 7,072.64 7,090.28 7,107.91 7,125.55 7,143.19

403.70 64,770.00 5,330.03 5,343.53 5,357.02 5,370.51 5,384.01 5,397.50 5,397.50 5,410.99 5,424.49 5,437.98 5,451.48 5,464.97


2018 Budget

Depreciation Allocation Details


Debt Service/Interest



2018 Budget

Debt Service

Total January February March April May June July August September October November December

RUS

Beginning Balance 452,720.03 450,665.30 448,401.62 446,327.14 444,177.30 442,083.52 439,914.90 437,801.63 435,678.69 433,481.73 431,339.04 429,122.88

Principal 2,054.73 2,263.69 2,074.47 2,149.84 2,093.79 2,168.62 2,113.28 2,122.94 2,196.96 2,142.69 2,216.16 2,162.62

Interest 2,071.59 1,862.63 2,051.85 1,976.48 2,032.53 1,957.70 2,013.04 2,003.38 1,929.36 1,983.63 1,910.16 1,963.70

Total Payment 4,126.32 4,126.32 4,126.32 4,126.32 4,126.32 4,126.32 4,126.32 4,126.32 4,126.32 4,126.32 4,126.32 4,126.32

Ending Balance 450,665.30 448,401.62 446,327.14 444,177.30 442,083.52 439,914.90 437,801.63 435,678.69 433,481.73 431,339.04 429,122.88 426,960.26

FFB

Beginning Balance 6,727,582.09 6,727,582.09 6,727,582.09 6,679,999.69 6,679,999.69 6,679,999.69 6,632,678.78 6,632,678.78 6,632,678.78 6,585,611.54 6,585,611.54 6,585,611.54

Principal - - 47,582.39 - - 47,320.91 - - 47,067.24 - - 47,547.10

Interest - - 68,805.85 - - 69,075.54 - - 69,337.18 - - 68,842.48

Total Payment - - 116,388.24 - - 116,396.45 - - 116,404.42 - - 116,389.59

Ending Balance 6,727,582.09 6,727,582.09 6,679,999.69 6,679,999.69 6,679,999.69 6,632,678.78 6,632,678.78 6,632,678.78 6,585,611.54 6,585,611.54 6,585,611.54 6,538,064.43

CFC

Balance 3,810,241.12 3,714,951.11 3,714,951.11 3,714,951.11 3,618,329.90 3,618,329.90 3,618,329.90 3,520,379.57 3,520,379.57 3,520,379.58 3,421,070.95 3,421,070.95

Principal 95,290.01 96,621.21 97,950.33 99,308.62

Interest 56,865.86 55,498.66 54,205.54 52,847.25

Discount (946.44) (936.74) (926.90) (916.90)

Net Interest 55,919.42 54,561.91 53,278.64 51,930.35

Total Payment 151,209.43 151,183.13 151,228.97 151,238.97

Ending Balance 3,714,951.11 3,714,951.11 3,714,951.11 3,618,329.90 3,618,329.90 3,618,329.90 3,520,379.57 3,520,379.57 3,520,379.57 3,421,070.95 3,421,070.95 3,421,070.95

CoBank

Balance $1,920,527.39 $1,878,441.59 $1,836,249.23 $1,793,759.33 $1,751,352.59 $1,708,781.85 $1,666,159.97 $1,623,380.50 $1,580,542.41 $1,537,595.87 $1,494,501.42 $1,451,337.06

Principal 42,085.80 42,192.36 42,489.90 42,406.74 42,570.74 42,621.88 42,779.47 42,838.09 42,946.54 43,094.45 43,164.36 43,305.78

Interest 5,417.20 5,310.64 4,707.25 5,096.26 4,830.31 4,881.12 4,621.58 4,664.91 4,556.46 4,306.60 4,338.64 4,095.27

Total Payment 47,503.00 47,503.00 47,197.15 47,503.00 47,401.05 47,503.00 47,401.05 47,503.00 47,503.00 47,401.05 47,503.00 47,401.05

Ending Balance 1,878,441.59 1,836,249.23 1,793,759.33 1,751,352.59 1,708,781.85 1,666,159.97 1,623,380.50 1,580,542.41 1,537,595.87 1,494,501.42 1,451,337.06 1,408,031.28



2018 Budget

Debt Service

Total January February March April May June July August September October November December

Summary of Debt Service

Ending Balance 12/31/2018

RUS 426,960.26$

FFB 6,538,064.43

CFC 3,421,070.95

CoBank 1,408,031.28

New LTD 750,000.00

Cushion of Credit - 1 (286,027.26)

Cushion of Credit - 2 (500,000.00)

Cushion of Credit - 3 (1,057,787.00)

Cushion of Credit - Interest Income (105,947.26)

Ending Balance 12/31/2018 10,594,365.41$

Interest Expense

Total RUS Interest 23,756.07 2,071.59 1,862.63 2,051.85 1,976.48 2,032.53 1,957.70 2,013.04 2,003.38 1,929.36 1,983.63 1,910.16 1,963.70

Total FFB Interest 276,061.04 22,935.28 22,935.28 22,935.28 23,025.18 23,025.18 23,025.18 23,112.39 23,112.39 23,112.39 22,947.49 22,947.49 22,947.49

Total CFC Interest 215,690.32 18,639.81 18,639.81 18,639.81 18,187.30 18,187.30 18,187.30 17,759.55 17,759.55 17,759.55 17,310.12 17,310.12 17,310.12

Total CoBank Interest 56,826.24 5,417.20 5,310.64 4,707.25 5,096.26 4,830.31 4,881.12 4,621.58 4,664.91 4,556.46 4,306.60 4,338.64 4,095.27

Total interest expense 572,333.68 49,063.88 48,748.36 48,334.19 48,285.22 48,075.33 48,051.31 47,506.56 47,540.23 47,357.76 46,547.84 46,506.41 46,316.58

Total interest payment 515,507.44 57,991.02 1,862.63 70,857.70 56,538.40 2,032.53 71,033.24 55,291.69 2,003.38 71,266.54 53,913.98 1,910.16 70,806.18

Total principal payment 1,116,943.71 139,430.54 44,456.05 92,146.76 141,177.79 44,664.53 92,111.41 142,843.07 44,961.03 92,210.74 144,545.76 45,380.52 93,015.50

Total Payment 1,689,277.39 202,838.75 51,629.32 167,711.71 202,812.45 51,527.37 168,025.77 202,756.34 51,629.32 168,033.74 202,766.34 51,629.32 167,916.96

Total principal payment

from Cash 901,666.29 137,375.81 42,192.36 42,489.90 139,027.95 42,570.74 42,621.88 140,729.80 42,838.09 42,946.54 142,403.07 43,164.36 43,305.78

Total principal payment

from Cushion of Credit

Account 215,277.42 2,054.73 2,263.69 49,656.86 2,149.84 2,093.79 49,489.53 2,113.28 2,122.94 49,264.20 2,142.69 2,216.16 49,709.72

Debt Service Coverage

Ratio 12/31/2018 1.35


Beartooth Electric Cooperative 2018 System Goals

Employee Goals

Safe 1. No lost-time accidents during the year.2. Current year Workers’ Compensation experience modification rate shall not increase more

than 5%.3. No verifiable member complaints regarding safety issues that could result in liability to the

Cooperative.

Reliable 1. System Average Interruption Duration Index (SAIDI) less than the average for the past

three-year period*.2. System Average Interruption Frequency Index (SAIFI) less than the average for the past

three-year period*.3. Complete 100% of the system maintenance plan.

(* excludes outages over 12 hours in duration)

Efficient 1. Total year-end controllable expenses will be within +/-5% of budget.2. Capital projects are completed on time and under budget.3. Overtime hours will be less than the average of the past three years.

Long-term Strategic Company Goals

Reasonably Priced 1. No overall, membership-wide rate increase (no increase in revenue requirements) over the

next 5 years (2018 – 2022).2. BEC rates for the average monthly consumption are within X% of a defined peer group.3. BEC residential rates at 1,000 kWh hours per month will be equal to Northwestern Energy

by 12/31/2023.4. Meet annual TIER, DSC and equity targets according to long-term financial plan.

R:\3.accounting\budget\2018\bec 2018 budget.6.pdf
