SPRINGFIELD UTILITY BOARD General Manager's Office Budget Whole Packet.pdf · SPRINGFIELD UTILITY BOARD General Manager's Office MEMORANDUM ... FROM: Jeff Nelson SUBJECT: ... Beginning

SPRINGFIELD UTILITY BOARD General Manager's Office

MEMORANDUM

DATE: August 7, 2014

TO: Budget Committee Members

FROM: Jeff Nelson

SUBJECT: Electric and Water Utilities’ Ten-Year Cash Flow Information

Attached are copies of the proposed Electric and Water utilities’ ten-year cash flow models and

the ten-year major capital improvement projects for each utility.

At the mid-year Budget Committee meeting, we will review for each utility:

1. Highlighted mid-year financials for Water and Electric;

2. Categories of capital projects;

3. Rate increase projections for 2015 through 2024; and

4. Projected working capital reserves.

As mentioned before, each year we review and update the cash flow models at least twice each

year.

The Budget Committee requested additional information and provided recommendations.

Those were:

• A recommendation to increase the minimum Electric Utility Reserves from $6,000,000.

The Board adopted $13,000,000 in the 2014 Budget.

• A recommendation to increase the minimum Water Utility Reserves from $400,000.

The Board adopted $2,500,000 in the 2014 Budget.

• A request for additional information on customer bills (discussed further in this memo)

• A recommendation to continue evaluating opportunities for the Water Utility to borrow

funds from the Electric Utility for water capital projects.

Memorandum to the Budget Committee

August 7, 2014

Page 2

Review

The Budget Committee met for a mid-year review on August 14, 2013 and again for the 2014

Budget process on November 25, 2013. The Board adopted the 2014 Budget at the December

11, 2013 regular Board meeting (Resolution 2013-6).

Power Cost Update

Over 60% of the Electric Utility’s expenses are associated with purchased power costs. SUB

currently purchases all of its power from the Bonneville Power Administration to serve SUB’s

retail customers. BPA raised its power rates in October 2011 and October 2013 and SUB’s

Board increased SUB’s electric retail rates effective April 1, 2012 to partially offset the BPA rate

increases. Ultimately, SUB adopted three electric rate increases from 2012 to 2013. 4% in April

2012, 4.5% in November 2012, and 4% in May 2013. Prior to 2012, SUB had not had a rate

increase since 2006.

BPA has a two year rate cycle with the next potential power and transmission rate changes

occurring effective October1, 2015. Staff has been following the BPA power and transmission

rate processes. BPA is projecting an 8.7% power rate increase as well as a 6.1% percent

increase in transmission rates. Each utility has a different rate impact and SUB’s models were

updated to reflect BPA’s actual rate schedules.

Water System Update

SUB has completed corrosion control facilities for our Willamette Treatment plant and Thurston

wellfield. This is related to the Environmental Protection Agencies Lead and Copper rule that

requires water utilities to have water delivered to end-users be of sufficient pH level to reduce

the likelihood of corrosion of pipes within structures (e.g. homes).

SUB’s water system has a number of plans, such as the Water Master Plan and the Water

Conservation Plan, and a new plan is near completion a Water Source Plan. The Water Source

Plan will expand the analysis on SUB’s water source options and identify recommendations

which will feed into the Water Master Plan and future capital improvement plans.

In my memo last year, I noted that the results of the new Water Source Plan could result in

significant changes in the longer term planning horizon and the 10-Year plan presented in 2014

may be materially different from 2013. The Water Source Plan and the Seismic Analysis of

SUB’s water facilities have increased projected capital spending for the Water Utility.

Regulatory requirements associated with both electric and water utilities are expected to

continue to put upward pressure on rates.


August 7, 2014

Page 3

Long Term Capital Funding

From 2004-2013, the Electric Division spent ~$20 million. From 2015-2024, the Electric Division

is proposing to spend ~$30 million

(~50% increase).

From 2004-2013, the Water Division spent ~$23 million. From 2015-2024, the Water Division is

proposing to spend ~$49 million (~100% increase).

These figures exclude planned property purchases for water and electric facilities. The budget

for property acquisition is ~1.3 million in 2015 and paid by the Electric division. As properties

are developed, the Water division may purchase or lease the property from the Electric

division.

Capital spending in the ten year horizon is due to updated cost projections for projects such as:

1) Seismic studies for SUB water storage facilities.

2) Additional work to optimize SUB’s electric distribution system to provide for distribution

service to be from at least two separate sources.

3) Replacement of structures and conductor along SUB’s Alvey-Springfield 115kV

transmission line.

Debt Forecast

The rate scenarios assume no additional debt for the Electric Utility. Consistent with prior 10-

year plans, it is assumed that the Water Utility would acquire additional debt to cover a portion

of the cost to develop a new surface water source.

The results presented do not assume that the Water Utility will borrow funds from the Electric

Utility. Staff would continue to evaluate this on an ongoing basis and provide a

recommendation on this option as SUB gets closer to the period where larger water projects

will trigger either larger rate increases or additional borrowing.

SUB Organizational Structure

The Board and I.B.E.W. Local Union 659 agreed upon a new 5-year labor-management contract

beginning May 1, 2012. Among other outcomes, this agreement provides additional planning

certainty around projected labor costs.

SUB has a succession planning process that is periodically reviewed. Retirement and transition

of long-term staff at SUB has created opportunities to evaluate a range of positions, from entry

level apprenticeships to management progression. As noted last year, two management

positions have been consolidated, a new Water Superintendent position and a new Customer

Service Supervisor position have been filled, and a modest increase in staffing was

implemented at the operational level. With the planned retirement of the Director of Electric

and Water Divisions, SUB will be transitioning back to two directors for these divisions.


August 7, 2014

Page 4

Customer Bills and Rates

The Budget Committee requested additional information on a typical customer bill. Staff have

put together typical bills for residential customers as well as representative samples of

commercial and industrial customers. These bills reflect both SUB’s current rates as well as bill

comparisons with other utility rates.

SUB bills customers for electric, water, sewer, and stormwater. SUB provides billing services for

the City of Springfield which establishes sewer and stormwater rates. Because customers may

call SUB to comment on how high their bills are, the annual trend of combined electric, water,

and sewer/stormwater is provided for your information.

For your information, attached is a copy of a rate comparison study for water and electric rates

performed by EWEB that includes SUB in the study. In addition, a recent EWEB projection of

EWEB rate increases for water and electric is included.

Utility Goal Setting

The proposed projections are designed to be consistent with SUB’s mission. I look forward to

continuing the collaborative goal setting process that the Board employs to provide additional

policy direction to the General Manager.


August 7, 2014

Page 5

WATER UTILITY:

Conditions since the beginning of the budget year:

1. Beginning Working Capital on January 1, 2014, was $3,267,580.

2. Year End 2014 Revenues from water sales are projected to be up by approximately

$340,286, or approximately a three and seven tenths (3.7) percent increase on an annual

basis for 2014 compared to budget. The revised Year End 2014 figure is now $9,633,252 for

General and Contract Sales compared to the original budget of $9,292,966.

3. Year End capital costs are up approximately $450,000 and labor is unchanged from budget.

4. The Water Utility is on a course to end the calendar year with expenses exceeding revenues

by $1,085,209. The budget assumed that expenses would exceed revenues by $1,064,327.

Proposed Water Rate Increases

Year August 2012

Forecast

Percent of Rate

Increase

August 2013

Forecast

Percent of Rate

Increase

August 2014

Forecast

Percent of Rate

Increase

2013 9.5 9.5

2014 9.0 9.5 9.5

2015 0.0 9.0 9.5

2016 9.0 0.0 9.5

2017 0.0 7.0 9.5

2018 9.0 0.0 9.0

2019 0.0 0.0 0.0

2020 9.0 9.0 4.0

2021 0.0 0.0 0.0

2022 9.0 9.0 0.0

2023 n/a 0.0 0.0

2024 n/a n/a 0.0


August 7, 2014

Page 6

Water Utility2014 Retail Rate Revenue Budget vs. Revised Year End Forecast (July 2014)

Budget Actual Budget ActualWater Retail Revenues $1,906,083 $2,009,302 $2,041,591 $2,175,788Addition (Deficit) $103,219 $134,197

Budget Projected Budget ProjectedWater Retail Revenues $3,141,034 $3,243,903 $2,204,259 $2,204,259Addition (Deficit) $102,869 $0

Budget ProjectedWater Retail Revenues 9,292,966$ 9,633,252$ Addition (Deficit) 340,286$

Jan-Mar Apr-June

Jul-Sep Oct-Dec

Jan-Dec

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

Jan-Mar Apr-Jun Jul-Sep Oct-Dec

Jan-Dec 2014

Budget Actual/Forecast


August 7, 2014

Page 7

ELECTRIC UTILITY:

Conditions since the beginning of the budget year:

1. Beginning Working Capital as of January 1, 2014, was $29,741,302.

2. Year-to-Date (through July 2014) electric usage is ~2.9% lower than forecast. Year End rate

revenue is projected to be down approximately $1,642,085 compared to budget. Year End

Purchased Power costs are projected to be approximately $1,357,592 below budget. The

10-year model includes escalators for a variety of cost components, including projected

market prices and BPA rate changes.

3. The Electric Utility is on a course to end the calendar year with expenses exceeding

revenues by $1,753,821.

4. The Electric Utility is debt free.

Proposed Rate Increases:

Year August 2012

Forecast

Percent of Rate

Increase

August 2013

Forecast

Percent of Rate

Increase

August 2014

Forecast

Percent of Rate

Increase

2013 4.0 4.0

2014 3.0 0.0 0.0

2015 0.0 3.0 5.6

2016 7.0 0.0 3.0

2017 0.0 3.0 3.0

2018 7.0 0.0 3.0

2019 0.0 4.0 0.0

2020 7.0 0.0 3.0

2021 0.0 4.0 0.0

2022 7.0 0.0 2.0

2023 n/a 3.0 0.0

2024 n/a n/a 0.0


August 7, 2014

Page 8

Electric Utility2014 Retail Rate Revenue and Purchase Power Budget vs. Revised Year End Forecast (July 2014)

Budget Actual Budget ActualElectric Retail Revenues $14,750,039 14,988,248.42$ $10,943,970 10,428,164.52$ Purchased Power Costs $10,184,056 9,555,062.90$ $7,129,286 7,111,443.15$ Gross Margin $4,565,982 $5,433,186 $3,814,684 $3,316,721Addition (Deficit) $867,203 ($497,963)

Budget Projected Budget ProjectedElectric Retail Revenues $10,709,916 9,807,722.46$ $12,600,697 12,138,401$ Purchased Power Costs $6,956,203 7,100,949.34$ $10,042,307 9,186,805$ Gross Margin $3,753,713 $2,706,773 $2,558,389 $2,951,596Addition (Deficit) ($1,046,940) $393,207

Budget ProjectedElectric Retail Revenues 49,004,621$ 47,362,536$ Purchased Power Costs 34,311,852$ 32,954,260$ Gross Margin 14,692,769$ 14,408,276$ Addition (Deficit) (284,493)$

Jan-Mar Apr-June

Jul-Sep Oct-Dec

Jan-Dec

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

Electric Retail

Revenues

Purchased Power

Costs

Gross Margin

Jan-Mar 2014

Budget Actual

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

Electric Retail

Revenues

Purchased Power

Costs

Gross Margin

Apr-Jun 2014

Budget Actual

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

Electric Retail

Revenues

Purchased Power

Costs

Gross Margin

Jul-Sep 2014

Budget Forecast

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

Electric Retail

Revenues

Purchased Power

Costs

Gross Margin

Oct-Dec 2014

Budget Forecast

JDN:jcb


August 7, 2014

Page 9

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

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

Shape of the BP-14 Increase

(Power Costs by Month)

BP-12

BP-14

JDN:jcb

BPA Rate Increase focused in Spring/Summer

Electric and Water Utility

Major Capital Improvements and

Ten Year Cash Flow Presentation

2014 Update

Springfield Utility Board

August 13, 2014

Water Utility Financials – June 2014

Water Utility

As of

June 30, 2014

As of

June 30, 2013

As of

June 30, 2012

Total Assets $64,041,024 $59,695,793 $56,623,704

Capital Work $1,888,449 $2,334,016 $1,259,010

Depreciation $840,411 $754,850 $753,426

$107,590 $277,890 $108,553Developer Installed Revenue & DRCs

Long Term Debt $3,228,982 $3,582,517 $3,757,307

$2,361,513 $2,971,974 $4,601,378

Budget Year End Margin (Revenue Less Expenses) ($1,085,209) * ($943,477) $246,327

Possible Loan from Electric Utility 317,629$ $0 $0

Beginning Working Capital 3,267,580$ 4,211,057$ 5,424,713$

Ending Working Capital 2,500,000$ 3,267,580$ 4,211,057$

Working Capital Reserve (2,500,000)$ (400,000)$ (400,000)$

Net Available Working Capital -$ 2,867,580$ 3,811,057$

* Projected Year End

Total Cash and Investments (First 6 Months)

Electric Utility Financials – June 2014

Electric Utility

As of

June 30, 2014

As of

June 30, 2013

As of

June 30, 2012

Total Assets $118,730,567 $115,324,652 $112,643,434

Capital Work $3,532,252 $1,858,370 $1,449,662

Depreciation $1,400,961 $1,375,191 $1,366,432

$145,800 $135,180 $55,099Developer Installed Revenue & DRCs

Long Term Debt $0 $0 $0

$30,449,659 $29,538,820 $27,699,582

Budget Year End Margin (Revenue Less Expenses) ($1,753,821) * $1,935,237 $246,327

Possible Loan to Water Utility ($317,629) $0 $0

Year End Beginning Working Capital $29,741,302 $27,806,065 $27,000,563

Ending Working Capital 27,669,852$ * 29,741,302$ 27,806,065$

Working Capital Reserve (13,000,000)$ (6,000,000)$ (6,000,000)$

Net Available Working Capital 14,669,852$ 23,741,302$ 21,806,065$

* Projected Year End

Total Cash and Investments (First 6 Months)

Loss Of Industrial Load

SierraPine facility being purchased by Flakeboard and shut down.

Swanson facility fire reduced operations significantly.

Combined, these represent:

•~7% of total annual retail energy sales•~7% of total annual retail energy sales

•~$3 million in annual retail revenue

•~$750,000 in gross margin (revenue less power cost)

With no other impacts to consider, loss of gross margin is the equivalent of a 1.6% rate increase to remain whole.

Proposed Capital Spending• From 2004-2013, the Electric Division spent ~$20

million 1

• From 2015-2024, the Electric Division is proposing to spend ~$30 million 1 (~50% increase)

• From 2004-2013, the Water Division spent ~$23 • From 2004-2013, the Water Division spent ~$23 million 1

• From 2015-2024, the Water Division is proposing to spend ~$49 million 2 (~100% increase)

1 Excluding property purchases2 Excluding property and new large treatment plant

Spending Mix – ElectricElectric Utility - Where Each Dollar Expensed GoesExcludes land purchases (Capital)

2004 2009 2014 2015 2019 2024Labor 0.18$ 0.20$ 0.21$ 0.21$ 0.21$ 0.22$ O&M 0.05$ 0.05$ 0.05$ 0.05$ 0.05$ 0.05$ Capital 0.06$ 0.04$ 0.05$ 0.05$ 0.06$ 0.06$ Purchased Power 0.63$ 0.65$ 0.64$ 0.63$ 0.63$ 0.63$ Debt Service 0.02$ 0.00$ -$ -$ -$ -$ Other 0.06$ 0.06$ 0.05$ 0.06$ 0.05$ 0.05$

1.00$ 1.00$ 1.00$ 1.00$ 1.00$ 1.00$ 1.00$ 1.00$ 1.00$ 1.00$ 1.00$ 1.00$

$0.21

$0.05

$0.06

$0.63

$0.05 2019

Labor

O&M

Capital

Purchased Power

Debt Service

Other

$0.18

$0.05

$0.06

$0.63

$0.02 $0.06

2004

Labor

O&M

Capital

Purchased Power

Debt Service

Other

Spending Mix – WaterWater Utility - Where Each Dollar Expensed GoesExcludes land purchases (Capital)

2004 2009 2014 2015 2019 2024Labor 0.38$ 0.51$ 0.39$ 0.39$ 0.41$ 0.53$ O&M 0.12$ 0.12$ 0.08$ 0.07$ 0.08$ 0.09$ Capital 0.31$ 0.23$ 0.46$ 0.47$ 0.45$ 0.21$ Purchased Power -$ -$ -$ -$ -$ -$ Debt Service 0.11$ 0.09$ 0.04$ 0.03$ 0.03$ 0.14$ Other 0.07$ 0.06$ 0.04$ 0.03$ 0.03$ 0.03$

$0.38

$0.12

$0.31

$0.11

$0.07 2004

Labor

O&M

Capital

Purchased Power

Debt Service

Other

$0.41

$0.08

$0.45

$0.03 $0.03 2019

Labor

O&M

Capital

Purchased Power

Debt Service

Other

Production• Pump Station Repairs and Testing

• Willamette Heights Reservoir Fill Line Work

• Seismic Retrofit of Storage Facilities

• Water Plan Updates

• Water Source Plan

Major Capital Projects – Water Utility

• Water Master Plan

• Conservation Plan

Source• Pump, Motor and Well Testing and Rehabilitation

• Surface Water Intake Construction

• Re-Sanding of Filter Beds at Willamette

• New Treatment Plant Construction

Water Transmission• Continue the Installation of a Tie Between Thurston

Wellfield and Willamette Wellfield

• Extension of 24” Line along Bob Straub Parkway

• Eastside Pump Station to Steam Plant

• Steam Plant North to Gateway

• Completion of Marcola Road Transmission

Major Capital Projects – Water Utility

• Completion of Marcola Road Transmission

• Cathodic Protection of Steel Water Transmission Lines

Major Capital Projects – Water UtilityWater Quality Regulations

• Reconfiguration of Pipelines to Corrosion Facilities

• Addition and Modification of Entry Points of Water into SUB’s System for Sampling

Water Distribution• Replace Aging and Leaking Pipelines and Services• Replace Aging and Leaking Pipelines and Services

• Replace Old Water Meters

• Investigate and Purchase New Reservoir Sites

• Improve Reliability

Water Rate Increases

9.50% 9.50% 9.50%9.00%

8.00%

10.00%

Water Rate Increases - January of Each Year

(Subject To Change)

0.00%

4.00%

0.00% 0.00% 0.00% 0.00%0.00%

2.00%

4.00%

6.00%

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Water Utility – Ending Working Capital

$21,134,958

$15,000,000

$20,000,000

$25,000,000

Water Utility

Ending Working Capital

$2,182,371

$90,651

$1,785,005

$5,494,775

$10,282,751

$0

$5,000,000

$10,000,000

$15,000,000

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Water Utility Cash Flow (8/13/2014 Budget Meeting)

2014 2015 2016 2017 2018 2019Total General Sales (No Growth after 2013 and No Rate Increase) 9,298,426$ 9,298,426$ 9,298,426$ 9,298,426$ 9,298,426$ Usage Growth 0.0% 0.0% 0.0% 0.0% 0.0%Cummulative Usage Growth 0.0% 0.0% 0.0% 0.0% 0.0%Total General Sales (No Rate Increase) 9,298,426$ 9,298,426$ 9,298,426$ 9,298,426$ 9,298,426$ Rate Increase 9.50% 9.50% 9.50% 9.00% 0.00%Cummulative Rate Increase 9.50% 19.90% 31.29% 43.11% 43.11%General Sales with Rate Increase 10,181,777$ 11,149,045$ 12,208,205$ 13,306,943$ 13,306,943$

BUDGETED RESOURCESTotal General Sales 9,498,426$ 10,181,777$ 11,149,045$ 12,208,205$ 13,306,943$ 13,306,943$ Total Contract Sales 134,826$ 134,826$ 147,634$ 161,660$ 176,209$ 176,209$ New Treatment Plant Loans -$ -$ -$ -$ -$ -$ TOTAL OTHER INCOME (Includes Loans) 494,581$ 543,928$ 664,971$ 720,808$ 750,158$ 788,716$

TOTAL RESOURCES 10,127,833$ 10,860,531$ 11,961,650$ 13,090,673$ 14,233,310$ 14,271,868$

BUDGETED EXPENSESBUDGETED EXPENSESTotal Labor 4,345,173$ 4,885,643$ 5,034,837$ 5,189,207$ 5,348,410$ 5,512,604$ Total Operating Costs 913,367$ 931,634$ 950,267$ 969,272$ 988,658$ 1,008,431$ Total Capital 5,119,653$ 5,836,698$ 5,635,122$ 5,675,821$ 5,818,564$ 6,047,093$

Debt Service Cost 404,849$ 404,849$ 404,849$ 404,849$ 404,849$ 404,849$ Purchased Water Rainbow 415,000$ 415,000$ 415,000$ 415,000$ 415,000$ 415,000$ New Water Source Debt Service -$ -$ -$ -$ -$ -$

TOTAL OTHER COSTS 834,849$ 819,849$ 819,849$ 819,849$ 819,849$ 819,849$

TOTAL EXPENSES 11,213,042$ 12,473,825$ 12,440,075$ 12,654,149$ 12,975,480$ 13,387,977$

Excess/(Deficit) (1,085,209)$ (1,613,294)$ (478,424)$ 436,524$ 1,257,830$ 883,891$

Beginning Working Capital 3,267,580$ 2,182,371$ 569,077$ 90,652$ 527,176$ 1,785,006$ Restricted Funds Moving To Unrestricted FundsUnrestricted Funds Moving To Restricted FundsEnding Working Capital 2,182,371$ 569,077$ 90,652$ 527,176$ 1,785,006$ 2,668,898$ Working Capital Reserve (2,500,000)$ (2,500,000)$ (2,500,000)$ (2,500,000)$ (2,500,000)$ (2,500,000)$ Net Available Working Capital (317,629)$ (1,930,923)$ (2,409,348)$ (1,972,824)$ (714,994)$ 168,898$

Water Utility Cash Flow (8/13/2014 Budget Meeting)

2020 2021 2022 2023 2024Total General Sales (No Growth after 2013 and No Rate Increase) 9,298,426$ 9,298,426$ 9,298,426$ 9,298,426$ 9,298,426$ Usage Growth 0.0% 0.0% 0.0% 0.0% 0.0%Cummulative Usage Growth 0.0% 0.0% 0.0% 0.0% 0.0%Total General Sales (No Rate Increase) 9,298,426$ 9,298,426$ 9,298,426$ 9,298,426$ 9,298,426$ Rate Increase 4.00% 0.00% 0.00% 0.00% 0.00%Cummulative Rate Increase 48.83% 48.83% 48.83% 48.83% 48.83%General Sales with Rate Increase 13,839,221$ 13,839,221$ 13,839,221$ 13,839,221$ 13,839,221$

BUDGETED RESOURCESTotal General Sales 13,839,221$ 13,839,221$ 13,839,221$ 13,839,221$ 13,839,221$ Total Contract Sales 183,257$ 183,257$ 183,257$ 183,257$ 183,257$ New Treatment Plant Loans 17,000,000$ -$ -$ -$ -$ TOTAL OTHER INCOME (Includes Loans) 829,384$ 1,361,869$ 1,093,140$ 991,893$ 1,074,525$

TOTAL RESOURCES 31,851,862$ 15,384,347$ 15,115,618$ 15,014,371$ 15,097,003$

BUDGETED EXPENSESBUDGETED EXPENSESTotal Labor 5,677,982$ 5,848,322$ 6,023,771$ 6,204,484$ 6,390,619$ Total Operating Costs 1,028,599$ 1,049,171$ 1,070,155$ 1,091,558$ 1,113,389$ Total Capital 5,859,370$ 12,187,961$ 13,240,165$ 3,780,500$ 2,525,578$

Debt Service Cost 404,849$ 404,849$ 404,849$ -$ -$ Purchased Water Rainbow 415,000$ 415,000$ 415,000$ 415,000$ 415,000$ New Water Source Debt Service -$ 1,693,635$ 1,693,635$ 1,693,635$ 1,693,635$

TOTAL OTHER COSTS 819,849$ 2,513,484$ 2,513,484$ 2,108,635$ 2,108,635$

TOTAL EXPENSES 13,385,801$ 21,598,938$ 22,847,575$ 13,185,177$ 12,138,221$

Excess/(Deficit) 18,466,061$ (6,214,591)$ (7,731,957)$ 1,829,194$ 2,958,782$

Beginning Working Capital 2,668,898$ 21,134,959$ 14,920,368$ 7,188,411$ 9,017,605$ Restricted Funds Moving To Unrestricted FundsUnrestricted Funds Moving To Restricted Funds -$ Ending Working Capital 21,134,959$ 14,920,368$ 7,188,411$ 9,017,605$ 11,976,387$ Working Capital Reserve (2,500,000)$ (2,500,000)$ (2,500,000)$ (2,500,000)$ (2,500,000)$ Net Available Working Capital 18,634,959$ 12,420,368$ 4,688,411$ 6,517,605$ 9,476,387$

Substations• Add Secondary Oil Containment for Existing Substation

Transformers

• Replacement of Aging Equipment

• Equipment Upgrades and Additions

Transmission

Major Capital Projects – Electric Utility

Transmission• Upgrade the Springfield - Alvey Transmission Line

Overhead Distribution• Deteriorated Pole Replacement Program

• Upgrade Distribution Facilities for Increased Transfer Capability

• On Hold - Voltage Conversion Projects, except for Glenwood

• Enhanced – Glenwood Infrastructure

Major Capital Projects – Electric Utility

• Enhanced – Glenwood Infrastructure

Underground Distribution• Ongoing monitoring and replacement of underground

cable

Electric Rate Increases

5.6%

5.0%

6.0%

7.0%

Electric Rate Increases - May of Each Year

(Subject To Change)

3.00% 3.00% 3.00%

0.00%

3.00%

0.00%

2.00%

0.00% 0.00%0.0%

1.0%

2.0%

3.0%

4.0%

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Electric Utility – Ending Working Capital

$27,987,481 $25,505,979

$24,990,301 $24,887,739 $23,878,170

$24,026,282

$20,000,000

$25,000,000

$30,000,000

Electric Utility

Ending Working Capital

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Electric Utility Cash Flow (8/13/14 Budget Meeting)

2014 2015 2016 2017 2018 2019Gross General Sales (No Growth) 45,953,855$ 45,953,855$ 45,953,855$ 45,953,855$ 45,953,855$ Load Growth 1.0% 1.0% 1.0% 1.0% 1.0%Cummulative Load Growth 1.00% 2.01% 3.03% 4.06% 5.10%Gross General Sales (With Growth) 46,413,393$ 46,877,527$ 47,346,303$ 47,819,766$ 48,297,963$ Rate Increase 5.60% 3.00% 3.00% 3.00% 0.00%Cummulative Rate Increase 3.15% 7.38% 10.60% 13.92% 15.39%Specific Load 2010 Rates 175,416$ 175,416$ 175,416$ 175,416$ 175,416$ Specific Load with Cummulative Rate Increase 180,940$ 188,365$ 194,016$ 199,836$ 202,416$ General Sales with Rate Increase 48,056,008$ 50,526,193$ 52,560,458$ 54,676,646$ 55,934,388$

BUDGETED RESOURCESTotal General Sales 47,362,536$ 48,056,008$ 50,526,193$ 52,560,458$ 54,676,646$ 55,934,388$ Total Contract Sales -$ -$ -$ -$ -$ -$ Utility InterCompany Loan 404,849$ 404,849$ 404,849$ 404,849$ 404,849$ 404,849$ TOTAL OTHER INCOME (Includes Intercompany Loan) 3,692,766$ 3,678,964$ 3,998,310$ 4,243,746$ 4,240,861$ 4,140,291$

TOTAL RESOURCES 51,055,302$ 51,734,973$ 54,524,502$ 56,804,204$ 58,917,507$ 60,074,679$

BUDGETED EXPENSESTotal Labor 10,762,293$ 11,031,350$ 11,340,809$ 11,681,034$ 12,031,465$ 12,392,409$ Total Operating Costs 2,598,105$ 2,650,067$ 2,703,069$ 2,757,130$ 2,812,273$ 2,868,518$ Total Capital 3,903,895$ 3,675,802$ 2,864,672$ 3,503,464$ 3,811,544$ 3,630,624$

SUB Conservation Payment 737,280$ 1,000,000$ 1,000,000$ 1,000,000$ 1,000,000$ 1,000,000$ In Lieu of Taxes 1,936,290$ 1,916,290$ 1,935,453$ 1,954,807$ 1,974,356$ 1,994,099$ Debt Service Cost -$ -$ -$ -$ -$ -$ Purchased Power 32,871,260$ 33,063,555$ 35,559,910$ 36,278,030$ 37,433,286$ 38,055,244$ TOTAL OTHER COSTS 35,544,830$ 35,979,845$ 38,495,363$ 39,232,838$ 40,407,642$ 41,049,343$

TOTAL EXPENSES 52,809,123$ 53,337,065$ 55,403,913$ 57,174,466$ 59,062,923$ 59,940,894$

Excess/(Deficit) (1,753,821)$ (1,602,092)$ (879,411)$ (370,262)$ (145,416)$ 133,785$

Beginning Working Capital 29,741,302$ 27,987,481$ 26,385,389$ 25,505,978$ 25,135,716$ 24,990,300$ Refinancing Water Debt From Electric Reserves -$ Ending Working Capital 27,987,481$ 26,385,389$ 25,505,978$ 25,135,716$ 24,990,300$ 25,124,085$ Working Capital Reserve (13,000,000)$ (13,000,000)$ (13,000,000)$ (13,000,000)$ (13,000,000)$ (13,000,000)$ Net Available Working Capital 14,987,481$ 13,385,389$ 12,505,978$ 12,135,716$ 11,990,300$ 12,124,085$

Electric Utility Cash Flow (8/13/14 Budget Meeting)

2020 2021 2022 2023 2024Gross General Sales (No Growth) 45,953,855$ 45,953,855$ 45,953,855$ 45,953,855$ 45,953,855$ Load Growth 1.0% 1.0% 1.0% 1.0% 1.0%Cummulative Load Growth 6.15% 7.21% 8.29% 9.37% 10.46%Gross General Sales (With Growth) 48,780,943$ 49,268,752$ 49,761,440$ 50,259,054$ 50,761,645$ Rate Increase 3.00% 0.00% 2.00% 0.00% 0.00%Cummulative Rate Increase 17.34% 18.85% 20.19% 21.23% 21.23%Specific Load 2010 Rates 175,416$ 175,416$ 175,416$ 175,416$ 175,416$ Specific Load with Cummulative Rate Increase 205,831$ 208,489$ 210,834$ 212,658$ 212,658$ General Sales with Rate Increase 57,444,779$ 58,766,239$ 60,019,365$ 61,142,114$ 61,751,409$

BUDGETED RESOURCESTotal General Sales 57,444,779$ 58,766,239$ 60,019,365$ 61,142,114$ 61,751,409$ Total Contract Sales -$ -$ -$ -$ -$ Utility InterCompany Loan 404,849$ 404,849$ 404,849$ 404,849$ -$ TOTAL OTHER INCOME (Includes Intercompany Loan) 3,444,529$ 3,419,539$ 3,404,620$ 3,417,773$ 3,015,112$

TOTAL RESOURCES 60,889,307$ 62,185,778$ 63,423,985$ 64,559,887$ 64,766,521$

BUDGETED EXPENSESTotal Labor 12,764,181$ 13,147,106$ 13,541,520$ 13,947,765$ 14,366,198$ Total Operating Costs 2,925,889$ 2,984,406$ 3,044,094$ 3,104,976$ 3,167,076$ Total Capital 3,453,800$ 4,873,197$ 3,293,837$ 3,540,125$ 3,581,395$

SUB Conservation Payment 1,000,000$ 1,000,000$ 1,000,000$ 1,000,000$ 1,000,000$ In Lieu of Taxes 2,014,040$ 2,034,180$ 2,054,522$ 2,075,067$ 2,095,818$ Debt Service Cost -$ -$ -$ -$ -$ Purchased Power 38,967,746$ 39,601,466$ 40,045,003$ 40,446,953$ 40,852,922$ TOTAL OTHER COSTS 41,981,786$ 42,635,647$ 43,099,525$ 43,522,020$ 43,948,741$

TOTAL EXPENSES 61,125,655$ 63,640,356$ 62,978,977$ 64,114,887$ 65,063,409$

Excess/(Deficit) (236,347)$ (1,454,578)$ 445,009$ 445,000$ (296,888)$

Beginning Working Capital 25,124,085$ 24,887,738$ 23,433,160$ 23,878,169$ 24,323,169$ Refinancing Water Debt From Electric ReservesEnding Working Capital 24,887,738$ 23,433,160$ 23,878,169$ 24,323,169$ 24,026,281$ Working Capital Reserve (13,000,000)$ (13,000,000)$ (13,000,000)$ (13,000,000)$ (13,000,000)$ Net Available Working Capital 11,887,738$ 10,433,160$ 10,878,169$ 11,323,169$ 11,026,281$

Project Labor Capital

1

Distribution: 2000 Of Main Replacement-Replacement

of failing galvanized and OD steel pipe. $ 65,000 $ 145,000

2 Transmission: Eastside - Steam Plant Transmission Phase 2 $ 97,500 $ 525,000

3

Production: Master and Water Conservation 5 year plan

update. $ 2,800 $ 60,000

4 Distribution: 36" pipeline at Millrace extension for path. $ 6,500 $ 20,000

5 Transmission: Eastside - Steam Plant Transmission Phase 3. $ 81,300 $ 505,000

6 Source: Surface Water Intake Design Phase 1. $ 3,500 $ 250,000

7 Production/Distribution: South 57th St Pump Station $ 42,900 $ 910,000

8 Transmission: Thurston Transmission Phase 1. $ 1,400 $ 620,000

9

Production: South 72nd St Pump Station Power & Control

Retrofit $ 7,000 $ 45,000

10

Transmission: Marcola Road Transmission

Design/Easements. $ 1,300 $ 10,000

11 Transmission: South 7th Railroad Crossing Design/Permit. $ 1,300 $ 5,000

12

Production: South 67th St Pump Station Meter & PRV

Facility. $ 10,400 $ 35,000

13

Production: Seismic Retrofit of South 57th Reservoirs -

piping. $ 7,000 $ 652,400

14 Production: Thurston Slough Pipeline Crossing $ 3,300 $ 160,000

15 Production: South Hills Reservoir Replacement Design $ 3,300 $ 460,000

16

Production: Pump Station Testing-Pumps & Motors-

Annual testing for efficiency and condition. $ 3,500 $ 5,000

17

Source: Pump & Motor Testing at Wells-Annual testing

for efficiency and condition. $ 10,400 $ 20,000

18 Source: Water Quality Monitoring Station. $ 1,400 $ 25,000

19

Source: Pump Test 2 Wells-Extended testing of wells for

condition and capacity. $ 3,500 $ 5,000

20

Source: Well Rehabilitation-Treatment and

reconditioning of 2 wells to recover lost capacity. $ 3,500 $ 75,000

Totals $ 356,800 $ 4,532,400

Budget 2015

Water Division

Capital Improvements


1

Distribution: 2000' Of Main Replacement-Replacement


2

Transmission: McVey Highway transmission pipeline

construction Phase 2 (E 19th Avenue to city limits) $ 52,000 $ 650,000

3 Production: Thurston wellfield access bridge construction $ 7,000 $ 370,000

4 Source: Surface water intake design Phase 2 $ 3,500 $ 250,000

5

Transmission: Natron transmission pepeline Phase 2 (Mt

Vernon Road - Quartz Avenue) $ 65,000 $ 350,000

6 Transmission: Thurston transmission Phase 2 $ - $ 455,000

7

Production: Replace South Hills reservoir Phase 1 - Access,

site work, utilities $ 7,000 $ 778,650

8

Source: Seismic retrofit of S. 67th Street reservoir -

design $ 3,500 $ 147,800

9

Distribution: Marcola Road transmission pipeline

construction Phase 1 (Peace Health) $ 39,000 $ 360,000

10

Transmission: Marcola Road transmission pipeline

construction Phase 2 (19th Street/Marcola Road - City

limits) (Complete in conjuntion with city sewer project) $ 48,800 $ 325,000

11 Source: Water Quality Monitoring Station $ 1,400 $ -

12

Distribution: Quartz Avenue pipeline (Bob Straub

Parkway to S. 60th Street) $ 13,000 $ 20,000

13

Transmission: Natron transmission pepeline Phase 3

(Bob Straub Pkwy/Quartz Avenue south 700') $ 22,800 $ 105,000

14 Source: Resand filter bed $ 13,500 $ 180,000

15 Production: Pump & montor testing at pump stations $ 3,500 $ 5,000

16 Source: Pump and motor testing at wells $ 10,400 $ 20,000

17

Source: Test two (2) production wells for capacity and

efficiency $ 3,500 $ 5,000

18 Source: Rehabilitate two (2) production wells $ 3,500 $ 75,000

Totals $ 362,400 $ 4,241,450

Water Division


Budget 2016


1



2

Transmission: North System transmission pipeline

construction Phase 1 (Olympic St/5th-6th and 6th St/Olympic-

Centennial). $ 52,000 $ 360,000

3

Production: Replace South Hills reservoir Phase 2 - Pump

Station. $ 7,000 $ 785,700

4

Production: Seismic retrofit of Willamette Heights reservoir -

design $ 7,000 $ 189,400

5

Transmission: Eastside transmission pipeline Phase 4 (S

28th Street/Booth Kelly Road to Eastside Pump Station). $ 81,300 $ 510,000

6 Source: Surface water intake construction Phase 1 $ 7,000 $ 1,187,500

7

Transmission/Production: Thurston transmission

pipeline construction Phase 3 (School District property) $ 13,500 $ 511,000

8

Transmission: Marcola Road transmission pipeline Phase

3 (Marcola Road/19th St - Peace Health) $ 29,300 $ 210,000

9

Transmission: Cathodic protection OD steel transmission

pipeline Phase 1. $ 130,000 $ 150,000

10 Production: Pump and motor testing at pump stations $ 3,500 $ 5,000


12 Source: Test two (2) wells for capacity and efficiency $ 3,500 $ 5,000


Totals $ 413,000 $ 4,153,600

Water Division


Budget 2017


1

Distribution: 2000' Of Main Replacement-Replacement


2

Transmission: Thurston transmission pipeline

construction Phase 4 (School District property) $ 88,300 $ 785,000

3

Source: Willamette surface water intake construction Phase

2. $ 7,000 $ 1,187,500

4


construction Phase 2 (Relocate intertie). $ 23,300 $ 150,000

5

Transmission: Cathodic Protection of OD steel pipelines

Phase 2. $ 130,000 $ 150,000

6

Production: Seismic Retrofit of Willamette Heights

reservoir $ 7,000 $ 372,650

7 Production: Replace South Hills reservoir Phase 3 - Tank $ 7,000 $ 835,700

8 Source: Resand Filter Bed-Resand filter bed to 36" depth. $ 13,500 $ 180,000

9 Production: Seismic Retrofit of S 67th Street reservoir $ 7,000 $ 261,250

10 Production: Pump & Motor Testing at pump stations $ 3,500 $ 5,000




Totals $ 369,000 $ 4,172,100

Water Division


Budget 2018


1



2


construction Phase 3 (6th St/Centennial- G). $ 45,500 $ 365,000

3

Production: Seismic Retrofit and painting of 57th Street

reservoir #1 $ 7,000 $ 729,350

4 Source: Surface Water Plant design Phase 1. $ 17,400 $ 1,500,000

5


construction Phase 5 $ 97,500 $ 650,000

6

Source: Pump & Motor Testing at Wells-Annual testing

for efficiency and condition. $ 700 $ 104,835

7 Production: Remove S 70th Street reservoir $ 3,500 $ 58,000

8 Production: Painting of S 67th Street reservoir $ 3,500 $ 656,500


10 Source: Pump and motor teting at wells $ 10,400 $ 20,000


12 Source: Rehabilitate two 2 wells to recover lost capacity. $ 3,500 $ 75,000

Totals $ 261,000 $ 4,313,685

Budget 2019

Water Division



1



2


construction Phase 4 (G - C). $ 48,800 $ 320,000

3

Production: Master Plan-5 year update of Water Master

Plan. $ 1,400 $ 50,000

4 Source: Surface Water Plant design Phase 2. $ 17,400 $ 1,500,000

5

Production: Thurston transmission pipeline construction

Phase 6 $ 97,500 $ 650,000

6

Production: Water Conservation & Management Plan

update $ 1,400 $ 25,000

7

Production: Seismic retrofit and painting of S 57t Street

reservoir #2 $ - $ 997,600

8 Distribution: Resand filter bed $ 13,500 $ 180,000



11 Source: Test two (2) wells for capacity and efficeincy $ 3,500 $ 5,000


Totals $ 265,900 $ 3,972,600

Water Division


Budget 2020


1



2


construction Phase 5 (C/6th-4th and 4th/C-B). $ 55,800 $ 260,000

3 Source: Surface Water Plant construction Phase 1. $ 13,900 $ 8,220,000

4







Totals $ 253,100 $ 9,380,000

Water Division


Budget 2021


1



2

Transmission: Henderson Avenue transmission pipeline

construction (14th Ave - 19th Ave). $ 55,300 $ 375,000

3 Production: SCADA System upgrade. $ 34,800 $ 100,000

4 Source: Surface Water Plant construction Phase 2 $ 13,900 $ 8,220,000

5

Transmission: 35th Street transmission pipeline

construction (Commercial - Industrial, includes new

railroad crossing) $ 32,500 $ 295,000

6



7 Source/Transmission: Resand filter bed $ 13,500 $ 180,000





Totals $ 333,400 $ 10,070,000

Water Division


Budget 2022


1



2

Transmission: 42nd Street transmission pipeline

construction (Hwy 126 - Marcola Road). $ 78,000 $ 515,000


4

Transmission: Mallard Avenue transmission pipeline

construction (Pheasant Blvd. - MLK Jr Pkwy). $ 16,300 $ 72,000

5 Production: Painting Willamette Heights reservoir $ 3,500 $ 780,000

6

Transmission: Replace 20" OD steel and 16" AC pipelines

in S 28th Street from Eastside Pump Station to S 'F'

Street $ 39,000 $ 216,000





Totals $ 257,500 $ 1,933,000

Water Division


Budget 2023


1




3 Transmission/Production: Relocate Steam Plant $ 23,300 $ 257,500

4 Transmission: S 57th Street reservoir fill pipeline $ 48,800 $ 234,000





Totals $ 192,800 $ 841,500

Water Division


Budget 2024

Electric Division


Budget 2015

Labor Capital

1 Reliability through Proactive Maintenance: Pole Replacement Replace 30 poles that have been

identified with structural weakness. This project replaces poles that are typically found during our

test and treat cycle. The poles are replaced before failure.

$69,700 $42,000

2 Reliability through Proactive Maintenance: Underground Cable Replacement Replace 10,000' of

primary underground cables in the distribution system. This project limits exposure to future cable

failures.

$53,800 $183,900

3 Reliability through Operational Efficiency: Transfer Station Loop Convert distribution voltage for

area west of Henderson Ave that includes the transfer station. The voltage conversion will remove

step-down components from the system and replace aging equipment. The loop will give the

ability to move the load as needed.

$14,600 $116,200

4 Reliability through Diversity: ELK to BISON Backbone Reconductor Reconductor and construct

an overhead backbone connection on Industrial Ave. This project will increase the ability to shift

load within the system.

$42,700 $20,500

5 External: Glenwood Distribution Reroute Construct underground backbone from Henderson Ave

to Brooklyn Ave. This project moves the backbone off of Franklin Blvd so the City can realign and

reconstruct the road.

$20,700 $106,000

6 Reliability through Diversity: MOOSE to MAPLE Backbone Connection Reconductor to construct

overhead backbone from 'Q' St across I-105 and Mohawk Blvd. This project will increase the ability

to shift load within the system.

$37,400 $17,900

7 Reliability through Operational Efficiency: Reconductor Small Wire Reconductor 2,000' of small

wire, heavily loaded taps and refuse for coordination. This project replaces the conductor for

better capacity and workability and checks sectionalizing coordination.

$21,500 $7,100

8 Reliability through Increased Capacity: Reconductor SOCKEYE / CEDAR Reconductor backbone

north of Centennial replacing 2/0 copper conductor. This project will increase the conductor size

which will increase the capability for transferring load during system switching.

$40,000 $19,200

9 Reliability through Diversity: FILBERT / ACORN Swap Reconfigure and replace get-aways in the

substation and replace cables. This project will intermix feeder connections with different banks,

giving more options for system switching.

$11,500 $23,100

10 Upgrade to Current Standards: 10th St Bank Protection Install transformer protection equipment

at 10th St substation. This project will replace aging circuit switchers with new circuit switchers for

better coordination and control.

$39,300 $33,800

11 Reliability through Proactive Maintenance: Replace Breaker Replace 115kV transmission breaker

at Laura substation. This project will replace aging equipment as it nears end of life.

$8,400 $62,600

12 Reliability through Proactive Maintenance: Replace FILBERT PCB Replace Filbert feeder breaker

at 10th St substation. This project will replace aging equipment as it nears end of life.

$4,300 $18,100

13 Upgrade to Current Standards: Replace Relay Panels Replace relay panels at 10th St. This is Phase

1 of the project and will replace aging relays and communication equipment with modern devices

at 10th St substation.

$22,800 $28,600

14 Reliability through Proactive Maintenance: Rebuild Alvey/Springfield Final phase of structure

rebuild for the Alvey/Springfield 115 kV Line. This project will replace old structures and increase

capacity.

$56,000 $318,900

TOTALS $442,700 $997,900

DISTRIBUTION:

SUBSTATION:

TRANSMISSION:

Projects

Electric Division


Budget 2016

Projects Labor Capital

1 Reliability through Proactive Maintenance: Pole Replacement

Replace 30 poles that have been identified with structural weakness. This project replaces poles

that are typically found during our test and treat cycle. The poles are replaced before failure.

$69,700 $42,000

2 Reliability through Proactive Maintenance: Underground Cable Replacement

Replace 10,000' of primary underground cables in the distribution system. This project limits

exposure to future cable failures.

$53,800 $183,900

3 Reliability through Proactive Maintenance: Emerald Upgrade

Replace old underground backbone with larger cable on S. 67th St. This project will remove 30+

year old cable with new cable that has higher capacity.

$23,200 $94,400

4 Reliability through Diversity: KING to SILVER Backbone Connection

Construct an underground backbone connection from Laura St to Dornoch St. This project will

support the KING circuit with the SILVER for increased reliability and load relief.

$62,800 $154,100

5 Reliability through Operational Efficiency: KOKANEE Northbound Tap to Backbone

Reconductor for an overhead backbone from 'L' St to Quinalt St. This phase replaces some heavily

loaded #6 copper line.

$50,700 $24,300

6 Reliability through Diversity: MOOSE/CARIBOU/MAPLE Backbone Connection

Construct overhead backbone connection along 19th St. It will increase the ability to shift load

within the system.

$11,800 $117,900

7 Reliability through Increased Capacity: Reconductor FIR

Reconductor backbone near 28th St and Main St replacing 2/0 copper conductor. This project will

increase the conductor size and ability to transfer load.

$72,300 $28,500

8 Reliability through Operational Efficiency: Reconductor Small Wire

Reconductor 2,000' of small wire, heavily loaded taps and refuse for coordination. This project

replaces the conductor for better capacity and workability and checks sectionalizing coordination.

$21,500 $7,100

9 Upgrade to Current Standards: Bank Protection Upgrade

Install transformer protection equipment for Bank #1 at Mt. Vernon substation. This project will

replace power transformer fuses with circuit switchers for better coordination and control.

$17,700 $76,000

10 Reliability through Proactive Maintenance: Replace QUARTZ PCB

Replace QUARTZ feeder breaker at Jasper substation, which replaces aging equipment as it nears

end of life.

$4,300 $18,100

11 Upgrade to Current Standards: Replace Relay Panels

Phase 2 of 2. This project will replace aging relays and communication equipment with modern

devices at 10th St substation.

$22,800 $28,600

12 Reliability through Proactive Maintenance: Replace SAPPHIRE PCB

Replace SAPPHIRE feeder breaker and control wire at Mt. Vernon substation Replaces aging

equipment as it nears end of life.

$7,500 $20,600

13 Upgrade to Current Standards: Sierra Pine Bank Protection and Support Install SUB's own 115kV

breaker and construct control house to improve safety and replace our oldest relay equipment.

$21,500 $196,500

Totals $439,600 $992,000

DISTRIBUTION:

SUBSTATION

Electric Division


Budget 2017





$69,700 $42,000

2 Reliability through Proactive Maintenance: Underground Cable Replacement Replace 10,000'

of primary underground cables in the distribution system. This project limits exposure to future

cable failures.

$53,800 $183,900

3 Reliability through Diversity: ACORN to COHO Backbone Connection

Construct an underground backbone connection from Rainbow Drive to Prescott Ln, which will

increase the ability to shift load within the system.

$79,200 $127,500

4 Upgrade to Current Standards: Gateway St RVS Replacement

Replace aging padmount switchgear with modern equipment serving the mall area. This project

standardizes equipment to similar installations in the system.

$12,900 $70,700

5 Reliability through Diversity: PANTHER Backbone Connection to COUGAR Install primary

underground cable from Gateway substation to Martin Luther King Blvd. to create an additional

backbone connection which will become the PANTHER circuit when the feeder breaker is

installed.

$48,400 $111,500

6 Reliability through Operational Efficiency: Reconductor COHO on W. Fairview Reconduct #6 Cu

with 1/0 Al and refuse for coordination. This project replaces the conductor of a heavily loaded

tap for increased capacity, fuse coordination and workability.

$68,100 $32,600

7 Reliability through Diversity: KOKANE / SOCKEYE / MOOSE Backbone Connection

Construct underground backbone from 5th St to 10th St and reconductor to backbone along 'S' St

to 15th and 'Q' Sts. This will increase the ability to shift load within the system.

$104,000 $226,000

8 Reliability through Increased Capacity: Glenwood Substation - Site Work Construct ground grid,

concrete foundations, control house, conduit systems and fend work for the new substation. This

project is part of a multi-year process to build a new substation in the Glenwood area for

increased reliability and capacity.

$37,000 $660,000


Install transformer protection for Bank #3 at Jasper substation. This project will replace power

transformer fuses with circuit switchers for better coordination and control.

$16,800 $80,500

10 Reliability through Proactive Maintenance: Replace GRANITE PCB Replace GRANITE feeder

breaker at Jasper substation, which will replace aging equipment as it nears end of life.

$6,500 $21,600

TOTALS $496,400 $1,556,300

SUBSTATION:

DISTRIBUTION:

Electric Division


Budget 2018





$69,700 $42,000




$53,800 $183,900

3 Reliability through Operational Efficiency: Convert Mohawk Area Taps to 20.8kV

Convert distribution voltage from 12.47kV to 20.8kV for taps east of 16th St and north of Main St.

The voltage conversion will remove step-down components from the system.

$73,200 $222,200

4 Reliability through Diversity: ELK to MAPLE Backbone Reconductor

Reconductor and construct a backbone connection on 'J' St. This project will increase the ability

to shift load within the system.

$54,700 $26,200

5 Reliability through Diversity: KOKANEE Eastbound Tap to Backbone

Reconductor for an overhead backbone connection north of Quinalt St to 17th St. This removes a

I-105 crossing and replaces some #6Cu line. This project will increase the ability to shift load

within the system.

$29,400 $14,100

6 Reliability through Increased Capacity: Reconductor ACORN Tap from 7th to 10th St

Reconductor to support the heavily loaded downtown underground loop. This project replaces

the conductor for critical services and checks sectionalizing coordination.

$47,400 $20,200



replaces the conductor for better capacity and workability and checks sectionalizing

coordination.

$21,500 $7,100

8 Reliability through Increased Capacity: Glenwood Substation - Equipment

Buy and start installation of substation equipment (not including the power transformer). This

project is part of a multi-year process to build a new substation in the Glenwood area.

$35,300 $361,000


Install transformer protection equipment for Banks #1 and #2 at Jasper. This project will replace

power transformer fuses with circuit switchers for better coordination and control; also provides

additional protection to the bus.

$20,200 $167,200

10 Reliability through Increased Capacity: New 12.47 Area Substation - Acquire Land

Secure land to construct a new substation to support the area east of 42nd St. This project is part

of a multi-year process to build a new substation for increased reliability, capacity and SUB

control.

$0 $655,300

11 Reliability through Proactive Maintenance: Replace CONDOR PCB

Replace CONDOR feeder breaker at Thurston substation, which will replace aging equipment as it

nears end of life.

$6,500 $18,100

12 Reliability through Increased Capacity: Glenwood Substation - 115kV Reconfigure transmission

structures and construct two transmission lines to new substation site. This project will provide

transmission service from Alvey and connection to Springfield substation.

$21,700 $59,900

13 Reliability through Proactive Maintenance: Jasper/Olympic 115kV Structure Replacement

Rebuild transmission structures along the truck road from 30th St to 42nd St. This project will

replace old structures and increase capacity.

$32,300 $56,000

TOTALS $465,700 $1,833,200

SUBSTATION:

TRANSMISSION:

DISTRIBUTION:

Electric Division


Budget 2019





$69,700 $42,000




$53,800 $183,900

3 Reliability through Diversity: BISON to MOOSE Backbone Connection

Construct a backbone connection and transfer about 1 MW of load on Olympic St, which will


$15,100 $33,400

4 Reliability through Operational Efficiency: Convert NUGGET to 20.8kV

Convert primary loop of distribution voltage along Nugget Way. The voltage conversion will

remove step-down components from the system. There will also be cable and transformer

replacements which will remove aging equipment.

$12,900 $167,300

5 Reliability through Increased Capacity: Glenwood Substation Distribution

Construct overhead and underground backbone connections from Glenwood substation site to

existing backbone.

$82,400 $212,000

6 Reliability through Increased Capacity: Reconductor LOCUST, 10th to 12th Reconductor

backbone from 10th Street to 12th St replacing 2/0 Cu conductor. This project will increase the

conductor size for transferring load during system switching.

$26,700 $12,800




coordination.

$21,500 $7,100

8 Reliability through Diversity: Add PANTHER PCB

Add a distribution breaker at the Gateway substation to feed new PANTHER circuit. This project

will add a feeder position, allowing for more options to shift load within the system.

$9,000 $26,500

9 Reliability through Increased Capacity: Glenwood Substation-Equipment Continue installation

of substation equipment. Buy and install the power transformer. This project is part of a multi-

year process to build a new substation in the Glenwood area.

$35,300 $601,000


Finish installing transformer protection equipment for Jasper Bank #1 and #2. This project will

replace power transformer fuses with circuit switchers for better coordination and control.

$25,800 $41,000

11 Reliability through Proactive Maintenance: Circuit Switcher Replacement

Replace the circuit switcher for Bank #2 at Mt. Vernon substation. Replace aging equipment as it

nears end of life.

$6,500 $49,500

12 Reliability through Increased Capacity: Olympic to E Springfield 115kV This project is section

#1 of 4 and is a placeholder for bringing transmission to new substation. This project is part of a

multi-year process to build a new substation in the area east of 42nd St for increased reliability,

capacity and SUB control.

$70,500 $120,900

TOTALS $429,200 $1,497,400

SUBSTATION:

TRANSMISSION:

DISTRIBUTION:

Electric Division


Budget 2020


1

Reliability through Proactive Maintenance: Pole Replacement



$69,700 $42,000




$53,800 $183,900

3 Reliability through Operational Efficiency: Convert Hayden Bridge Taps to 20.8kV

Convert distribution voltage for taps in the Hayden Bridge area. The voltage conversion will

remove step-down components from the system.

$73,200 $217,700

4 Reliability through Operational Efficiency: Convert Henderson to 20.8kV

Convert distribution voltage for taps along Henderson Ave. The voltage conversion will remove

step-down components from the system.

$10,800 $59,200

5 Reliability through Diversity: MOOSE to CHINOOK Backbone

Construct backbone from 'S' St. to Hayden Bridge Rd. to tie the CHINOOK to the MOOSE. It will


$50,600 $179,500




coordination.

$21,500 $7,100

7 Reliability through Proactive Maintenance: Replace WALNUT Get-Aways

Replace WALNUT get-away cables at 10th St. This project will replace aging equipment before it

fails.

$6,900 $6,000

8 Reliability through Increased Capacity: Strengthen Bridge Crossing from Glenwood

Populate existing conduit with primary cable crossing the bridge from Franklin Blvd. to Main St.

$22,600 $19,700

9 Reliability through Increased Capacity: Glenwood Substation - Commissioning

Make final electrical connections and complete testing before serving load out of the new

substation. This project is the final step of a multi-year process.

$49,500 $216,000

10 External: Protection Upgrades at Alvey & Springfield

This is part of the line differential relay scheme to be implements with the construction of

Glenwood substation.

$15,900 $45,000

11 Reliability through Proactive Maintenance: Replace FLINT PCB

Replace FLINT feeder breaker at Jasper substation. This will replace aging equipment as it nears

end of life.

$4,300 $18,100

12 Reliability through Proactive Maintenance: Replace SILICON PCB

Replace SILICON feeder breaker at Jasper substation. This project will replace aging equipment

as it nears end of life.

$4,300 $18,100

13 Reliability through Increased Capacity: Olympic to E. Springfield 115kV

This project is section 2 of 4 and is a placeholder for bringing transmission to new substation.

This project is part of a multi-year process to build a new substation in the area east of 42nd St.

$104,000 $178,300

TOTALS $487,100 $1,190,600

SUBSTATION:

TRANSMISSION:

DISTRIBUTION:

Electric Division


Budget 2021



Replace 30 poles that have been identified with structural weakness. This project replaces

poles that are typically found during our test and treat cycle. The poles are replaced before

failure.

$69,700 $42,000




$53,800 $183,900

3 Reliability through Diversity: BISON to MAPLE Backbone Construct a double circuit line along

Industrial Ave. and railroad with the ELK and BISON. It will increase the ability to shift load

within the system.

$35,200 $118,200

4 Reliability through Proactive Maintenance: Reconductor Small Wire Reconductor 2,000' of

small wire, heavily loaded taps and refuse for coordination. This project replaces the conductor

for better capacity and workability and checks sectionalizing coordination.

$21,500 $7,100

5 Reliability through Proactive Maintenance: Replace Get-Aways Replace KING get-away cables

at Laura. This will replace aging equipment as it nears end of life.

$5,200 $4,000

6 Hazard Mitigation: Install Oil Containment

Install oil containment for all banks at Laura substation. This project is part of the hazard

mitigation plans to minimize impact of a large oil spill.

$5,200 $300,000

7 Reliability through Increased Capacity: New 12.47 Area Substation - Site Work

Construct ground grid, concrete foundations, control house, conduit systems, oil containment

and fence work for the new substation. This project is part of a multi-year process to build a

new substation in the area of 42nd St.

$37,000 $655,800

8 Reliability through Proactive Maintenance: Replace Power Transformer at Laura

Replace Bank #2 at Laura substation. This will replace aging equipment as it nears end of life.

$12,900 $780,000

9 Reliability through Proactive Maintenance: Replace CHINOOK PBC

Replace CHINOOK feeder breaker at Laura substation. This will replace aging equipment as it

nears end of life.

$4,300 $18,100

10 Upgrade to Current Standards: Replace Relay Panel Begin replacing first generation of SEL

relays at Gateway. This project will replace aging relays and communication equipment with

modern devices.

$15,900 $11,000

11 Reliability through Increased Capacity: Move Transformer to Olympic Move Laura Bank #2 to

Olympic as a live back-up transformer.

$6,500 $53,700

12 Reliability through Increased Capacity: Olympic to E. Springfield 115kV - Section 3

This project is section 3of4 and is a placeholder for bringing transmission to new substation and

is part of a multi-year process to build a new substation in the area east of 42nd St.

$95,800 $164,300

13 Reliability through Increased Capacity: Reconductor Springfield/Olympic 115kV

Replace existing 397 ACSR with 795 AAC from Springfield along the truck road. This project

would bring increase in the capacity of the Springfield / Olympic transmission line.

$19,400 $30,300

TOTALS $382,400 $2,368,400

TRANSMISSION:

SUBSTATION:

DISTRIBUTION:

Electric Division


Budget 2022





$69,700 $42,000




$53,800 $183,900

3 Reliability through Diversity: Double Circuit with LOCUST to Glenwood

Construct a second river crossing from Glenwood to West 'D' St. It will increase the ability to shift

load within the system.

$32,300 $15,100

4 Reliability through Increased Capacity: New 12.47 Area - Distribution

Backbone construction to tie new substation to existing feeder network. This project is part of a

multi-year process to build a new substation in the area east of 42nd St.

$133,500 $64,000

5 Reliability through Operational Efficiency: Reconductor Small Wire Reconductor 2,000' of small

wire, heavily loaded taps and refuse for coordination. This project replaces the conductor for

better capacity and workability and checks sectionalizing coordination.

$21,500 $7,100

6 Reliability through Proactive Maintenance: Replace Get-Aways

Replace SOCKEYE get-away cables at Laura. This project will replace aging equipment before it

fails.

$5,200 $4,000


Install oil containment for all Banks at Jasper substation. This project is part of the hazard

mitigation plans to minimize impact of a large oil spill.

$6,500 $300,000

8 Upgrade to Current Standards: Replace Relay Panel at Gateway Complete the replacement of

aging relays and communication equipment with modern devices.

$15,900 $11,000

9 Reliability through Proactive Maintenance: Replace Regulators

Replace the three phase regulator with three single phase regulators for SAPPHIRE at Mt. Vernon

substation. Replace aging equipment as it nears end of life and achieve better voltage control with

single phase regulation.

$15,100 $75,000

10 Reliability through Increased Capacity: Install Transformer Protection

Install transformer protection equipment for Bank #2 at Olympic substation. This project will add a

circuit switcher for new bank position at Olympic.

$17,700 $76,000

11 Reliability through Increased Capacity: Install New Open Distribution Bus at Olympic

Install 3-bay steel structure for bus tie, distribution breaker and transformer. Bus tie will go to

existing metal clad and the MOOSE will be on new structure.

$15,500 $82,200

12 Reliability through Increased Capacity: Olympic to E. Springfield 115kV - Section 4

This project is section 4 of 4 and is a placeholder for bringing transmission to new substation. This

project is part of a multi-year process to build a new substation in the area east of 42nd St.

$46,100 $79,100

TOTALS $432,800 $939,400

SUBSTATION:

TRANSMISSION:

DISTRIBUTION:

Electric Division


Budget 2023





$69,700 $42,000




$53,800 $183,900

3 Reliability through Operational Efficiency: Reconductor Small Wire Reconductor 2,000' of

small wire, heavily loaded taps and refuse for coordination. This project replaces the conductor

for better capacity and workability and checks sectionalizing coordination.

$21,500 $7,100

4 Reliability through Proactive Maintenance: Replace Get-Aways

Replace QUARTZ get-away cables at Jasper substation. This project will replace aging equipment

before it fails.

$8,600 $9,100


Install oil containment for all Banks at Mt. Vernon substation. This project minimizes the impact

of a large oil spill.

$4,300 $194,300

6 Reliability through Increased Capacity: New 12.47 Area Substation - Equipment

Buy and start installation of substation equipment. This project is part of a multi-year process to

build a new substation in the area east of 42nd St. for increased reliability, capacity and SUB

control.

$35,300 $361,000

7 Reliability through Proactive Maintenance: Replace Transmission Breaker

Replace a transmission breaker that is 30 years old. This project will replace aging equipment

before it fails.

$12,900 $62,600

8 Reliability through Increased Capacity: New 12.47 Area Substation - 2nd 115kV

Placeholder to construct second transmission circuit to new substation. This project assures a

second transmission feed into the new substation, meeting our planning criteria.

$135,600 $232,500

TOTALS $341,700 $1,092,500

SUBSTATION:

TRANSMISSION:

DISTRIBUTION:

Electric Division


Budget 2024



Replace 30 poles that have been identified with structural weakness. This project replaces

poles that are typically found during our test and treat cycle. The poles are replaced before

failure.

$69,700 $42,000




$53,800 $183,900

3 Reliability through Operational Efficiency: Reconductor Small Wire Reconductor 2,000' of

small wire, heavily loaded taps and refuse for coordination. This project replaces the

conductor for better capacity and workability and checks sectionalizing coordination.

$21,500 $7,100

4 Reliability through Increased Capacity: New 12.47 Area Substation - Equipment

Continue installation of substation equipment. Buy and install the power transformer. This

project is part of a multi-year process to build a new substation in the area east of 42nd St

for increased reliability, capacity and SUB control.

$35,300 $801,000

5 Reliability through Proactive Maintenance: Replace Two (2) - 30 Year Old PCB

Replace two (2) distribution feeder breakers that are 30 years old. This project will replace

aging equipment as it nears end of life.

$8,600 $36,200

TOTALS $188,900 $1,070,200

SUBSTATION:

DISTRIBUTION:

1

M E M O R A N D U M

EUGENE WATER & ELECTRIC BOARD

TO: Commissioners Brown, Mital, Helgeson, Manning and Simpson

FROM: Cathy Bloom, Finance Manager; Sue Fahey, Fiscal Services Supervisor; Harvey Hall, Deborah Hart & Edward Yan, Senior Financial Analysts DATE: July 15, 2014

SUBJECT: Long-Term Financial Plan Update and 2015 Budget Assumptions

OBJECTIVE: Direction on 2015 Budget Assumptions Issue Board Policy SD6 requires that staff prepare balanced budgets for the Electric and Water Utilities on an annual basis and that the Board approves those budgets by the end of the calendar year. Each summer the Board provides direction to staff on the assumptions used to develop the following year’s budget. Background In recent years both the Electric and Water Utilities have experienced financial challenges, albeit very different ones. Water consumption did not rebound as quickly as anticipated after the recession resulting in lower than projected revenues to support the high fixed cost nature of the business. Water Utility reserve levels and working cash were extremely low which was compounded by aging infrastructure replacement needs. While Electric loads remained comparatively stable, wholesale power prices plummeted. Power sales revenue budgets which had been used to support operations declined over $40 million in the last five years as a result of that wholesale price reduction and less resources available from the Bonneville Power Administration. Accordingly, the Electric Utility struggled to balance budgets and meet Board targets for debt service coverage. In June 2013, faced with the potential of over $20 million in 2014 operations and maintenance (O&M) budget reductions to meet Board financial targets, the Board approved financial policies that align with an “A” bond rating for the Electric Utility versus the prior ones that aligned with a “AA” bond rating. Shortly after that, the Electric Utility’s bond rating was reduced to “A” by rating agencies. In developing the 2013 and 2014 budgets, EWEB reduced over 70 positions and $7.7 million O&M dollars to increase the financial stability of both Utilities. In addition, capital budgets were reduced or deferred by $60 million and $20 million in 2013 and 2014, respectively. These reductions were made using a priority-based budgeting approach aligned with EWEB’s overarching strategy “To Deliver Value for Generations.” Discussion Over the last several months, management and staff have considered the Board’s feedback from strategic planning meetings to develop the long term financial plans (LTFP) and budget assumptions. The Strategic Plan approved by the Board included three cornerstone concepts to prepare EWEB for

2

the future: Be Flexible and Resilient, Enhance Customer Value, and Focus on People – both Customers and Employees. The plan also discusses trade-offs that are often required in order to achieve EWEB’s core mission to enhance our community’s vitality by providing water and electric services consistent with the values of our customer-owners. In assessing those trade-offs, Commissioners indicated that the Electric Utility should improve average bill competitiveness and in order to accomplish that, a slight reduction in Electric reliability would be acceptable given EWEB’s current extremely high reliability. The Water Utility primary trade off was to reduce risk by securing an alternative water source (AWS) and also reducing the average bill competitiveness given the fact that EWEB’s average residential water bill is in the bottom quartile of its comparators. Additional information on bill competitiveness will be provided at the meeting. Management believes that the assumptions used to develop the LTFP address those trade-offs. Overarching Forecast Assumptions The assumptions used in creating forecasts and budgets greatly influence the results. The following assumptions have been used in developing the current forecasts and are anticipated to be used in creating the 2015 budget. Both Utilities

2.5% non-labor CPI increase as per the US Bureau Labor and Statistics, Portland/Salem 10 year average

Labor/Benefits increases: o 2.4% salary escalation based on an average of the Portland/Salem CPI for All Urban

Consumers (CPI-U) and Wages (CPI-W) o PERS increase – 3 percentage points on July 1, 2015, 5 percentage points on July 1,

2017; 3 percentage points on July 1, 2019, 2021, and 2023 $45 million payment to reduce PERS unfunded actuarial liability in 2017

which results in projected total O&M savings of over $2.5 million starting in 2018

o Health insurance increase – 15% in 2015, 10% in subsequent years o Priority Based Budgeting Related O&M Net Change – Electric: $1.5 million increase;

Water: $500,000 increase Major items include:

Information technology major project assistance - $800,000 Harvest Wind warranty extension - $300,000 Regulatory Increases (NERC/Oregon Department of Energy) -

$125,000 System upgrades (Interagency radio system/Customer texting services

for outage management) - $150,000 o Net 3.0 FTE increase

Additions include Electric Distribution Tech, Water Meter Mechanic, Security Systems Coordinator, Work Asset Management Coordinator and Customer Service Specialists

Most positions were funded through reorganizations or other budget reductions

Rate changes effective February

3

Electric

Retail load approximately the same as 2014 budget – 2.5 million mWh 90% generation $36 melded mid-market price curve increasing to $58 in 2024 Use of reserves to pay off Harvest Wind note in 2015 Partial year Carmen-Smith generation outages in 2017 and 2023 Reduction in capital expenses from “business as usual” BPA rate increases of 6% in October of odd-numbered years which represents approximately

a 2.5% rate impact to EWEB customers. o BPA rate increases are assumed to be incorporated into February rate proposals

Bond issuances of $15 million and $53.5 million in 2017 and 2022, respectively Water

Consumption: 7.7 million kgals; 300,000 kgals higher than 2014 due to unrealized assumed sensitivity to prior rate changes

AWS major work begins in 2018 Bond issuances of $19 million in 2016; $58 million in 2018; and $21 million in 2021

Long-term Financial Plan Rate Assumptions and Outcomes Electric For the Electric Utility, both 1.5% and 0% February 2015 rate change scenarios are presented along with the resulting projected financial metrics and change in reserves.

Scenario 1 includes selective strategic capital work which is approximately 25% less than “business as usual” and assumes a 1.5% overall average rate change in 2015 and 2.5% to 5% rate increases in the out years of the LTFP.

Scenario 2 also assumes a 2015 1.5% overall average rate increase and the same expense assumptions as Scenario 1. Rate increases in the out years; however, have been reduced in order to make progress towards bringing EWEB’s average bill closer to the middle of our comparator utilities and range from 2.25% to 3.5%. Based on LTFP assumptions, in order to maintain the Board target for debt service coverage, approximately $2 million of reductions would need to occur by 2017.

Scenario 3 focuses on minimizing rate increases in the short term and further reduces capital work over the LTFP by $35 million and assumes a 0% rate increase in 2015, 1.5% rate increases in 2016-2018 with rate increases in the out years ranging from 3% to 6.5%. In order to meet board metrics, $14 million of O&M reductions would be required by 2018. The Electric LTFP outcomes are included in Attachment 1.

Water Water Utility scenarios include a 6.3% and a 5.2% February 2015 rate increase. Scenario 1 assumes a 6.3% overall average rate increase in 2015 and includes the financial impact of AWS construction beginning in 2018 with completion in 2020. Scenario 2 assumes a 5.2% 2015 overall average rate increase with the financial impact of AWS construction spread over 4 years beginning in 2018 with completion in 2021. Both options maintain Board targets for financial metrics for the length of the financial plan. The Water LTFP outcomes are included in Attachment 2.

4

Recommendation Management recommends that the Board direct staff to prepare the 2015 budget using the assumptions set forth in this document, a 1.5% February 2015 overall average Electric rate increase and the Selective Strategic Capital Plan which is approximately a 25% reduction from “business as usual”. For the Water Utility, management recommends that the Board direct staff to use a 5.2% February 2015 overall average Water rate increase. Requested Board Action Staff is not requesting Board action at the July 22nd meeting; however, staff is requesting that the Board provide clear direction on the assumptions to be used in developing the 2015 budget. Attachment 1 – Summary of Electric LTFP Rate Assumptions and Outcomes Attachment 2 – Summary of Water LTFP Rate Assumptions and Outcomes

Attachment 1 Attachment 1 –– Summary of Electric LTFP Rate Assumptions and Summary of Electric LTFP Rate Assumptions and OutcomesOutcomes(Dollars in $000’s)(Dollars in $000’s)

Current Target 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024Scenario 2015 Assumptions CS outage CS outage

Reserves & Cash $48,420 - $58,920 $102,578 $108,111 $84,511 $97,211 $107,711 $116,111 $130,911 $153,211 $179,811 $213,911Operating Reserve Change $12,000 $6,700 $13,300 $12,700 $10,500 $8,400 $14,800 $22,300 $26,600 $34,100

Days Cash 90 147 147 135 148 159 165 181 208 235 272 DSC 1.75 - 2.0 2.06 1.94 1.93 1.92 2.00 1.99 2.17 2.68 3.00 3.37

Reserves & Cash $48,420 - $58,920 $102,378 $105,711 $75,411 $82,611 $84,811 $85,211 $88,011 $92,411 $100,011 $109,111O ti R Ch $11 800 $4 500 $6 600 $7 200 $2 200 $400 $2 800 $4 400 $7 600 $9 100

1 Adjusted Present Model - Selective Strategic CIP

Long-Term Transformation: Operating Reserve Change $11,800 $4,500 $6,600 $7,200 $2,200 $400 $2,800 $4,400 $7,600 $9,100Days Cash 90 147 143 121 126 125 121 122 126 131 139

DSC 1.75 - 2.0 2.05 1.85 1.67 1.71 1.69 1.69 1.72 1.98 2.16 2.27 Incremental O&M Cuts to support 1.75 DSC $2,000Cumulative O&M Cuts to support 1.75 DSC $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

Reserves & Cash $48,420 - $58,920 $99,096 $95,756 $58,056 $58,956 $52,556 $49,166 $48,966 $52,101 $53,031 $68,951Operating Reserve Change $10,300 $800 -$700 -$2,600 -$6,400 -$3,200 -$500 $6,100 $11,300 $18,500

Days Cash 90 140 126 91 89 78 69 67 70 69 87 DSC 1 75 - 2 0 1 86 1 53 1 27 1 21 1 30 1 37 1 47 1 93 2 18 2 48

3 Near Term Rate Priority: 0% 2015 rate - Responsive CIP

2g

Lower/Smoother rates - Selective Strategic CIP

DSC 1.75 - 2.0 1.86 1.53 1.27 1.21 1.30 1.37 1.47 1.93 2.18 2.48 Incremental O&M Cuts to support 1.75 DSC $5,500 $6,400 $2,200Cumulative O&M Cuts to support 1.75 DSC $5,500 $11,900 $14,100 $14,100 $14,100 $14,100 $14,100 $14,100 $14,100

Note: Orange highlight represents metric is close to target. Red highlight represents metric is below target.

CompoundedRate Schedule 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 Yr Total

General Rate Increase 1.50% 1.75% 4.25% 0.00% 4.00% 0.50% 4.50% 2.50% 2.50% 2.50% 26.64%

BPA I

Rate Incease Assumptions

BPA Increase 2.50% 2.50% 2.50% 2.50% 2.50% 13.14%

Carmen/Smith Debt 0.25% 1.00% 1.25%

TOTAL RATE CHANGE 1.50% 4.25% 4.50% 2.50% 4.00% 3.00% 4.50% 6.00% 2.50% 5.00% 44.74%


BPA Increase 2.50% 2.50% 2.50% 2.50% 2.50% 13.14%


Adjusted Present Model

Long‐Term Transformation

1

2



BPA Increase 0.00% 0.00% 2.50% 2.50% 2.50% 7.69%



Near‐Term Rate Priority3

Targets FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 cummulative totals

Rate Adjustment 6.30% 6.30% 6.30% 6.30% 6.30% 6.30% 2.80% 2.80% 2.80% 2.80% 61%Debt Service Coverage Target 2.00‐2.50 2.00‐2.50 3.00 2.79 2.76 2.30 2.05 2.14 2.11 2.12 2.16 2.33

Cash Balance Diff from Target ($1000s) $3400 $5,004 $6,660 $10,648 $10,554 $4,515 $85 $717 $1,408 $132 $50

Borrowing assumptions $19,500 $75,500 $4,700 $99,700Days Cash on Hand 90 233 259 347 342 200 103 119 136 110 108

Rate Adjustment 5.20% 5.20% 5.20% 5.20% 5.20% 5.20% 5.20% 5.20% 5.20% 1.30% 60%Debt Service Coverage Target 2.00‐2.50 2.00‐2.50 2.95 2.70 2.60 2.25 2.04 2.11 2.04 2.04 2.16 2.29

Cash Balance Diff from Target ($1000s) $3400 $5,103 $7,234 $11,055 $10,825 $6,596 $3,667 $115 $751 $1,096 $2,061

Borrowing assumptions $19,000 $57,800 $21,500 $98,300Days Cash on Hand 90 245 277 355 345 240 170 95 109 111 125

Attachment 2 – Summary of Water LTFP Rate Assumptions and Outcomes ($000s omitted)

Selective Strategic Capital Work‐ Overall 10% decrease in Capital, AWS construction spread over 4 years

Present Model‐ Current course on capital construction, AWS

construction spread over 3 years#1

#2

1

M E M O R A N D U M

EUGENE WATER & ELECTRIC BOARD

TO: Commissioners Simpson, Brown, Helgeson, Manning and Mital

FROM: Cathy Bloom, Finance Manager; Sue Fahey, Fiscal Services Supervisor; Edward Yan, Senior Financial Analyst; Tom Williams, Key Account Manager DATE: July 3, 2013

SUBJECT: Comparative Rate Analysis OBJECTIVE: Information only Issue This comparative rate analysis is provided to assist the Board in strategic decision making. Background The last comparative rate analysis was presented to the Board in June 2012. Discussion The report provides a comparison of 13 electric utilities and 16 water providers in sixteen Northwest communities, including Eugene. It displays the rankings of EWEB in five customer profiles in comparison to the other communities.

Oregon Washington Beaverton Coburg Bellevue Corvallis Cottage Grove Everett Creswell Eugene Seattle Junction City Portland Tacoma Salem Springfield Vancouver Veneta The communities were selected due to their common characteristics. They are served by a mix of public and private electric providers and typically receive municipal water service. They all participate, to varying extents, in the federal power system and have similar weather patterns. Customer Profiles In order to account for tiered rates and summer/winter differentials, monthly bills for each profile were calculated in this analysis. Residential Apartment – This profile assumes that a residential apartment will use a total of 570 kWh of electricity and 3 kgal of water per month. It should be noted that, in most cases, water is included in the rent of an apartment and not billed separately.

2

Residential House – This profile is a weatherized residential home of a family of four, with an electric heat pump as the primary heating source. Although there are many heating configurations in the community, this is a relatively common design. It has an average consumption of 1,600 kWh of electricity and 7 kgal of water per month. Small General Service – Based on a campus area restaurant, this profile assumes the usage of just above 8,000 kWh of energy plus 21 kW of demand and 14 kgal of water per month. Medium General Service – Represented by a major grocery store with an electric consumption of 164,000 kWh of energy with 290 kW demand and 250 kgal of water per month. Large General Service – Based on the sample of a forest product processor and reseller. Average electric consumption of 630,000 kWh with 1,140 kW of demand and 800 kgal of water per month. Summary Results of EWEB’s ranking are summarized in the table below. (1st = lowest)

Customer Profile ELECTRIC (Out of 13)

WATER (Out of 16)

COMBINED (Out of 16)

Residential Apartment 9th 10th 8th

Residential House 10th 4th 7th

Small General Service 8th 4th 6th

Medium General Service 9th 7th 10th

Large General Service 6th 7th 5th For the typical residential home customer, electric ranked tenth out of thirteen communities this year compared to ninth out of thirteen in 2012. On the water side, even after the 2013 20% rate increase EWEB is still in the bottom quartile of comparators and maintained its 2012 ranking. For combined electric and water services, the typical residential home ranked seventh in 2013, one slot above its 2012 position. The combined ranking is not directly comparable to the individual electric and water ranking due to the fact that certain electric utilities service more than one community. It is important to note that this analysis is a snapshot in time and that periodic rate revisions will change the results. Recommendation / Board Action This memo is for informational purposes. No board action is requested. If you have any questions, please contact us at [email protected] (541-685-7390) or [email protected] (541-685-7160). Attachment: Comparator Information

$89.96

$123.77 $126.22$138.28 $142.56 $144.41 $145.20

$152.48 $157.53 $159.14$168.00 $173.45 $176.08

0

20

40

60

80

100

120

140

160

180

200

SUB Tacoma Salem Electric

EPUD Vancouver Everett Lane Electric Seattle Bellevue EWEB Blachly-Lane PGE Pacific Power

Dol

lars

Northwest

Monthly Residential - House (1,600 kWh)

* EPUD and Lane Electric serve surrounding rural areas and small towns in Lane County.* PGE serves Portland & Beaverton.* Pacific Power serves Corvallis, Junction City, Coburg, Creswell & Cottage Grove, and portions of Portland metropolitan area.

$20.92$23.89 $24.16

$27.07 $27.94 $27.96 $28.29 $28.82$31.88 $32.69 $32.74

$38.24$41.12

$52.67 $53.56$58.31

10

20

30

40

50

60

70

Dol

lars

Monthly Residential - House (7.0 kgal)

$89.96

$123.77 $126.22$138.28 $142.56 $144.41 $145.20

$152.48 $157.53 $159.14$168.00 $173.45 $176.08

0

20

40

60

80

100

120

140

160

180

200

SUB Tacoma Salem Electric

EPUD Vancouver Everett Lane Electric Seattle Bellevue EWEB Blachly-Lane PGE Pacific Power

Dol

lars

Northwest

Monthly Residential - House (1,600 kWh)

* EPUD and Lane Electric serve surrounding rural areas and small towns in Lane County.* PGE serves Portland & Beaverton.* Pacific Power serves Corvallis, Junction City, Coburg, Creswell & Cottage Grove, and portions of Portland metropolitan area.

$20.92$23.89 $24.16

$27.07 $27.94 $27.96 $28.29 $28.82$31.88 $32.69 $32.74

$38.24$41.12

$52.67 $53.56$58.31

0

10

20

30

40

50

60

70

Vancouver SUB Cottage Grove

EWEB Corvallis Salem Everett Veneta Tacoma TVWD* Junction City

Coburg Portland Creswell Bellevue Seattle

Dol

lars

Northwest

Monthly Residential - House (7.0 kgal)

* Tualatin Valley Water District (TVWD) serves Beaverton, portions of Hillsboro & Tigard.

$114

$154 $156$163 $167 $173

$186$200 $204 $206 $209 $211 $211 $214 $215

$229

0

50

100

150

200

250

SUB Salem Tacoma Vancouver Veneta Everett EWEB Cottage Grove

Corvallis TVWD* Junction City

Seattle Bellevue Coburg Portland Creswell

Dol

lars

Northwest

Monthly Electric & Water Combined - Residential House

* Tualatin Valley Water District (TVWD) serves Beaverton, portions of Hillsboro & Tigard.

$1,000

$1,200

$1,400

$1,600

$1,800

SUB Total Bill By Year

Average Residential Customer

Swr23%

32%

18%

$0

$200

$400

$600

$800

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

2010-2013 Average Usage

Wtr

Elec

64%

13%

50%

$80

$100

$120

$140

$160

SUB Average Total Bill2014 Rates

Swr

Wtr

$0

$20

$40

$60

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

2010-2013 Average Usage

Elec

$13,606

$13,750

$16,554

$20,957

Klamath Falls

Salem

Beaverton

Portland

Public Irrigation Customer (5,583 units/yr)Using Rate Schedules In Effect As Of July 2014

$3,603

$9,722

$12,240

$0 $5,000 $10,000 $15,000 $20,000 $25,000

Medford


EWEB

Annual Water Bill

$354,834

$410,231

$490,408

$625,070

EWEB

Klamath Falls

Beaverton

Portland

Industrial Customer (169,655 units/yr)Using Rate Schedules In Effect As Of July 2014

$87,064

$243,988

$249,312

$0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000

Medford


Salem

Annual Water Bill

$3,224

$3,511

$4,337

$5,673

EWEB

Klamath Falls

Beaverton

Portland

Restaurant Customer (1,432 units/yr)Using Rate Schedules In Effect As Of July 2014

$883

$2,569

$3,030

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000

Medford


Salem

Annual Water Bill

$1,047

$1,106

$1,329

$1,921

EWEB

Salem

Beaverton

Portland

Large Residential Customer (413 units/yr)Using Rate Schedules In Effect As Of July 2014

$351

$782

$1,029

$0 $500 $1,000 $1,500 $2,000 $2,500

Medford


Klamath Falls

Annual Water Bill

$672

$736

$905

$1,376

Klamath Falls

Salem

Beaverton

Portland

Medium Residential Customer (265 units/yr)Using Rate Schedules In Effect As Of July 2014

$243

$549

$658

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600

Medford


EWEB

Annual Water Bill

$366

$382

$480

$831

Salem

EWEB

Beaverton

Portland

Small Residential Customer (117 units/yr)Using Rate Schedules In Effect As Of July 2014

$149

$316

$323

$0 $100 $200 $300 $400 $500 $600 $700 $800 $900

Medford

Klamath Falls


Annual Water Bill

$379

$380

$494

$850

Salem

EWEB

Beaverton

Portland

Average Residential Customer (122 units/yr)Using Rate Schedules In Effect As Of July 2014

$151

$328

$329

$0 $100 $200 $300 $400 $500 $600 $700 $800 $900

Medford

Klamath Falls


Annual Water Bill

$1,337

$1,440

$1,494

$1,528

Lane Electric

EWEB

PacifiCorp

Blachly-Lane

Average Residential Customer (13,620 kwh/yr)Using Rate Schedules In Effect As Of July 2014

$825

$1,116

$1,263

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800


Central Lincoln

EPUD

Annual Electric Bill

$775

$796

$801

$949

Lane Electric

EWEB

PacifiCorp

Blachly-Lane

Low Residential Customer (7,009 kwh/yr)Using Rate Schedules In Effect As Of July 2014

$481

$667

$737

$0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000


Central Lincoln

EPUD


$1,718

$1,882

$1,901

$1,989

Lane Electric

EWEB

Blachly-Lane

PacifiCorp

High Residential Customer (17,887 kwh/yr)Using Rate Schedules In Effect As Of July 2014

$1,059

$1,386

$1,602

$0 $500 $1,000 $1,500 $2,000 $2,500


Central Lincoln

EPUD


$26,086

$27,588

$28,977

$32,431

EWEB

PacifiCorp

Lane Electric

EPUD

Restaurant Customer (373,704 kwh/yr)Using Rate Schedules In Effect As Of July 2014

$17,544

$17,809

$20,189

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000

Blachly-Lane

Central Lincoln



$120,258

$160,072

$169,968

$177,805

$179,814

PacifiCorp

EWEB

EPUD

Lane Electric

Grocery Store Customer (2,366,400 kwh/yr)Using Rate Schedules In Effect As Of July 2014

$111,630

$115,006

$120,258

$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 $200,000

Blachly-Lane


Central Lincoln


$2,235,136

$2,524,885

$2,780,474

$3,035,606

$3,070,251

EWEB

PacifiCorp

EPUD

Lane Electric

Large Industrial Customer (38,531,200 kwh/yr)Using Rate Schedules In Effect As Of July 2014

$2,089,491

$2,175,091

$2,235,136

$0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000


Blachly-Lane

Central Lincoln


Documents

SPRINGFIELD UTILITY BOARD General Manager's Office Budget Whole Packet.pdf · SPRINGFIELD UTILITY BOARD General Manager's Office MEMORANDUM ... FROM: Jeff Nelson SUBJECT: ... Beginning