Board of directors regular meeting VIRTUAL MEETING ONLY

Board of directors regular meeting

2000 E. Horsetooth Road, Fort Collins, CO 80525 Thursday, Mar. 26, 2020, 9:00 a.m.

*VIRTUAL MEETING ONLY* Call to order

1) Consent agenda Motion to approve a. Minutes of the regular meeting of Feb. 27, 2020

Public comment – SEND COMMENTS TO [email protected] Committee report

2) Retirement committee report Board action items

3) Executive session – personnel matters and legal advice Motion (2/3 vote required) • Annual review of general manager • Annual review of general counsel • Platte River legal authority and personnel matters

4) Reconvene regular session • Discussion and any action resulting from review of general manager • Discussion and any action resulting from review of general counsel • Discussion and any action resulting from legal advice

5) Election of Chair/Vice Chair • Chair Resolution 03-20 • Vice chair Resolution 04-20

Management reports – for informational purposes only

6) Pandemic planning Monthly informational reports – for informational purposes only

7) Legal, environmental and compliance report 8) February 2020 operating report 9) February 2020 financial report 10) February general management report

Adjournment

mailto:[email protected]

Updated Mar. 17, 2020 This calendar is for planning purposes only and is subject to change.

2020 BOARD MEETING PLANNING CALENDAR

April 30, 2020

Board Action Items

Management Presentations

Management Reports

Monthly Informational

Reports 2019 BKD audit report

IRP update Water resources reference document (updated version)

Legal, environmental and compliance report

Acceptance of 2019 annual report

DER strategy committee update

Wholesale rate projections

March 2020 operating report

Retirement committee appointment

Future water requirements

March 2020 financial report

General management report

May 28, 2020 Retirement Committee Meeting

Board Action Items


Management Reports


Reports

Revision to wholesale transmission service (Tariff WT-21)

Wholesale rate projections and wholesale transmission

Debt financing plan Legal, environmental and compliance report

IRP Synopsis of State Legislation of interest

April 2020 operating report

April 2020 financial report


June 5-10, 2020

APPA National Conference Long Beach, CA


July 30, 2020

Board Action Items


Management Reports


Reports Retirement committee report

Energy Efficiency programs update


May and June 2020 operating report – mid-year review

May and June 2020 financial report – mid-year review


August 27, 2020 Retirement Committee Meeting

Board Action Items


Management Reports


Reports

Energy Efficiency programs update

2021 Rate tariff schedules


July 2020 operating report

July 2020 financial report


September 24, 2020

Board Action Items


Management Reports


Reports

Retirement committee report

2021 Proposed strategic budget work session

Workforce update (MEMO only)



August 2020 operating report

August 2020 financial report



October 29, 2020 Board Action

Items Management Presentations

Management Reports


Reports

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

Benefits updates – memo only (much like staffing update)



September 2020 operating report

September 2020 financial report


November, 2020 Retirement Committee Meeting

No Board of Directors Meeting

December 10, 2020

Board Action Items


Management Reports


Reports

Retirement committee report

2021 Strategic budget update and review


2021 Strategic budget adoption

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

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

Workforce updates October 2020 financial report (November 2020, if available)

2021 Proposed board of directors regular meeting schedule


Topics to be scheduled: • Windy Gap Firming project debt financing • Windy Gap Firming Project update – provided by Northern Water

o Chimney Hollow Reservoir tour

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

2020 BOARD OF DIRECTORS

Owner communities Term expiration

Town of Estes Park P.O. Box 1200, Estes Park, Colorado 80517 Mayor Todd Jirsa—Chairman, Board of Directors April 2020 Reuben Bergsten December 2024

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

City of Longmont 350 Kimbark Street, Longmont, Colorado 80501 Mayor Brian Bagley November 2021 David Hornbacher December 2022

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

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

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

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

Memorandum

Date: 3/18/2020 To: Board of directors From: Jason Frisbie, general manager and chief executive officer

Angela Walsh, board secretary Subject: Consent agenda

Staff is requesting approval of the following item(s) on the consent agenda, supporting documents are included for each item. Approval of the consent agenda will approve all item(s) unless a member of the board removes an item from consent for further discussion. a) Minutes of the regular meeting of Feb. 27, 2020

Attachment

Regular meeting minutes of the board of directors

2000 E. Horsetooth Road, Fort Collins, CO Thursday, Feb. 26, 2020

ATTENDANCE Board members Representing Estes Park: Mayor Todd Jirsa and Reuben Bergsten1 Representing Fort Collins: Mayor Wade Troxell2 and Ross Cunniff Representing Longmont: Mayor Brian Bagley and David Hornbacher Representing Loveland: Mayor Jacki Marsh and Joe Bernosky Platte River staff Jason Frisbie (General Manager/CEO) Sarah Leonard (General Counsel) Dave Smalley (Chief Financial Officer and Deputy GM) Andy Butcher (Chief Operating Officer) Alyssa Clemsen Roberts (Chief Strategy Officer) Angela Walsh (Executive Assistant/Board Secretary) Pat Connors (Vice President of Power Supply) Shelley Nywall (Director of Finance) Libby Clark (Director of Human Resources and Safety) Trista Fugate (Director of Community & Government Affairs) Steve Roalstad (Communications and Marketing Manager) Masood Ahmad (Resource Planning Manager) Caroline Schmiedt (Deputy General Counsel) Andy Cofas (Plant Manager) Jason Harris (Controller) Paul Davis (Energy Solutions Manager) Guests Tim McCollough (City of Fort Collins) Kevin Gertig (City of Fort Collins) Kevin Jones (Fort Collins Chamber of Commerce) Karen Dyke (Longmont resident) Jane Clevenger (Loveland resident) Dick Mallot (Loveland resident) Ken Regelson (Boulder resident) Jacy Marmaduke (Fort Collins Coloradoan) Abby Driscoll (Longmont resident) Dave Mills Karen Artell CALL TO ORDER Chairman Jirsa called the meeting to order at 9:01 a.m. A quorum of board members was

1 Attended via Skype 2 Attended via phone at 9:10am

Regular board meeting minutes: Feb. 27, 2020

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present and the meeting, having been duly convened, proceeded with the business on the agenda. Dave Smalley, chief financial officer and deputy GM, introduced a new staff member, Jason Harris, controller, to the board. ACTION ITEMS (1) Consent agenda

a. Approval of the regular meeting minutes of Dec. 5, 2019 b. Incorporation into record of resolution 10-19: 2020 board of directors regular

meeting schedule c. Transfer of 2019 capital budget carryover to 2020 strategic budget d. Proposed survey question changes for 2019 GM/GC annual review

Director Bagley moved to approve the consent agenda as presented. Director Bernosky seconded. The motion carried 7-0. PUBLIC COMMENT Dick Mallot commented on interim noncarbon goals. Karen Dyke commented on climate change. Jane Clevenger commented on carbon emissions. Ken Regelson commented on the IRP modeling. ANNUAL MEETING (2) Platte River Power Authority Annual Meeting

a. Election of officers

Chair Jirsa noted the present elected officers are: • Todd Jirsa, Chair • Wade Troxell, Vice Chair • Angela Walsh, Secretary • David Smalley, Treasurer • Jason Frisbie, General Manager/CEO

Chairman Jirsa reminded the directors that officers serve for one year and are elected by resolution. If the board receives multiple nominations for any office a roll call vote will be called for each office separately. The Chair also noted as set forth in the annual meeting memo, the Organic Contract requires that the Chair and Vice Chair be members of the board. These are the two positions for which nominations will be received. The officer positions filled by management staff are traditionally retained and reaffirmed for purposes of meeting the requirements of the Organic Contract. The floor was opened for nominations. Nominations: Director Bergsten nominated the existing slate. Director Hornbacher seconded. Director Cunniff asked what the process is for electing a new chairman once the position becomes open. Jason Frisbie, general manager and chief executive officer, responded that there is time allocated at the end of this meeting to discuss and elections will be held during the March board meeting. No other nominations were received.


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Chair Jirsa restated the elected officers for clarity; Todd Jirsa for Chair, Wade Troxell for Vice Chair, and the staff members Angela Walsh for Secretary, Sarah Leonard for Assistant Secretary, David Smalley for Treasurer and Jason Frisbie for General Manager/CEO. Director Bagley moved to approve Resolution No. 01-20, Annual Election of Officers as presented. Director Bernosky seconded. Mr. Frisbie noted that upon Joe Wilson’s retirement, no assistant secretary was previously appointed. Motion carried 8-0.

b. Annual retirement committee appointments Chair Jirsa stated the present retirement committee consists of the following members:

• Directors: Todd Jirsa, Brian Bagley, Joe Bernosky and Ross Cunniff • Management: Jason Frisbie and David Smalley

For 2020, no changes are proposed for management members. Chair Jirsa explained that the board needs to appoint four directors and two management members to the committee and opened the floor for nominations. If there are more than four nominations a roll call vote will be called for each of the individuals nominated. Nominations: Director Cunniff nominated the existing slate of officers to the retirement committee. Director Bagley seconded and asked about the timing of appointing a new member upon committee member Todd Jirsa’s retirement. Staff responded that an appointment will occur at the April board meeting. No further nominations were received. Chair Jirsa restated the nominated Retirement Committee members will consist of the four directors: Todd Jirsa, Brian Bagley, Joe Bernosky, and Ross Cunniff, the two management members: Jason Frisbie and David Smalley. Director Cunniff moved to approve Resolution No. 02-20, Annual Retirement Committee Appointments as presented. Director Bagley seconded, and the motion carried 8-0.

c. 2019 Platte River year in review Jason Frisbie opened up the year in review outlining the order of presentations.

• Andy Butcher, chief operating officer, discussed the events of significance for operations including the surplus sales market, impact of joint dispatch, power supply, fuels and water, power production, power delivery, system maintenance and facilities. Mr. Frisbie pointed out that since 2005 base load generation has declined due to the impact of purchasing power at a lower price. Director Bagley asked about the status of the 22 MW of solar project. Mr. Butcher responded that construction is ongoing and will be online this year. Director Bagley asked about the Windy Gap unit sales and what was purchased from Longmont. Mr. Butcher clarified that storage was purchased from Longmont, not water. Director Cunniff asked if the upgrades to the service transformer for the solar project at Rawhide will have an impact on the expected service lifetime. Mr. Butcher responded that it won’t because adding more MWs to the transformer will decrease life expectancy, however, Platte River hired consultants to evaluate the transformer and staff has added remedial action steps to protecting the transformer. Director Cunniff asked about keeping infrared scans of the transmission system. Mr. Butcher confirmed those are maintained in records and infrared scans are completed regularly. Mr. Frisbie complemented staff’s work on the operation system while online, never loosing load and the cost savings reflected in the work on the new HQ system.


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• Mr. Smalley discussed the events of significance for finance, IT and the HQ campus. Mr. Frisbie added that the shaft sharing agreement with Tri-State has resulted in about $7.2 million dollars in total over the years. Director Cunniff asked if Platte River has a cybersecurity ransomware policy. Mr. Smalley responded that the IT group has developed runbooks, it’s more of a standard process and anything that would come up would be elevated to the senior leadership team. Director Bagley asked how much in revenues Platte River receives from surplus sales and if Platte River stopped selling in the surplus energy market what impact on rates it would have. Mr. Smalley responded that revenues are about $36 million and the percentage is about 14%, however, staff would need to run the models to know how it would impact rates. Director Bergsten asked if there would be any operational hurdles in discontinuing surplus sales. Mr. Frisbie responded there would be situations where more energy is produced, and Platte River would need to dispose of that energy.

• Alyssa Clemsen Roberts, chief strategy officer, provided highlights for the events of significance in the business strategies department including community and governance affairs, communications and marketing, energy solutions, human resources and safety. Director Marsh asked if all four communities were being represented at the solar battery car competitions. Ms. Clemsen Roberts responded that yes, all four are represented and thanked the Mayors for their support in promoting the event this year.

• Sarah Leonard, general counsel, provided highlights for the events of significance in the legal, environmental and compliance departments.

• Mr. Frisbie recapped the accomplishments for 2019 and outlined the goals for 2020. Director Cunniff requested design requirements and expectations for the enterprise resource management (ERM) project. Mr. Frisbie responded that staff is working on that and will supply that to the board. Director Troxell and Director Hornbacher complemented staff on the accomplishments and results from 2019 and filing a new integrated resource plan (IRP) before the due date. Chair Jirsa also complemented staff for 2019 accomplishments.

Break (10:20-10:33)

MANAGEMENT PRESENTATIONS

(3) Western Energy Imbalance Market update (presenter: Andy Butcher)

Mr. Butcher presented a summary regarding the decision for Platte River to move into the Western Energy Imbalance Market until the region moves into a full energy market.

Director Bagley asked if the four utilities currently in the joint dispatch agreement share the same roadblock of transmission connection in the WEIM within the PSCo balancing authority territory. Mr. Butcher responded that the four utilities operate within the PSCo balancing authority and all need to find a solution to connection issues with the California ISO.

Director Cunniff asked about the correlation between north and south region wind production. Mr. Butcher responded that there are limitations of wind and solar production and resulting in the need to spread out projects to gain geographic diversity, and markets will help with diversity when the transmission issue is solved.


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(4) IRP preliminary results (presenter: Masood Ahmad)

Mr. Frisbie reminded the board that this is strictly preliminary modeling results and no recommendations or decisions will be made until the April board meeting. Masood Ahmad, resource planning manager, provided an overview of what an integrated resource plan (IRP) is, reviewed the assumptions used in modeling and presented the preliminary results from the modeling with four portfolio options. Director Troxell discussed public policy such as incentive programs to meet goals and if it’s being modeled as off-takers and not as active management/storage options. Ms. Clemsen Roberts responded to the first part of the question regarding public policy and engagement with legislators and the Colorado Energy Office. Mr. Frisbie responded to the second part and the responsibility of the DER strategy committee is to address the active management piece and for assumptions purposes the electric vehicle usage was to acknowledge them as energy requirements. Director Marsh asked about the CSU geothermal project. Director Troxell confirmed that it was a CSU project. Director Bagley stated his understandings of the presented options for backup resources to complement wind and solar are including batteries and natural gas. Staff confirmed. Director Cunniff asked when the coal supply starts to decline and how it affects the price assumptions as presented. Mr. Frisbie responded the market doesn’t affect prices for coal and staff can help control the price through existing agreements and mine ownership at the Craig Station. Mr. Butcher discussed how assumptions will change and that is why IRPs are updated more frequently. Mr. Ahmad passed out an enlarged version of the portfolio comparison chart slide within the presentation. Director Bagley asked if the numbers on the portfolio comparison chart could show totals after incorporating additional resources. Staff will update the chart to reflect totals that carry through the future lines on all portfolio options for future presentations. Mr. Frisbie added that all portfolios show when resources would be added but realistically, the resources would be added in a timelier manner, not all at once like the numbers show. Director Cunniff suggested changing storage options to MW hours. Ms. Clemsen Roberts added that the last IRP Platte River submitted showed no new resources were required to add and clearly the staff has chosen to add non-carbon resources so the plans will evolve from what is being presented. Mr. Butcher added that the big difference between P2 and P4 is that P2 forces the retirement of Rawhide where P4 will be driven by economics. Director Cunniff asked for an added footnote for carbon footprint changes to the presentations. Director Bagley asked how often the combustion turbines (CT) units are currently used. Mr. Frisbie responded they are used about 2% of the time. Mr. Butcher added that the CTs currently at Rawhide are different than the RICE units suggested/used in the portfolio because the CTs have limitations of following the wind and solar production fluctuations. Discussion ensued among directors and staff regarding the differences between the CT units and the advantages RICE units have with wind and solar resources.


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Mr. Ahmad provided the cost comparisons to the four portfolio options. Director Cunniff asked if future water needs will affect Platte River’s participation in the Windy Gap project. Mr. Frisbie noted that there will be future discussions related to water depending on the recommendations staff brings forward for the board’s consideration. Director Cunniff asked about the decrease in change of carbon in 2021 compared 2022. Mr. Ahmad commented on the major outage planned for Rawhide in 2021 changes the numbers because of the actual numbers compared to the assumptions. Director Cunniff further requested to see the gap between P2 and P4 on carbon emissions. Director Hornbacher asked if the information provided was nameplate ratings of all resources back to the portfolio table. Mr. Butcher responded that the information is energy generated and is a net view of overproducing energy and selling renewables to the market to get to the 100%. Director Hornbacher reiterated that there will be offloading of energy from all resources within the P3 option. Staff confirmed. Director Bagley asked if the rates will increase if the excess energy of P3 is not sold in the market. Mr. Butcher said that the assumptions are assuming that Platte River staff will be able to sell but if they are not able to sell into the market, the rates will increase more than the current model shows. Mr. Butcher also added that there’s two things that resources need to do; serve load and charge the batteries. Director Troxell complemented the portfolios and suggested setting a goal by 2030 as a board to have a more reliable system at a normal annual rate increase. He continued to comment on leveraging an active management system from the city utilities and as a board how we can achieve an active system within their own communities and creating advantages to the future planning for integrating distributed energy resources. Chair Jirsa cautioned the board that no decisions will be made and listening sessions are still yet to be held. Director Marsh asked if we know how aggressively other utilities are moving forward with renewables and how that will affect our planning as we move into the market. Mr. Butcher discussed the recent announcements by Tri-State with their goals and expects all utilities to be aggressive which is why changing to a full energy market is so important. Mr. Frisbie also responded that coordinating activities via APPA and LPPC are important to broader communications and planning with the other utilities. Director Bagley clarified his understanding of the four portfolios presented and how they will change as technology evolves. Discussion ensued among directors and staff regarding assumptions, understanding the portfolio options presented and possible interim goals. Director Bernosky asked the board to also consider the investments the owner communities will have to make within each portfolio on the distribution side. Director Marsh asked about carbon tax and how will they be charged. Mr. Ahmad responded that staff worked with Siemens who provided the carbon tax assumptions expecting them to begin in 2025 and the utility provider would pay for them. Ms. Clemsen Roberts discussed recent legislative discussions on carbon taxes and options they are looking at, proposing to start in 2022 and accounting would start in 2025 pending the legislative bill passing. Director Bergsten reminded the board they all agreed to an adaptive strategy that maximizes the three pillars, and reiterated that there will be major community investment to the distribution


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system and asked that everyone have faith in Platte River staff before asking them to model something different from other sources. Director Bergsten continued by asking what info was assumed in battery durability and cost to replacing batteries. Mr. Ahmad responded that the price curve reflects a 15-year life cycle and a fixed cost on a monthly basis added for annual costs. Mr. Butcher commented that costs would be through a purchase power agreement (PPA). Chair Jirsa commented on an email sent to the board regarding the IRP process. MANAGEMENT REPORTS (5) Gainshare program update (presenter: Jason Frisbie)

Mr. Frisbie provided an overview to the gainsharing program in response to board request during the December board meeting. MONTHLY INFORMATIONAL REPORTS (6) Legal, environmental and compliance report (presenter: Sarah Leonard) Ms. Leonard referred to an update on page 80 describing an order by FERC noting that it does not apply to Platte River and discussed a future executive session topic regarding Platte River’s legal authority. (7) January operating report (presenter: Andy Butcher)

Mr. Butcher highlighted the operating results for the month of January noting an addition of purchases to the results chart. Director Cunniff asked if a derived matrix would be helpful to show purchases. Mr. Frisbie commented that it’s a variance on the expected budget for purchase volume. (8) January financial report (presenter: Dave Smalley) Mr. Smalley noted that January was the first month under the new billing structure and while demand showed to be 12% below budget it did not impact the financials. Mr. Smalley noted that one component was the ratchet built into the rates and the other component was less renewable energy on the system saving renewable costs indicating that the signal is improving from a rates perspective. (9) General management report (presenter: Jason Frisbie) Mr. Frisbie provided a few highlights from the general management report including the listening session schedule, APPA CEO Roundtable event and the upcoming YAMPA project CEO meeting to discuss the closure of Craig Unit 2. Director Cunniff asked if Platte River has a pandemic policy or procedure in place to handle employees working from home. Mr. Frisbie responded that staff is currently working on updating the procedures to reflect technology changes enabling people to work from home. Ms. Clemsen Roberts commented on following the Centers for Disease Control’s recommendation of having people work from home to make sure everyone is prepared in doing so if that is required.


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Roundtable and strategic discussion topics Chair Jirsa discussed that the board will conduct elections of a board chair and potentially a vice chair during the March meeting. Board members shared the latest news from the owner communities. ADJOURNMENT With no further business, the meeting adjourned at 12:27 p.m. The next regular board meeting is scheduled for Thursday, March 26, at 9:00 a.m. at the Platte River Power Authority, 2000 E. Horsetooth Road, Fort Collins, Colorado. AS WITNESS, I have executed my name as Secretary and have affixed the corporate seal of the Platte River Power Authority this day of , 2020.

Secretary

Memorandum

Date: 3/18/2020 To: Board of directors From: Jason Frisbie, general manager and chief executive officer Subject: Retirement committee report

The retirement committee held its quarterly meeting on Feb. 27, 2020. The minutes of that meeting are included in the board packet.

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

Attachment

Meeting minutes of the defined benefit plan committee 2000 East Horsetooth Road, Fort Collins, Colorado

Thursday, February 27, 2020

ATTENDANCE Committee members Joseph J. Bernosky (chair) Jason Frisbie (plan administrator) Brian Bagley 1 Ross Cunniff Todd Jirsa Dave Smalley Platte River staff Julie Depperman (director of treasury services) Caroline Schmiedt (deputy general counsel) Tracy Thompson (executive administrative assistant)

Guests Jason Palmer and Dan Phillips of Northern Trust Investments, Inc. (“Northern Trust”) CALL TO ORDER The meeting was called to order at 12:56 p.m. A quorum was present and the meeting, having been duly convened, was ready to proceed with business. ACTION ITEMS (1) Review minutes of November 15, 2019, meeting. Chair Bernosky asked for a motion to approve the minutes from the November 15, 2019, meeting. Mr. Bagley moved to approve the minutes as submitted. Mr. Jirsa seconded, and the motion carried 6-0. (2) Fourth quarter investment performance. Northern Trust provided an overview of the market environment for the fourth quarter and the year, explaining the market experienced good overall performance with many asset classes achieving strong results. Northern Trust summarized key market developments, economic indicators, and significant events which impacted the market. Northern Trust also reviewed the plan’s portfolio position for the fourth quarter and the year and overviewed their firm’s asset allocation process. The process includes development of a tactical asset allocation and strategic asset allocation which have different time horizons, 12 months and 5 years, respectively. The portfolio is comprised of risk control and risk assets and was moderately overweight in risk assets for the quarter. Page 13 of the quarterly investment report provides rationale for the portfolio’s positioning in each asset class. Northern Trust presented the tactical asset allocation changes that occurred during the fourth quarter. Utilizing the outsourced chief investment officer (OCIO) model, Northern Trust uses the

1 Excused himself from the meeting from at 1:00 p.m. and returned at 1:21 p.m.

Defined benefit plan committee meeting minutes: February 27, 2020

Page 2 of 3

investment policy statement (IPS) to determine whether allocation changes are appropriate and within the committee-approved ranges. When tactical changes are made, Mr. Frisbie, Mr. Smalley, and Ms. Depperman are notified, and the remaining committee members are provided an update at each quarterly meeting. In the fourth quarter, Northern Trust reduced the plan’s allocation to natural resources by 2% and increased the allocation to high yield by 2%. This shift was made because they anticipate interest rates and inflation to remain low. Global real estate is also expected to be positively impacted by low interest rates, however a change to this asset allocation was not made due to the limitations of the IPS allocation range and Northern Trust’s overall comfort with the existing global real estate allocation. Chair Bernosky asked about the rationale for reducing the natural resources allocation. Mr. Phillips explained that some natural resources, oil in particular, have experienced poor performance over the last few years and Northern Trust anticipates slower economic growth in the future which could continue to negatively impact the returns of natural resources. Additionally, natural resources are often utilized as an inflation hedge and Northern Trust anticipates inflation to remain low. The committee further discussed the current low inflation environment and potential market implications. Northern Trust reviewed the plan’s investment performance for the quarter. The portfolio experienced an investment return of 2.9%, less than the benchmark which returned 3.4%. For the year, the portfolio experienced an investment return of 12.8%, less than the benchmark which returned 13.4%. Over the three-, five-, and seven-year periods, the portfolio has outperformed its benchmark. Northern Trust will obtain longer-term data from Platte River’s former investment consultant. For the quarter, the plan’s balance increased $3.4 million, which accounts for contributions, income, appreciation, benefit payments and expenses. For the year, the plan’s balance increased $6.1 million. As of December 31, 2019, all asset allocations were within the target policy allocations. Northern Trust provided a performance summary of each of the funds which includes a total market value for each fund as well as the rate of return. Northern Trust does not recommend any changes at this time. They noted that Black Stone and Partners Group had not yet released their final fourth quarter numbers at the time this report was prepared; therefore, these numbers should be considered preliminary at this time. (3) Investment approach. Northern Trust provided an overview of their firm’s approach to asset allocation and developing investment strategies. Their capital market assumptions are developed through firm-wide participation and implementation and result in a strategic outlook, with a 5-year time horizon, and a tactical outlook, with a 12-month time horizon. The strategic outlook is completed annually with outputs including long-term asset class forecasts and strategic portfolio recommendations. The tactical outlook is formally evaluated on a monthly basis with outputs including tactical interest rate, credit spread and asset class forecasts, and tactical portfolio recommendations. Based on the strategic and tactical outlook, Northern Trust builds a custom strategic asset allocation for Platte River. Northern Trust provided their five-year return forecasts for each asset class and presented data on their forecast results. Details are provided in the five-year outlook booklet included in the meeting materials. (4) Capital markets outlook. Northern Trust provided a report on their firm’s outlook for the capital markets. They anticipate that political uncertainty and slowing growth will lead to below historical average global equity returns over the next five years, however these returns will remain more attractive than low-yielding fixed income asset classes. Northern Trust presented

Defined benefit plan committee meeting minutes: February 27, 2020

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major themes and their analysis of future capital markets. Five-year themes which are expected to have market impacts include global growth restructuring, trade uncertainty between the U.S. and China, low and stagnant inflation rates globally, changes in global leaders and economic policy, changes in central banks’ monetary policies, and uncertain impacts of climate risk. These themes and the anticipated market impacts are presented in more detail in the five-year outlook booklet included in the meeting materials. (5) Transition update. Northern Trust provided an update on the process of converting the plan’s investment portfolio to the recommended long-term asset allocation. So far, there have been no issues and by December 31, 2019, Northern Trust has been able to redeem all funds apart from the reinsurance fund, hedge fund, and private equity fund, as anticipated. As of the end of January 2020, the hedge fund and private equity fund have been 95% redeemed. Reinsurance is currently 3.5% of the portfolio, but due to the liquidity gate and quarterly restrictions, redemption of this fund will take more time; Northern Trust will continue to place quarterly sell orders as allowed and will continue to oversee the fund while also providing updates to the committee. After receiving proceeds from the sale of the private equity and hedge funds, Northern Trust originally planned for the $20 million of redeemed funds to be immediately invested in equities; however, after assessing the market environment at the time and informing Platte River staff, Northern Trust did not immediately make this conversion. With the recent 3% market correction, however, Northern has taken the first step to invest part of the sum and anticipates completing the conversion by the end of March. In addition, the original emerging market and international equity funds were sold and reinvested in high quality, low volatility international and emerging markets equity strategies. These strategies are expected to provide downside protection in the equity portfolio as the equity allocation increases during the transition. Staff was informed of the changes and anticipated cost savings. The committee will see more details on the changes as part of the 2020 first quarter portfolio review at the May meeting. The committee and Northern Trust discussed this as an example of how the OCIO approach has already been utilized to achieve positive results. In this case, the portfolio was rebalanced to a more defensive structure during a time of high market volatility without the need for multiple committee meetings. (6) Investment policy statement (IPS). Northern Trust reviewed proposed changes to the appendices of the IPS. Language has been added to address the illiquidity of the reinsurance fund and how it will be overseen, in addition to slight adjustments to the allocation ranges for infrastructure, global real estate, and inflation protection assets based on the firm’s capital markets outlook. Exhibit 2b in the redlined and clean IPS documents included in the meeting materials contained errors, so handouts were provided at the meeting demonstrating the correct redlines. Chair Bernosky asked for a motion to approve changes to the IPS. Mr. Jirsa moved, Mr. Cunniff seconded, and the motion carried 6-0. (7) Other business. Northern Trust and the committee discussed market impacts of the coronavirus. The next regular committee meeting is scheduled for May 28, 2020, at 12:30 p.m. in the Platte River Power Authority Board Room. The meeting adjourned at 2:08 p.m. Chair Joseph J. Bernosky

Memorandum


Sarah Leonard, general counsel Subject: Executive session

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

No materials will be provided for this section.

Memorandum


Sarah Leonard, general counsel Subject: Election of chair and vice chair

Due to Todd Jirsa not running for re-election as mayor, the position of chair will be vacant. Pursuant to the Organic Contract, vacancies among the officers may be filled at any meeting. Should it become necessary to elect a new vice chair, nominations will be taken after the chair is elected. Platte River does not rely upon a nominating committee, but rather typically opens the floor for nominations. Nominations need not be seconded to be effective. The terms of the newly sitting chair (and vice chair, if applicable) will begin at the conclusion of the March 2020 meeting. Attachments

Resolution No. __-20: Election of board chairman Page 1 of 1

RESOLUTION NO. __-20

WHEREAS, pursuant to the Organic Contract the Board of Directors may fill a vacancy in

an office at any meeting; and

WHEREAS, because the current Chair has chosen not to seek re-election, the office of

Chair will be vacant at the end of this meeting.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Platte River

Power Authority that is elected to serve as Chair until the next Annual Meeting

of the Board of Directors, with [his/her] term to begin at the conclusion of this meeting.

AS WITNESS, I have executed my name as Secretary and have affixed the corporate seal of the Platte River Power Authority this day of , 2020. Secretary

Resolution No. __-20: Election of board vice chairman Page 1 of 1

RESOLUTION NO. __-20

WHEREAS, pursuant to the Organic Contract the Board of Directors may fill a vacancy in

an office at any meeting; and

WHEREAS, because the former Vice Chair has been elected as Chair, the office of Vice

Chair will be vacant at the end of this meeting.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Platte River

Power Authority that is elected to serve as Vice Chair until the next Annual

Meeting of the Board of Directors, with [his/her] term to begin at the conclusion of this meeting.

AS WITNESS, I have executed my name as Secretary and have affixed the corporate seal of the Platte River Power Authority this day of , 2020. Secretary

Memorandum


Alyssa Clemsen Roberts, chief strategy officer Libby Clark, director of human resources and safety

Subject: Pandemic planning

Platte River staff has been closely monitoring the evolving COVID-19 situation over the past several weeks and has revised our procedures related to pandemic planning to ensure the safety and wellbeing of our employees, contractors and visitors.

Staff has reviewed information from several sources to validate and update our pandemic planning procedures. These sources include organizations such as The Center for Disease Control and Prevention (CDC), the World Health Organization (WHO), Colorado Department of Public Health and Environment (CDPHE) and Larimer County Health and Environment, American Public Power Association (APPA), Large Public Power Council (LPPC) and Society for Human Resources Management (SHRM).

The updated procedures include precautionary measures such as good respiratory and hand hygiene etiquette and as well as updated travel guidelines. Platte River has currently suspended tours at the Rawhide Energy Station through May 1 and will continue to monitor the situation to determine when tours can resume. Furthermore, we are limiting exposure to our control room operators to ensure reliability of our service delivery to our owner communities.

As reference, included are the complete guidelines that have been provided to employees. We extend our hand and are willing to share any benchmark information we have collected or developed with our owner communities as we all navigate this evolving situation. Our main contact is Libby Clark, director of human resources and safety.

Platte River Power Authority

Pandemic planning

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Pandemic Planning Guidelines

All employee precautionary measures

• Stay home when you are sick • If a member of your household is exhibiting flu like symptoms such as a fever, coughing

or shortness of breath – please stay home • If you or a member of your household tests positive for COVID-19 we ask you

quarantine yourself for a minimum of 14 days and report that information to human resources as soon as possible

• If you have been in contact with someone who has tested positive or is currently being tested, please contact human resources immediately

• Wash your hands frequently with warm, soapy water for at least 20 seconds • Cover your mouth with tissues whenever you sneeze and discard used tissues in the

trash • Avoid people who are sick with respiratory symptoms • Clean frequently touched surfaces • Take computer home each night in the event you need to work from home

Organizational precautionary measures

• Provide alcohol-based hand sanitizers throughout the workplace and in common areas • Cleaning wipes available for desk areas • Provided CDC recommended cleaning procedures requested increased frequency of

cleaning of common areas by 3-party janitorial staff • Request all guidelines including travel are followed by our contractors, vendors and

visitors • Restrict access to control rooms to limit exposure possibilities and encourage control

room employees to limit exposure outside of work

Travel guidelines

• Any international or cruise ship travel (personal or business) to a CDC designated Level 2 or 3 Warning areas requires a 14-day quarantine period

• Notification to human resources for any upcoming international travel with requirement to contact HR prior to returning to the workplace

• All business travel requires approval by senior leadership

Memorandum

Date: 3/18/2020 To: Board of Directors From: Sarah Leonard, general counsel Subject: Legal, Environmental and Compliance Report – March board meeting

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

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

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of the leases and a declaration of Platte River’s rights to remove the cellular antenna facilities at T-Mobile’s expense. T-Mobile answered the complaint on Nov. 14, 2019, and the case is now “at issue.” Among other things, T-Mobile has asserted “necessity” and “impossibility of performance” as defenses to Platte River’s claims for breach of contract. This matter is subject to simplified civil procedure, which means that discovery will be limited, and procedure is generally expedited. The court has not yet set a trial date. Current Status: The parties have shared initial disclosures of witnesses and documents, and Platte River has served an initial set of discovery requests to obtain further information regarding T-Mobile’s affirmative defenses. Responses to these requests were due March 16, 2020. All discovery must be completed by May 31, 2020. Counsel for T-Mobile has reiterated T-Mobile’s interest in an early settlement, but as of the date of this report no settlement offer has been made. We will be required to engage in mediation or another form of alternative dispute resolution by May 31, 2020, and we engaged outside counsel to assist with this matter. Potential Claim Staff sent a demand letter in connection with the potential claim against a contract vendor discussed in executive session at the July board meeting. The vendor responded on Oct. 24, 2019, generally denying any responsibility for the claim. Platte River has engaged outside counsel to represent its interests in this matter. Outside counsel is currently reviewing documentation related to this claim and conferring with consultants who have industry subject-matter expertise. Staff is actively working with outside counsel to develop a litigation strategy, and will provide further reports in executive session as this matter develops. LITIGATION MATTERS OF INTEREST TO PLATTE RIVER Southwest Power Pool Western Energy Imbalance Service filing with the Federal Energy Regulatory Commission On Sept. 9, 2019, the Southwest Power Pool announced that Basin Electric Power Cooperative, Tri-State Generation and Transmission Association (Tri-State), and the Western Area Power Administration (Western) committed to join the Southwest Power Pool’s western energy imbalance service, which is a regional energy imbalance market in the western interconnection anticipated to begin operations in February 2021. To implement this new market, the Southwest Power Pool will require changes to its tariff (as approved by the Federal Energy Regulatory Commission (FERC)), including details of how the market will operate and the rates that will be charged to participants in that


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market. To secure FERC approval, the Southwest Power Pool must demonstrate that its proposed rates are “just and reasonable.” Platte River has a significant interest in the Southwest Power Pool market because Platte River purchases hydropower from Western and shares many common transmission interests with it and with Tri-State. There are significant questions on how the Southwest Power Pool’s market will affect entities in the West, as well as how it will allocate market costs. Platte River staff and its Washington, D.C. legal counsel met with FERC Commissioners and their staff in late January (ahead of the Southwest Power Pool’s anticipated filing) to raise these concerns. We understand that representatives of other Colorado utilities similarly reached out to FERC. On Feb. 21, 2020, the Southwest Power Pool filed its proposed tariff changes with FERC. Although Platte River has announced its intent to join the California Independent System Operator’s (California ISO) Western Energy Imbalance Market along with Joint Dispatch Agreement participants Public Service Company of Colorado, Black Hills Colorado Energy, and Colorado Springs Utilities, the Southwest Power Pool’s tariff filing may have significant impacts on Platte River and other utilities in the western interconnection. Among other things, there are potential issues with “seams”; that is, how rates and use of transmission facilities that overlap within the Southwest Power Pool’s energy imbalance service market footprint and other adjacent market territories will be managed. For example, Western jointly owns transmission lines with Platte River and other utilities that will not be part of the Southwest Power Pool’s western energy imbalance service market, and there are other parties with contractual rights on transmission paths that will be managed by the Southwest Power Pool. The Southwest Power Pool’s FERC filing leaves open significant questions as to how these “seams” issues will be addressed. In addition, there are concerns about the lack of any cost-benefit analysis demonstrating the benefits of participation in the western energy imbalance service or whether those benefits would outweigh the approximate $9 million start-up cost and $5 million annual administrative cost. There are concerns about whether the western energy imbalance service would allow one or more participants to exercise market power. In light of these considerations, we are working with outside counsel to prepare a motion to intervene and protest the Southwest Power Pool’s FERC filing. Protest filings are due March 20. FERC will have 60 days to act on the Southwest Power Pool’s filing and will either approve or reject the filing. FERC no longer “conditionally” approves filings as had been the case in the past, where approvals could be conditioned upon certain changes to the filing. We are coordinating with other participants in the Joint Dispatch Agreement group on these issues and will further update the board as this matter develops.


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


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


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removing Glen Canyon Dam altogether. Of particular concern is the plaintiffs’ focus on the Bureau’s consideration of hydropower interests. They assert that hydropower is “subservient” to the other purposes of the Colorado River Storage Project and should not be given weight in the NEPA process. If the plaintiffs’ litigation succeeds, it would halt the adaptive management program and could force the Bureau to reopen the NEPA process, potentially leading to a program even less favorable for hydropower interests. It may also set a precedent that could endanger other hydropower projects that did not take climate change into consideration. Current Status: The Bureau answered the complaint on Dec. 5, 2019. This case is in the early phases of litigation, as the parties focus on preparing the administrative record for review. Several entities, including the state of California, the state of Nevada and the Colorado River Energy Distributors Association (of which Platte River is a member) moved to intervene. Save the Colorado, et al. v. United States Bureau of Reclamation (D. Colo. No. 17-cv-2563-REB) Background: As a member of the Municipal Subdistrict of the Northern Colorado Water Conservancy District, Platte River is a participant in the Windy Gap Firming Project (the “Firming Project”), which seeks to secure delivery of water from the Western Slope to the Front Range. The centerpiece of the Firming Project is Chimney Hollow Reservoir, a 90,000-acre-foot reservoir adjacent to Carter Lake, which will store water delivered from the Colorado River and certain tributaries for future use by Platte River and the other project participants. The Firming Project was permitted by the U.S. Bureau of Reclamation and the Army Corps of Engineers after an extensive environmental review under NEPA. On Oct. 26, 2017, several environmental groups filed a legal action challenging the adequacy of the NEPA review for the Firming Project and seeking to invalidate the permits for the project. Unlike a typical civil lawsuit, the case will be heard by a court without pretrial discovery, and the court’s review will be limited to whether there is adequate support in the administrative record to justify the agencies’ actions on the permits for the project. The Bureau of Reclamation and Army Corps of Engineers filed an answer on Jan. 16, 2018, denying the allegations of the complaint. Northern Water and several other parties moved to intervene, and those motions were granted. The administrative record has been filed and the matter has been fully briefed. The case has been assigned to U.S. District Judge William Martinez for a decision on the merits, and staff is hopeful that the court will issue its ruling in early 2020. The District Court recently issued an order indicating that this matter has been reassigned to Judge Tim Tymkovich, who sits on the Tenth Circuit court of appeals. The District Court may assign a case to an appellate judge to help relieve backlog. We believe it is a positive sign that this case has been reassigned and may indicate that the District Court will act soon. Because this case involves the review of an administrative record and will not involve a trial with live testimony and documentary evidence, we do not believe the reassignment will cause any delay while the new judge gets up to speed.


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Current Status: There are no new developments in this matter since the last report. El Paso Electric Co. vs. Federal Energy Regulatory Commission, (5th Cir. No. 18-60575) Background: FERC Order 1000, issued in 2011, requires FERC-jurisdictional utilities to create regional transmission planning organizations with authority to plan transmission expansions and allocate costs to the beneficiaries of the new transmission projects. Although Platte River is not subject to FERC jurisdiction, Platte River participates in the Order 1000 planning process through WestConnect, a planning organization covering a region generally corresponding with boundaries of the states of Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming. Platte River is a party to the WestConnect Planning and Participation Agreement along with other FERC-jurisdictional and non-jurisdictional utilities in the planning region. The current dispute concerns the cost allocation provisions of the Planning and Participation Agreement, which allow non-FERC jurisdictional utilities (referred to as “Coordinating Transmission Owners” or “CTOs”) to opt out of cost allocation for regional transmission projects. El Paso Electric Co. and several other FERC-jurisdictional utilities filed appeals challenging FERC’s approval of the WestConnect cost allocation provisions, asserting that permitting CTOs to opt out of cost allocation would result in rates to other utilities that are unjust and unreasonable. On Aug. 8, 2016, the Fifth Circuit Court of Appeals agreed with El Paso and remanded the case to FERC. On remand, FERC reaffirmed its decision to accept the WestConnect cost allocation proposal. In so doing it reiterated the unique jurisdictional characteristics of the Western Interconnect and explained that the WestConnect proposal contained sufficient incentives for non-jurisdictional utilities to accept cost allocation responsibilities. FERC noted that it could resort to its authority under Section 211A of the Federal Power Act if non-jurisdictional utilities’ refusal to participate in cost allocation would result in rates that were not just and reasonable. On Aug. 17, 2018, El Paso Electric Company filed a review action with the Fifth Circuit Court of Appeals. Platte River is not a party to the action but may coordinate with other affected, non-jurisdictional utilities in filing an amicus brief. Platte River participated in settlement negotiations between the jurisdictional and non-jurisdictional utilities on modifications to the cost allocation and governance provisions of the Planning and Participation Agreement. The jurisdictional and non-jurisdictional utilities agreed on settlement principles. On Nov. 20, 2019, the Court granted an extension of the abeyance period to allow the utilities to incorporate the settlement principles into tariff language to be filed with FERC. The utilities are developing the tariff language.


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Current Status: There are no new developments in this matter since the last report. ONGOING AND CURRENT MATTERS OF SIGNIFICANCE Grand Lake Clarity NEPA Process Background: The water Platte River receives from the Windy Gap Project is stored in a three-lake system, including Lake Granby, Shadow Mountain Reservoir, and Grand Lake, before it is pumped to the Front Range via the Alva Adams Tunnel. The Northern Colorado Water Conservancy District operates the system. Concerns have arisen about the impact stored water from the Windy Gap Project and the larger Colorado-Big Thompson Project have on the clarity of water in Grand Lake, largely due to the deposit of nutrients in the lakes, which contributes to algal growth. The U.S. Bureau of Reclamation started a NEPA process to address this water clarity issue. Platte River is a coordinating agency in the NEPA process. The outcome of the NEPA process could affect Platte River both as a participant in the Windy Gap Project and as a power customer of the Western Area Power Administration. At present the matter will proceed as an Environmental Assessment, but may convert to an Environmental Impact Statement, which entails a higher standard of review. A “visioning process” conducted by the Bureau yielded several capital projects that may address the clarity issue. The capital project alternatives currently under discussion include (1) dredging and deepening Shadow Mountain Reservoir; (2) extending the Alva Adams Tunnel to tie directly into Shadow Mountain Reservoir; or (3) installing a high-pressure piping system to bypass Shadow Mountain Reservoir. Additionally, a range of smaller-scale options that could be implemented either separately or in conjunction with one of the large-scale alternatives are being evaluated. Public scoping and outreach have not been scheduled but are anticipated to begin the summer of 2020 at the earliest. Current Status: The Bureau postponed the next cooperating agency meeting from October 2019 to the first quarter of 2020 to allow additional time for preliminary analysis of the current alternatives. The date for this next cooperating agency meeting has not yet been set. This may be due, in part, to changes in personnel at the Bureau, including the retirement of the area manager responsible for this matter.


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Western Wholesale Market Activities Background: Since negotiations between the Mountain West Transmission Group and the Southwest Power Pool ended in 2018, Platte River has been focusing primarily on market operations under the Joint Dispatch Agreement (JDA) among Platte River, Black Hills Energy and Public Service Company of Colorado, which has been in place since June 2017. On June 20, 2019, FERC approved changes to the JDA Tariff necessary to authorize Colorado Springs’ participation in the JDA market. Because the JDA market lacks sufficient size to balance out the significant variable resources Platte River and other Colorado utilities will need to meet their aggressive decarbonization goals, Platte River and other members of the former Mountain West Transmission Group evaluated proposals from the California Independent System Operator (California ISO) and Southwest Power Pool to provide energy imbalance market services in the West. A significant number of utilities in the West (including Salt River Project and PacifiCorp) have joined the California ISO energy imbalance market. By 2022, this market will include approximately 77% of the electric load in the western United States. Platte River and the other participants in the JDA engaged the Brattle Group to analyze the costs and benefits of the California ISO energy imbalance market and Southwest Power Pool’s western energy imbalance service (discussed above). The results of the Brattle Group study showed significantly greater benefits for the members of the JDA market to participate in the California ISO market than for the Southwest Power Pool market. Accordingly, on Dec. 17, 2019, the JDA market participants (including Platte River) issued a joint press release announcing their intention to join the California ISO market. On Sept. 17, 2019, the Colorado Public Utilities Commission (Commission) opened a docket under the newly adopted Colorado Transmission Coordination Act (Transmission Act) to study the potential advantages and disadvantages of various market options for the West, including energy imbalance markets, regional transmission organizations, power pools, and joint tariffs. The Transmission Act directed the Commission to hold hearings for public comments on the costs and benefits of markets and to determine by Dec. 1, 2021, whether participation in a market is in the public interest. If the Commission determines that participation in a market is in the public interest, it may claim it has authority to direct jurisdictional utilities to take “appropriate actions” to pursue participation in such a market. Platte River and several other utilities, independent power producers, Southwest Power Pool, California ISO, and various non-governmental organizations have filed notices to participate and initial comments. Platte River and other interested parties filed comments on Nov. 15, 2019, and rebuttal comments were filed on Dec. 15, 2019. The Commission will likely schedule public hearings for early 2020.


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Current status: The Commission’s investigatory docket is ongoing, although legislation has been proposed to limit its scope in light of the decision of Colorado’s largest utilities to join the California ISO’s western energy imbalance market and the Southwest Power Pool’s western energy imbalance service. Colorado Springs Utilities is fully integrated into the JDA market and commenced market operations on March 2, 2020. Fiber Utilization and Telecommunications Background: Following a work session on June 7, 2018, Platte River and the municipal staff members working on broadband issues agreed to move forward with Platte River transferring title of excess fiber within the local fiber loops to the Town of Estes Park, the City of Fort Collins, and the City of Loveland. (The City of Longmont took ownership of its excess fiber in 1998.) The board approved resolutions authorizing the general manager to convey excess fiber in the local loops to Estes Park, Fort Collins and Loveland at its September 2018 meeting, as well as a resolution authorizing the general manager to convey assets supporting the fiber cable in the local Longmont loop to the City of Longmont. The board approved a Fiber Management Intergovernmental Agreement (IGA) at its December 2018 meeting. The IGA was approved by the Fort Collins City Council on Dec. 4, 2018, by the Longmont City Council on Jan. 22, 2019, by the Estes Park Town Board on Feb. 12, 2019, and by the Loveland City Council on Feb. 19, 2019. The IGA was fully executed on May 15, 2019. The Technical Committee met on July 9, 2019, and approved an updated version of the System-wide Fiber Maintenance Protocol document (the protocols for accessing the fiber) and a draft Acknowledgement of Asset Transfer document was sent to each community for review. The fiber management Executive Committee created through the IGA continues to meet and hold strategic discussions. The last meeting was held Nov. 15, 2019. Current status: All of owner communities have approved and signed the Acknowledgment of Asset transfer documents transferring excess fiber located in the respective local fiber optic loop.


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CONTRACTUAL MATTERS: Solar and Storage Power Purchase Agreement Background: On Feb. 13, 2019, Platte River entered into a Solar Renewable Energy and Storage Power Purchase Agreement (Solar Purchase Agreement) for the construction of a 20 MW solar facility with a 2 MW battery at the Rawhide Energy Station. The term of the Solar Purchase Agreement is 20 years, with an option to extend the term to 40 years. At its meeting on June 10, 2019, the Larimer County Commission gave final approval for the “1041” land use permit required under state law (Colorado House Bill 1041, originally adopted in 1974) for the construction of the solar and battery storage facility. Platte River and DEPCOM, the project developer, entered into an interconnection agreement for the project on June 12, 2019. Because of difficulties in siting the solar facilities, in order to maintain the economics of the project without an increase in the cost of energy, Platte River and the project developer agreed to increase the capacity of the project from 20 MW to 22 MW. Platte River and the project developer signed an amendment to the Solar Purchase Agreement on Aug. 29, 2019. The project developer received Larimer County’s final approval for its building permit on Dec. 10, 2019. Current status: Construction is ongoing. Roundhouse Energy Project Background: On Jan. 22, 2018, Platte River entered into a Renewable Energy Power Purchase Agreement with Roundhouse Renewable Energy, LLC. Platte River agreed to purchase 150 MW of wind energy from the Roundhouse wind energy project that is being constructed in southern Wyoming. The project developer will deliver the wind energy to Platte River using a 230-kV generation interconnect transmission line that is being constructed by the project developer. On July 10, 2019, Platte River and the project developer entered into a Fifth Amendment to the Power Purchase Agreement to increase the amount of energy purchased from 150 MW to 225 MW. In addition, Platte River entered into an asset purchase agreement to acquire the generation interconnect transmission line when the project achieves commercial operation, which is anticipated to occur by Dec. 1, 2020.


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Current status: Construction is ongoing. Platte River and the developer are working on the interconnection agreement between the parties, station service agreements with incumbent utilities for station service power to the generation site, and land use agreements along the transmission path. The developer executed crossing agreements with the Western Area Power Administration and Poudre Valley Rural Electric Association. The developer is pursuing crossing agreements with the state of Colorado across certain gas pipeline easements. Platte River has concerns with the rights to several parcels needed for the transmission path. Platte River and the developer are working to resolve the concerns with these parcels. Oil and Gas Exploration at the Rawhide Energy Station Background: Although Platte River owns all surface rights to the Rawhide Energy Station property, we only own a portion of the mineral rights under the property. Other parties have full or partial ownership of the remaining portions. King Operating Corporation (King), a Texas-based oil and gas company, approached Platte River to explore for oil and gas under the Rawhide property on behalf of several of these other mineral rights holders. Platte River granted King a permit to conduct a seismic survey exploring for oil and gas, which was completed in March 2019. King has notified Platte River that it is in the planning stages for wells to extract oil and gas from reservoirs underneath the Rawhide property. Platte River has been coordinating with King regarding its extraction plans. King has also approached Platte River regarding a potential lease of Platte River’s mineral rights. Platte River management is assessing the potential advantages and disadvantages of King’s request. A potential benefit could be greater control (through negotiated agreements) of King’s oil and gas extraction activities near the Rawhide Energy Station. In June 2019, King approached Platte River to request water to support its proposed fracking activities. Platte River declined this request. Current Status: Larimer County has issued draft rules governing oil and gas operations within the County (pursuant to its authority under SB 19-181). Platte River worked with its consulting oil and gas legal counsel to submit comments to address Platte River’s interests. The Larimer County Planning Commission held a public hearing to consider the rules on Feb. 19, 2020. Larimer’s Board of County Commissioners will hold a public hearing to consider the rules on March 23, 2020.


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ENVIRONMENTAL MATTERS: EPA Affordable Clean Energy Rule/Colorado Air Quality Statute Implementation Background: On June 19, 2019, the EPA issued its final Affordable Clean Energy (ACE) Rule, which establishes guidelines for states to use when developing plans to limit carbon dioxide (CO2) emissions at coal-fired power plants. The ACE Rule focuses on heat rate improvements or efficiency improvements as the best system of emission reduction (best reduction systems) for CO2 emissions from coal-fired power plants. The best reduction systems are determined based on technical feasibility, cost, non-air quality health and environmental impacts and energy requirements. In addition to improvements to operation and maintenance practices, the ACE Rule identifies several “candidate technologies” for best reduction systems, including neutral network/intelligent sootblowers, boiler feed pumps, air heater and leakage control, variable frequency drives, blade path upgrades, and economizer improvements. Primary responsibility for implementation of the ACE Rule is delegated to the states, and states will be expected to establish unit-specific standards of performance that reflect the emissions limitation achievable through application of the best reduction system technologies. States will have three years to submit implementation plans to EPA. At least one lawsuit has been filed challenging the ACE Rule, and staff anticipates more lawsuits will be filed in the near future. At the same time EPA was finalizing the ACE Rule, the Colorado General Assembly adopted a number of aggressive air quality statutes, including SB 19-096 (which established goals for the reduction of greenhouse gas emissions) and HB 19-1261 (which granted the Colorado Air Quality Commission (Air Commission) broad rulemaking authority to implement greenhouse gas reduction goals). These measures were discussed in more detail at the May 2019 board meeting. Unlike the ACE Rule, which is focused on technology-based emissions reductions, the new Colorado statutes focus on overall emissions reductions without regard to technology. The Air Commission has begun to hold stakeholder meetings on the new emissions reduction statutes. Although development and implementation of new rules is many months away, Air Commission staff made clear that, to meet the aggressive greenhouse gas emissions reduction goals, it will require a greater reduction of greenhouse gases from the electric utility sector than it will from other sectors over which it lacks effective regulatory control. Staff will provide further updates on these rules as more information becomes available. Current status: There are no significant new developments in this matter since the last report.


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Regional Haze Review Background: Under the Federal Clean Air Act, the state of Colorado must evaluate regional haze in the front range every ten years to determine if reasonable progress is being made to improve visibility. As part of this process, the state requires emitters of nitrogen oxides (NOx) (a principal contributor to haze) and other emissions to analyze technologies that could be employed to reduce those emissions. Platte River received a letter from the Colorado Department of Public Health and Environment (Health Department) on May 14, 2019 asking Platte River to perform a four-factor analysis for all applicable emission units at Rawhide. Rawhide Unit 1 was the only emission unit for which a four-factor analysis was required. The four-factor analysis assesses the financial cost and technical logistics of control technologies on emission sources, including, for example, the addition of further emissions controls (such as selective catalytic reduction systems) and repowering the unit to fire natural gas. Platte River engaged Burns & McDonnell to conduct the analysis. If the Health Department determines that additional control measures are economically feasible, it may require new technologies to reduce NOx and other emissions. In the past, the Health Department used a cost threshold of $5,000 per ton of NOx reduction to determine feasibility, which was less than half of the cost of adding selective catalytic reduction systems at the time. The cost threshold for feasibility applied by the state likely will increase. Going forward, the Health Department will include new requirements in state regulations to be approved by the Air Commission. The commitment for additional reductions will also be incorporated into a new State Implementation Plan, which will be reviewed by the State Legislature and then submitted to the EPA for approval. Platte River submitted the results of its four-factor analysis to the Health Department on Oct. 14, 2019. The report addressed the technically feasible emissions controls that could be implemented at Rawhide Unit 1 to reduce NOx emissions and the associated costs. Staff is waiting for the Health Department to decide whether to require any further emissions controls. Current Status: We responded on Feb. 27 2020 to the Health Department’s request for additional information about our four-factor analysis report. The Health Department confirmed it received our response and to date has had no further questions.


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15

Coal Combustion Residuals Regulation Background: The EPA Administrator signed the Disposal of Coal Combustion Residuals from Electric Utilities final rule (Residuals Rule) on Dec. 19, 2014, and it was published in the Federal Register on Apr. 17, 2015. This rule finalized national regulations to provide a comprehensive set of requirements for the safe disposal of combustion residuals, primarily coal ash, from coal-fired power plants. On Mar. 1, 2018 the EPA issued proposed revisions to the 2015 final Residuals Rule, which remains in litigation before the U.S. Court of Appeals for the D.C. Circuit. The proposed revisions address several provisions of the 2015 Residuals Rule that had been challenged in previous litigation, as well as additional provisions in response to comments received since the final rule went into effect. Many of the proposed revisions would allow state regulatory programs more flexibility to establish equivalent standards considering site-specific conditions. For now, the state of Colorado has indicated that it intends to continue to regulate coal combustion residuals under its existing solid waste regulations rather than pursuing enforcement authority under the Residuals Rule. As previously reported, Platte River has taken steps to update its operational plan to comply with the requirements of the Residuals Rule and Colorado solid waste regulations. These steps include increased groundwater monitoring and evaluating the existing topsoil cover at the monofill where ash had previously been disposed of. Concurrently, Platte River obtained approval from the Health Department to close the reclaim pond and bottom ash ponds, which have been replaced with the installation of a concrete settling tank with two separate cells. Decommissioning activities are currently underway and are expected to be completed by mid-2020. Additional revisions to the Residuals Rule may modify current deadlines, allowing additional time for groundwater monitoring and analysis. However, even if these modifications are adopted, they will not alter Platte River’s chosen path to compliance. Current status: Platte River is moving forward with final plans to close the bottom ash impoundments at Rawhide. We currently expect site work to begin in May 2020. Closure activities will include removal of all waste material, liner, and other related infrastructure. We will conduct soil and groundwater sampling to confirm no residual impact. COMPLIANCE MATTERS: On Feb. 26, 2020, Platte River filed a self-report with the Western Electricity Coordinating Council (WECC) for an instance of potential non-compliance with reliability standard COM-001-3. This standard requires registered Transmission Operators to designate an alternative interpersonal communication


3/18/2020

16

capability with its Reliability Coordinator, Balancing Authority, and neighboring Transmission Operators. Platte River is also required to test the alternative communication capability once per calendar month. Platte River designated an alternative phone system known as the “Hotline” phone as its alternative communications capability with its neighboring Transmission Operators and Balancing Authorities. In October 2019 the Hotline phone system was repurposed, and inadvertently missed testing the phone in November and December 2019. Transmission Operations staff discovered the discrepancy in January and designated a new alternative interpersonal communication capability and conducted testing to return to compliance. Staff implemented additional internal controls to mitigate the risk of recurrence. Reliability compliance staff communicated the details of the issue to WECC and expects WECC will treat this as a compliance exception. A compliance exception results in no sanction or penalty and will not become a part of Platte River’s permanent compliance history.

Executive summary

Category February variance YTD variance

Municipal demand (5.5%) n (8.6%) n

Municipal energy 4.3% l (0.0%) u

Baseload generation (10.0%) n (16.6%) n

Wind generation 12.3% l (3.2%) n

Solar generation 11.3% l (2.6%) n

Surplus sales volume (8.7%) n (7.3%) n

Surplus sales price (0.7%) u (0.6%) u

Purchase volume 87.5% n 138.2% n

Purchase price (3.4%) l (15.4%) l

Dispatch cost (2.7%) l (2.4%) l

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

February 2020

operating report

Municipal demand came in below budget for the month, while energy came in above budget due to

below average temperatures throughout the month. Demand is well below budget while energy is at

budget, year to date.

Rawhide had a good operational month, with only one runback and a minor curtailment. The Craig

units ran exceptionally well during the month of February, with no unplanned outages, although both

units had minor curtailments for testing and Craig Unit 1 remained curtailed, due to a feedwater

heater tube leak which is scheduled for repair in March.

Wind and solar generation came in above budget for the month but remain below budget, year to

date.

Surplus sales volume came in below budget for the month of February, due to contract, JDA and

short-term sales all having come in below budget. Pricing also came in slightly below budget. Volume

remains below budget and pricing remains slightly below budget, year to date.

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

dispatched down in order to purchase JDA energy at prices which often fell below our generating

costs. Year to date, purchase volumes remain substantially above budget, while pricing remains well

below budget.

Dispatch costs came in below budget for the month of February, mainly due to below budget JDA

purchase costs and wind generation costs, though partially offset by above budget Craig costs which

were attributed to below budget generation. Year to date, dispatch costs remain below budget.

Operational overview

2020 goal

0 l 0 l 0 l

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

of February.

Peak day obligation. Peak demand for the month was 459 megawatts which occurred on Feb. 4,

2020, at hour ending 19:00 and was 27 megawatts below budget. Platte River’s obligation at the time

of the peak totaled 525 megawatts.

February actual YTD total

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

Forecast demand486

0

50

100

150

200

250

300

350

400

450

500

550

600

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

MW

Hour

Peak day obligation: Feb. 4, 2020

Hydro Wind* Solar Rawhide Craig CTs Purchases

Total obligation525

Municipal obligation459

February 2020 operating report Page 1

Municipal loads

February budget February actual Minimum

Coincident demand (MW) 486 459 497 (5.5%) n

Estes Park 22 24 13 7.2% l

Fort Collins 232 217 234 (6.3%) n

Longmont 122 118 137 (2.7%) n

Loveland 111 100 114 (9.5%) n

Non-coincident demand (MW) 489 463 503 (5.3%) n

Estes Park 23 24 20 2.8% l

Fort Collins 232 217 234 (6.4%) n

Longmont 123 119 137 (3.3%) n

Loveland 111 103 112 (6.9%) n

Energy sales (MWh) 249,184 259,864 4.3% l

Estes Park 11,623 13,231 13.8% l

Fort Collins 118,669 122,840 3.5% l

Longmont 62,090 66,387 6.9% l

Loveland 56,803 57,405 1.1% u

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

Municipal demand came in below budget for the month, while energy came in above

budget due to below average temperatures throughout the month. Demand is well below

budget while energy is at budget, year to date.

Actual variance

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

actual metered demand or the annual minimum rachet.

Estes Park

13,231

Fort Collins122,840

Longmont66,387

Loveland57,405

Actual February energy sales = 259,864 MWh

Estes Park24

Fort Collins

217Longmont

118

Loveland100

Actual February coincident demand = 459

MW

Estes Park24

Fort Collins

217Longmont

119

Loveland103

Actual February non-coincident demand = 463

MW


Source of supply variance

Overall resources came in above budget for the month, primarily due to above budget JDA purchases,

despite having been partially offset by below budget coal, bilateral purchases and shaft sharing. Year to date,

resources are below budget.

February variance in production from energy resources

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

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


Source of delivery variance

Loads and obligations came in above budget for the month, due to municipal energy having come in above

budget, despite having been partially offset by below budget surplus sales, including JDA, contract and short-

term sales, as well as below budget shaft sharing. Year to date, loads and obligations remain below budget.

February variance in deliveries for loads and obligations

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


Power generation - Rawhide

Rawhide had a good operational month, with only one runback and a minor curtailment. Equivalent

availability factor came in above budget, while net capacity factor came in slightly above budget for the

month. Year to date, equivalent availability remains above budget while net capacity factor remains below

budget.

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

84.70% 88.60%85.70% 83.50%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

February YTD

Net capacity factor

Budget Actual

97.00% 97.00%99.75% 99.87%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

February YTD

Equivalent availability factor

Budget Actual

0.0087 0.00870.0062 0.0064

0.000

0.002

0.004

0.006

0.008

0.010

0.012

0.014

February YTD

Hg (lb/GWh)

Limit Actual

0.1450 0.14500.1130 0.1140

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

February YTD

NOx (lb/MBtu)

Limit Actual

0.0900 0.09000.0610 0.0700

0.00

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.10

February YTD

SO2 (lb/MBtu)

Limit Actual


Power generation - Craig

The Craig units ran exceptionally well during the month of February, with no unplanned outages, although

both units had minor curtailments for testing and Craig Unit 1 remained curtailed, due to a feedwater heater

tube leak which is scheduled for repair in March. Craig equivalent availability factor came in above budget,

while net capacity factor came in well below budget for the month. Year to date, equivalent availability

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

95.00% 95.00%97.10% 96.10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

February YTD

Equivalent availability factor

Budget Actual

66.60% 69.20%42.40% 40.00%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

February YTD

Net capacity factor

Budget Actual


Power generation - CTs

The CTs were run in February for validation testing and to serve shaft sharing obligation. Year to date, CT

generation is above budget as a result of testing requirements.

$0.00 $0.00$2.57 $2.62

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

February YTD

$/MBtuNatural gas pricing

Budget Actual

2020 annual budgeted pricing = $2.74/MBtu

0.00 0.00582.00 682.00

0

100

200

300

400

500

600

700

800

February YTD

MWh CT generation

Budget Actual


Power generation - renewables serving load

Wind and solar generation came in above budget for the month but remain below budget, year to date.

3.23 7.013.60 6.82

-

2

4

6

8

10

12

14

16

18

20

February YTD

MWh(000s)

Solar generation

22.02 24.62

-

10

20

30

40

50

60

70

80

90

100

Februarybudget

Februaryactual

MWh(000s)

55.51 52.56

-

10

20

30

40

50

60

70

80

90

100

YTDbudget

YTDactual

MWh(000s)

Wind generation

n Budget n Actual n Budget n Actual

February 2020 Operating report Page 8

Market sales

Surplus sales volume came in below budget for the month of February, due to contract, JDA and short-term

sales all having come in below budget. Pricing also came in slightly below budget. Volume remains below

budget and pricing remains slightly below budget, year to date.

Market purchases

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

dispatched down in order to purchase JDA energy at prices which often fell below our generating costs. Year

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

$13.43 $12.98

$0

$5

$10

$15

$20

$25

$30

$35

$40

Februarybudget

Februaryactual

$/MWh

$14.27 $12.08

$0

$5

$10

$15

$20

$25

$30

$35

$40

YTDbudget

YTDactual

$/MWh

Average purchase price

10,775

1,493

16,979

50,554

-

10,000

20,000

30,000

40,000

50,000

60,000

Februarybudget

Februaryactual

MWh

14,779 1,790

38,099

124,145

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

YTDbudget

YTDactual

Th

ou

sa

nd

s

MWh

Energy purchases

n Budget n Actual n JDA

$24.83 $24.65

$0

$5

$10

$15

$20

$25

$30

$35

$40

Februarybudget

Februaryactual

$/MWh

$25.02 $24.87

$0

$5

$10

$15

$20

$25

$30

$35

$40

YTDbudget

YTDactual

$/MWhAverage sales price

n Budget n Actual

52.66 46.81

1.41

0.48

38.16

36.95

-

20

40

60

80

100

120

Februarybudget

Februaryactual

MWh(000s)

121.52 113.01

5.310.85

80.03

77.80

-

50

100

150

200

250

YTDbudget

YTDactual

MWh (000s)

Sales volume

n Budget n Actual n JDA n Contract

n Budget n Actual


Dispatch cost

Dispatch costs came in below budget for the month of February, mainly due to below budget JDA purchase

costs and wind generation costs, though partially offset by above budget Craig costs which were attributed to

below budget generation. Year to date, dispatch costs remain below budget.

$25.95 $31.90 $27.20 $32.07 $12.30 $13.80 $47.84 $54.76 $0.00$25.62 $40.69 $27.20 $32.07 $24.50 $12.63 $46.38 $54.63 $51.59

$0

$10

$20

$30

$40

$50

$60

Rawhide Craig CRSP LAP Purchases JDApurchases

Wind* Rawhidesolar

CTs

$/M

Wh

February resource cost

Budget Actual Blended Actual

$25.39 $30.69 $26.46 $30.14 $13.61 $14.25 $45.02 $54.66 $0.00$25.74 $40.76 $26.46 $30.14 $23.72 $11.90 $45.89 $54.69 $53.40

$0

$10

$20

$30

$40

$50

$60

$70

Rawhide Craig CRSP LAP Purchases JDApurchases

Wind* Rawhidesolar

CTs

$/M

Wh

YTD resource cost

Budget Actual Blended Actual

Blended budget: $29.49 | Blended actual: $28.69

YTD blended budget: $28.60 | YTD blended actual: $27.90

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


Power delivery

Major system operations projects benefitting the municipalities:

Estimated finish date Status Description

April 2020 98% completeHarmony circuit breaker replacements and

circuit switcher additions, T1 and T3

December 2020 18% completeCounty Line Substation, T3 transformer

addition for Longmont

June 2020 45% complete Roundhouse 230kV wind bay addition

June 2020 50% complete22 MW Rawhide Prairie Solar 34 kV feeder

breaker 302 addition

Events of significance

•

•

•

The relay upgrade at the Longs Peak and Boyd substations for Tri-State’s new Gateway Substation is

complete.

The remaining staff in the electric operations building was successfully moved into the new

headquarters building, Feb. 21-23.

Longmont

Fort Collins

Location

Community invoicing was successfully transitioned to the accounting and finance department for

monthly processing.

Rawhide

Rawhide


Financial reportFebruary 2020

Page 2 of 15

Financial highlights year-to-date

Key budget variances year-to-date

Platte River reported favorable results year to date. Net income of $5 million was favorable by $2.3 million compared to budget due to below-budget expenses partially offset by below-budget revenues.

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

Total revenuesSales for resale - short-term were below budget $0.4 million primarily due to 10.2% below-budget energy or $0.3 million of the variance. Average price was also 2.5% below budget or $0.1 million of the variance.Interest and other income was above budget $0.1 million due to an unbudgeted tower lease and higher interest income.

Total operating expensesFuel expenses were $1.4 million below budget.

Rawhide Unit 1 21% of the overall variance, $0.3 million below budget. Generation was below budget due to operating at lower loads to take advantage of lower cost energy under the joint dispatch agreement.Craig units 79% of the overall variance, $1.1 million below budget. Generation was below budget due to operating at lower loads to take advantage of lower cost energy under the joint dispatch agreement.

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

Net income 1.1$ 2.6$ 1.5$ 136.4% 2.7$ 5.0$ 2.3$ 85.2% 17.2$

Fixed obligation charge coverage 2.31x 2.96x .65x 28.1% 2.46x 2.95x .49x 19.9% 2.17x

Budget results

Total revenues 18.1$ 18.4$ 0.3$ 1.7% 38.1$ 37.8$ (0.3)$ (0.8%) 240.5$

Sales to owner communities 15.0 15.5 0.5 3.3% 31.4 31.4 0.0 0.0% 198.7

Sales for resale - contract 1.0 1.0 0.0 0.0% 2.0 2.0 0.0 0.0% 14.4

Sales for resale - short-term 1.3 1.1 (0.2) (15.4%) 3.1 2.7 (0.4) (12.9%) 17.6

Wheeling 0.5 0.5 0.0 0.0% 1.0 1.0 0.0 0.0% 5.9

Interest and other income 0.3 0.3 0.0 0.0% 0.6 0.7 0.1 16.7% 3.9

Total operating expenses 14.6$ 13.8$ 0.8$ 5.5% 30.6$ 28.6$ 2.0$ 6.5% 190.3$

Purchased power 3.2 3.6 (0.4) (12.5%) 7.0 7.6 (0.6) (8.6%) 44.6

Fuel 3.6 3.2 0.4 11.1% 7.8 6.4 1.4 17.9% 45.9

Production 3.9 3.7 0.2 5.1% 7.6 7.4 0.2 2.6% 47.9

Transmission 1.3 1.2 0.1 7.7% 3.1 3.0 0.1 3.2% 17.3

Administrative and general 1.9 1.6 0.3 15.8% 3.7 3.1 0.6 16.2% 22.4

Distributed energy resources 0.7 0.5 0.2 28.6% 1.4 1.1 0.3 21.4% 12.2

Capital additions 2.3$ 0.9$ 1.4$ 60.9% 7.6$ 4.3$ 3.3$ 43.4% 72.8$

February Favorable(unfavorable)

Year to date Favorable(unfavorable)

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

Page 3 of 15

Purchased power expenses were above budget $0.6 million. Purchases were madeunder the joint dispatch agreement because of favorable pricing, which replaced base loadgeneration. Reserves were below budget due to holding more reserves on Craig thananticipated, which partially offset the additional purchases.

Other financial informationDebt - The table below shows current debt outstanding. The remaining outstanding principal for Series II and JJ represents debt associated with the Rawhide Energy Station ($25.6 million) and transmission assets ($143.8 million). Principal and interest payments are made June 1 and interest only payments are made Dec. 1.

Capital additions (year-end estimates as of February 2020)The projects listed below are projected to end the year with a budget variance of more than $100,000. In addition, the amounts below are costs for 2020 and may not represent the total cost of the project. Further changes to capital projections are anticipated and staff will continue to monitor spending estimates to ensure capital projects are appropriately funded.

Distributed energy resources program expenses were $0.3 million below budget primarily due to the unpredictability of the completion of customers' energy efficiency projects.

Several expenses were below budget due to timing of expenses or expenses not being required at this time. The net impact was approximately $0.9 million below budget. The below-budget expenses include: 1) non-routine projects, 2) software purchases and maintenance, 3) information technology outsourcing, 4) integrated resource plan studies and 5) other smaller projects. Expenses above budget due to timing of expenses include annual membership fees and maintenance support agreements.

Series

Debt outstanding $/thousands

Par issued $/thousands

True interest

costMaturity

dateCallable

date Purpose

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

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

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

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

Total par outstanding 169,425

Unamortized bond premium 21,787

Total revenue bonds outstanding

191,212

Less: due within one year (10,310)

Total long-term debt, net $ 180,902

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

Page 4 of 15

Project ($ in thousands) Budget EstimateFavorable

(unfavorable) Carryover

request

Below budget projects** Monofill upgrades - Rawhide - This project will be below

budget due to a delay of the design approval by the Colorado Department of Public Health & Environment. The project is expected to be complete in spring 2021. The below-budget funds will be requested to be carried over into 2021. 6,556$ 1,000$ 5,556$ 5,556$ Headquarters campus - This project will be below budget due to timing of costs. A portion of construction costs occurred in 2019 rather than 2020 as originally budgeted. The increased spending in 2019 reduced the estimated costs for 2020 keeping the total project cost estimate the same. 3,419$ 2,765$ 654$ -$

* Project details or amounts have changed since last report.

** Project is new to the report.

Page 5 of 15

Page 6 of 15

Budget schedules

Page 7 of 15

February 2020Non-GAAP budgetary basis (in thousands)

Favorable

Budget Actual (unfavorable)

Revenues

Operating revenues

Sales to owner communities 15,033$ 15,485$ 452$

Sales for resale - contract 981 967 (14)

Sales for resale - short-term 1,309 1,110 (199)

Wheeling 489 479 (10)

Total operating revenues 17,812 18,041 229

Other revenues

Interest income(1) 263 280 17

Other income 11 74 63

Total other revenues 274 354 80

Total revenues 18,086$ 18,395$ 309$

Expenditures

Operating expenses

Purchased power 3,194$ 3,542$ (348)$

Fuel 3,637 3,244 393

Production 3,840 3,691 149

Transmission 1,326 1,231 95

Administrative and general 1,834 1,576 258

Distributed energy resources 740 533 207

Total operating expenses 14,571 13,817 754

Capital additions

Production 482 120 362

Transmission 189 73 116

General 1,622 735 887

Total capital additions 2,293 928 1,365

Debt expense

Principal 859 859 -

Interest expense 660 660 -

Total debt expense 1,519 1,519 -

Total expenditures 18,383$ 16,264$ 2,119$

Revenues less expenditures (297)$ 2,131$ 2,428$

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

Month of February

Schedule of revenues and expenditures, budget to actual

Page 8 of 15

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

Favorable Annual

Budget Actual (unfavorable) budget

Revenues

Operating revenues

Sales to owner communities 31,431$ 31,394$ (37)$ 198,688$

Sales for resale - contract 2,051 2,031 (20) 14,454

Sales for resale - short-term 3,126 2,735 (391) 17,607

Wheeling 971 959 (12) 5,918

Total operating revenues 37,579 37,119 (460) 236,667

Other revenues

Interest income(1) 528 567 39 3,825

Other income 7 99 92 38

Total other revenues 535 666 131 3,863

Total revenues 38,114$ 37,785$ (329)$ 240,530$

Expenditures

Operating expenses

Purchased power 6,976$ 7,599$ (623)$ 44,599$

Fuel 7,838 6,466 1,372 45,953

Production 7,607 7,412 195 47,888

Transmission 3,111 2,984 127 17,284

Administrative and general 3,714 3,129 585 22,446

Distributed energy resources 1,404 1,055 349 12,163

Total operating expenses 30,650 28,645 2,005 190,333

Capital additions

Production 2,874 2,329 545 34,089

Transmission 680 434 246 25,340

General 4,065 1,540 2,525 13,345

Total capital additions 7,619 4,303 3,316 72,774

Debt expense

Principal 1,718 1,718 - 11,713

Interest expense 1,320 1,320 - 11,397

Total debt expense 3,038 3,038 - 23,110

Total expenditures 41,307$ 35,986$ 5,321$ 286,217$

Contingency reserved to board - - - 26,000

Total expenditures 41,307$ 35,986$ 5,321$ 312,217$

Revenues less expenditures (3,193)$ 1,799$ 4,992$ (71,687)$


February year to date

Schedule of revenues and expenditures, budget to actual

Page 9 of 15

Page 10 of 15

Financial statements

Page 11 of 15

Unaudited (in thousands)

2020 2019AssetsElectric utility plant, at original cost

Land and land rights 16,997$ 16,997$

Plant and equipment in service 1,375,145 1,342,987

Less: accumulated depreciation and amortization (891,999) (890,948)

Plant in service, net 500,143 469,036

Construction work in progress 86,651 94,732

Total electric utility plant 586,794 563,768

Special funds and investmentsRestricted funds and investments 21,876 21,697

Dedicated funds and investments 91,409 99,033

Total special funds and investments 113,285 120,730

Current assetsCash and cash equivalents 35,448 27,217

Other temporary investments 35,441 33,607

Accounts receivable - owner communities 15,463 14,980

Accounts receivable - other 6,030 7,372

Fuel inventory, at last-in, first-out cost 15,450 16,813

Materials and supplies inventory, at average cost 15,107 14,576

Prepayments and other assets 2,721 3,139

Total current assets 125,660 117,704

Noncurrent assetsRegulatory assets 13,820 11,564

Other long-term assets 14 -

Total noncurrent assets 13,834 11,564

Total assets 839,573 813,766 Deferred outflows of resources

Deferred loss on debt refundings 5,881 7,019

Pension deferrals 1,769 10,356

Asset retirement obligations 23,740 23,818

Total deferred outflows of resources 31,390 41,193 LiabilitiesNoncurrent liabilities

Long-term debt, net 180,902 194,568

Net pension liability 18,679 24,071

Asset retirement obligations 28,635 29,509

Other liabilities and credits 6,913 5,913

Total noncurrent liabilities 235,129 254,061 Current liabilities

Current maturities of long-term debt 10,310 10,335

Current portion of asset retirement obligations 1,886 -

Accounts payable 14,038 17,765

Accrued interest 1,979 2,107

Accrued liabilities and other 2,417 2,022

Total current liabilities 30,630 32,229

Total liabilities 265,759 286,290

Deferred inflows of resourcesRegulatory credits 6,579 2,177

Pension deferrals 69 256

Total deferred inflows of resources 6,648 2,433 Net position

Net investment in capital assets 398,556 358,371

Restricted 19,896 19,591

Unrestricted 180,104 188,274

Total net position 598,556$ 566,236$

Statements of net position

February 29

Note: Certain prior year line items have been reclassified and/or restated to conform with GASB pronouncements.

Page 12 of 15


Twelve months endedMonth of February 29February 2020 2019

Operating revenuesSales to owner communities 15,485$ 198,557$ 196,514$ Sales for resale 2,077 23,670 23,300

Wheeling 479 5,758 5,391

Total operating revenues 18,041 227,985 225,205

Operating expensesPurchased power 3,542 38,361 42,699 Fuel 3,244 44,449 41,474 Operations and maintenance 4,977 61,531 55,993 Administrative and general 1,604 19,368 17,550 Distributed energy resources 536 9,567 8,040

Depreciation and amortization 1,983 22,342 22,758

Total operating expenses 15,886 195,618 188,514

Operating income 2,155 32,367 36,691

Nonoperating revenues (expenses)Interest income 271 3,564 3,195 Other income 74 429 487 Interest expense (660) (8,044) (8,608) Amortization of bond financing costs 171 2,143 2,204 Allowance for funds used during construction - - 712

Net increase in fair value of investments 559 1,861 711

Total nonoperating revenues (expenses) 415 (47) (1,299)

Income before contributions 2,570 32,320 35,392

Contribution of assets to owner communities - - (137)

Change in net position 2,570 32,320 35,255

Net position at beginning of period 595,986 566,236 530,981

Net position at end of period 598,556$ 598,556$ 566,236$

net positionStatements of revenues, expenses and changes in


Page 13 of 15


Month ofFebruary 2020 2019

Cash flows from operating activitiesReceipts from customers 19,446$ 228,434$ 223,193$ Payments for operating goods and services (9,990) (124,560) (140,595)

Payments for employee services (3,698) (39,810) (38,489)

Net cash provided by operating activities 5,758 64,064 44,109

Cash flows from capital and related financing activities

Reductions/(additions) to electric utility plant 1,980 (41,464) (61,875) Payments from accounts payable incurred for electric utility plant additions (2,640) (7,513) (1,706) Proceeds from disposal of electric utility plant - 251 37,125 Principal payments on long-term debt - (10,335) (14,580)

Interest payments on long-term debt - (8,172) (8,790)

Net cash used in capital and related financing activities (660) (67,233) (49,826)

Cash flows from investing activities

Purchases and sales of temporary and restricted investments, net 8,505 7,449 6,467 Interest and other income, including realized gains and losses 349 3,951 3,615

Net cash provided by investing activities 8,854 11,400 10,082

Increase in cash and cash equivalents 13,952 8,231 4,365

Balance at beginning of period in cash and cash equivalents 21,496 27,217 22,852

Balance at end of period in cash and cash equivalents 35,448$ 35,448$ 27,217$

Reconciliation of net operating income to net cash

provided by operating activitiesOperating income 2,155$ 32,367$ 36,691$

Adjustments to reconcile operating income to net cash provided by operating activities

Depreciation and amortization 1,919 21,096 21,193 Changes in assets and liabilities which provided/(used) cash

Accounts receivable 1,392 859 (2,576) Fuel and materials and supplies inventories 151 832 (2,888) Prepayments and other assets 245 (1,927) (1,867) Deferred outflows of resources 63 8,665 (25,071) Accounts payable (461) 877 (2,019) Net pension liability - (5,392) 10,964 Asset retirement obligations - 1,012 29,510 Other liabilities (99) 1,461 (10,120)

Deferred inflows of resources 393 4,214 (9,708)

Net cash provided by operating activities 5,758$ 64,064$ 44,109$


Twelve months endedFebruary 29

Statements of cash flows

Page 14 of 15


Twelve months endedMonth of February 29February 2020 2019

Net revenuesOperating revenues 18,041$ 227,985$ 225,205$ Operations and maintenance expenses,

excluding depreciation and amortization 13,903 173,276 165,756

Net operating revenues 4,138 54,709 59,449 Plus interest income on bond accounts

and other income (1) 354 4,017 3,681

Net revenues before rate stabilization 4,492 58,726 63,130 Rate stabilization

Deposits - - -

Withdrawals - - -

Total net revenues 4,492$ 58,726$ 63,130$

Bond servicePower revenue bonds 1,519$ 18,360$ 20,005$

Allowance for funds used during construction - - (712)

Net revenue bond service 1,519$ 18,360$ 19,293$

CoverageFixed obligation charge coverage ratio 2.96 3.20 3.27



Schedule of net revenues for debt service

Page 15 of 15

FEBRUARY 2020 GENERAL MANAGEMENT REPORT BUSINESS STRATEGIES Communications and marketing. Staff continued collaboration and planning for the IRP community focus group sessions, facilitated by CSU’s Center for Public Deliberation, which was held in early March. A second statistically valid survey of business and residential customers from the owner communities will take place during the same time period. Results from both will be provided to leadership and the board. Staff facilitated an interview between the Fort Collins Coloradoan and Jason Frisbie concerning the progress Platte River has made toward achieving the 100% noncarbon goal by 2030, established by the board in late 2018. Combined with information posted in advance of the board meeting, the resulting story appeared on the front page of the Feb. 27 edition. A secondary story from the board meeting was posted on the newspaper’s website on Feb. 28. Regular monthly publications were produced and distributed to Platte River employees and included information about annual employee awards, participation in the National Western Stock Show and safety tips. Other internal communications covered issues associated with the headquarters move, IRP focus group sessions and cybersecurity training. Headquarters. Staff finalized vinyl artwork for the entry halls in the new headquarters campus featuring Platte River’s owner communities, mission, vision and values. Staff collaborated with utility communications staff to select historical images of each owner community for the entry wall outside the board room. The artwork is scheduled to be installed in mid-March. Staff also investigated software programs that will be used to drive public and employee communication through various monitors found throughout the new building.

Community and government affairs. Staff continues to build and fortify relationships with stakeholders by expanding engagement with community partners and organizations.

• 2/5-7 East Meets West conference • 2/11 Colorado Chamber Government Affairs Council meeting • 2/12 Meeting with Kevin Jones, Fort Collins Chamber • 2/13 Fort Collins Energy Board meeting • 2/20 Elected officials tour at Rawhide • 2/21 Meeting with Lucas McConnell, Xcel Energy • 2/24-26 APPA Legislative Rally in Washington, DC • 2/25 Meeting with Sanjana Puskoor and Austin McCleary (Senator Bennett’s office) • 2/25 Meeting with Dustin Sheerer (Senator Gardner’s office) • 2/25 Meeting with Nikki Roy (Congresswoman DeGette’s office) • 2/26 Meeting with Abbie Calahan (Congressman Neguse’s office) • 2/29 Coffee with Council (Longmont) – Council Members Tim Waters & Aren Rodriguez

Platte River Power Authority 2 February 2020 Management Report

Human Resources. Staff attended career fairs at Colorado State University and University of Northern Colorado focusing on recruitment for engineering, accounting and internship positions. Staff conducted a crucial conversations leadership session at quarterly manager’s meeting. Safety. There were no recordable injuries for February. Received new fire extinguisher training device, which allows for portable, easy-to-use trainings with employees. Updated hearing booth and health testing process with UCHealth. The updated process reduced testing cost by $5,000 compared to the cost of the 2019 process. Injury statistics 2018

Year end 2019 Year end

YTD through Feb. 2019

YTD through Feb. 2020

Recordable injury rate 1.67 .85 0.00 0.00 DART 0.00 0.00 0.00 0.00 Lost time rate 0.00 0.00 0.00 0.00

ERT. Final inspection for engine 12 replacement was completed. The new truck is scheduled for delivery mid-March. Three staff attended training for ERT positions at Aims Community College. HQ construction project. No lost time injuries reported in February. Initiated review of new evacuation procedures with departments in preparation for move in March. Energy efficiency (EE) programs. A total of $13.7 million has been budgeted by Platte River and the owner communities, consisting of approximately $12.2 million in program spending for rebates, assessments and contracted services and $1.5 million for Platte River to administer the programs. Platte River is expected to provide $10.9 million and the owner communities will provide $2.8 million to fund the Efficiency Works programs. Our goal is to achieve 28,500 MWh energy savings with Platte River funding and as much as 5,500 MWh additional with the owner community funding for a total energy savings of 34,000 MWh. As of the end of February, Efficiency Works programs have achieved energy savings of 3,200 MWh and have spent nearly $1.1 million on programs, including administration costs. We have committed $6.8 million in funding, including the $1.1 million spent, for specific customer projects and program administration. The Efficiency Works Business program has experienced above average participation for the past three months. However, we are beginning to hear concerns from vendors that supply chain disruptions due to COVID-19 are leading to uncertainty regarding future deliveries of equipment needed for efficiency upgrades. We will continue to monitor the situation and look for other ways to promote energy savings. FINANCIAL AND INFORMATION TECHNOLOGY SERVICES Rating update. Fitch Ratings has finished conducting a ratings assessment of Platte River. On March 16, Fitch Ratings released their report, affirming Platte River’s AA credit rating, with a stable outlook. The report highlights that the rating reflects strong revenue defensibility, a sound contractual framework with members and strong credit quality of members. In addition,


they reference Platte River’s low operating costs and very strong financial profile. An area of concern noted in the report is the projection for increasing nonmember sales for resale, which Fitch Ratings views as a more variable revenue stream. Insurance renewals. The auto liability insurance policy with the Philadelphia Indemnity Insurance Company renewed for the policy period of March 1, 2020, to March 1, 2021. The auto liability policy has a $500 deductible and $1 million limit of liability.

The directors and officers (D&O) liability policy renewed with Zurich American Insurance Company for the policy period of March 17, 2020, to March 17, 2021. The D&O liability policy has a $100 thousand per occurrence deductible and a combined aggregate limit of liability of $10 million.

The commercial crime policy renewed with Travelers for the policy period of March 17, 2020, to March 17, 2021. The commercial crime policy has a $25 thousand per occurrence deductible and an aggregate of $2 million.

The fiduciary liability insurance policy renewed with Travelers for the policy period of March 17, 2020, to March 17, 2021. The fiduciary liability policy has no deductible and has an aggregate of $5 million. The Information Security and Data Privacy policy renewed with Lloyd’s of London syndicates for the policy period of March 19, 2020, to March 19, 2021. The Information Security and Data Privacy policy provides coverage for cyber related events impacting both Platte River operations and third parties. The cyber policy has a $500 thousand deductible and $50 million limit of liability.

2021 budget preparation. Platte River’s 2021 budget process has begun. We continually look for ways to improve the existing process and to improve work planning and budgeting by better aligning scope, schedules and available resources. Staff received instructions on forms, processes and procedures to facilitate departmental budget preparation. Below is a condensed schedule to show the overall budget process.

March to May Kickoff presentations and preparation of budget details by departments

June Data compilation and reporting July Senior management and GM/CEO budget review August Refine budget and document preparation September Budget work session with board October Public hearing and board review of budget modifications November Prepare final budget document December Final budget review with board and request adoption

2019 financial audit. Between Feb. 24, 2020 and March 12, 2020, staff from BKD, LLP, were onsite for audit fieldwork. Platte River staff prepared audit schedules and were available to


respond to audit inquiries. Jodie Cates from BKD, LLP, will present the results of the audit at the April 2020 board meeting. The net pension liability was updated for 2019 based on the actuary report. As a result of a gain in the market value of assets, the liability has decreased $5.4 million to $18.7 million. The average rate of return was 13.5% compared to the assumed rate of 7.5%. Two accounting pronouncements will impact the financial statements as described below.

• GASB 83 Certain Asset Retirement Obligations was implemented in 2019. The primary objective of this statement is to establish criteria for determining the timing and pattern of recognition of a liability for a legal obligation to perform future asset retirement activities. Specifically, it imposes requirements on the liability recognition, measurement and if/when subsequent re-measurement should occur. The amount is recorded as a liability and a deferred outflow of resources. The amount is adjusted annually for inflation and the deferred outflow of resources is expensed over the life of the related asset. As a result of this statement, a decommissioning study for the Rawhide Energy Station was completed to comply with a contract obligation with Larimer County that states if energy is no longer produced at the site, decommissioning of the facility would be required. Decommissioning costs related to impoundments at the Craig Station and the Rawhide Energy Station and the reclamation costs of the Trapper Mine were also included in this statement. This will result in an adoption of a change in accounting principle and restating Platte River’s 2018 financial statements impacting the statement of net position and the statements of revenues, expenses and changes in net position.

• GASB 89 Accounting for Interest Cost Incurred before the end of a Construction Period was early adopted in 2019. Interest costs are no longer required to be allocated to capital projects. This pronouncement is applied prospectively.

Enterprise resource planning (ERP) project update. Platte River has identified an actionable ERP strategy and will review three ERP software solutions in April. The solution will allow Platte River staff to gain efficiencies, automate routine manual processes and view actionable data in real-time. The solution will replace our existing human resources, finance and asset management point solutions. The project team has identified dedicated implementation team members and is working through additional staffing needs. It is too early in the process to bring forward estimated costs, but we will provide the board budgetary implications once a solution is selected. Headquarters campus project. Employees that were in the old engineering and operations building moved into the new building in late February. This move went very well, and we are now in the process of getting a demolition permit for the building. Our general contractor has been working to finish the ceilings and main forum space that needed to be reworked after letting a contractor go in early December. This work has been completed ahead of the revised schedule and moved the remaining employees into the building in mid-March. Moving the remaining employees into the building is a large milestone in the project and we can now move towards completing the main scope and start to shift our focus to the construction of the Energy Engagement Center (EEC). We will start the process of demolishing the old


headquarters building which we anticipate being done by early May and plan to start construction of the EEC directly after that. Staff is working to gather the final numbers for the construction of the EEC and have a gross max price by the end of March. OPERATIONS Fuels and water. Throughout the winter and into spring, Platte River staff monitors conditions on both the east and west slope to ensure sufficient water supplies for Rawhide operations. On the east slope, precipitation and drought conditions in the Cache la Poudre and South Platte River basins dictate Platte River’s ability to utilize its Cache la Poudre water rights. Thus far, in the 2020 water year, Platte River has been able to maintain a steady supply of cooling water to Rawhide, thanks to a healthy amount of winter precipitation and a corresponding lack of significant drought in the region (see image). This is especially helpful during periods of Windy Gap Short operations, which is the current mode of operation between Platte River and the City of Fort Collins. On the west slope, a combination of snowpack conditions in the Upper Colorado River basin and the storage level in Granby Reservoir determine the potential for Windy Gap pumping and C-BT system storage availability. Current snowpack levels indicate a slightly above average runoff season in 2020; however, since Granby Reservoir is currently 15% above 2019 storage levels, it is expected to spill in the spring and have no space for Windy Gap water storage. This lack of storage availability will likely prevent Windy Gap pumping, despite the availability of water in the system. By providing a dedicated storage reservoir, the Windy Gap Firming Project will enable the Windy Gap Project to pump more regularly and provide water security for Platte River and other project participants. The Windy Gap Firming Project continues to progress through the pre-construction phase. The general contractor, Barnard Construction, has begun the project submittal process which will require the review and approval of hundreds of documents. On average, Black & Veatch, the project construction management firm, will process 20-30 submittals per week, as the project team advances toward the construction phase. Additionally, certain long lead time items require approval well in advance of their incorporation into the project in order to allow for timely fabrication and delivery to the site. Although we are currently awaiting the resolution of the pending federal litigation, construction is anticipated to begin in the second half of 2020 and is estimated to last approximately four years.

2020 solar RFP. Platte River recently executed a non-binding term sheet with the preferred developer for the 50-150 MW utility scale solar project and negotiations of the key terms to be included in the power purchase agreement between the parties has begun. Rawhide Prairie Solar Project. The module frames which support the solar panels and the actuation devices which rotate the panels are currently being installed. Electrical cabling and

Colorado drought conditions, March 11, 2020


combiner boxes, which combine the output of several solar panels together, are also being installed. Platte River equipment upgrades and trenching work will begin in late March.

Project Schedule Transformer testing

May

Functional and performance testing

June

Mechanical completion milestone

July 31

Commissioning

Aug 28

Commercial operation date

Sept 5

NextEra generator outlet and Roundhouse wind project status. The construction of the Roundhouse wind project is progressing successfully, and is estimated for completion by the summer of 2020.

Project Status Transmission pole installation

100% complete

19.5-mile generator outlet line construction from the Roundhouse wind project to the Rawhide Substation

80% complete

Roundhouse Substation

50% complete

Wind tower installation

34% complete

Wind turbine component deliveries

85% complete

On-site road construction

85% complete

2020 Integrated Resource Plan (IRP). The preliminary IRP results were presented to the board at the February board meeting. Staff is currently working to refine the preliminary results and to finalize the IRP document for presentation to the senior management team by the end of March. The IRP analysis and document will be refined using feedback from the board, the senior management team and the recent community focus group sessions. Staff will be providing a recommendation to the board for consideration at the April board meeting.

Resource planning. Staff has implemented a major initiative in developing analytical tools and reports to better support the operations team in managing the Roundhouse wind generation which is expected to go live by the summer of 2020. These predictive and reporting tools will help improve decision making for monetizing Platte River’s investments in intermittent wind resources and participation in JDA.

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