CONTINUING DISCLOSURE REPORT POWER PROJECT REVENUE BONDS Dogwood Generating Facility Project Fredericktown Energy Center Project Iatan Unit 2 Project Plum Point Project Prairie State Project FISCAL YEAR ENDING December 31, 2018 Prepared by: Michael J. Loethen Chief Financial Officer & Vice President of Administrative Services Updated May 31, 2019 This Continuing Disclosure Report (the “Report”) provides information and updates pertaining to certain MJMEUC projects that have been financed with bonds and is not intended to be an all-inclusive report regarding MJMEUC’s operations or financial position. This Report is delivered as required by MJMEUC pursuant to continuing disclosure undertakings entered into in connection with the issuance of its Power Project Revenue Bonds, and pursuant to Rule 15c2- 12 of the Securities and Exchange Commission. Nothing contained in the undertaking or this document shall be deemed to be a representation by MJMEUC that the financial information and operating data included in this Report constitutes all of the information that may be material to a decision to invest in, hold or sell any securities of MJMEUC. The financial data and operating data presented in this document are as of the dates shown. Under the terms of MJMEUC’s CONTINUING DISCLOSURE AGREEMENT, the Report is to be disseminated to the MSRB via EMMA not later than 5 months after the end of each of MJMEUC’s fiscal year (currently, by May 31). MJMEUC members’ audits required by this Report will be disseminated in conjunction with this Report or as soon as received.
Transcript
CONTINUING DISCLOSURE REPORT POWER PROJECT REVENUE BONDS
Dogwood Generating Facility Project
Fredericktown Energy Center Project
Iatan Unit 2 Project
Plum Point Project
Prairie State Project
FISCAL YEAR ENDING December 31, 2018
Prepared by:
Michael J. Loethen Chief Financial Officer & Vice President of Administrative Services
Updated May 31, 2019 This Continuing Disclosure Report (the “Report”) provides information and updates pertaining to certain MJMEUC projects that have been financed with bonds and is not intended to be an all-inclusive report regarding MJMEUC’s operations or financial position. This Report is delivered as required by MJMEUC pursuant to continuing disclosure undertakings entered into in connection with the issuance of its Power Project Revenue Bonds, and pursuant to Rule 15c2-12 of the Securities and Exchange Commission. Nothing contained in the undertaking or this document shall be deemed to be a representation by MJMEUC that the financial information and operating data included in this Report constitutes all of the information that may be material to a decision to invest in, hold or sell any securities of MJMEUC. The financial data and operating data presented in this document are as of the dates shown.
Under the terms of MJMEUC’s CONTINUING DISCLOSURE AGREEMENT, the Report is to be disseminated to the MSRB via EMMA not later than 5 months after the end of each of MJMEUC’s fiscal year (currently, by May 31). MJMEUC members’ audits required by this Report will be disseminated in conjunction with this Report or as soon as received.
Contents
Officers & Management Information ................................................................................. 2
Chair, Budget & Finance Committee ............................................. Richard Shockley
Chair, Power Contract Cities Committee ....................................... Chad Davis
Chair, MISO Committee ................................................................. Tad Johnsen
Chair, SPP Committee .................................................................... Steve Stodden
Member at Large............................................................................. Skip Schaller
Immediate Past Chair ...................................................................... Chuck Bryant
MJMEUC Management
President, Chief Executive Officer, and General Manager......... Duncan Kincheloe
Senior Vice President and Associate General Manager ............. Eve Lissik
Chief Operating Officer and Vice President of Engineering, Operations and Power Supply ................................................
John Grotzinger
Chief Financial Officer and Vice President of Administrative Services ..................................................................................
Michael J. Loethen
Financial Advisor
Ramirez & Co., Inc. New York, New York
Bond Counsel Trustee, Bond Registrar and Paying Agent Gilmore & Bell, P.C. Kansas City, Missouri
The Bank of New York Mellon Trust Company, N.A. Jacksonville, Florida
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Introduction
MJMEUC
The Missouri Joint Municipal Electric Utility Commission, (“MJMEUC”), a body public and corporate of the State of Missouri, was created by contract as of May 1, 1979 (the “Joint Contract”) for the purpose of permitting cities, incorporated towns and villages of the State of Missouri that own and operate retail electric utility systems and that become parties to such contract (the “Contracting Municipalities” or the “Members”) to secure, by joint action among themselves, or by contract with other utilities, an adequate, reliable and economical supply of electric power and energy. The Joint Contract was entered into pursuant to the Joint Municipal Utility Commission Act, Sections 393.700 to 393.770, Revised Statutes of Missouri, as amended (the “Act”). Under the Act, MJMEUC may construct, operate and maintain jointly owned generation, transmission and distribution facilities and related resources for the benefit of its Members. MJMEUC has the authority to enter into contracts for power supply, transmission service, and other services necessary for the operation of an electric utility. Established by six charter Members, MJMEUC has grown to a membership of 70 municipally owned retail electric systems ranging in size from 230 to 115,800 electric service meters, as of 2018 calendar year-end. In order to become a Member, a city, town or village requesting membership must execute and deliver a supplement to the Joint Contract, satisfy certain requirements for membership as set forth in the Joint Contract, and be approved by the affirmative vote of two-thirds of the MJMEUC Board of Directors. Under the Act and the Joint Contract, each Member is represented on the Board of Directors by a director and alternate director, and are eligible to participate in all activities undertaken by MJMEUC on behalf of its Members. In 1989, MJMEUC created two additional categories of membership to accommodate participation in MJMEUC’s power supply programs and projects by entities that do not quality for regular membership in accordance with the Act and the Joint Contract. The first additional category is referred to as “advisory membership,” and is open to municipalities located outside the State of Missouri who operate electric utility systems. The second additional category is referred to as “associate membership,” and is open to rural electric cooperatives located within or outside of the State of Missouri. MJMEUC’s Advisory Members currently consist of four municipally-owned retail electric systems located in the State of Arkansas. MJMEUC’s Associate Members currently consist of one rural electric cooperative located in the State of Missouri. MJMEUC Members’ and Advisory Members’ electric systems serve over 514,000 retail customers, and have a combined peak load of approximately 3,200 MW, as of 2018 calendar year-end.
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ENERGY POOLS
There are three full requirements energy pools within MJMEUC: MoPEP, which consists of 35 municipal members, the Mid-Missouri Municipal Power-Energy Pool (“MMMPEP”), which consists of 13 municipal members and the Southwest Missouri Public Energy Pool (“SWMPEP”), which consists of two (2) municipal members. Missouri Public Energy Pool #1 MoPEP was formed for the benefit of those MJMEUC Members that are participating in MoPEP (the “Pool Power Purchasers”), pursuant to an agreement among MJMEUC and each Pool Power Purchaser (the “Pool Power Purchase Agreement”). MoPEP commenced operations on January 1, 2000. The Pool Power Purchase Agreement provides for MJMEUC to supply the full energy requirements of each Pool Power Purchaser. As of December 31, 2018, the Pool Power Purchasers currently consist of 35 of MJMEUC’s Members who take full requirements service from MoPEP. The Pool Power Purchaser Agreement does not have an established termination date and will remain in effect until cancelled as to all Pool Power Purchasers. The Pool Power Purchasers directed MJMEUC to acquire ownership interests and/or long-term capacity entitlements in several generating facilities, the first of which commenced operations in 2007. MoPEP operations are governed by a committee (the “Pool Committee”) consisting of one representative from each Pool Power Purchaser. Rates established by the Pool Committee for services to Pool Power Purchasers are based on recovery of all of MJMEUC’s expenses. Rates are established so as to charge each Pool Power Purchaser its proportionate share of all costs associated with MJMEUC’s performance under the Pool Power Purchase Agreement. If the Pool Power Purchase Agreement is cancelled by a Pool Power Purchaser for any reason, the Pool Power Purchaser must continue to pay MoPEP monthly charges designed to recover the Pool Power Purchaser’s allocable share of MJMEUC’s direct costs associated with the Pool Power Purchase Agreement. Only the Pool Power Purchasers, and no other MJMEUC Members, are responsible for MJMEUC’s obligations under the Pool Power Purchase Agreement. Each Pool Power Purchaser owns and operates an electric system for the distribution of electric power and energy, together with the additional facilities necessary to conduct its business. As of December 31, 2018, twelve Pool Power Purchasers operate electric generating facilities, all the capacity of which is dedicated solely to MoPEP. Retail electric service in areas adjoining the service areas of the Pool Power Purchasers is provided by investor-owned utilities (“IOUs”) or rural electric cooperatives which, in some instances, also serve a limited number of customers within the corporate limits of the Pool Power Purchasers. Missouri law controls the boundaries of an electric utility’s assigned service area, and changes to these boundaries must be approved by the Missouri Public Service Commission. Mid-Missouri Municipal Power-Energy Pool The second pool operated by MJMEUC is called the Mid-Missouri Municipal Public Energy Pool (“MMMPEP”). The original twelve municipal members of the MMMPEP pool entered into power
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purchase contracts with MJMEUC for the full power requirements of their respective municipality. These contracts were originally for five years and were set to expire on May 31, 2018. MJMEUC and MMMPEP entered into a new contract in 2016 that extended the commitment of services for an additional ten years, now expiring on May 31, 2028. A thirteenth city joined MMMPEP as a member in 2016 and began receiving full requirements power in January 2018. Southwest Missouri Public Energy Pool The third pool operated by MJMEUC is called the Southwest Missouri Public Energy Pool (“SWMPEP”). On September 29, 2017, MJMEUC authorized the Missouri cities of Monett and Mt. Vernon (together, the “SWMPEP Cities”) to join MJMEUC and execute a power supply contract with the SWMPEP Cities. The SWMPEP Cities and MJMEUC have executed ten-year power purchase contracts for the full power requirements of their respective municipality. Supply pursuant to these contracts will begin in June 2020 and expires May 31, 2030. MPUA
The Missouri Public Utility Alliance (“MPUA”) represents community-owned (municipal) electric, natural gas, wastewater, and water utilities that work together for the benefit of their customers - customers who, in effect, "own" the utilities in their community. For many years, the vision of a strong, versatile and multi-faceted collaboration grew in the minds of municipal utility leaders from across Missouri. In October of 1998, the three member organizations of MPUA (Municipal Gas Commission of Missouri, Missouri Association of Municipal Utilities, and Missouri Joint Municipal Electric Utility Commission) voted to combine efforts and resources to better serve their members by establishing the umbrella of the Missouri Public Utility Alliance. MPUA is a trade name representing the nature of the partnership among the three legally distinct member organizations. Each organization maintains its own legal status and Board of Directors. A Joint Operating Committee, comprised of three Executive Committee members from each of the three organizations, provides guidance and cohesiveness to joint issues. An integrated set of budgets make the broad array of MPUA services available to all members of the three member organizations.
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MJMEUC – Map of Project Locations & MPUA/MJMEUC Office
The Laddonia Project is a nominal 12 MW natural gas fired generating facility near the City of Laddonia, Missouri owned by MJMEUC. The generating facility, which commenced commercial operations in the third quarter of 2007, is included for illustration purposes only. MJMEUC has not issued any revenue bonds for the construction or operations for the Laddonia facility, and there are no continuing disclosure requirements related to this facility.
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MJMEUC – Map of MoPEP Pool Participants & Unit Power Purchasers
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MoPEP FACILITIES BONDS
MJMEUC has issued its MoPEP Facilities Bonds to finance the Fredericktown Energy Center and Dogwood Generating Facility. The MoPEP Facilities Bonds are payable from certain net revenues generated by MJMEUC from MoPEP under the Pool Power Purchase Agreement; revenues dedicated to repayment of debt issued for other specific projects (like Iatan Unit 2, Prairie State and Plum Point) are excluded as a source of revenue for repayment of MoPEP Facilities Bonds.
Bonds
Issue Date
Final
Maturity
Amount Outstanding as of
December 31, 2018* Power Supply System Revenue Bonds (MoPEP Facilities), Series 2011**
12/8/2011
12/1/2020
$ 1,480,000
Power Supply System Revenue Bonds (MoPEP Facilities), Series 2012**
3/28/2012
1/1/2021
$ 2,950,000
Power Supply System Revenue Bonds (MoPEP Facilities), Series 2017 (Refunding Bonds)***
12/21/2017
12/1/2036
$ 35,600,000
Power Supply System Revenue Bonds (MoPEP Facilities), Series 2018
05/30/2018
12/1/2043
$ 26,605,000
* Balances shown are net of any debt refunded amounts, as applicable. ** Partially advance refunded with the Series 2017 bonds. *** Proceeds from the Series 2017 partially refunded certain MoPEP Series 2011 & Series 2012 Bonds.
Ratings:
Fitch Ratings: A Stable Outlook Moody’s Investor Services: A2 Stable Outlook
The Series 2011 Bonds were issued to finance MJMEUC’s costs to construct the Fredericktown Energy Center, to fund a debt service reserve for the Series 2011 Bonds, and to pay costs of issuance of the Series 2011 Bonds. The capacity and power of the MJMEUC ownership interest is fully dedicated to MoPEP power supply needs. The Series 2012 Bonds were issued to finance MJMEUC’s costs to acquire an undivided 8.2% ownership interest in the Dogwood Generating Facility, fund a debt service reserve, and pay costs of issuance. The capacity and power of the MJMEUC ownership interest is fully dedicated to MoPEP power supply needs. The Series 2017 Bonds were issued to advance refund and defease certain of MJMEUC’s outstanding Power Supply System Revenue Bonds (MoPEP Facilities), Series 2011 and Series 2012 and pay costs of issuance of the Series 2017 Bonds. The refunding was initiated by MJMEUC to achieve interest cost savings and reduce annual debt service requirements. MJMEUC reduced its MoPEP total debt service payments by approximately $3.7 million with this refunding. The Series 2018 Bonds were issued to finance MJMEUC’s costs to acquire an additional undivided 8.2% ownership interest in the Dogwood Generating Facility, fund a debt service reserve, and pay costs of
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issuance. All MJMEUC Dogwood Generating Facility costs associated with its combined 16.4% undivided ownership after the acquisition, including operating and maintenance and debt service costs, will be paid with revenues received by MJMEUC from MoPEP. Until 2021, when a power purchase contract currently being used to supply MoPEP expires, MoPEP does not fully need 100 MW of capacity and energy from the Dogwood Generating Facility. MoPEP members have directed MJMEUC to use 50 MWs of capacity and energy from the Dogwood Generating Facility to serve MMMPEP during that time period. Through a joint resolution, a memorandum of understanding among the parties entitles MMMPEP to purchase 50 MW of MoPEP’s 100 MW capacity and energy output from MoPEP’s Dogwood Generating Facility Resource Obligation beginning June 1, 2018 through May 31, 2021, at which time the 50 MW portion is reduced to 25 MW until May 31, 2024, when the contract expires. Revenues received by MJMEUC from MMMPEP related to the MMMPEP Dogwood Resource will be credited against MoPEP’s obligations to pay for its obligations pursuant to the terms of the Pool Agreement. In the event of a shortfall in revenues received by MJMEUC from MMMPEP, MoPEP will remain obligated to pay any such shortfall to MJMEUC to make payments of principal of or interest on the Series 2018 Bonds.
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DOGWOOD GENERATING FACILITY
Introduction
The Dogwood Generating Facility is a nominal 610 MW combined-cycle natural gas-fired electric generating facility located in Pleasant Hill, Missouri. MJMEUC owns an undivided 16.4% ownership interest in all the assets, properties and rights related to the Dogwood Generating Facility. Five of the six co-owners of the Dogwood Generating Facility are public power entities. Below is the complete list of co-owners of the Dogwood Generating Facility.
Owner Ownership Interest % MJMEUC 16.4% Kansas Power Pool 10.3% City of Independence, Missouri 12.3% Kansas City, Kansas Board of Public Utilities 17.0% Kansas Municipal Electric Agency (“KMEA”) 10.1% Dogwood Energy, LLC 33.9%
In March 2018, Dogwood Energy, LLC sold a 10.1% interest in the Dogwood Generating Facility to KMEA. Upon consummation of KMEA’s purchase, KMEA became party to, and is now bound by the terms of, the Participation Agreement among the co-owners. In May 2018, MJMEUC acquired an additional 8.2% interest in the Dogwood Generating Facility, bringing MJMEUC’s total ownership interest to 16.4% and reducing Dogwood Energy, LLC’s ownership interest to 33.9%. Dogwood Energy, LLC has publicly announced its intention to sell all or a part of its remaining interest in the Dogwood Generating Facility.
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Participants
All of MJMEUC’s interest in the Dogwood Generating Facility has been dedicated to MoPEP.
Project Financing MJMEUC issued its MoPEP Facilities Series 2012 Bonds to finance MJMEUC’s costs to acquire an undivided 8.2% ownership interest in the Dogwood Generating Facility, fund a debt service reserve, and pay costs of issuance. The Series 2012 Bonds were originally issued in the principal amount of $32,950,000.
The Series 2017 Bonds were issued to advance refund and defease a portion of MJMEUC’s outstanding MoPEP Facilities Bonds, which included certain Series 2012 Bonds. (See “MoPEP Facilities Bonds”).
MJMEUC issued its MoPEP Facilities Series 2018 Bonds to finance MJMEUC’s costs to acquire an additional undivided 8.2% ownership interest in the Dogwood Generating Facility, fund a debt service reserve, and pay costs of issuance. The Series 2018 Bonds were issued in the principal amount of $26,605,000.
All anticipated capital costs are included in MJMEUC’s annual budget. Capital costs are funded through member rates. MJMEUC has available, and may use at its discretion, operating and maintenance accounts and reserve accounts for funding operating and capital costs.
Project Update Background
The Dogwood Generating Facility (“Dogwood”) is contained within a 67 acre parcel. The generating station includes two Siemens Westinghouse model 501FD2 gas-fired turbines that were upgraded in 2009 to model 501FD3 specifications, two Toshiba heat recovery steam generators (“HRSGs”), a Toshiba steam turbine, three generator step-up transformers, associated buildings, and ancillary support facilities. The generating station was constructed by Black & Veatch. Dogwood contracts with North American Energy Services (“NAES”) operating company to operate and maintain the plant on behalf of the ownership group. With duct-firing and power augmentation, the plant has a 650 MW nominal output capacity measured at 60 degrees and 60% humidity, and an annual average of approximately 635 MW. Dogwood primarily serves as an intermediate power supply resource.
Dogwood is within the Southwest Power Pool (“SPP”) Regional Transmission Operator (“RTO”) geographical footprint and participates in the SPP Day-Ahead Market. The plant is located adjacent to an existing substation owned and operated by KCP&L - GMO and includes three 161 kV interconnections and two 345 kV interconnections. The 161 kV steps down to 69 kV and has direct connection to MJMEUC’s MoPEP member, the City of Harrisonville, Missouri.
Project Performance Summary
In 2018, Dogwood’s operations met and exceeded MJMEUC’s expectations setting an all-time record for annual generation and capacity factor at 2,044,000 MWh and 35.9%, respectively. Scheduled outages
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were completed during the year for repair and maintenance activities customary from time to time for a similarly designed facility. Dogwood had two scheduled outages completed in 2018, one in the spring and one in the fall. Both outages were scheduled for 14 days, and the fall outage was extended 5 days for Unit 1 to address items found as a result of an inspection.
Unit 2 of the Facility experienced unscheduled outages for approximately a week in September and a total of two weeks in November & December. Based on the issues causing these two outages, a combustion inspection was completed on Unit 2 in December. This inspection had been planned for Spring 2019. During these outages for Unit 2, Unit 1 was able to continue to operate in a 1x1 configuration. The 1x1 configuration allowed the Facility to offer into the SPP Market the output of Combustion Turbine 1 along with the steam turbine at a de-rated output. Similarly, during the extended fall outage, Unit 2 was able to operate in a 1x1 configuration while work was completed on Combustion Turbine 1.
During the first quarter of 2019, operations of the Facility have been strong resulting in 502,000 MWh generated and a 35.8% capacity factor. In March 2019, a new Long-Term Service Agreement was entered into with Siemens. The term of the agreement is 18-years or after the Hot Gas Path Inspections on each combustion turbine, whichever comes first.
The Dogwood Generating Facility continues to be a valuable asset for MoPEP in SPP.
Permits, Licenses and Approvals
All permits necessary for operation of Dogwood remain in place and the facility is in full compliance with all environmental permits, NERC requirements and the plant continues to maintain a strong safety culture.
Capital Expenditures
MJMEUC’s share of capital improvements related to the Dogwood Generating Facility totaled $632,896 in fiscal year 2018. These costs were funded through rates and charges paid by MoPEP.
Reserve Accounts
MJMEUC has fully funded all required debt service reserves and operating and maintenance reserves required by the bond documents.
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Performance Statistics The following chart summarizes 2018 operations and an update of operations through the first quarter of 2019 for Dogwood.
2018Operating ExpensesFuel & Transportation 6,228,972$ Other Variable Expenses and Commodities 429,033 Fixed Operating Expenses 1,745,992 Total Operating Expenses 8,403,997
Capital Costs and Reserve RequirementsNet Debt Service 2,998,021 Capital Expenditures 632,896 Total Capital Costs 3,630,917
Total Dogwood Project Annual O&M Costs 12,034,914$ Average Annual Busbar Cost ($/MWh) 71.99$
2018 AveragePower Purchaser Net Revenue Busbar ($/MWh)
MoPEP (Net of off system sales) 7,544,623$ $45.13MMMPEP (Net of off system sales) 4,490,291$ $43.65MJMEUC Total 12,034,914$ $44.57270,046
167,179
MJMEUC Project Costs
ElectricitySold (MWh)
102,867
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FREDERICKTOWN ENERGY CENTER
Introduction
The Fredericktown Energy Center (the “Fredericktown Facility”) is a two-unit, 28 MW (combined) natural gas fired generating facility, and located in the City of Fredericktown, Missouri.
Participants
All of MJMEUC’s interest in the Fredericktown Facility has been dedicated to MoPEP.
Project Financing MJMEUC issued its MoPEP Facilities Series 2011 Bonds to finance MJMEUC’s costs to construct the Fredericktown Energy Center, to fund a debt service reserve for the Series 2011 Bonds, and to pay costs of issuance of the Series 2011 Bonds. The Series 2011 Bonds were originally issued in the principal amount of $17,060,000.
The Series 2017 Bonds were issued to advance refund and defease a portion of MJMEUC’s outstanding MoPEP Facilities Bonds, which included certain Series 2011 Bonds. (See “MoPEP Facilities Bonds”).
Owner Ownership Interest % MJMEUC 100.0%
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Project Update Background
On January 31, 2013, turbines were operated up to full speed with no load for the first time. Additional third party electrical interconnection upgrades to connect the plant to the power grid, final tuning, testing and startup followed before Fredericktown Energy Center commenced operations at the end of June 2015.
The Fredericktown Energy Center serves as an efficient natural gas peaking power supply resource within the MoPEP power supply portfolio and is interconnected into the SPP Regional Transmission Operator (“RTO”) geographical footprint and participates in the real-time market. The turbines have been equipped for remote operations from MJMEUC’s Columbia, Missouri office. SPP contacts MJMEUC’s energy schedulers when making notifications for unit operations. The energy schedulers then remotely start and operate the turbines for the required schedule based on SPP requirements.
MJMEUC has a maintenance agreement with Solar Turbines, Inc. (“Solar”), the turbines’ original equipment manufacturer (“OEM”). MJMEUC staff and the member cities of Macon and Fredericktown assist MJMEUC with operations of the Fredericktown Energy Center. Semi-Annual and Annual Maintenance tasks are performed on the turbines. Typically, MJMEUC will schedule the outages in the Spring and Fall to serve as a “tune-up” for summer and winter peak operations.
Project Performance Summary
Fredericktown 2018 operations exceeded expectations, achieving its highest annual generation output of 13,002 MWh since commencing operations. With relatively quick start times (15-minutes) and operational flexibility, the turbines were dispatched many times through the year by SPP in the day-ahead and real-time markets. During the extreme cold weather events in January and November the turbines operated more hours each of those two months than previous annual hours of operation in 2016 and 2017. The two scheduled outages for routine maintenance in accordance with OEM recommendations were completed in May and October.
During the first three months of 2019, the Fredericktown Energy Center’s turbines continued to be dispatched by SPP. The quick starting times, flexible operations and heat rate make these turbines a valuable peaking asset in SPP.
Permits, Licenses and Approvals
All permits necessary for operation of the Fredericktown Energy Center remain in place.
Capital Expenditures
There were no capital improvement expenditures related to the Fredericktown Energy Center in fiscal year 2018. MJMEUC typically funds any capital improvement expenditures through MoPEP rates and charges.
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Performance Statistics The following chart summarizes 2018 operations and an update of operations through the first quarter of 2019 for the Fredericktown Energy Center. The Fredericktown Energy Center includes two single-shaft turbine generators, each with a nominal net output capacity of approximately 12 MW to serve MoPEP peaking capacity needs.
2018Operating ExpensesFuel & Transportation 501,970$ Other Variable Expenses and Commodities 37,976 Fixed Operating Expenses 347,412 Total Operating Expenses 887,358
Capital Costs and Reserve RequirementsNet Debt Service 1,271,746 Capital Expenditures - Total Capital Costs 1,271,746
Total Fredericktown Project Annual O&M Costs 2,159,104$
Power Purchaser Net RevenueMoPEP (Net of off-system sales) 2,159,104$
MJMEUC Project Costs
Sold (MWh)13,002
Electricity
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IATAN UNIT 2 PROJECT
Introduction
In August 2006, MJMEUC acquired an undivided interest in the Iatan Unit 2, a 870 MW (net) coal-fired generating plant constructed at the Iatan Station site in Platte County, Missouri (“Iatan Unit 2”). MJMEUC’s undivided interest in Iatan Unit 2 and certain associated common facilities entitles MJMEUC to approximately 102 MW (net) of the capacity and output of Iatan Unit 2 (the “Iatan 2 Project”). Iatan Unit 2 commenced operation in January 2011.
Kansas City Power & Light (“KCP&L”) is the majority owner and operator of the Iatan Station site and was the developer of the Iatan Unit 2. The current co-owners of Iatan Unit 2 are:
Owner Ownership Interest % MJMEUC 11.8% Kansas Electric Power Cooperative 3.5 Empire District Electric Company 12.0 KCP&L Greater Missouri Operations Company 18.0 Kansas City Power & Light 54.7
MJMEUC continues to monitor project operations since construction was finalized in January 2011 and also retains an outside engineering consultant to provide additional monitoring of the Iatan Unit 2 Project operations.
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Participants
Approximately 71 MW of the capacity of the Iatan 2 Project is assigned to the Missouri cities of Columbia and Independence (together, the “Iatan Unit Power Purchasers”) pursuant to separate unit-specific, life-of-unit, take-or-pay power purchase agreements between MJMEUC and each of the Iatan Unit Power Purchasers, and the balance of the capacity of the Iatan 2 Project (approximately 31 MW) is assigned to MoPEP to provide a portion of the electric power and energy requirements of those MJMEUC Members participating in MoPEP. Iatan Unit 2 Project MoPEP Cities: Albany, Ava, Bethany, Butler, Carrollton, Chillicothe, El Dorado Springs, Farmington, Fayette, Fredericktown, Gallatin, Harrisonville, Hermann, Higginsville, Jackson, La Plata, Lamar, Lebanon, Macon, Marshall, Memphis, Monroe City, Odessa, Palmyra, Rock Port, Rolla, Salisbury, Shelbina, St. James, Stanberry, Thayer, Trenton, Unionville, Vandalia, and Waynesville. Iatan Unit 2 Project Unit Power Participants: Cities of: Columbia and Independence.
Project Financing
Bonds Issue Date
Final Maturity
Amount Outstanding as of
December 31, 2018* Iatan 2 Project, Series 2009A ** 4/1/2009 1/1/2019 $ 2,300,000 Iatan 2 Project, Series 2014A (Refunding Bonds) 10/7/2014 1/1/2034 146,275,000
Iatan 2 Project, Series 2015A (Refunding Bonds) 11/5/2015 12/1/2038 80,045,000
* Balances shown are net of any debt refunded amounts, as applicable. ** Partially advance refunded with 2014A and 2015A Bonds.
Ratings: Fitch Ratings: A Stable Outlook
Moody’s Investor Services: A2 Stable Outlook MJMEUC issued its Series 2006 Bonds (fully retired in 2016; original principal amount of $182,385,000) and Series 2009 Bonds (original principal amount of $103,135,000) to finance MJMEUC’s share of costs to construct Iatan Unit 2 and certain associated common facilities. All necessary financing for construction of MJMEUC’s portion of Iatan Unit 2 is complete. Final construction costs of approximately $1.85B for completion cost of Iatan Unit 2, common facilities and initial coal inventory were determined in 2012 after procurement efforts closed out all contracts and purchase orders.
In fall 2014, MJMEUC issued the Series 2014A Bonds to advance refund a portion of its Power Project Revenue Bonds Series 2006A and Series 2009A. The advance refunding was initiated by MJMEUC to achieve interest cost savings and reduce annual debt service requirements. MJMEUC reduced its Iatan total debt service payments by approximately $23.9 million with this advance refunding.
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In fall 2015, MJMEUC issued the Series 2015A Bonds to refund the remaining portion of its Power Project Revenue Bonds Series 2006A and a portion of its Power Project Revenue Bonds Series 2009A. The refunding was initiated by MJMEUC to achieve interest cost savings and reduce annual debt service requirements. MJMEUC reduced its Iatan total debt service payments by approximately $15.0 million with this refunding.
Project Update
Project Performance Summary
Iatan Unit 2 completed its first steam turbine major overhaul which was unexpectedly extended causing 2018 operations to fall short of expectations. Year-end performance summaries showed the unit achieving an annual equivalent availability factor (“EAF”) of 58.24% and capacity factor (“CF”) of 51.9% for the year.
The Unit experienced a couple of short forced outages in early 2018 before starting its planned 70-day outage in the Spring for the first steam turbine overhaul as well as a replacement of certain sections of tubes in the boiler. The Spring outage was originally scheduled to wrap-up in mid-May, however, additional items discovered on the turbine/generator and issues with boiler tube replacement, caused the outage to be extended into June. Once startup activities commenced in June, several equipment failures occurred further delaying operations into July. A Fall outage was also planned to resolve items outstanding from the extended Spring outage.
Once returning to service, the Unit performed well through the latter part of the summer and into the Fall. Following the Fall outage, the Unit operated well through the end of 2018. With the extensive work completed in 2018, operations are expected to return to historic norms going forward.
During the first quarter of 2019, the Unit has performed well despite severe flooding in the region. Heavy rains and snow melt in the upper Midwest caused severe flooding around the plant site. Employees had to be brought into the plant via boats and a small section of railroad track washed out. The Unit was able to stay online, and BNSF made timely repairs to the track thus not disrupting operation of the Unit. Unrelated to the flooding, the Unit experienced a de-rate of approximately 40 MW due to the failure of one of four Induced Draft (ID) fans. ID fans pull the exhaust gases from the boiler, through the emissions scrubber vessels and out the stack. A 10-day outage was scheduled in mid-April to repair the ID fan and address other maintenance issues.
Coal pile inventories continue to be effectively managed although inventory levels are below targets due to the flood event. Additional train sets have been placed in service following the 2019 flood event to increase coal inventories to desired levels.
Iatan 2 remains fully compliant with all environmental permits and regulations. In addition, KCPL has a strong safety culture as demonstrated by their continuous excellent safety record.
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Capital Expenditures
MJMEUC’s share of capital improvements related to Iatan Unit 2 totaled $5,479,854 in fiscal year 2018. These costs were funded through rates and charges paid by MoPEP and the Unit Power Purchasers.
MJMEUC has fully funded all required debt service reserves and operating and maintenance reserves required by the bond documents.
Performance Statistics The following chart summarizes 2018 operations and an update of Iatan Unit 2’s operations through the first quarter of 2019.
Thru 1Q 2019 2018 AnnualIatan Unit 2 Net Generation (MWh) 1,757,583 4,005,268 Unit Capacity Factor 92.36% 51.90%Unit Operating Availability Factor 94.33% 58.24%Total Fuel Cost 25,208,978$ 56,349,887$
2018Operating ExpensesFuel & Transportation 5,341,056$ Other Variable Expenses and Commodities 679,539 Fixed Operating Expenses 6,703,195 Total Operating Expenses 12,723,790
Capital Costs and Reserve RequirementsNet Debt Service 18,578,761 Deposit to O&M Reserve and other Contingency Fund - Additions to Working Capital - Capital Expenditures 5,479,854 Total Capital Costs 24,058,615
Total Iatan Unit 2 Project Annual O&M Costs 36,782,405$ Average Annual Busbar Cost ($/MWh) 97.12$
2018 AveragePower Purchaser Net Revenue Busbar ($/MWh)
Columbia 7,308,281$ 101.32$ Independence 18,511,703 93.30$ MoPEP 10,962,421 101.32$ MJMEUC Total 36,782,405$ 97.12$
MJMEUC Project Costs
ElectricitySold (MWh)
72,134
378,734
198,400 108,200
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PLUM POINT PROJECT
Introduction
In March 2006, MJMEUC acquired an undivided interest in the Plum Point Energy Station, a 665 MW (net) coal-fired generating plant constructed in northeast Arkansas (“Plum Point”). MJMEUC’s undivided interest in Plum Point entitles MJMEUC to approximately 147 MW (net) of the capacity and output of such generating plant (such interest is referred to herein as the “Plum Point Project”). The Plum Point Energy Station commenced commercial operations on September 1, 2010. The current co-owners of Plum Point are:
Owner Ownership Interest % MJMEUC 22.1% Municipal Energy Agency of Mississippi 6.0 Empire District Electric Company 7.5 East Texas Electric Cooperative, Inc. 7.5 Plum Point Energy Associates, LLC 56.9
In addition to its undivided ownership interest, MJMEUC also executed a long-term power purchase agreement with Plum Point Energy Associates, LLC (“PPEA”), a wholly-owned subsidiary of PPEA Holding Company, LLC, entitling it to 50 MW of capacity and energy from Plum Point. The capacity and energy supplied under the power purchase agreement with PPEA is dedicated to MoPEP.
MJMEUC continues to monitor project operations since construction was finalized in September 2010 and retains an outside engineering consultant to provide additional monitoring of the Plum Point Project (“Plum Point”), operations.
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Participants
MJMEUC has assigned 127 MW of the capacity of the Plum Point Project to three of its Members (the Missouri cities of Poplar Bluff, Carthage and Malden) and to the four Advisory Members that are Arkansas Cities (the cities of North Little Rock, Osceola, Benton and Piggott) pursuant to separate unit power purchase contracts. On June 9, 2011, MJMEUC voted to approve a proposal from the City of Kennett, Missouri (“Kennett”) to terminate Kennett’s 20 MW unit power purchase contract associated with the Plum Point Project and to dedicate the full 20 MW of output to MoPEP to provide a portion of the electric power and energy requirements of the Pool Power Purchasers. In 2012, the Cities of Malden and Piggott agreed to assign 3 MW and 2 MW, respectively, for a combined 5 MW assignment to the City of Benton, Arkansas, effective April 1, 2014. Plum Point Project MoPEP Cities: Albany, Ava, Bethany, Butler, Carrollton, Chillicothe, El Dorado Springs, Farmington, Fayette, Fredericktown, Gallatin, Harrisonville, Hermann, Higginsville, Jackson, La Plata, Lamar, Lebanon, Macon, Marshall, Memphis, Monroe City, Odessa, Palmyra, Rock Port, Rolla, Salisbury, Shelbina, St. James, Stanberry, Thayer, Trenton, Unionville, Vandalia, and Waynesville. Plum Point Project Unit Power Participants: Missouri Cities: Carthage, Malden, and Poplar Bluff Arkansas Cities: North Little Rock, Osceola, Piggott, and Benton
Project Financing
Bonds Issue Date
Final Maturity
Amount Outstanding as of
December 31, 2018* Plum Point Project, Series 2009A (Federally Taxable Build America Bonds – Direct Pay)
8/20/2009 1/1/2039 $ 48,600,000
Plum Point Project, Series 2009B 8/20/2009 1/1/2037 4,860,000 Plum Point Project, Series 2014A (Refunding Bonds) 12/20/2014 1/1/2034 178,575,000
Plum Point Project, Series 2015A (Refunding Bonds) 12/17/2015 1/1/2036 37,190,000
* Balances shown are net of any debt refunded amounts, as applicable.
Ratings: Fitch Ratings: A Stable Outlook
Moody’s Investor Services: A3 Stable Outlook Standard & Poor’s Rating Service: A- Stable Outlook
MJMEUC issued its Series 2006 Bonds (original principal amount of $278,880,000) and Series 2009 Bonds (original principal amount of $53,460,000) to finance MJMEUC’s share of costs to construct Plum Point. All necessary financing for construction of MJMEUC’s portion of Plum Point is complete.
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The 2009 Bonds were issued as direct pay Federally Taxable Build America Bonds (“BABs”), where MJMEUC is entitled to receive a 35% subsidy from the United States Federal Government. The United States Federal Government has been and is currently subject to the process of sequestration, whereby spending for many Federal programs, including BABs subsidy payments, have been reduced. MJMEUC’s subsidies were reduced by approximately 6.9% and 6.6% for 2017 and 2018 by the United States Government. MJMEUC is recovering these lost subsidies through member rates.
In fall 2014, MJMEUC issued the Series 2014A Bonds to advance refund a portion of its Power Project Revenue Bonds Series 2006. The advance refunding was initiated by MJMEUC to take advantage of market rates at the time, achieve interest savings and an annual reduction in debt service. MJMEUC reduced its Plum Point total debt service payments by approximately $26.7 million from this advance refunding.
In fall 2015, MJMEUC issued the Series 2015A Bonds to refund the remaining portion of its Power Project Revenue Bonds Series 2006. The refunding was initiated by MJMEUC to take advantage of market rates at the time, achieve interest savings and an annual reduction in debt service. MJMEUC reduced its Plum Point total debt service payments by approximately $4.5 million from this refunding.
Project Update Project Performance Summary
PPEA, restructured its ownership in January 2018. PPEA previously comprised of John Hancock Life Insurance and Ares Management L.P. Energy Investors Fund (“Ares EIF”). In January 2018, Starwood Energy Group Global acquired Ares EIF’s ownership in PPEA. Additionally, Plum Point Services Company, LLC, formed by PPEA to manage Plum Point operations under the Plum Point Management Agreement, was succeeded by PurEnergy Management Services (“PEMS”), a subsidiary of North American Energy Services (“NAES”) as Plum Point Energy Station’s Project Management Company.
In 2018, Plum Point had its best year of operations since going into commercial operation. Plum Point set new records in 2018 for capacity factor at 87.66% and annual generation of 5,202,634 MWh. Operationally, the Unit performed very well through the first three months of 2018 leading up to the Spring Outage in April. During the Spring Outage, the critical path work performed was the replacement of one layer of SCR Catalyst. SCR Catalyst removes NOx emissions from the exhaust gas before exiting the stack.
During the second half of 2018, the boiler developed tube leaks on multiple occasions, but the leaks were monitored, and the Unit continued to operate. In August, the Unit tripped offline due to a valve failure and time was taken to address some maintenance issues including known tube leaks. Once returning to service in August, the Unit continued its strong operational run through the end of the year. In late November, the boiler developed another tube leak that did not materially impact operations through the end of 2018.
During the first quarter of 2019, Plum Point experienced multiple forced outages due to multiple boiler tube leaks. The planned 21-day Spring outage in April was started a few days early and expected to be
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extend multiple weeks to perform a thorough inspection of boiler tubes, root cause analysis and repairs/modifications to address the tube failures.
The NRG safety record continues to be excellent. Through March 2019 NRG employees have worked over 3.5 years without a lost time accident and almost 2 years without an OSHA recordable accident. Plum Point was recognized as the 2018 NRG Plant of the Year based on its outstanding year of operations. The plant remains fully compliant with all environmental permits and regulations.
Coal deliveries from BNSF Railway continued to have good cycle times during most of 2018, however spring flooding in the upper Midwest caused a number of track repairs for BNSF causing cycle time to increase substantially in the first quarter of 2019. Coal inventories should rebuild close to target levels during the Spring outage in 2019.
Capital Expenditures
MJMEUC’s share of capital improvements related to Plum Point totaled $774,000 in fiscal year 2018. MJMEUC has available, and may use at its discretion, operating and maintenance accounts and contingency reserve accounts for funding certain operating and capital costs.
MJMEUC has fully funded all required debt service reserves and operating and maintenance reserves required by the bond documents.
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Performance Statistics The following chart summarizes 2018 operations and provides an update of operations for Plum Point through the first quarter of 2019.
2018Operating ExpensesFuel & Transportation 21,070,932$ Other Variable Expenses and Commodities 1,558,952 Fixed Operating Expenses 8,645,082 Total Operating Expenses 31,274,966
Capital Costs and Reserve RequirementsNet Debt Service 20,847,987 Deposit to O&M Reserve and other Contingency Fund - Capital Expenditures 774,000 Total Capital Costs 21,621,987
Total Plum Point Project Annual O&M Costs 52,896,953$ Average Annual Busbar Cost ($/MWh) 44.56$
MJMEUC Project Costs
2018 Average
Power Purchaser Net Revenue Busbar ($/MWh)Benton 1,797,885$ 44.53$ Carthage 4,318,020 44.56$ Malden 1,437,606 44.51$ MoPEP 7,197,395 44.57$ North Little Rock AR 21,593,224 44.57$ Osceola AR 7,197,395 44.57$ Piggott AR 2,158,034 44.54$ Poplar Bluff 7,197,395 44.57$ MJMEUC Total 52,896,953$ 1,187,008
96,899 32,300
161,498 484,493
48,449 161,498
ElectricitySold (MWh)
40,374
161,498
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PRAIRIE STATE PROJECT
Introduction
In 2007, MJMEUC acquired an undivided interest in the Prairie State Energy Campus (“Prairie State”). Prairie State includes an approximately 1,600 MW (net) coal-fired, steam-electric generating station located in Washington, St. Clair and Randolph Counties, Illinois. Prairie State also includes transmission facilities to interconnect Prairie State with the grid at the delivery point; a water pipeline to the Kaskaskia River; a natural gas pipeline to deliver gas to the site; facilities for the disposal of coal combustion waste from the facilities; associated power plant facilities and equipment; and certain coal reserves, mine facilities, mining equipment and coal storage handling and conveying equipment. MJMECU’s undivided interest in Prairie State entitles MJMEUC to approximately 195 MW (net) of the capacity and output of Prairie State (the “Prairie State Project”). Prairie State Unit 1 commenced operations in June 2012 and Prairie State Unit 2 commenced operations in November 2012. Prairie State Energy Campus is fully under public power and rural electric cooperative ownership.
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The co-owners of Prairie State are as follows:
Owner Ownership Interest % MJMEUC 12.3% Wabash Valley Power Association 5.0 Northern Illinois Municipal Power Agency 7.6 Kentucky Municipal Power Agency 7.9 Southern Illinois Power Cooperative 7.9 Prairie Power, Inc. 8.2 Indiana Municipal Power Agency 12.6 Illinois Municipal Electric Agency 15.2 American Municipal Power 23.3
MJMEUC continues to monitor project operations since construction was finalized in November 2012 and also retains an outside engineering consultant to provide additional monitoring of the Prairie State operations.
Participants
MJMEUC has assigned approximately 109 MW (56%) of the capacity of the Prairie State Project to the Missouri cities of Columbia, Kirkwood, Hannibal, Fulton, Centralia and Kahoka pursuant to separate unit power purchase contracts. The balance of the capacity of the Prairie State Project (approximately 86 MW, or 44%) has been dedicated to MoPEP to provide a portion of the electric power and energy requirements of the Pool Power Purchasers.
Initially, the City of Marceline received a 4 MW (2%) share of the Prairie State Project pursuant to a separate unit power purchase contract. On June 1, 2017, this 4 MW of capacity was permanently assigned to MoPEP and Marceline was discharged from all obligations in connection with the Prairie State Project. MoPEP’s 86 MW, or 44%, of MJMEUC’s total output from the Prairie State Project referenced above includes the former Marceline share.
Prairie State Project Missouri Public Energy Pool #1 Power Participants: Albany, Ava, Bethany, Butler, Carrollton, Chillicothe, El Dorado Springs, Farmington, Fayette, Fredericktown, Gallatin, Harrisonville, Hermann, Higginsville, Jackson, La Plata, Lamar, Lebanon, Macon, Marshall, Memphis, Monroe City, Odessa, Palmyra, Rock Port, Rolla, Salisbury, Shelbina, St. James, Stanberry, Thayer, Trenton, Unionville, Vandalia, and Waynesville.
Prairie State Project Unit Power Participants: Cities of: Centralia, Columbia, Fulton, Hannibal, Kahoka, and Kirkwood.
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Project Financing
Bonds Issue Date
Final Maturity
Amount Outstanding
as of December 31, 2018
Prairie State Project, Series 2009A (Federally Taxable Build America Bonds – Direct Pay)*
12/17/2009 1/1/2042 180,520,000
Prairie State Project, Series 2010A (Federally Taxable Build America Bonds – Direct Pay) 12/10/2010 1/1/2042 70,280,000
Prairie State Project, Series 2015A (Refunding Bonds) 4/14/2015 12/1/2031 194,645,000
Prairie State Project, Series 2016A (Refunding Bonds) 3/10/2016 12/1/2041 252,745,000
Prairie State Project, Series 2017 (Refunding Bonds)** 12/21/2017 1/1/2029 26,640,000
* Includes the Series 2009A Bonds maturing January 1, 2029 in the principal amount of $30,845,000 that were partially advance refunded with Series 2017 Bonds on a crossover basis where the refunded Series 2009 Bonds are not legally or financially defeased and will remain outstanding until January 1, 2019. **Crossover advance refunding of Series 2009A Bonds, as described above.
Ratings: Fitch Ratings: A Stable Outlook
Moody’s Investor Services: A2 Stable Outlook
Originally, Series 2007 (original principal amount $549,805,000), Series 2009 (original principal amount $207,920,000), and Series 2010 Bonds (original principal amount $78,005,000) were issued by MJMEUC to finance the costs of acquiring its interest in the Prairie State Project.
The 2009A and 2010A Bonds were issued as direct pay Federally Taxable Build America Bonds (“BABs”), where MJMEUC is entitled to receive a 35% subsidy from the United States Federal Government. The United States Federal Government has been and is currently subject to the process of sequestration, whereby spending for many Federal programs, including BABs subsidy payments, have been reduced. MJMEUC’s subsidies were reduced by approximately 6.9% and 6.6% for 2017 and 2018 by the United States Government. MJMEUC is recovering these lost subsidies through member rates.
In April 2015, MJMEUC issued the Series 2015A Bonds to advance refund a portion of its Power Project Revenue Bonds Series 2007A. The advance refunding was initiated by MJMEUC to take advantage of market rates at the time, achieve interest savings and an annual reduction in debt service. MJMEUC reduced its Prairie State total debt service payments by approximately $27.8 million from this advance refunding.
In March 2016, MJMEUC issued the Series 2016A Bonds to advance refund a portion of its Power Project Revenue Series 2007A Bonds. The advance refunding was initiated by MJMEUC to take advantage of market interest rates at the time, to achieve interest savings and reduce total debt service payments. MJMEUC reduced its Prairie State debt service payment by approximately $56.2 million from the advance refunding.
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The Series 2017 Bonds were issued to advance refund on a crossover basis $30,845,000 of MJMEUC’s outstanding Power Supply System Revenue Bonds, Series 2009 Bonds maturing on January 1, 2029 (the “Refunded Bonds”) and pay costs of issuance of the Series 2017 Bonds. Proceeds of the Series 2017 Bonds and certain other funds were deposited in an escrow fund pledged to the owners of the Series 2017 Bonds and the owners of the Refunded Bonds for payment of: (i) interest on the Series 2017 Bonds to and including January 1, 2019 and (ii) to redeem the principal of the Refunded Bonds until the crossover date on January 1, 2019. The Refunded Bonds are not legally or financially defeased and will remain outstanding until the crossover date, at which point the funds held in escrow will be used to refund the principal amount of the Refunded Bonds and they will be removed from MJMEUC’s statements of net position. The refunding was initiated by MJMEUC to achieve interest cost savings and reduce annual debt service requirements. MJMEUC reduced its Prairie State total debt service payments by approximately $4.8 million with this refunding.
Project Update Background The ownership group governs the construction and operation of Prairie State through a non-profit corporation, Prairie State Generating Company, LLC (“PSGC”). Each Prairie State owner indirectly owns PSGC on a basis proportionate to their ownership interests and exercise control through a management committee (referred to herein as the “PSGC Board”) based on weighted voting proportionate to their voting interests.
Project Performance Summary – Unit 1 For 2018, Unit 1 generally met operating expectations with an annual capacity factor of 80.82% and total generation of 5,792,831 MWh. Unit 1’s 2018 started off with good winter operations and early spring operations leading up to the Spring outage. The Unit started its 28-day scheduled outage in April, the goal coming out of the outage was to complete a scope of work which would allow the Unit to go to an 18-month outage cycle versus the traditional 12-month cycle. Work was focused in the boiler on the replacement of two Selective Catalytic Reduction (SCR) catalyst layers, which remove NOx emissions from the exhaust gas, and overhauls on several major pieces of equipment. The Unit does not have another scheduled outage until September 2019.
Following the Spring outage, Unit 1 was back in service and saw a very good summer operating period. Unit 1 experienced a forced outage in August and a 6-day maintenance outage in December. On each occasion staff promptly addressed the issues requiring attention and brought the Unit back online.
Through the first quarter of 2019, Unit 1 capacity factor of 77.98% is similar to 2018 annual results. Heavy rains and snow around Prairie State caused wet coal issues resulting in de-rates on the unit for several hours at times during the quarter. Equipment malfunctions resulted in short maintenance outages in each month of the first quarter.
Project Performance Summary – Unit 2
For 2018, Unit 2 generally met operating expectations with an annual capacity factor of 80.67% and total generation of 5,739,588 MWh. Unit 2, started off 2018 operating well with few issues. The Unit remained
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in service into April when the unit experienced a boiler tube leak requiring an outage to make repairs. The Unit was down 5-days then returned to service and ran well up into July when a tube leak developed in the boiler forcing a 4-day outage to make repairs.
Prairie State staff completed the 56-day scheduled Fall outage in 42-days, allowing Unit 2 to come back online two weeks early. Lessons learned during the Unit 1 steam turbine in 2017 contributed to the success of the outage. Major work completed during the outage included the first steam turbine major overhaul for this Unit, replacement boiler nose tube panels, miscellaneous boiler repairs, induced and force draft fan hub overhauls, and the installation of two SCR catalyst layers for NOx emissions control. Upon completion of this work, Unit 2 will go to an 18-month maintenance cycle.
Unit 2 performance has started 2019 meeting expectations with a capacity factor of 91.6% for the quarter.
Management continues to place safety as a priority for the plant and the results show an improvement in the overall safety culture of the employees. Prairie State received the Southern Illinois Occupational Safety and Health Excellence Award for General Industry in 2018.
Environmentally, Prairie State remains in compliance with all permit requirements.
Mine
The Mine continues to provide good reliable operations. Staff continues to work safely and productively for a mining operation of this size. Through the end of 2018, the mine produced and delivered over 6.3 million tons of coal to the plant. At the end of the first quarter 2019, Prairie State had a coal inventory of approximately 54-days.
The Mine received its CORESafety certification in 2018.
Capital Expenditures
MJMEUC’s share of capital improvements related to Prairie State totaled $4,889,417 in fiscal year 2018. These costs were funded through rates and charges paid by MoPEP and the Unit Power Purchasers. In addition, MJMEUC has available, and may use at its discretion, operating and maintenance accounts and contingency reserve accounts for funding certain operating and capital costs.
MJMEUC has fully funded all required debt service reserves, contingency reserves, and operating and maintenance reserves required by the bond documents.
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Performance Statistics
The following chart summarizes 2018 operations and provides an update of operations for the Prairie State through the first quarter of 2019.
Thru 1Q 2019 2018 AnnualPrairie State UNIT 1 Net Generation (MWh) 1,380,794 ## 5,792,831 Unit 1 Capacity Factor 77.98% 80.82%Unit 1 Operating Availability Factor 79.39% 82.81%Total Fuel Cost 16,342,773$ 69,402,174$
Thru 1Q 2019 2018 AnnualPrairie State UNIT 2 Net Generation (MWh) 1,608,579 ## 5,739,588 Unit 2 Capacity Factor 91.60% 80.67%Unit 2 Operating Availability Factor 92.03% 82.65%Total Fuel Cost 18,904,486$ 66,622,831$
2018Operating ExpensesFuel & Transportation 16,864,036$ Other Variable Expenses and Commodities 4,204,985 Fixed Operating Expenses 17,820,384 Total Operating Expenses 38,889,405
Capital Costs and Reserve RequirementsNet Debt Service 49,875,041 Deposit to O&M Reserve and other Contingency Fund - Capital Expenditures 4,889,417 Total Capital Costs 54,764,458 Total Prairie State Project Annual O&M Costs 93,653,863$ Average Annual Busbar Cost ($/MWh) 65.61$
MJMEUC Project Costs
699,412 727,960 2018
0.49 0.51 ElectricityAverage Busbar
Power Purchaser Unit 1 Unit 2 Sold (MWh) Net Revenue ($/MWh)Centralia 7,345 7,294 14,640 960,552$ 65.61$ Columbia 183,637 182,356.00 365,993 24,013,811 65.61$ Fulton 36,727 36,471 73,199 4,802,762 65.61$ Hannibal 73,455 72,942 146,397 9,605,524 65.61$ Kahoka 7,345 7,294 14,640 960,552 65.61$ Kirkwood 91,819 91,178 182,996 12,006,906 65.61$ MoPEP 315,856 313,652.00 629,508 41,303,755 65.61$ MJMEUC Total 716,186 711,187 1,427,372 93,653,863$
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A. MISSOURI PUBLIC ENERGY POOL #1 (“MoPEP”)
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MoPEP Pool Member Cities
MoPEP participates in the following revenue bond projects: Dogwood, Prairie State, Iatan Unit 2, Plum Point, and Fredericktown
Total Pool Power Purchasers Served by MoPEP as of December 31, 2018 ........................................................................................
(1) Excludes new Members until the respective years in which they become Pool Power Purchasers. (2) Includes firm sales, 15% system reserve requirements, sales to MMMPEP of 35 MW through May 2018, and
planned sales to MMMPEP of 70 MW from June 2018 through 2021 and dropping to 35 MW for 2021-2024. (3) Includes firm power purchase agreements, 57 MW of capacity from NC2, 50 MW of capacity from the Plum
Point Project, 7.6 MW of capacity from the Lamar Project, and 3.8 MW from the Black Oak landfill. (4) Includes Iatan Unit 2 Project (31 MW), Prairie State 1 and Prairie State 2 (86 MW), Plum Point (20 MW), 50
MW of Dogwood Generating Facility in 2012 and another 50 MW ownership interest in 2018, the Fredericktown Energy Center (25 MW) commenced service in June 2015 and Laddonia (13 MW)
(5) Beginning in 2018, includes 0.3 MW from Loess Hills, 1.5 MW from Butler Solar. Addition in 2019 of 7 MW Marshall County Kansas Wind, and 1.5 MW each from Macon Solar and Trenton Solar. Addition in 2020 of 1.5 MW each from Rolla Solar, Marshall Solar, and Waynesville Solar. Addition in 2021 of 1.5 MW each from Lebanon Solar, Chillicothe Solar, Higginsville Solar. Addition in 2022 of 1.5 MW each from El Dorado Springs Solar and Farmington Solar.
Fiscal Year Ending
December 31
Annual Peak Load
Peak Capacity
Requirement(2)
Dedicated Member
Capacity Contract
Purchases(3,5)
MJMEUC Owned
Capacity(4) Total
Capacity Surplus/ (Deficit)
Historical:
2014 531 646 268 240 194 702 56
2015 526 640 268 244 218 730 90
2016 532 650 288 244 218 750 100
2017 531 646 284 244 222 750 105
2018 529 678 283 244 274 800 122
Projected:
2019 547 699 283 244 274 801 102
2020 552 704 283 254 274 805 101
2021 556 674 283 259 274 716 42
2022 560 679 283 163 274 722 43
2023 565 684 283 166 274 724 40
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MoPEP’s Diversified Resource Mix Includes:
Co-Gen Coal Hydro Landfill Gas Natural Gas Solar Wind
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2014 2015 2016 2017 2018Revenues
Sale of Electricity Wholesale(1) 202,426,526$ 183,904,260$ 183,082,750$ 181,249,511$ 185,494,528$ Other Operating Revenue 3,407 967 773 580 387
Total Revenues 202,429,933 183,905,227 183,083,523 181,250,091 185,494,915
Total Non-Operating (1,693,774) (2,131,312) (3,148,243) (2,699,724) (2,703,130)
Increase in Fund Equity 4,080,711 4,414,568 4,907,067 7,717,335 4,934,530
Fund Equity Beginning of Year 25,185,662 29,266,373 33,680,941 38,588,008 46,305,343
Fund Equity End of Year 29,266,373$ $ 33,680,941 $ 38,588,008 $ 46,305,343 $ 51,239,873
(1) MoPEP sells electric in the energy market though Regional Transmission Operators (“RTOs”) and MoPEP purchases energyfrom the RTOs where MoPEP economically needs to receive the power.
Condensed Statements of Operations and Changes in Fund Equity(1)MoPEP POOL FUND
The table above shows the system average rate for all energy delivered during the last five calendar years. Charges include all costs for capacity, energy, transmission, load monitoring, scheduling, dispatch and ancillary services and all administrative costs for managing MoPEP. System average rates include average bill credits for the use of Member Capacity. If MJMEUC did not apply such credits as an offset to MoPEP participants’ energy bills, MJMEUC’s average cost of delivered energy and annual revenues for MoPEP would be approximately 5-6 percent higher and MJMEUC’s operating expenses for MoPEP would be higher by an equal amount.
For Additional Information
Copies of MJMEUC’s audited financial statements may be obtained from Missouri Joint Municipal Electric Utility Commission, 1808 I-70 Drive S.W., Columbia, MO 65203 or website: www.mpua.org/Financials.php. This Report and prior years’ reports can be also found on Municipal Securities Rulemaking Board (“MSRB”) via Electronic Municipal Market Access (“EMMA”). In addition to this Report, annual audits for all Large Pool Power Purchasers, and Unit Power Purchasers, event notices, annual reports, and other materials are located on the MSRB website at www.emma.msrb.org.
Chillicothe Units 1 & 2 Natural Gas/Oil 80.0 <1.0%
Macon Gas Turbine Natural Gas 9.5 105%(1)
City of Higginsville Natural Gas 38.1 <2.0%
City of Jackson 10 units Oil 21.0 <1.0%
Other Peaking Units Natural Gas/Oil 134.6 <1.0%
Total Member Capacity ……………… 283.2 _______________
(1) The capacity of this unit is based upon a summertime rating, determined with evaporation at
100oF. At lower temperatures, the output of the unit is well above 9.0 MW, and the unit regularly produces 10 MW.
Litigation
At the time of delivery of this Report, MJMEUC certifies that other than matters disclosed in this Report, there is no material pending litigation relating to MJMEUC or its operations.
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B. MOPEP LARGE POOL POWER PURCHASERS
(OFFICIAL STATEMENT - APPENDIX B)
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Large Pool Power Purchasers General Information Summary
RollaMunicipal Utilities
City of Lebanon
City of Farmington
City of Marshall
City of Jackson
GeneralYear Established 1945 1853 1891 1914 1905Service Area (sq. Miles) 11.6 19 9.35 10.5 11.14Fiscal Year End September-30 June-30 September-30 September-30 December-31
(b) Prior years reporting is representative of the Utility Fund which included Electric and Water. FY2018 these were separated into two distinct funds, and the data depicts the Electric Fund only.
(a) MJMEUC anticipates Jackson's annual audits to be diseminated by the end of June.
City of Jackson (a)
City of Marshall
City of Farmington
(b)
City of Lebanon
Rolla Municipal Utilities
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Large Pool Power Purchasers Income Statement Summary (‘000s)
Debt Service/Capital Lease $ - $ - $ 627 $ - $ - Debt Service Coverage 0.00 0.00 3.88 0.00 0.00 (a) Combined utility (electrc and water) (b) Prior years reporting is representative of the Utility Fund which included Electric and Water. FY2018 these were separated into two distinct funds, and the data depicts the Electric Fund only.
Rolla Municipal Utilities (a)
City of Lebanon
City of Farmington (b)
City of Marshall
City of Jackson
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Large Pool Power Purchasers Top Ten Customers by Revenue Customer
Industry
% of Revenues
Rolla – 2018
MS&T – Physical Facilities Educational 12.3% Phelps County Regional Medical Center Medical 5.7% Brewer Science Research & Development 2.8% MS&T – Student Affairs Educational 2.5% Hartmann US Manufacturing 2.3% Rolla Public Schools Educational 2.2% City of Rolla Local Government 2.0% Rolla Municipal Utilities Local Government 1.7% Mercy Clinic Medical 1.5% Wal-Mart Stores Inc. 01-101 Retail 1.4%
Lebanon – 2018
Copeland Manufacturer AC Compressors 10.8% Independent Stave Company Manufacturer Oak Barrels 7.6% Tracker Marine LLC Manufacturer Aluminum Boats 2.4% Detroit Tool Metal Products Manufacturer Metal Stamper 2.4% Mercy Hospital Healthcare 1.9% Marathon Electric Manufacturer Electric Motors 1.5% Wal-Mart Retail 1.5% Marine Electric Manufacturing Marine Electrical 1.3% Tracker Marine Plastics Manufacturing Plastic Kayaks 1.2% Detroit Tool & Engineering Manufacturing Tool & Die 1.1%
Farmington – 2018
SR Automotive Products Automotive 11.2% BJC Health Group Medical Center/Health Services 3.2% US Tool Grinding Inc Manufacturing – Tooling 3.2% Farmington R-7 Schools Education 2.7% Wal-Mart Super Center Retail 1.6% Schnuck’s Markets Retail 0.9% The Molding Company-Forte Manufacturing - Plastics 0.9% Menard’s Retail 0.8% Presbyterian HomeLife Medical Center/Health Services 0.8% Country Mart Retail 0.7%
Marshall – 2018
Con Agra Food Packaging Mfg. 18.1% Cargill Food Packaging Mfg. 5.9% Fitzgibbon Hospital Hospital 2.2% Americold Logistics Refrigeration Plant 2.2% MMU Wastewater Government 1.8% Wal-Mart Retail 1.7% CMAS Grain Facility 1.4% MMU Water Government 1.2% Marshall Public Schools Schools 9-12 0.9% Marshall Egg Products Agriculture-Dry Egg Production 0.8%
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Jackson – 2018
Jackson R-2 Schools* Education 6.7% Rubbermaid Closet Organization Products 6.0% American Rail Car* Railroad car industry 2.4% Mondi Jackson Inc. Flexible packaging manufacturer 2.3% Midwest Sterilization Processing 1.6% Cape Girardeau County* Government 1.5% Wal-Mart Retail 1.3% NLC, Inc. Manufacturer electrical 1.3% Country Mart Grocery Retail 1.0% Signature Packaging Manufacturer Corrugated Packaging 0.7%
*Multiple locations
[The remainder of this page left purposely blank]
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C. LARGE UNIT POWER PURCHASERS
AS SHOWN IN THE FOLLOWING OFFICIAL STATEMENTS
OFFICIAL STATEMENT (PLUM POINT & IATAN UNIT 2) - APPENDIX B
OFFICIAL STATEMENT (PRAIRIE STATE) - APPENDIX C
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Large Unit Power Purchasers – Projects Involved
• Columbia, MO (Unit Power Purchaser - Iatan Unit 2 & Prairie State) ......62
• Hannibal, MO (Unit Power Purchaser - Prairie State) ..............................58
• Independence, MO (Unit Power Purchaser - Iatan Unit 2) ...............................68
• Kirkwood, MO (Unit Power Purchaser - Prairie State) ..............................54
• North Little Rock, AR (Unit Power Purchaser - Plum Point) ................................50
• Osceola, AR (Unit Power Purchaser - Plum Point) ................................50
• Poplar Bluff, MO (Unit Power Purchaser - Plum Point) ................................50
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Unit Power Purchasers - General Information Summary
Cities of North Little Rock, AR, Poplar Bluff, & Osceola, AR Unit Power Purchaser: Plum Point Project
NorthGeneral Little Rock, AR Osceola, AR
Year Established 1906 1913 1918Service Area (sq. Miles) 60 40 7.8Fiscal Year End December-31 December-31 December-31
Unit Power Purchasers - Top Ten Customers by Revenue
Customer
Industry
% of Revenues
North Little Rock, AR – 2018
VA Medical Center Hospital 2.2% L’Oreal USA Manufacturing 2.0% Union Pacific Railroad Transportation 1.8% Baptist Health (Springhill) Hospital 1.5% Caterpillar Inc. Manufacturing 1.3% Tyson Poultry Inc. Poultry 1.2% All American Poly Corporation Manufacturing 0.8% St. Vincent Hospital Hospital 0.7% Tenebaum Recycling 0.7% Wal-Mart Stores, Inc. Retail 0.5%
Poplar Bluff, MO – 2018
Briggs & Stratton Manufacturing 7.1% Poplar Bluff Regional Medical Center Hospital 6.0% Mid-Continent Fasteners Manufacturing 3.0% PB School District School 2.8% Gates Rubber Co. Manufacturing 2.0% VA Hospital Hospital 2.0% Wal-Mart Superstore Retail 1.7% Revere Plastics Manufacturing 1.7% Three Rivers College College 1.3% Nordyne Manufacturing 0.7% Starting USA Manufacturing 0.6%
Osceola, AR – 2018
Cyro Industries Acrylic Mfg. 16.5% American Greetings Greeting Card Mfg. 13.4% Kagome (Creative) Foods Margarine Mfg. 5.5% Denso Automobile Part Mfg. 5.1% Systex Automobile Part Mfg. 2.8% SMC Regional Med Hospital 2.1% Wal-Mart General Merchandise 1.8% BlueOak Arkansas E-Waste Recycler 1.3% Actagro Fertilizer Mfg. 1.3% SMS Steel Ind Equip Maint 0.9%
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City of Kirkwood, Missouri
Unit Power Purchaser: Prairie State Project
139 South Kirkwood Road Kirkwood, Missouri 63122
314-822-5806 www.Kirkwoodmo.org
Fiscal Year Ending March 31, 2018 Organization
The City of Kirkwood, Missouri (“Kirkwood”) was the first planned suburban residential area west of the Mississippi River. Kirkwood is located in St. Louis County, approximately 14 miles west of the City of St. Louis. Kirkwood covers approximately 9.1 square miles and is bounded by Interstate 44 on its southern boundary and traversed by Interstate 270 near its western boundary. Together, the interstate highways provide excellent access to all parts of the St. Louis metropolitan area. Kirkwood has a diverse economic base, which includes several large retailers, limited industries, and many small specialty shops.
Kirkwood was established in 1853, incorporated in 1865, re-incorporated as a fourth class city in 1899, and as a third class city in 1930. In 1984, Kirkwood became a home rule city as permitted under a 1971 amendment to the Missouri Constitution. Kirkwood is governed according to a Council–Manager form of government which places legislative and policy-making authority in the city council, which includes the Mayor, and the administrative authority in a Chief Administrative Officer. The Mayor and six council members are elected by the citizens of Kirkwood. Other than the Mayor, three council seats are filled every two years on a rotating basis. The Mayor is elected from the city at large for a term of four years.
The Mayor is the official representative of Kirkwood, presides over meetings of the City Council, and leads the annual review of the Chief Administrative Officer. The City Council appoints a Chief Administrative Officer to implement its policies and direct operations of Kirkwood departments. All decisions concerning the Electric Department are made by the City Council. Recommendations are made to the Council by the Chief Administrative Officer.
Service Territory, Transmission and Distribution System
Kirkwood serves retail customers in approximately two thirds of Kirkwood. The remainder of Kirkwood’s residents and business receive service from Ameren Missouri. Kirkwood limits consist of a 9.1 square mile area. Kirkwood serves just over 10,000 retail customers for electric service.
As of March 31, 2018, Kirkwood’s distribution system consisted of approximately 132 circuit miles of overhead and underground lines. The City maintains six distribution substations. Kirkwood’s distribution system is interconnected to transmission facilities owned by Ameren Missouri.
Power Supply
Kirkwood currently purchases energy and capacity at very favorable rates under agreements with Nextera, and MISO. These contracts will supplement Kirkwood’s purchase of capacity and energy from the Prairie State Project. Kirkwood performs its own scheduling and load forecasting services to round out its power portfolio. The transition from full requirements contracts to partial requirements and market participation has enabled Kirkwood to rebuild its reserve fund to nearly one year’s worth of operating expenses.
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Projected Capital Additions
Current estimates indicate that Kirkwood will invest up to $4.347 million in capital improvements over the next 5 years. A majority of the capital improvements will be dedicated to improving and updating the distribution system, with additional improvements to the traffic signal and street lighting systems in Kirkwood. Kirkwood will fund the improvements with available cash on hand, Congestion Mitigation and Air Quality Improvement Program grants, and Transportation Enhancement Program grants.
Electric Rates
The City Council has sole authority to establish electric rates. Kirkwood reviews these rates as needed and the City Council has the authority by ordinance to adjust the energy rate included in its electric rate schedules in accordance with recommendations by the Chief Administrative Officer. Kirkwood has historically charged the same rates for electric service as Ameren Missouri but also has a power supply cost recovery factor that allows Kirkwood to adjust its rates as needed to maintain a predetermined target of reserve funds by the end of fiscal year 2020 of at least one year’s worth of operating expenses. The Missouri General Assembly approved legislation (HB2265) that has streamlined Ameren Missouri’s ability to adjust its rates. Kirkwood electric rates were most recently changed in January of 2016 when the City Council approved an overall base rate increase of 5% with 2.5% of that increase effective in April of 2017. Since the legislation before the Missouri General Assembly passed Kirkwood Electric will now evaluate any rate modifications made by Ameren Missouri and if need be will modify its rates to maintain consistent rates for Kirkwood residents presiding in the Ameren Missouri and Kirkwood Electric service territories.
Energy Sales and Customer Information
Fiscal year 2018 produced electric sales revenue in excess of $22,272,879. Since Kirkwood’s load is almost exclusively residential and affluent, its load continues to remain steady at an average of 207.78 GWh. Although the area experienced a mild summer and lower summer peak demand, the generation portfolio possessed by the utility stabilized purchase power expenses. Total energy in Fiscal Year 2018 was consistent with prior years and the energy produced from Prairie State hedged the utility’s expenses against higher than normal energy prices in the MISO market. Delinquent account write-offs continue to be less than 1% of billing and sales in Fiscal Year 2018. Reduced energy market prices have enabled the department’s revenues to exceed its expenditures.
Kirkwood’s service area is primarily residential in nature. As of March 31, 2018, 87.44% of Kirkwood’s customers were residential and 12.56% were commercial.
Kirkwood’s sales are fairly evenly dispersed among residential and commercial customer classes. As of March 31, 2018, 47.68% of Kirkwood’s energy sales were made to residential customers and 52.32% were made to commercial customers. Commercial customers represent a full spectrum of business. Education, health care and retail represent major areas of the large customer base.
As of March 31, 2018, 47.41% of Kirkwood’s revenues from the sale of energy were made to residential customers and 52.59% were made to commercial customers.
Total Retail Sales $20,832,656 $22,039,822 $22,272,879
Financial Condition
The following Condensed Balance Sheet and Condensed Statement of Operations for the last three fiscal years have been prepared by Kirkwood based upon audited financial statements. Copies of Kirkwood’s audited financial statements may be obtained from City of Kirkwood, Finance Department, 139 South Kirkwood Road, Kirkwood, MO 63122 or on the web at www.Kirkwoodmo.org under the Finance Department link.
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City of Kirkwood Electric Enterprise Condensed Balance Sheet
Fiscal Year Ending March 31
2016 2017 2018 Assets
Utility Plant, Net $ 6,501,313 $ 10,442,273 $ 13,794,781 Cash and Investments 17,188,078 15,310,246 8,588,296 Other Assets 2,556,183 2,555,065 5,459,235
Total Assets $26,245,574 $28,307,584 $27,842,312 Liabilities and Net Position
Net Position $25,566,565 $26,495,147 $27,092,598 Total Liabilities 679,009 1,812,437 749,714
Total Liabilities and Net Position $26,245,574 $28,307,584 $27,842,312
City of Kirkwood Electric Enterprise Condensed Statement of Operations
Fiscal Year Ending March 31
2016 2017 2018 Revenues Sale of Electricity Retail $20,832,656 $22,039,822 $22,272,879 Other Revenues 293,281 261,229 267,820 Total Revenues 21,125,937 22,301,051 22,540,699 Operating Expenses Purchased Power 14,585,165 16,011,719 16,077,006 Distribution & Customer Care 3,095,361 3,149,084 2,961,336 Administrative and General 1,096,438 1,170,723 1,238,340 Depreciation 250,434 277,088 312,079 Total Operating Expenses 19,027,398 20,608,614 20,588,761 Non-Operating/Other (Revenues) Expenses
Other / Transfers 1,440,550 763,855 1,354,487 Change in Net Position $ 657,989 $ 928,582 $ 597,451
Net Revenues Available for Debt Service
The City of Kirkwood’s Electric Department has no long-term debt outstanding.
Litigation
There is no material pending litigation relating to Kirkwood or its operations.
The City of Hannibal, Missouri (“Hannibal”) was founded in 1819 and became chartered as a city in 1845. Hannibal is located 116 miles northwest of St. Louis in Marion County along the Mississippi River’s west bank. Hannibal and adjacent area comprise an area over 14 square miles and contain approximately two-thirds of the Marion County population and a portion of Ralls County. Hannibal and surrounding area population is over 20,000, and over 250,000 people live within a radius of fifty miles.
Hannibal is organized under the laws of the State of Missouri and operates under a Constitutional Charter approved by the citizenry in 1845. Hannibal is governed according to a Council–Manager form of government. The Mayor and six council members are elected by the citizens of Hannibal for 3 years with staggered terms of service. The City Council appoints a City Manager to implement its policies and direct operations of Hannibal departments.
The Board of Public Works (the “BPW”) is an executive department of the City of Hannibal under the City Charter. The City Charter grants the Board all management, supervision and control of Hannibal’s electric, water, wastewater treatment, collection and artificial underground stormwater collection systems. The BPW was formed in 1903 and is governed by four Board Members who are appointed for a four-year term by the City Manager, subject to confirmation by the City Council, with one member appointed each year. The Board has the exclusive power to establish rates and provide for the assessment and collection of charges for Hannibal’s municipal utilities. The Board has delegated responsibility for the day-to-day management and operations of the municipal utilities to its General Manager.
Service Territory, Transmission and Distribution System
The BPW serves retail customers inside and outside the limits of Hannibal and provides approximately 8,800 retail customers with electric, water and wastewater service.
The BPW’s transmission and subtransmission systems are comprised of approximately 8 miles of 161 kV transmission line and 21 miles of 34.5 kV subtransmission lines, and is interconnected to transmission facilities owned by AmerenUE. The BPW operates three transmission lines that loop around Hannibal, allowing supply of power from any of three directions. The BPW built a 161 kV transmission line and substation west of Hannibal in 2009-2010.
As of June 30, 2018, the BPW’s distribution system consisted of approximately 132 miles of overhead and underground 13.8 kV primary circuits. Hannibal maintains 6 distribution substations.
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Power Supply
The BPW is a unit participant in the purchase of 20 MW of capacity and energy from the Prairie State Project. The BPW purchases the balance of its power needs in the MISO day-ahead marketplace, with the assistance of a consulting engineering firm with significant expertise in MISO operations and scheduling.
Projected Capital Additions
The BPW completed $10 million of capital improvements in the electrical system during 2009-2010 to increase the reliability of the BPW power grid. These improvements are expected to carry Hannibal’s load for the next 20 years. In the fall of 2016, the BPW committed to purchase 20 MW of diesel gensets. These were purchased for the purpose of providing generation capacity as well as a source of backup power in case of a failure in the transmission lines bringing power to the City.
Electric Rates
Rate adjustments were made to the residential class in Fiscal Year 2013. Net revenue in Fiscal Year 2013 after all expenses including debt service was 5.1% of gross revenues. Rate adjustments were also made to all rate classes in Fiscal Year 2014. Net revenue for Fiscal Year 2014 fell due to higher costs of purchased power. Fiscal Year 2014 was the first full year of Prairie State debt repayments. Net revenue in Fiscal Year 2014 was 1.9% of gross revenue. Rate adjustments were again made to all rate classes for Fiscal Year 2015. Net revenue in Fiscal Year 2015 was 10.7% of gross revenue. Rate adjustments were made to some rate classes in Fiscal Year 2016. Net revenue in Fiscal Year 2016 was 4.1% of gross revenue. No rate adjustments were made in Fiscal Year 2017. Net revenue in Fiscal Year 2017 was 10.8% of gross revenue. Rate adjustments were made to some rate classes in Fiscal Year 2018. Net revenue in Fiscal Year 2018 is 16.8% of gross revenue.
BPW’s service area is primarily residential in nature. As of June 30, 2018, 86.5% of BPW’s customers were residential, 12.1% were commercial, and 1.4% were industrial.
The BPW’s sales are dispersed among all customer classes. As of June 30, 2018, 32% of the BPW’s energy sales were made to residential customers, 12% were made to commercial customers and 56% were attributable to industrial and other customers. Large commercial and industrial customers represent a full spectrum of business. Major industrial customers include General Mills Incorporated, Spartan Light Metal Products, Enduro Industries, Watlow Industries, and Buckhorn Rubber Products. General Mills Incorporated is the area’s largest employer, with approximately 1,100 employees.
Total Energy Sales (MWh) 405,076 388,878 405,666 _________________ * Other energy sales in 2018 includes 149,597 MWh of sales into the MISO market
As of June 30, 2018, 37% of the BPW’s revenues from the sale of energy were made to residential customers, 14% were made to commercial customers and 49% were attributable to industrial and other customers.
Energy Revenues by Class
2016 2017 2018 Residential $ 9,184 $ 9,243 $ 9,397 Commercial 3,562 3,514 3,535 Industrial 12,461 12,574 12,196 Other * 3,271 3,827 0 Total Energy Revenues (000’s) $28,478 $29,158 $25,128
* Beginning in Fiscal Year June 30, 2019 the BPW has moved to a ‘self-managed’ power supply portfolio, utilizing a consultant to schedule power in the day ahead marketplace. Consequently, revenues from Prairie State are now netted against MISO purchases in the audited financial statements. If these revenues were separately presented, they would total $3,809,906 for the fiscal year ended June 30, 2018.
Financial Condition
The following Condensed Balance Sheet and Condensed Statement of Operations for the last three fiscal years have been prepared by the BPW based upon audited financial statements. Copies of the City’s audited financial statements may be obtained from City of Hannibal, 320 Broadway, Hannibal, MO 63401 or email [email protected].
City of Hannibal Electric Enterprise Condensed Balance Sheet
2016 2017 2018 Assets:
Utility Plant, Net $15,399,996 $19,870,430 $20,139,237 Cash and Investments 8,477,630 10,647,099 11,691,678 Other Assets 5,481,232 5,430,701 6,737,613
Total Assets $29,358,858 $35,948,230 $38,568,528 Deferred Outflows 1,097,224 492,945 639,947
Total Assets & Deferred Outflows $30,456,082 $36,441,175 $39,208,475 Liabilities and Equity:
Total Liabilities and Equity $27,212,839 $36,207,969 $38,836,754 Deferred Inflows 243,243 233,206 371,721
Total Liabilities & Deferred Inflows $30,456,082 $36,441,175 $39,208,475
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City of Hannibal Electric Enterprise Condensed Statement of Operations
2016 2017 2018 Revenues Sale of Electricity Retail $25,206,850 $25,331,603 $25,128,274 Other Revenues 3,554,739 4,445,794 170,370 Total Revenues 28,761,589 29,777,397 25,298,644 Operating Expenses Purchased Power 22,430,734 21,192,751 15,707,765 Distribution & Customer Care 2,902,101 2,980,372 3,227,871 Administrative and General 1,981,565 1,986,915 2,102,213 Total Operating Expenses 27,314,400 26,160,038 21,037,849 Other Expenses (Revenue) Depreciation 1,140,470 1,152,343 1,114,054 Interest Expense 110,114 191,858 188,185 Other/Transfers 0 0 (1,175,877) Total Other Expenses (Revenue) 1,250,584 1,344,201 126,362 Net Earnings $ 196,605 $ 2,273,158 $ 4,134,433
City of Hannibal Electric Enterprise Net Revenues Available for Debt Service(1)
2016 2017 2018 Total Gross Revenue $28,761,589 $29,777,397 $25,298,644 Operating Expenses 27,314,400 26,160,038 21,037,849 Net Revenue Available for Coverage 1,447,189 3,617,359 4,260,795
Principal and Interest Payments 1,005,964 1,047,573 1,590,130 Debt Service Coverage 1.4 3.5 2.68
_________________ (1) Calculation may differ from specifics contained in any bond ordinance, indenture or capital lease agreement.
Litigation
There is no material pending litigation relating to the BPW Electric Fund or its operations.
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City of Columbia, Missouri
Unit Power Purchaser: Iatan Unit 2 and Prairie State Projects
701 E. Broadway Columbia, MO 65201
573-874-7325 Fiscal Year Ending September 30, 2018
Organization
The City of Columbia, Missouri (the “City”) was incorporated in 1826 and became a Constitutional Charter City in 1949. The City is located near the center of the state, and is joined by interstate with Kansas City, Missouri, to the west and St. Louis, Missouri, to the east. The City is located in Boone County. The City’s utility is Columbia Water & Light (“CWLD”), which was formed in 1904. The City is home to the University of Missouri, Columbia College and Stephens College.
The City is organized under the laws of the State of Missouri and operates under a Constitutional Charter approved by the citizenry in 1949. The City is governed according to a Council–Manager form of government. The Mayor and six council members are elected by the citizens of Columbia for three years with staggered terms of service. The City Council appoints a City Manager to implement its policies and direct operations of City departments, including CWLD.
All decisions concerning CWLD are made by the City Council. Recommendations are made to the Council by the Water and Light Advisory Board (the “Board”). The Board is a five member advisory board created by the City Charter. Board members serve overlapping four year terms. The Board’s powers and duties are solely advisory. The Board performs duties according to the City Charter and Code of Ordinances of the City of Columbia, Missouri, and reports its findings and recommendations at least annually to the residents of Columbia and the City Council.
Service Territory, Transmission and Distribution System
CWLD serves retail customers inside and outside the limits of the City. The CWLD electric service area is approximately 60 square miles. CWLD serves over 50,300 retail electric customers and over 49,400 retail water customers.
CWLD’s transmission system is comprised of approximately 70 miles of 161 kV lines and 69 kV lines. CWLD’s transmission system is interconnected to transmission facilities owned by Associated Electric Cooperative, Ameren, City of Fulton, and the University of Missouri.
As of September 30, 2018, CWLD’s distribution system consisted of over 933 circuit miles of overhead and underground lines. The City maintains eight distribution substations.
Power Supply
The City provides power and energy to its customers from a combination of owned generating resources and purchased power. See “Operating Statistics” below for certain historical information regarding CWLD’s demand and energy requirements. CWLD owns and operates the Columbia Municipal Power Plant which has one natural gas boiler and one gas turbine. The plant has a net rated capacity of 47.5 MW and the last unit was placed in service in 1970. In addition, a retired 22 MW solid-fuel boiler is being evaluated as a potential for conversion to biomass. The plant is used primarily for system support and contributed approximately 0.4% of system energy during the previous year.
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CWLD also owns 3MW of landfill gas generation. This facility began operation in June 2009 with two 1 MW generators. In 2013, a third 1 MW generator began operation. The facility was built to allow the addition of another 1MW of generation as the landfill gas supply develops, which is currently being evaluated. In 2010, CWLD purchased a 25% (36 MW) interest in the 144 MW natural gas fired Columbia Energy Center peaking facility. Columbia purchased the remaining 75% of Columbia Energy Center in May 2011. The majority of CWLD’s energy is purchased from market participants under long-term contracts. The City has long term purchase agreements in place with the City of Sikeston, Missouri, MJMEUC, Associated Electric Cooperative and Ameresco. The amount and term of these contracts is as follows:
Columbia Water & Power Long Term Power Supply Contracts
Capacity (MW)
Contract Expiration
City of Sikeston, Missouri 66 Plant Life MJMEUC – Prairie State 50 Plant Life MJMEUC – Iatan 2 20 Plant Life Associated Electric Cooperative (Wind) 6.3 20 Years Ameresco 3 20 Years NextEra (Wind) 21 20 Years NextEra (Wind) – January 2017 27 End Date Prior Contract
CWLD expects to utilize market purchases for short-term requirements and arrange additional power supply contracts to provide sufficient capacity and energy to meet customer loads into the foreseeable future. In 2015, CWLD entered into a capacity-only contract with Dynegy Marketing and Trade, LLC. The contract started this year (planning year 2017-2018) with 5 MW’s of capacity and runs for ten years. Capacity amounts increase to 45 MW’s in planning year 2023-2024 and remain at that level until termination.
The City has contracted with The Energy Authority (“TEA”) to act as the MISO market participant for the City. All short-term purchased power arrangements are handled by TEA, with prior approval by the CWLD. In addition, the CWLD has contracted with TEA for power supply risk management services. CWLD’s portfolio is modeled and monthly status updates are held to review current status and future options.
Environmental and Regulatory Factors
The Columbia Municipal Power Plant had the capability to burn coal, gas, and wood. Low sulfur coal was used to reduce air emissions. Because of regulations related to coal ash and increasing regulations on emissions, coal combustion was discontinued in September 2015.
Other measures have also been installed at the plant to accurately measure and reduce air emissions produced by the remaining natural gas units. The system is in full compliance with air quality standards set forth by the Missouri Air Conservation Commission and approved by the Federal Environmental Protection Agency. During 2008, CWLD received a temporary permit to test burn wood as a fuel source. Missouri Department of Natural Resources subsequently informed CWLD that no further permitting would be required in order to continue burning wood as a fuel source. Final evaluations are underway to determine the viability of biomass only combustion in one of the units that previously burned coal.
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Projected Capital Additions
Current estimates indicate that CWLD will invest up to $59.7 million in capital improvements over the next 5 years. Bond funding, authorized by voters in early 2015, will fund $29.0 million. All other investment will come from cash. Planned capital improvements include additions to the transmission system; additions to the landfill gas plant; and improvements and updates to the distribution system.
Electric Rates
The City Council has sole authority to establish electric rates. The City reviews these rates and charges annually. The City Council has also granted CWLD the authority to automatically adjust energy rates included in its electric class rate schedules in accordance with a fuel adjustment rider (the “Fuel Adjustment Rider”).
As provided in its bond indentures, the City covenants to charge and collect rates for the electric power and energy supplied by CWLD’s electric system shall be required to provide the greater of (i) net revenues sufficient to cover 110% of CWLD’s aggregate debt service, or (ii) revenues and income sufficient to pay operating expenses, 100% of aggregate debt service on all bonds of the City and any other charges required to be paid out of revenues of CWLD’s electric system. Other charges to be paid out of revenues are generally defined by the City to include payments of in lieu of taxes to the City, capital improvements and replacements that are not bond financed and system working capital requirements. In addition, the City covenants to review the sufficiency of its rates for electric service annually.
In September 2018, the City Council approved a 2.5% rate increase. While CWLD has the authority to use a Fuel Adjustment Rider, every effort is made to maintain a zero fuel adjustment. The last time the Fuel Adjustment Rider was utilized was for three months in the summer of 2004.
The City’s electric service rate schedules are designed to encourage energy conservation and the efficient use of energy. All customer classes are subject to seasonal rates that increase during peak summer months.
Energy Sales and Customer Information
The City continues to experience growth in its energy requirements. Due to the national economic situation, CWLD’s customer growth has slowed from a 3%-4% annual growth to a 1%-2% growth. Forecasts of peak loads and annual energy requirements have been adjusted. CWLD updated an Integrated Resource Plan (“IRP”) in 2013 and is currently in the process of developing a new IRP as part of an Integrated Electric Resource & Master Plan (“IERMP) process.
CWLD’s service area is primarily residential in nature. As of September 30, 2018, 86.6% of CWLDs customers were residential, 13.3% were commercial and 0.1% were industrial or other classifications.
CWLD’s sales are dispersed among all customer classes. As of September 30, 2018, 37.8% of CWLD’s energy sales were made to residential customers, 41.0% were made to commercial customers and 21.2% were attributable to industrial and other customers. Large commercial and industrial customers represent the full spectrum of CWLD’s business. Food processing, electronics, car parts, insurance, and health care represent major areas of the large customer base.
Total Retail Sales (MWh) 1,133,857 1,158,577 1,194,769
As of September 30, 2018, 43.2% of CWLD’s revenues from the sale of energy were made to residential customers, 39.6% were made to commercial customers and 17.2% were attributable to industrial and other customers.
Total Retail Sales $120,871,552 $115,001,550 $121,380,249
Regional Transmission Organization (“RTO”)
CWLD became a member of MISO in 2005. CWLD is a Transmission Owner (“TO”) and has contracted with TEA for market participant services. CWLD receives revenue as a TO and by selling energy in the market when not needed for local requirements. TEA also provides energy risk management services for CWLD. CWLD’s portfolio is modeled and monthly telephone status update meetings are held to assess current and long-term positions. Energy sales are from existing supplies that are not needed for native load and benefit CWLD’s customers by mitigating rate changes.
Revenues from RTO Transactions 2016 2017 2018 Energy Revenues $ 1,072,511 $ 832,964 $ 878,743 Transmission Revenues 3,787,624 1,884,354 2,488,202 Total RTO Revenues $ 4,860,135 $ 2,717,318 $ 3,366,945
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Financial Condition
The following Condensed Balance Sheet and Condensed Statement of Operations for the last fiscal year has been prepared by CWLD based on audited financial statements. Copies of the City’s audited financial statements may be obtained from City of Columbia, Finance Department, P. O. Box 6015, Columbia, MO 65205 or on the web at www.gocolumbiamo.com.
Columbia Water & Light Condensed Balance Sheet
2016 2017 2018 Assets and Deferred Outflows
Net Plant in Service $278,418,494 $274,497,850 $273,460,493 Cash and Marketable Securities 49,290,444 55,353,738 55,140,779 Other Assets 106,843,006 96,265,082 102,160,477
Total Assets 434,551,944 426,116,670 430,761,749 Deferred Outflows 20,266,086 13,782,467 10,219,763
Total Assets and Deferred Outflows $454,818,030 $439,899,137 $440,981,512 Liabilities, Equity and Deferred Inflows
Net Position $208,088,407 $202,693,195 $214,011,273 Revenue Bonds Payable, Noncurrent 212,169,024 202,413,373 192,267,721 Other Noncurrent Liabilities 0 0 0 Current Liabilities from Restricted 23,627,407 20,459,935 19,486,378 Current Liabilities 9,210,743 12,379,719 10,533,354
Total Liabilities and Retained Earnings 453,095,581 437,946,222 436,298,726 Deferred Inflows 1,722,449 1,952,915 4,682,786
Total Liabilities, Equity & Deferred Inflows
$454,818,030 $439,899,137 $440,981,512
Columbia Water & Light Condensed Statement of Operations
2016 2017 2018 Revenues Sale of Electricity Retail $123,926,993 $122,809,576 $130,920,944 Other Revenues(1) 31,285,900 28,321,013 30,656,023 Total Revenues $155,212,893 $151,130,589 $161,576,967 Operating Expenses Fuel and Purchased Power 68,616,338 70,560,710 70,900,537 Other Electric Production Expenses 5,432,139 6,862,649 4,551,825 Electric Distribution & Transmission 15,312,081 14,787,856 13,088,625 Other Operating Expenses(2) 23,004,952 25,549,156 25,717,643 Total Operating Expenses 112,365,510 117,760,371 114,258,630 Other Expenses Depreciation 15,069,433 15,608,709 15,704,438 Interest Expense 8,145,631 7,798,825 7,590,165 Other 16,738,654 19,028,829 17,302,844 Total Other Expenses 39,953,718 42,436,363 40,597,447 Contributed Capital 2,300,466 175,966 1,783,143 Net Earnings $ 5,194,131 $ (8,890,179) $ 8,504,033
________________ (1) Does not include unrealized gains. (2) Includes operating revenues or expenses associated with the operation of the City’s water system
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Columbia Water & Light Net Revenues Available for Debt Service(1)
2016 2017 2018 Total Gross Revenue $159,224,682 $151,130,589 $161,576,967 Operating Expenses (112,365,510) (117,760,371) (114,258,630) Net Revenue Available for Coverage $ 46,859,172 $ 33,370,218 $ 47,318,337
Principal and Interest Payments
$15,814,381
$14,908,750
$16,897,625 Debt Service Coverage 2.96 2.24 2.80
_______________ (1) Calculation may differ from specifics of City ordinances. Litigation
There is no material pending litigation relating to CWLD or its operations.
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City of Independence, Missouri
Unit Power Purchaser: Iatan Unit 2 Project
21500 E. Truman Road Independence, MO 64056
(816) 325-7500
Fiscal Year Ending June 30, 2018
Organization
Incorporated in 1849, the City of Independence, Missouri (“City”) is the county seat of Jackson County and adjoins Kansas City, Missouri, to the west. The City is the fourth largest city in Missouri and the City’s Electric Department (“Department”) operates the second largest municipal electric utility in the state.
The City is organized under the laws of the State of Missouri and operates under a Constitutional Charter approved by the citizenry in December 1961 and amended in 1972 and 1979. The City is governed according to a Council-Manager form of government. The City Council consists of seven members: four council members from single member districts, two council members elected at large, and a Mayor elected at large. Non-partisan elections are held every two years to provide for staggered terms of office. The Mayor and two at-large council members are elected to four year terms and, in alternating elections, the four district council members are elected to four year terms. The City Council appoints a City Manager to implement its policies and direct operations of City departments, including the Department.
The Public Utilities Advisory Board (“Board”) is a seven member advisory board created by the City Charter and appointed by the City Council for overlapping four year terms. The Board’s powers and duties are solely advisory. The Board is empowered to inspect or investigate all public utilities owned and operated by the City and all public utilities operating under franchises or permits granted by the City. The Board “shall report its findings and recommendations at least annually to the City Council, the people of the City, the City Manager, and the respective director(s) of the public utilities operated within the City to which such findings and recommendations apply.” As a matter of practice, the Board meets regularly, typically monthly, with the Electric Utility Director (as well as the Water Department and Wastewater Department Directors), receives reports from the Director on the status of operations, financial condition, or other operational aspects of the electric system and considers policy recommendations of the staff on important utility matters.
Service Territory, Transmission and Distribution System
The Department serves retail customers only within the limits of the City. The City limits consist of a 78 square mile area. The Department serves all the retail customers within the City limits except for the area occupied by the Lake City Arsenal, a United States Government Reservation (approximately 6.5 square miles). On August 1, 1997 the Kansas City Power & Light Company was granted a 20 year non-exclusive franchise to continue serving the Lake City Arsenal United States Government Reservation area.
The Department’s transmission system is comprised of approximately 26 miles of 161 kV lines and approximately 67 miles of 69 kV lines. One 161 kV line interconnects the Department’s Substation A with its Eckles Road Switching Station and provides the interconnection with Associated Electric Cooperative, Inc. The Department’s 161 kV line from Eckles Road to KCPL-GMO’s Sibley Power Station provides an interconnection with KCPL-GMO. The Department has three additional 161 kV interconnections with KCPL. One 161 kV line connects the Department’s Substation M to KCPL’s Hawthorn Power Station, another 161 kV line connects the Department’s Substation N with KCPL’s Blue Valley Substation and the third 161 kV interconnection is with KCPL’s Blue Mills Substation. In addition to these 161 kV interconnections, the Department maintains three 69 kV interconnections
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with KCPL at various locations on the Department’s 69 kV transmission system. The Department’s distribution system consists of approximately 564 circuit miles of 13 kV overhead lines, and 233 circuit miles of 13 kV underground lines.
Power Supply
Currently, the Department has 192 MW of accredited generating capacity (nine generating units) which is owned and operated by the Department. The amount of accredited capacity is based on the capacity accreditation rules of the Southwest Power Pool (SPP), in which the Department is a member. In addition, the Department has accredited generating capacity as described below.
Dogwood Generating Facility. On April 5, 2012, pursuant to an Asset Purchase Agreement with Dogwood Energy, LLC, the Department purchased a 12.3% undivided interest (approximately 75 MW) in the Dogwood Generating Facility (“Dogwood”), a nominal 610 megawatt natural gas-fired combined cycle generating plant located in Pleasant Hill, Missouri. Dogwood was originally developed as a joint venture between Aquila, Inc. and Calpine Corporation and placed into commercial operation in two phases: first as a peaking facility during the summer of 2001 and then as a combined cycle plant on February 27, 2002. In addition to the Department, the Kansas Power Pool (KPP), Missouri Joint Municipal Electric Utility Commission (MJMEUC), the Unified Government of Wyandotte County (KCBPU) and Kansas Municipal Energy Agency (KMEA) also own 10.3%, 16.4%, 17.0%, and 10.1% shares respectively of the Dogwood Energy Facility. Dogwood Energy, LLC maintains the remaining ownership share (33.9%) in the facility.
Each of the owners of Dogwood has entered into certain project agreements that provide for the joint ownership and operation of Dogwood. Under these project agreements, each owner of Dogwood is responsible for its respective share of the fixed operation and maintenance costs, the variable operating costs including fuel, and renewals and replacements of Dogwood. In addition, the owners of Dogwood share in any revenues from sales of unused capacity and energy in the facility. The Department utilized tax-exempt bonds to finance the purchase price of the facility and is responsible for payment of the debt service on these bonds.
Participation Power Agreement with OPPD. In January 2004, the Department entered into a participation power agreement with Omaha Public Power District (the “OPPD Participation Agreement”). Under the OPPD Participation Agreement, the Department purchases an 8.33% share (approximately 57 megawatts) of a 682 megawatt coal-fired baseload generating unit built at OPPD’s existing Nebraska City power station site (“Nebraska City Unit 2”). The OPPD Participation Agreement provides that OPPD is the owner/operator of Nebraska City Unit 2 and OPPD sells the Department’s share of the output on an actual cost-based approach. OPPD issued tax-exempt bonds to pay for the construction of Nebraska City Unit 2 and the Department is obligated to pay its appropriate share of the debt service on those bonds; fixed operation and maintenance costs; variable operating costs, including fuel; and renewals and replacements of Nebraska City Unit 2. Nebraska City Unit 2 began commercial operation on May 1, 2009. The term of the OPPD Participation Agreement is 40 years from the commercial operation date and can be extended by the Department for the life of Nebraska City Unit 2.
Unit Power Purchase Agreement with MJMEUC. In July 2005, the Department executed their Unit Power Purchase Agreement with Missouri Joint Electric Utility Commission (MJMEUC), which was further amended and restated in June 2006. Under the Unit Power Purchase Agreement, the Department purchases approximately 53 MW of capacity and energy from MJMEUC’s ownership interest in Iatan Unit 2. In June 2006, MJMEUC entered into an Ownership Agreement with KCPL for an 11.76 percent undivided ownership share (nominal 106 MW) in the nominal 870 MW Iatan Unit 2. Under the Unit Power Purchase Agreement, MJMEUC sells 50 percent (nominal 53 MW) of its capacity and energy in Iatan Unit 2 to the Department on a cost-based approach. Iatan Unit 2 began
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commercial operations on December 31, 2010, and the term of the Unit Power Purchase Agreement is designed to be for the life of Iatan Unit 2.
Renewable Energy Purchase Agreement with Smoky Hills Wind Project II, LLC. In August 2008, the Department executed a certain renewable energy purchase agreement with Smoky Hills Wind Project II, LLC (the “Smoky Hills Agreement”) for a 15 MW purchase from a wind generation project located in central Kansas (the “Smoky Hills Wind Farm”). The Department’s purchase pursuant to the Smoky Hills Agreement is from Phase II of the Smoky Hills Wind Farm, which added 148 MW of wind generation to the existing 100 MW Phase I. Energy deliveries from the Smoky Hills Wind Farm began on December 8, 2008 and will continue for a term of 20 years with certain renewal options at the mutual agreement of the parties to the Smoky Hills Agreement.
Renewable Energy Purchase Agreement with Marshall Wind Energy, LLC. In May 2015, the Department executed a certain renewable energy purchase agreement with Marshall Wind Energy LLC (The “Marshall Wind Agreement”). The Marshall Wind Agreement is for a 20 MW purchase from a wind generation project located in north central Kansas (the “Marshall Wind Farm”). Energy deliveries from the Marshall Wind Farm began on March 22, 2016 and will continue for a term of 20 years with certain renewable options at the mutual agreement of the parties.
Renewable Energy Purchase Agreement with MCP-Independence, LLC. In November 2015, the Department executed a certain renewable energy purchase agreement with MCP-Independence, LLC. This agreement is for the energy produced from a 3 MW solar farm located on the Department’s Distribution system. In July 2017, the city executed a second renewable energy purchase agreement with MCP-Independence LLC to expand the solar farm by 8.5 MW. Both agreements provide that the City will purchase all energy output of the projects for the entire 25-year term of the agreements. Energy deliveries from the initial solar farm began on March 15, 2017 and deliveries for the expansion began June 14, 2018.
The Department believes that its total accredited generating capacity resources, including the Department’s interest in Dogwood and the other capacity purchases, is sufficient to meet its projected annual system peak load, including the SPP requirement of 12 percent reserves, through 2025.
A breakdown of Department-owned and jointly-owned generating facilities are shown in the following table: Generating Unit Characteristics Plant
Accredited Net Capacity (MW)
Year of Initial Operation
Fuel Type
Blue Valley Steam Power Plant Unit No. 1 22 1958 Natural Gas Unit No. 2 22 1958 Natural Gas Unit No. 3 54 1965 Natural Gas
Total Steam Units 98
Jointly Owned Units
Dogwood Energy Facility 75 2001 Natural Gas Substation Generations
Regional Reliability Organization The Southwest Power Pool (SPP), an organization of electric utilities serving the central part of the United States, was established to oversee and maintain the reliability of the bulk electric power system. The Department has been a member of the SPP since 1970 and operates its electric system in accordance with the SPP rules. Beginning in the year 2000 and due to the restructuring of the electric industry, the SPP began the administration and operation of a regional transmission tariff where certain SPP members elected to have the SPP operate their transmission facilities under this tariff. At that time, the Department elected not to become a transmission owning member and to maintain its own transmission facilities.
In June 2015, the Department became a transmission owning member in SPP. As a transmission owner member, the City designates its transmission facilities to the SPP for operation and administrative control. In return for turning over control of our transmission facilities to SPP, SPP will pay the Department for use of the transmission system by the Department and by other entities utilizing the SPP transmission system, which now would include the Department’s facilities. The amount of revenue received is based on the Department’s cost to own, maintain and operate the transmission system, i.e., Annual Transmission Revenue Requirements or ATRR.
The North American Electric Reliability Corporation (NERC) is a not-for-profit international regulatory authority whose mission is to assure the effective and efficient reduction of risks to the reliability and security of the grid. NERC develops and enforces Reliability Standards; annually assesses seasonal and long‐term reliability; monitors the bulk power system through system awareness; and educates, trains, and certifies industry personnel. NERC is the electric reliability organization (ERO) for North America, subject to oversight by the Federal Energy Regulatory Commission (FERC) and governmental authorities in Canada.
NERC assigned enforcement of the reliability standards to Regional Entities (RE), which are assigned to monitor and enforce compliance in geographic areas of North American. The city became a member of the Midwest Reliability Organization (MRO) in July 1, 2018 after the Southwest Power Pool (SPP) membership voted to cease operations of the SPP RE. The MRO RE headquarters is located in St. Paul, MN and has jurisdiction in much of the Midwest, including all or parts of the states of Arkansas, Illinois, Iowa, Kansas, Louisiana, Michigan, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wisconsin.
Environmental and Regulatory Factors The Department operates its generation in accordance with the applicable federal and state emission rules and regulations. Blue Valley Unit No. 3 is subject to the Phase II requirements of the federal Acid Rain Program (ARP). Blue Valley Units No. 1 and No. 2 and the Missouri City units are exempt from the ARP requirements. Currently Blue Valley Unit No. 3 is allocated 4,670 tons of sulfur dioxide (SO2) stack emission allowances annually. The Department has utilized this unit in a least cost manner while considering the cost of the SO2
emissions. As of January 1, 2018, the accumulated available SO2 emission allowances carried forward into calendar year 2018 was 37,055 tons. These allowances are of little compliance or economic value due to the passage of the Cross State Air Pollution Rule in 2014, and Blue Valley’s cessation of coal firing on September 9, 2015.
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In addition to the ARP requirements for Blue Valley Unit No. 3, the Department is restricted to SO2 emissions (three hour average basis) of 6.3 pounds per million Btu for all three units at Blue Valley station. During the fiscal year ending June 30, 2017, the Department was in compliance with such SO2 regulations. Blue Valley Unit No. 3 is also regulated for nitrogen oxide (NOX) emissions. The unit is limited to 0.35 pounds per million Btu during the defined ozone season (May 1 through September 30) and 0.40 pounds per million Btu during the rest of the year. Low NOX burners were installed on this unit to comply with this regulation. The average NOX emission rate was 0.121 pounds per million Btu during the 2017 ozone season and 0.133 pounds per million Btu for the entire calendar year 2017. Blue Valley Unit No. 3 was also subject to the federal/state regulations in conjunction with the Clean Air Interstate Rule (“CAIR”) which was to further regulate SO2 and NOX emissions. Blue Valley Unit No. 3 was also subject to the Clean Air Mercury Rule (“CAMR”) which was to regulate mercury emissions. Both the CAIR and CAMR rules were vacated by the United States Court of Appeals for the District of Columbia. The proposed CAIR replacement rule was published in the federal register on July 6, 2010 and finalized as the Cross-State Air Pollution Rule (“CSAPR”) on August 8, 2011. Scheduled to be effective January 1, 2012, CSAPR would have limited the Blue Valley Unit No. 3 to an annual total of 587 tons of SO2 emissions and 147 tons of NOX emissions. In addition, it would have limited emissions of NOX during the ozone season to a combined total of 77 tons. CSAPR was vacated by the D.C. Court on August 21, 2012, and CAIR left in-place. The Environmental Protection Agency (“EPA”) appealed this decision to the Supreme Court and the Court upheld CSAPR, overruling the lower court’s ruling, on April 29, 2014. The CSAPR limits effective for the 2015 operating season and beyond are 464 tons SO2, 126 tons NOX, and 22 tons NOX ozone season. As of January 1, 2018, the Department had accumulated 387 NOx annual credits and 63 NOx ozone season credits under the CSAPR program. Compliance options for CSAPR include the addition of pollution control equipment, fuel switch to natural gas, or early retirement. The installation of pollution control equipment is not cost effective and the units are still an essential part of our power portfolio; consequently, the compliance plan for the next few years will be to run on natural gas. The proposed CAMR replacement rule (i.e., Mercury and Air Toxics Standards or MATS rule for power plants) was proposed on May 3, 2011. The final rule was published February 16, 2012. Compliance will be required three years and 60 days after publication of the rule in the Federal Register, thus Blue Valley 3 became compliant on April 16, 2015. Compliance options for Blue Valley Unit 3 include the addition of pollution control equipment, fuel switch to natural gas, or early retirement. The installation of pollution control equipment is not cost effective; consequently, the compliance plan after April 16, 2015 is to run the unit on natural gas. The Blue Valley Units No. 1 and No. 2 were to be subject to the National Emission Standards for Hazardous Air Pollutants for Industrial, Commercial, and Institutional Boilers and Process Heaters (“Industrial Boiler MACT”) which was to regulate the emitted amount of mercury, hydrogen chloride, particulates, and carbon monoxide. On June 8, 2007, the Industrial Boiler MACT rule was vacated by the United States Court of Appeals for the District of Columbia. On July 30, 2007 the vacatur was mandated making the rule void. The EPA published the proposed revised Industrial Boiler MACT (“IB-MACT”) rule in the federal register on June 4, 2010 and the rule was finalized on February 21, 2011. On May 18, 2011, the EPA published a notice delaying the effective date of the rule pending the completion of reconsideration or judicial review, whichever is earlier. The EPA completed its reconsideration and published the final rule on January 31, 2013. Compliance with the IB-MACT rule is now required by January 31, 2016. Compliance options include the addition of pollution control equipment, fuel switch to natural gas, or early retirement. The installation of pollution control equipment is not cost effective.
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Consequently, the compliance plan for Blue Valley Units 1 and 2 will be to run on natural gas after January 30, 2016. The Blue Valley Units are subject to the Missouri Department of Natural Resources’ (“MDNR”) Kansas City Ozone Maintenance Plan. The goal of the Maintenance Plan is to ensure the ozone levels do not increase to the point of causing a violation of the ozone air quality standard. Under Section 110(a)(1) of the Clean Air Act, one required element of the Maintenance Plan is a set of contingency measures with trigger levels based on measured regional ozone levels. The MDNR’s contingency control measures for the Missouri portion of the maintenance area have been designed as a two-phased approach with implementation occurring when the trigger of a specific phase occurs. The Phase I contingency measures have been triggered based on ozone levels in the years 2005 through 2007. Phase I includes early implementation of control devices (e.g., Low NOX Burners) on CSAPR affected coal-fired electric generating units (“EGU”) as a means to reduce NOX at several major NOX point sources. Blue Valley Unit 3 is a CSAPR-affected EGU. MDNR Air Pollution Control Program is currently working with the Department in developing the most appropriate set of NOX emission reductions for the Maintenance Plan contingency measures. The EPA published the final Greenhouse Gas (“GHG”) Tailoring Rule on June 3, 2010. The GHG Tailoring rule regulates GHG emissions (i.e., carbon dioxide (“CO2
”), methane, etc.) under Prevention of Significant
Deterioration (PSD) and Title V permitting programs and will be implemented in phases. Beginning January 2, 2011, the Blue Valley units must comply with the PSD provisions of the rule. Under these provisions, any construction project on the units must be evaluated for potential significant GHG emission increases. If any construction project produces a significant increase in GHG emissions then best available control technology (BACT) must be installed. As part of the Tailoring Rule, the USEPA released technical guidelines on what constitutes BACT for GHGs in October 2010. As of July 1, 2011 (Phase II), a new source with potential GHG emissions above 100,000 tons per year is subject to PSD permitting requirements for GHGs. With respect to the Title V permitting program, beginning January 2, 2011, new or existing Title V major sources are subject to Title V requirements for GHGs. The Department is monitoring the activities of the EPA and the MDNR will take the necessary action to comply with any future compliance rules regarding GHG emissions and how it will impact the Blue Valley units. On June 2, 2014, the EPA proposed the Greenhouse Gas Standards for Existing Power Plants, aka the Clean Power Plan. This proposed rule seeks to cut carbon dioxide emissions for existing plants 30 percent nationwide and 21 percent for the State of Missouri from 2005 levels by 2030. The proposed rule would require the State of Missouri to meet CO2 emission targets of 1,621 lbs/MWH by 2020 and 1,544 lbs/MWH by 2030. The comment period on this proposed regulation ended December 1, 2014. On August 3, 2015 the final Clean Power Plan was released with deeper CO2 cuts than those in the proposed plan. The final rule requires Missouri to meet CO2
emission targets of 1,621 lbs/MWH by 2022 and 1,272 lbs/MWH by 2030. On February 9, 2016, the Supreme Court stayed the implementation of the Clean Power Plan (CPP) pending judicial review. In March 2017, President Donald Trump signed an executive order calling for EPA to review the CPP. Currently, the Court has suspended the CPP and asked the EPA for a plan on how it will proceed with CO2 regulation. The Department is monitoring the activities of the EPA and will take the necessary action to comply with any future compliance rules regarding CO2. The Department is in compliance with the current regulations and expects to comply with future regulations through a combination of unit commitment strategy, use of compliant fuel, participation in cap and trade programs, and/or future environmental equipment enhancements on the units.
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Projected Capital Projects
Current estimates indicate that the Department will invest approximately $25.6 million in capital projects over the next 5 fiscal years. The capital projects will be dedicated to improving and updating the distribution system and projects for generation, transmission and other facilities. It is expected that the City will fund these projects with a combination of cash reserves and proceeds of municipal revenue bonds.
Electric Rates
The City Council has sole authority to establish electric rates. The Council has adopted electric class rate schedules by ordinance after receiving recommendations from the Department and consideration of rate studies performed by outside consultants. The City Council has also granted the Department the authority to automatically adjust the monthly energy rates of its electric class rate schedules in accordance with a Power Supply Fuel - Energy Cost Adjustment Schedule (“FCA”). The Department reviews the rate structure at least annually to determine if modifications are needed.
As provided in its bond indentures, the City covenants to charge and collect rates for the electric power and energy supplied by the Department’s electric system as shall be required to provide revenues and income sufficient to pay the cost of the following: operating expenses, 100% of aggregate debt service on all bonds of the City and any other charges required to be paid out of revenues of the Department’s electric system. Other charges to be paid out of revenues are generally defined by the City to include the payment in lieu of taxes to the City, the financing of system capital improvements and replacements that are not bond financed by the City, and system working capital requirements. In addition, the City covenants to review the sufficiency of its rates for electric service annually.
In November 2008, the City Council adopted multiple schedules of rate increases following a 5-year cost-of-service study and rate plan performed by Sawvel and Associates, Inc. Under the adopted rate plan, base rates were increased by 9% beginning January 1, 2009, 5% on July 1, 2009, 5% on July 1, 2010, 5% on July 1, 2011, and 5% on July 1, 2012. In addition to any base rate increases, customer billing increases/decreases may result from changes in fuel and purchased power costs which are passed along to customers pursuant to the FCA.
The City’s electric service rate schedules are generally similar in type and number to the rate schedules of other electric utilities adjoining its service territory.
Energy Sales and Customer Information
The City has experienced little change in its peak load and energy requirements over the last five years. The actual system peak load and energy requirements are significantly influenced by the variation in the number of summer season cooling degree days incurred in each annual period.
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Historical Peak Load and Energy Sales Fiscal Year Ending June 30
The Department’s Service area is residential in nature. As of June 30, 2018, 91% of the Department’s customers were residential and 9% were commercial and industrial or other classifications.
As of June 30, 2018, 51% of the Department’s retail energy sales were made to residential customers and 49% were made to commercial customers, industrial and other customers. Commercial customers are primarily in the business of general retail, professional services and food service.
Energy Sales (MWh) by Class Fiscal Year Ending June 30
Total Retail Sales 987,083 1,024,394 1,048,710 Wholesale 162,068 80,003 82,073
Total Energy Sales 1,149,151 1,104,397 1,130,783
As of June 30, 2018, 55% of the Department’s retail revenues from the sale of energy were made to residential customers and 45% were made to commercial, industrial and other customers.
Energy Revenues by Class Fiscal Year Ending June 30
Total Retail Sales 126,884,000 131,135,683 138,199,545 Wholesale 3,298,000 1,751,022 3,087,644
Total Energy Sales $ 130,182,000 $ 132,886,705 $ 141,287,189
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Financial Condition
The following Condensed Balance Sheet and Condensed Statement of Operations for the last three fiscal years have been prepared by the Department based upon audited financial statements. Copies of the City’s audited financial statements may be obtained from the City’s website at www.independencemo.org or by submitting a written request to the City Clerk, 111 E. Maple Street, P.O. Box 1019, Independence, MO 64051.
Condensed Balance Sheet Fiscal Year Ending June 30
2016 2017 2018 Assets Net Utility Plant Current Assets
$ 225,353,906 79,040,698
$ 230,948,288 94,955,310
$ 236,906,774 101,903,287
Deferred Charges & Other Assets 30,903,502 42,094,437 29,246,137 Total Assets & Deferred Outflows $ 335,298,106 $ 367,998,035 $ 368,056,198 Liabilities and Equity Current Liabilities
$ 21,240,023
$ 18,159,470
$ 17,655,072
Long Term Liabilities & Deferred Credits 177,545,648 217,226,965 253,368,121 Total Equity 136,512,435 132,611,600 97,033,005 Total Liabilities and Equity $ 335,298,106 $ 367,998,035 $ 368,056,198
Fuel 8,283,604 5,096,159 6,078,263 Purchased Power 42,690,233 47,313,899 46,421,508 Production 16,607,755 9,951,847 9,278,350 Transmission & Distribution 20,796,769 20,738,240 23,004,087 Customer Service 4,247,247 4,122,449 4,445,507 General & Administrative 21,869,347 21,891,928 19,668,550
Total O&M 114,494,955 109,114,522 108,896,265 Other Expenses 30,193,757 26,596,429 30,415,662 Total Operating Revenue Deductions 144,688,712 135,710,951 139,311,927 Net Operating Income (9,941,237) 2,234,951 8,735,801 Total Non-Operating Deductions (net) (3,989,597) (6,204,837) (3,729,741) Net Income (13,930,834) (3,969,886) 5,006,060 Capital Contributions 1,135,134 69,051 193,643 Change in Net Position $ (12,795,700) $ (3,900,835) $ 5,199,703
Net Revenues Available for Debt Service
2016 2017 2018 Total Gross Revenue $ 135,479,674 $ 138,833,335 $ 150,283,900 Revenue Available for Coverage of
Electric Revenue Bonds 25,097,750 34,917,143 40,782,032 Principal and Interest Payments 8,934,957 10,137,430 10,721,700 Debt Service Coverage 2.81 3.44 3.80
Litigation
There is no material pending litigation relating to the Department or its operations.
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MJMEUC 2018 AUDITED FINANCIAL STATEMENTS
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REPORT OF
MISSOURI JOINT MUNICIPAL ELECTRIC UTILITY COMMISSION
DECEMBER 31, 2018 AND 2017
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.:: WILLIAMS .::::KEEPERS LLC
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
2005 West Broadway, Suite 100, Columbia, MO 65203 OFFICE ( 573) 442-6171 FAX ( 573) 777-7800
3220 West Edgewood, Suite E, Jefferson City, MO 65109 OFFICE (573) 635-6196 FAX (573) 644-7240
www. wi 11 iamskeepers.com
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of Missouri Joint Municipal Electric Utility Commission
We have audited the accompanying combined and combining financial statements of the Missouri Joint Municipal Electric Utility Commission (MJMEUC), which comprise the combined and combining statements of net position as of December 31, 2018 and 2017; the related combined and combining statements of revenues, expenses and changes in net position, and cash flows for the years then ended; and the related notes to the financial statements, which collectively comprise MJMEUC's basic financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with U.S. generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
American Institute of Certified Public Accountants I Missouri Society of Certified Public Accountants I Member, Allinial Global
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Opinions
In our opinion, the combined and combining financial statements referred to above present fairly, in all material respects, the combined financial position of the Missouri Joint Municipal Electric Utility Commission and each of its funds as of December 31, 2018 and 2017, and the combined and individual results of the funds' operations and cash flows for the years then ended in accordance with U.S. generally accepted accounting principles.
Other Matters
Required Supplementary Information
U.S. generally accepted accounting principles require that the management's discussion and analysis on pages 3 to 11 and the pension plan schedules on pages 53 and 54 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with U.S. generally accepted auditing standards, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise MJMEUC's basic financial statements. The combining non-major fund financial statements and schedule of changes in restricted bond accounts (the supplemental information) on pages 54 to 60 are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The supplemental information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with U.S. generally accepted auditing standards. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
May 30, 2019
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MANAGEMENT'S DISCUSSION AND ANALYSIS
Management of the Missouri Joint Municipal Electric Utility Commission ("MJMEUC") offers all persons interested in the financial position and results of MJMEUC's operations this discussion and analysis of the financial performance of MJMEUC, which provides an overview of MJMEUC's financial activities for the fiscal years ended December 31, 2018 and 2017. Please read this narrative in conjunction with the accompanying financial statements and notes thereto, which follow this section.
Overview ofMJMEUC
MJMEUC was formed with the main purpose of providing dependable, sufficient and economical electric power and energy for the benefit of member municipalities and their residents. There are three full requirements energy pools within MJMEUC. The Missouri Public Energy Pool #1 ("MoPEP") consists of 35 municipal members, the Mid-Missouri Municipal Public Energy Pool ("MMMPEP") consists of 13 municipal members, and the Southwest Missouri Public Energy Pool ("SWMPEP") consists of two municipal members; however, SWMPEP will not start receiving power from MJMEUC until 2020. Each municipal member of the pools has entered into a power purchase contract with MJMEUC for the full power requirements of their respective municipality. MJMEUC provides the electric power and energy requirements of the pool members pursuant to their respective pool agreement. Additionally, MJMEUC has take-or-pay unit power purchase agreements with certain other MJMEUC members whereby the agreement entitles the member to a specific percentage share of capacity and electric output of MJMEUC joint ownership interest in power generating facilities with other entities.
Overview of the Financial Statements
This report consists of three parts; Management's Discussion and Analysis (this section), the Financial Statements, and Supplementary Information. The Financial Statements are comprised of the Government-wide Financial Statements; the Fund Financial Statements; and the Notes to Financial Statements. These statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP"). MJMEUC applies GAAP that pertains to regulated operations and uses the Uniform System of Accounts prescribed by the Federal Energy Regulatory Commission.
The Government-wide Financial Statements provide a broad overview ofMJMEUC's finances. These financial statements include the Combined Statements of Net Position; the Combined Statements of Revenues, Expenses, and Changes in Net Position; and the Combined Statements of Cash Flows.
The Fund Financial Statements are used to aid financial management by segregating transactions related to certain functions or activities and to ensure compliance with contractual and finance-related legal requirements. These financial statements include the Combining Statements of Net Position; the Combining Statements of Revenues, Expenses, and Changes in Net Position; and the Combining Statements of Cash Flows.
The financial statements are prepared using proprietary or enterprise fund accounting. Proprietary funds account for operations that are designed to be s�lf-supporting from fees charged to consumers for the provision of goods and services where the government has decided that the periodic determination of revenues, expenses, and net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. The accounting and financial reporting practices of proprietary funds are similar to those used for business enterprises and focus on capital maintenance and the flow of economic resources using accrual accounting.
The supplemental information is separated into two sections; the first section is referred to as Required Supplementary Information and its presentation is required by GAAP. The second section is referred to as Supplementary Information and is not required by GAAP to be presented. The R(;lquired Supplementary Information includes two schedules regarding MJMEUC's pension plan and are the Schedule of Changes in Net Pension Liability and the Schedule of Contributions - Last Ten Fiscal Years. The Supplemental Information section includes statements for non-major funds consisting of Combining Statements of Net Position; Combining Statements of Revenues, Expenses, and Changes in Net Positi�n; and Combining
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Statements of Cash Flows. In addition, the Supplemental Information section includes a Schedule of Changes in Restricted Bond Accounts. The Supplemental Information section is presented to provide additional information on the individual funds comprising MJMEUC's financial statements for the purposes of additional analysis.
The Combined and Combining Statements of Net Position presents MJMEUC's financial position as of the end of the years presented. Information is displayed on assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference reported as net position. Over time, increases and decreases in MJMEUC's net position are one indicator of whether MJMEUC's financial health is improving or deteriorating. Other factors to consider include MJMEUC's wholesale electric rates and its ability to maintain or exceed debt coverage levels and other covenants required by its bond indentures.
The Combined and Combining Statements of Revenues, Expenses and Changes in Net Position present information detailing the revenues, expenses, and deferred inflows and outflows that resulted in the change in net position that occurred during the years presented. All revenues, expenses, and deferred inflows and outflows are reported on an accrual basis, following GAAP for regulated operations. This means that the revenues, expenses, or deferred inflows and outflows are recognized as soon as the underlying event giving rise to when the change occurs, regardless of when the actual cash is received or paid. Thus, revenues, expenses, and deferred inflows and outflows are reported in these statements for some items that will not result in cash flows until future periods. Further, GAAP for regulated operations requires a matching of revenues and expenses for when costs are recoverable in MJMEUC's rates.
The Combined and Combining Statements of Cash Flows presents the cash inflows and outflows ofMJMEUC categorized by operating, capital and related financing, and investing activities. It reconciles the beginning and end-of-year cash and cash equivalents balances contained in the Statements of Net Position. The effects of accrual accounting are adjusted out and non-cash activities, such as depreciation, are removed to supplement the presentation in the Statements of Revenues, Expenses and Changes in Net Position.
The Notes to Financial Statements follow the above-mentioned financial statements and provide additional information that is essential to have a full understanding of the information provided in the financial statements.
Financial Highlights 2018 2017 2016
Net Position (equity) $ 71,583,519 $ 63,366,740 $ 53,693,510
Change in Net Position (net income) $ 8,216,779 $ 9,673,230 $ 9,066,400
Capital Improvements $ 40,780,329 $ 17,750,786 $ 18,627,702
Coincident Peak Demand
MoPEP 529 megawatts 531 megawatts 532 megawatts
MMMPEP 123 megawatts 107 megawatts 107 megawatts
Electric Sales (in megawatt hours)
MoPEP 2,666,193 2,517,758 2,609,294
MMMPEP 628,464 544,765 557,859
Plum Point 1,187,008 802,144 1,015,813
Iatan 2 378,734 675,718 542,927
Prairie State 1,427,372 1,335,885 1,312,755
Revenue Bond Credit Ratings
MoPEP (Moody's/Fitch) A2/ A A2/A A2/A
Plum Point (Moody's/Fitch/S&P) A3 I A I A- A3 I A I A- A3 I A I A-
Iatan 2 (Moody's/Fitch) A2/A A2/ A A2/ A
Prairie State (Moody's/Fitch) A2/A A2/ A A2/ A
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Financial Analysis
The following tables present summarized financial position and operating results as of and for the years ended December 31, 2018, 2017 and 2016. Additional details are available in the accompanying financial statements.
Combined Statements of Net Position as of December 31, 2018, 2017 and 2016
2018 2017 2016
ASSETS
Capital Assets $ 1,206,910,381 $ 1,210,821,203 $ 1,235,702,824
Other Noncurrent Assets 177,256,958 203,458,491 173,977,944
Current Assets 159,361,037 123,676,508 128,926,581
Total Assets 1,543,528,376 1,537,956,202 1,538,607,349
DEFERRED OUTFLOWS OF RESOURCES 35,954,277 38,230,479 39,187,572 Total Assets and Deferred Outflows of
Accounts Payable and Accrued Liabilities 19,460,904 19,807,421 22,202,386
Current Maturities of Long-Term Debt 66,281,000 33,336,000 42,145,000
Total Liabilities 1,464,737,280 1,474,080,569 1,489,737,944
DEFERRED INFLOW OF RESOURCES 43,161,854 38,739,372 34,363,467
NET POSITION
Net Investment in Capital Assets (61,512,279) (77,996,354) (92,394,746)
Restricted 53,772,915 49,939,311 56,557,149
Unrestricted 79,322,883 91,423,783 89,531,107
Total Net Position 71,583,519 63,366,740 53,693,510 Total Liabilities, Deferred Inflow of Resources,
and Net Position $ 1,579,482,653 $1,576,186,681 $ 1,577,794,921
Financial Position Analysis - 2018
MJMEUC issued $26,605,000 of MoPEP Facilities Revenue Bonds for the purchase of an additional 8.2% interest, or 50 MW, in the Dogwood Generating Facility, bringing MJMEUC's ownership share to 16.4% or 100 MW, which is all dedicated to MoPEP. On a cost share basis, MoPEP had directed MJMEUC to entitle MMMPEP to 50 MW through 2021 and then reduced to 25 MW until certain Mo PEP power purchase agreements expire through 2024. Other significant capital asset purchases were for capital improvements to existing power generation facilities.
Assets and Deferred Outflows of Resources
Capital assets, net of depreciation, decreased $3.9 million (0.3%) in 2018 due to depreciation expense exceeding capital improvement expenditures. Construction work in progress increased 26.3%, from $6.6 million at the end of 2017 to $8.3 million at the end of 2018.
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Other noncurrent assets consist of investments, restricted bond accounts, other restricted cash and investments, contractual deposits, and regulatory assets. Other noncurrent assets decreased by $26.2 million (12.9%) due to the proceeds from the Prairie State 2017 crossover advance refunding getting reclassified as a current asset in 2018 due to the refunded bonds being called in January 2019. Current assets increased $35.7 million (28 .9%) primarily due to the increase in the current portion of restricted bond accounts for the above refunding payment in 2019.
Deferred outflows of resources represent a consumption of net position that applies to a future period(s) and will not be recognized as an outflow of resources (expense) until then. The deferred outflows of resources in MJMEUC's financial statements as of December 31, 2018 and 2017 include refunding bond costs, which are amortized into MJMEUC' s expenses over the life of the refunding bonds, and certain costs related to MJMEUC' s defined benefit pension plan. Deferred outflows of resources decreased approximately $2.3 million, primarily due to the amortization of refunding bond costs.
Liabilities and Deferred Inflows of Resources
Long-term debt, including the current portion, had a net decrease of $10.4 million (0. 7%) as a of result principal payments made on debt during 2018. Accrued interest payable increased approximately $268,000 (1.2%) and consists of interest accrued on MoPEP, Plum Point, Iatan 2 and Prairie State capital projects. This slight increase was the result of additional bonds issued for the addition 5 0 MW purchased of the Dogwood Generating Facility mostly offset by large principal payments made on other debt issues that lowered interest costs. The current portion of unearned revenue increased by approximately $1.3 million (8.5%), which primarily has to do with the timing of payments and the associated costs of the power generation projects. The net pension liability decreased approximately $31,000 from 2017, see Note 10 to these financial statements for more information. Accounts payable and accrued liabilities remained flat from 2017 to 2018.
Deferred inflows of resources represent an acquisition of net position that applies to a future period(s) and will not be recognized as an inflow ofresources (revenue) until then. MJMEUC has two financial statement items that qualify for reporting in this category, which are regulatory credits and unamortized deferred gain on refunded debt, which are deferred and amortized over the shorter of the life of the refunded debt or the new debt. Regulatory credits are reductions in earnings ( or costs recovered) to cover future expenses. These amounts are being amortized or otherwise recognized in revenue in accordance with MJMEUC's rate making policy. Deferred inflows of resources increased $4.4 million from an increase in regulatory credits.
Net Position
MJMEUC's total net position increased $8.2 million (13%), which is primarily attributable to amounts collected for rate covenants according to debt agreements and investment return. The approximate $61.5 million deficit portion of net position decreased from 2017 figures by approximately $16.5 million and is primarily attributable to the reduction of debt in 2018. This deficit reflects the investments in capital assets less any outstanding debt net of unspent debt project funds that were issued to acquire those assets. Restricted net position increased $3.8 million from 2017, which consists of funds held by either MJMEUC for operations and maintenance reserves or held by MJMEUC's bond trustees that are to be used for payment of debt service and as debt service reserves, less the current portion ofrelated liabilities as of the end of the fiscal year that are to be settled with these funds. Unrestricted net position decreased $12.1 million in 2018.
Financial Position Analysis - 2017
MJMEUC issued two advance refunding revenue bond issues in December 2017 to take advantage of favorable interest rates and to lower total future debt service requirements. One advance refunding issue was MoPEP Facilities Revenue Refunding Bonds, which partially advance refunded certain other MoPEP Facilities Revenue Bonds relating to the Fredericktown and Dogwood power generation facilities. Total future debt service savings from this advance refunding is approximately $3. 7 million with net present value savings of approximately $2.8 million. The refunded bonds were removed from the Statements of Net Position as they were legally defeased and the Mo PEP Series 2017 refunding revenue bonds were added to the Statements of Net Position.
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MJMEUC's other advance refunding issue in December 2017 was Prairie State Project Revenue Bonds issued to advance refund certain other Prairie State Project Revenue Bonds. Total future debt service savings from this advance refunding is approximately $4.8 million with net present value savings of approximately $3.9 million. This advance refunding is classified as a crossover refunding, and as such, legal defeasance did not occur and the new and old debt are included in the Statements of Net Position as well as the net proceeds of the new debt issue, which are used to make debt service interest payments on the Prairie State Series 2017 Bonds until the crossover date. On the crossover date the advance refunded bonds will be called and retired with the remaining net proceeds of the new debt issue.
Assets and Deferred Outjlows of Resources
Capital assets before depreciation increased $13. 7 million ( 1 % ) as a result of continued capital improvements of the utility plants. Capital assets, net of depreciation, decreased $24.9 million (2%) in 2017 due to depreciation expense exceeding capital improvement expenditures. Construction work in progress decreased slightly from $6.9 million to $6.6 million at the end of 2017 compared to 2016.
Other noncurrent assets consist of investments, restricted bond accounts, other restricted cash and investments, contractual deposits, and regulatory assets. Other noncurrent assets increased by $29.5 million (16.9%) due to the addition of bond escrow funds from the Prairie State advance refunding in 2017. Current assets decreased $5.3 million (4.1 %) due to decreases in the current portion ofrestricted bond accounts, investments, and prepaid expenses, which were partially offset by increases in cash and cash investments, accounts receivable, fuel stock and material inventory.
Deferred outflows ofresources represent a consumption of net position that applies to a future period(s) and will not be recognized as an outflow of resources (expense) until then. The deferred outflows of resources in MJMEUC financial statements as of December 31, 2017 and 2016 include refunding bond costs, which are amortized into MJMEUC's expenses over the life of the refunding bonds, and certain costs related to MJMEUC's defined benefit pension plan. Deferred outflows ofresources decreased approximately $957,000, primarily due to the amortization of refunding bond costs.
Liabilities and Deferred Inflows of Resources
Long-term debt, including the current portion, had a net decrease of $14.4 million (1 %) as a ofresult principal payments made on debt. Accrued interest payable decreased approximately $1.4 million ( 5. 7%) and consists of interest accrued on MoPEP, Plum Point, Iatan 2 and Prairie State capital projects. This reduction was the result of bond refunding issues that lowered interest rates and large principal payments made that lowered interest costs. The current portion of unearned revenue increased by approximately $2.1 million ( 15. 7% ), which primarily has to do with the timing of payments and the associated costs of the power generation projects. The net pension liability decreased approximately $250,000 from 2016, see Note 10 to these financial statements for more information. Accounts payable and accrued liabilities decreased approximately $2.4 million from the 2016 amounts.
Deferred inflows of resources represent an acquisition of net position that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until then. MJMEUC has two financial statement items that qualify for reporting in this category, which are regulatory credits and unamortized deferred gain on refunded debt, which is deferred and amortized over the shorter of the life of the refunded debt or the new debt. Regulatory credits are reductions in earnings ( or costs recovered) to cover future expenses. These amounts are being amortized or otherwise recognized in revenue in accordance with MJMEUC's rate making policy. Deferred inflows ofresources increased $4.4 million from an increase in regulatory credits.
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Net Position
MJMEUC's total net position increased $9 .7 million (18% ), which is primarily attributable to amounts collected for rate covenants according to debt agreements and investment return. The approximate $78 million deficit portion of net position decreased from 2016 figures by approximately $14.4 million and is primarily attributable to the reduction in debt in 2017. This deficit reflects the investments in capital assets less any outstanding debt net of unspent debt project funds that were issued to acquire those assets. Restricted net position decreased $6.6 million from 2016, which consists of funds held by either MJMEUC for operations and maintenance reserves or held by MJMEUC's bond trustees that are to be used for payment of debt service and as debt service reserves, less the current portion of related liabilities as of the end of the fiscal year that are to be settled with these funds. Unrestricted net position increased $1.9 million in 2017.
Combined Statements of Revenues, Expenses, and Changes in Net Position for 2018, 2017 and 2016
Operating Revenues:
Power Sales and Related Charges
Transmission
Transfers from MAMU and MGCM
Other
Total Operating Revenues
Operating Expenses:
Power Purchases and Generation
Member Capacity and Generation Credits
Transmission
Depreciation
Net Costs Recoverable in Future Years
Other Pool and Project Expenses
Administrative, General, and Training
Total Operating Expenses
Operating Income
Nonoperating Income Net of Expenses
Increase in Net Position
Net Position, Beginning of Year
Net Position, End of Year
Operating Results Analysis - 2018
$
$
2018
322,402,080
17,798,571
119,224
1,159,737
341,479,612
193,511,040
10,342,815
17,777,401
41,131,454
5,217,043
5,092,718
3,605,945
276,678,416
64,801,196
(56,584,417)
8,216,779
2017
$ 321,837,345
17,124,886
112,511
1,077,362
340,152,104
188,791,583
9,838,349
17,104,145
38,814,587
8,629,588
4,519,781
3,474,522
271,172,555
68,979,549
(59,306,319)
9,673,230
2016
$ 322,401,937
16,960,869
105,448
968,563
340,436,817
189,602,940
10,209,217
16,939,815
36,457,575
13,598,722
4,343,165
3,162,934
274,314,368
66,122,449
(57,056,049)
9,066,400
63,366,740 53,693,510 44,627,110
71,583,519 $ 63,366,740 $ 53,693,510
MJMEUC power sales are primarily collections from members engaged in the agency's full-requirements power pools services (MoPEP and MMMPEP) and from members participating in the Plum Point, Iatan Unit 2, and Prairie State power generation projects. Overall, power sales and related charges increased approximately $565,000 (0.2%). For the 2018 and 2017 fiscal years, combined power sales and related charges to MJMEUC members were $322.4 million and $321.8 million, respectively, on a consolidated basis and $386.5 million and $382.2 million on a nonconsolidated basis, refer to pages 18 and 19 for the Combining Statements of Revenues, Expenses and Changes in Net Position. Unit sales for 2018 and 2017 were 5,355,300 megawatt hours (MWh) and 4,949,200 MWh, respectively, on a consolidated basis and 6,287,800 MWh and 5,876,300 MWh on a nonconsolidated basis. See the table on page 4 for details by fund.
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MJMEUC bills member municipalities monthly for power and energy based on the cost ofMJMEUC's power and energy purchases and generation plus a mark-up for associated MJMEUC overhead and to build MJMEUC's reserves. The cost structure ofMJMEUC's power supply has shifted more from energy to capacity with the ownership base-load from Plum Point, Iatan Unit 2, and Prairie State operations. Particularly, MoPEP's reliance on power supply contracts has reduced over the years and replaced with output from the aforementioned projects and the Dogwood facility. MMMPEP receives all of its power supply through power purchase agreements and does not have any city owned or generating capacity for itself. MJMEUC's combined power purchases and generation costs increased $4. 7 million in 2018 while member capacity and generation credits increased approximately $504,000.
Net costs recoverable in future years expense of $5.2 million represents a net of certain MJMEUC funds collected from MJMEUC members related to project expenses incurred that will be recovered in future years and debt service payments collected from members in excess of current interest and depreciation expense. This is the result of applying MJMEUC's rate making policy to revenue and expense transactions.
Nonoperating income (net of expenses) increased by approximately $2.7 million and is comprised ofreturns on investments (increased $1.5 million), bond interest subsidies received (decreased $79,000), interest expense (decreased $174,000), loss on disposal of capital assets ( decreased $653,000), and return of net position to members from MoPEP (decreased $466,000).
Operating Results Analysis - 2017
MJMEUC power sales are primarily collections from members engaged in the agency's full-requirements power pools services (MoPEP and MMMPEP) and from members participating in the Plum Point, Iatan Unit 2, and Prairie State power generation projects. Overall, power sales and related charges decreased approximately $565,000 (0.2%). For the 2017 and 2016 fiscal years, combined power sales and related charges to MJMEUC members were $321.8 million and $322.4 million, respectively, on a consolidated basis and $382.2 million and $3 82.1 million on a nonconsolidated basis, refer to pages 18 and 19 for the Combining Statements of Revenues, Expenses and Changes in Net Position. Unit sales for 2017 and 2016 were 4,949,208 megawatt hours (MWh) and 5,132,994 MWh, respectively, on a consolidated basis and 5,876,270 MWh and 6,038,648 MWh on a nonconsolidated basis.
MJMEUC bills member municipalities monthly for power and energy based on the cost ofMJMEUC's power and energy purchases and generation plus a mark-up for associated MJMEUC overhead and to build MJMEUC's reserves. The cost structure ofMJMEUC's power supply has shifted more from energy to capacity with the base-load from Plum Point, Iatan Unit 2, and Prairie State operations. Particularly, MoPEP's reliance on power supply contracts has reduced over the years and replaced with output from the aforementioned projects and the Dogwood facility. MMMPEP receives all of its power supply through power purchase agreements and does not have any city owned or generating capacity for itself. MJMEUC's combined power purchases and generation reflect power purchases increasing $279,000 in 2017 while MJMEUC's power generation costs related to power sales decreased $1.1 million in 2017. Member capacity and generation credits decreased approximately $371,000.
Net costs recoverable in future years expense of $8.6 million represents a net of certain MoPEP funds collected from MoPEP members related to refunds received from positive dispute settlements and RTO refunds. Additionally, it includes project expenses incurred that will be recovered in future years and debt service payments collected from members in excess of current interest and depreciation expense. This is the result of applying MJMEUC's rate making policy to revenue and expense transactions.
Nonoperating income (net of expenses) decreased by approximately $2.3 million and is comprised of returns on investments, which decreased approximately $100,000, bond interest subsidies received, interest expense, which decreased $1.5 million, an approximate $3 .6 million loss on disposal of capital assets in 2018, and an approximate $1.0 million return of net position to members from MoPEP.
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Financial Outlook for 2019 and Beyond
MJMEUC foresees its continued development of increasingly diverse services and power supply relationships with municipal utilities and energy industry organizations. Transitions in the utility environment, technologies, and customer expectations provide certain advantages to the municipal community utility model, and also amplify the value of inter-utility collaboration to achieve economic scale and specialized expertise. MJMEUC and its MPUA family are positioned to host and implement that collaboration through staff services, collective outsourcing, and coordinating member capabilities that can be shared.
For the benefit of its members, MJMEUC has entered into an agreement with Clean Line Energy Partners for up to 200 MW of transmission on the Grain Belt Express transmission line extending from Kansas to near Indiana. MJMEUC has also entered into an agreement with Iron Star Wind Project, LLC for up to 136 MW from a wind generation facility in Kansas to match with the beforementioned transmission contract. Both contracts contain contingencies on final completion of the Grain Belt Express transmission line. Final approval was received for the project from the Missouri Public Service Commission ("MOPSC") on March 20, 2019. The case previously went in front of the Missouri Supreme Court, which remanded it back to the MOPSC for the MOPSC to make a final determination on the project. Construction for both projects are expected to be completed in the 2023-24 timeframe after receiving all required approvals.
MoPEP
MJMEUC continues to increase its renewable resources of power supply with eleven solar farm projects now serving MoPEP. Two 3.2 MW solar farm projects in the cities of Farmington and Eldorado Springs, Missouri entered commercial operations in 2018. Three 3.2 MW solar farm projects in Chillicothe, Lebanon, and Higginsville, Missouri were placed into commercial operation in 2017. In 2016, three 3 .2 MW solar farm project went into operation, in Rolla, Waynesville, and Marshall, Missouri. In 2015, two 3.2 MW solar farm projects went into commercial operation, one in Macon and one in Trenton, Missouri. The initial solar farm project went into commercial operation in Butler, Missouri in 2014. MoPEP intends to add additional renewable energy from the Star Wind Project through the Grain Belt Express transmission line discussed above.
Megawatt hour costs for MoPEP are expected to remain relatively stable in the foreseeable future, assuming no significant modifications are made to federal and state environmental regulations affecting MJMEUC's power generation units. MoPEP believes the MJMEUC-owned generation will provide long-term price and performance stability to MoPEP's overall cost of power supply and will continue with its strategic policy to achieve economical and reliable power supply to its members with a well-positioned power supply portfolio of coal-fired, gas-fired, and renewable resources.
MMMPEP
The MMMPEP municipal members successfully transitioned in June 2018 from its initial five-year contract term to a new ten-year term expiring in May 2028. The length of commitment supports MJMEUC and MMMPEP to maintain their view that current market conditions favor shorter to mid-term supply arrangements for the pool's contractual portfolio. MJMEUC's 2018 acquisition of an additional 50 MW Dogwood ownership interest furnished a mutually beneficial power purchase agreement between MoPEP and MMMPEP establishing cost certainty to both pools going forward. Matching traditional power purchase contracts to the full-requirement supply needs to the thirteen-member MJMEUC power pool has proven successful in providing low cost wholesale power and is expected to continue in upcoming years.
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SWMPEP
Two cities in southern Missouri currently served by The Empire District Electric Company joined MJMEUC in 2017 and formed an energy pool named the Southwest Missouri Public Energy Pool ("SWMPEP"). The municipal members of SWMPEP have entered into power purchase contracts with MJMEUC for the full power requirements of their respective municipality. The power purchase contracts call for SWMPEP to start receiving power from MJMEUC on June 1, 2020 and the power purchase contracts expire on May 31, 2030. To date, power supply and transmission contracts are in place to supply SWMPEP from June 2020 to May 2025. There are currently two members of SWMPEP with the possibility for additional members to join the pool at a later date. Until 2020, when SWMPEP begins to receive power from MJMEUC, the financial transactions relating to SWMPEP are minimal and are accounted for within the General Fund.
Requests for Information
This financial report is designed to provide the reader a general overview and analysis of the financial activities of MJMEUC and is available at www.mpua.org. Questions or requests for more information concerning any of the information provided in this report should be directed to Duncan Kincheloe, CEO, President, and General Manager, Missouri Joint Municipal Electric Utility Commission, 1808 I-70 Drive, Columbia, Missouri 65203, (573-445-3279).
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MISSOURI JOINT MUNICIPAL ELECTRIC UTILITY COMMISSION
COMBINED STATEMENTS OF NET POSITION
December 31, 2018 and 2017
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
CAPITAL ASSETS
Plant, Buildings, and Equipment in Service
Construction Wark in Progress
Total Capital Assets, Net
RESTRICTED ASSETS
Bond Accounts Cash and Investments
Other Cash, Cash Equivalents and Investments
Total Restricted Assets
OTHER ASSETS
Investments
Prepaid Expenses
Contractual Deposits
Regulatory Assets
Total Other Assets
CURRENT ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable, Net
Prepaid Expenses
Fuel Stock and Material Inventory
Restricted Assets:
Bond Accounts, Current Portion
Total Current Assets
Total Assets
DEFERRED OUTFLOWS OF RESOURCES
Total Assets and Deferred Outflows of Resources
2018
$1,198,579,328
8,331,053
1,206,910,381
103,358,479
17,316,665
120,675,144
20,910,503
435,663
8,601,237
26,634,411
56,581,814
44,290,967
4,315,022
16,406,570
3,980,382
11,732,787
78,635,309
159,361,037
1,543,528,376
35,954,277
$1,579,482,653
2017
$1,204,224,596
6,596,607
1,210,821,203
130,821,345
17,084,995
147,906,340
19,844,051
474,991
8,272,401
26,960,708
55,552,151
41,168,155
5,580,988
16,307,802
3,582,327
10,764,973
46,272,263
123,676,508
1,537,956,202
38,230,479
$1,576,186,681
Continued on next page
See accompanying notes to financial statements.
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MISSOURI JOINT MUNICIPAL ELECTRIC UTILITY COMMISSION
COMBINED STATEMENTS OF NET POSITION
December 31, 2018 and 2017
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND NET POSITION
NONCURRENT LIABILITIES
Long-Term Debt, Net of Current Maturities
Net Pension Liability
Other Long-Term Liabilities
Unearned Revenue
Total Noncurrent Liabilities
CURRENT LIABILITIES
Accounts Payable
Accrued Payroll and Payroll Taxes
Unearned Revenue
Current Maturities, Long-Term Debt
Payable From Restricted Assets:
Accrued Interest Payable on Debt
Total Current Liabilities
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Net Position
Net Investment in Capital Assets
Restricted
Unrestricted
Total Net Position
Total Liabilities, Deferred Inflows of Resources and Net Position
2018
$1,338,387,183
625,858
530,825
10,919,801
1,350,463,667
18,860,416
600,488
5,818,886
66,281,000
22,712,823
114,273,613
1,464,737,280
43,161,854
(61,512,279)
53,772,915
79,322,883
71,583,519
$1,579,482,653
See accompanying notes to financial statements.
2017
$1,381,720,679
656,460
684,950
10,730,721
1,393,792,810
19,477,773
329,648
4,699,404
33,336,000
22,444,934
80,287,759
1,474,080,569
38,739,372
(77,996,354)
49,939,311
91,423,783
63,366,740
$1,576,186,681
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MISSOURI JOINT MUNICIPAL ELECTRIC UTILITY COMMISSION
COMBINED STATEMENTS OF REVENUES, EXPENSES,
AND CHANGES IN NET POSITION
Years Ended December 31, 2018 and 2017
2018 2017
OPERA TING REVENUES Power Sales and Related Charges $ 322,402,080 $ 321,837,345
Transmission 17,798,571 17,124,886
Energy Services 144,256 195,564
Transfers From MAMU and MGCM 119,224 112,511
Conferences and Member Training 563,006 572,427
Other 452,475 309,371
Total Operating Revenues 341,479,612 340,152,104
OPERA TING EXPENSES
Pool and Project Expenses
Power Purchases 101,594,339 107,481,986
Member Capacity and Generation Credits 10,342,815 9,838,349
Power Generation 91,916,701 81,309,597
Transmission 17,777,401 17,104,145 Personnel Services and Staff Support 2,748,924 2,445,842
Professional Services 1,179,155 881,804
Rental and Maintenance 256,789 249,410
SCADA Communications 328,069 375,743
Energy Services 12,867 12,863
Depreciation 41,131,454 38,814,587
Net Costs Recoverable in Future Years 5,217,043 8,629,588
Other Operating Expenses 566,914 554,119
Conferences and Member Training 275,709 284,576
Administrative and General 3,330,236 3,189,946
Total Operating Expenses 276,678,416 271,172,555
Operating Income 64,801,196 68,979,549
NONOPERATING REVENUES (EXPENSES)
Investment Return 3,895,480 2,387,953
Bond Interest Subsidy 6,938,516 7,017,026
Return of Equity to Members (492,815) (958,845)
Gain (Loss) on Disposal of Capital Assets (2,990,591) (3,643,774)
Interest and Fees Expense (63,935,007) (64,108,679)
Net Nonoperating Expenses (56,584,417) (59,306,319)
Increase in Net Position 8,216,779 9,673,230
Net Position, Beginning of Period 63,366,740 53,693,510
Net Position, End of Period $ 71,583,519 $ 63,366,740
See accompanying notes to financial statements.
93
MISSOURI JOINT MUNICIPAL ELECTRIC UTILITY COMMISSION
COMBINED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2018 and 2017
2018 OPERA TING ACTIVITIES
Receipts from Power and Transmission Sales
Receipts from Other Revenue Sources $ 343,190,808
Payments for Power Purchases and Other Goods and Services
Payments to Employees for Services and Benefits
Net Cash Provided by Operating Activities
CAPITAL AND RELATED FINANCING ACTIVITIES
Proceeds from Long-Term Debt
Bond Interest Subsidy Received
Proceeds from Disposal of Capital Assets
Payment of Bond Issuance Costs
Payment of Bond Advance Refunding Costs
Principal Payments on Long-Term Debt
Payments oflnterest and Fees on Debt
Return of Net Position to Members
Acquisition and Construction of Capital Assets
Net Cash Used by Capital and Related Financing Activities
INVESTING ACTIVITIES
Purchases of Restricted Cash and Investments
Proceeds from Sales and Maturities of Restricted Cash and Investments
Investment Income Received
Net Cash Used by Investing Activities
Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED BY OPERA TING ACTIVITIES
Operating Income
Adjustments to Reconcile Operating Income
to Net Cash Provided by Operating Activities:
Depreciation
Adjustments for (Increases) Decreases in Assets and Deferred Outflows of
Resources and Increases (Decreases) in Liabilities and Deferred Inflows of
Resources:
Accounts Receivable
Prepaid Expenses
Fuel Stock and Material Inventory
Contractual Deposits
Regulatory Assets
Accounts Payable
Accrued Payroll and Payroll Taxes
Deposits Held
Unearned Revenue
Net Pension Liability
Deferred Outflows of Resources
Deferred Inflows of Resources Net Cash Provided by Operating Activities
See accompanying notes to financial statements.
743,600
(229,094,859)
(4,217,349)
110,622,200
29,918,892
6,938,516
142,500
(386,128)
(33,336,000)
(68,467,168)
(492,815)
(40,780,329)
(106,462,532)
(213,927,976)
207,263,518
5,627,602
(1,036,856)
3,122,812
41,168,155 $ 44,290,967
$ 64,801,196
41,403,935
(98,768)
(358,727)
(967,814)
(328,836)
712,425
(617,357)
270,840
1,308,562
(30,602)
53,728
4,473,618 $ 110,622,200
2017
$ 342,458,597
1,647,510
(223,403,406)
(3,738,046)
116,964,655
72,386,488
7,017,026
87,400
(1,848,840)
(1,471,041)
(79,130,000)
(69,621,777)
(958,845)
(17,750,786)
(91,290,375)
(189,568,318)
165,553,021
4,026,720
(19,988,577)
5,685,703
35,482,452 $ 41,168,155
$ 68,979,549
39,086,183
(525,181)
723,646
(230,028)
210,900
5,501,262
(2,451,680)
56,715
500,000
2,094,344
(247,267)
407,449
2,858,763 $ 116,964,655
94
MIS
SO
UR
I JO
INT
MU
NIC
IPA
L E
LE
CT
RIC
UT
ILIT
Y C
OM
MIS
SIO
N
CO
MB
ININ
G S
TA
TE
ME
NT
OF
NE
T P
OS
ITIO
N
Dec
emb
er 3
1, 2
018
Ful
l Re
guir
emen
ts P
ools
G
ener
atio
n Fu
nds
MoP
EP
I
MMMPEP
Pl
um P
oint
Ia
tan
2 P
rair
ie S
tate
N
on-M
ajor
T
otal
Pool
Fun
d Po
ol F
und
Proi
ect F
und
Pro j
ect F
und
--1!£iec
t �un
d _
Funds
T
otal
E
limin
atio
ns
Com
bine
d
ASS
ET
S A
ND D
EFERRED
OU
TF
LO
WS
OF
RESO
UR
CE
S C
AP
ITAL
ASS
ET
S Pl
ant,
Bu
ildings, a
nd E
quip
men
t in
Ser
vice
$
74,5
85,6
04
$
$
234,
214,
772
$
223,
759,
131
$
664,
681,
347
$
1,33
8,47
4 $
l,19
8,57
9,32
8 $
$
1,19
8,57
9,32
8 C
onstru
ctio
n W
ork
in P
rogr
ess
956,
276
617,
135
5,92
0,85
3 83
6,78
9 8,
331,
053
8,33
1,05
3 T
otal
Cap
ital Assets,
Net
75
,541
,880
23
4 83
1,90
7 22
9,67
9,98
4 66
5,51
8 13
6 1,
338,
474
1,20
6,91
0,38
1 1,
206,
910,
381
RESTRIC
TE
D A
SSET
S
Bon
d A
ccou
nts C
ash
and
Investmen
ts
5,95
1,51
4 25
,271
,821
19
,551
,689
52
,583
,455
10
3,35
8,47
9 10
3,35
8,47
9 O
ther
Cas
h, C
ash
Equ
ival
ents
, and
Inve
stmen
ts
7,26
4 74
1 4,
684,
111
5,36
7,81
3 17
,316
,665
17
,316
,665
T
otal Restri
cted
Assets
5,95
1,51
4 32
536
,562
24
,235
,800
57
,951
,268
12
0,67
5,14
4 12
0,67
5,14
4
01HER A
SSE
TS
Inve
stmen
ts
19,0
56,4
45
1,85
4,05
8 20
,910
,503
20
,910
,503
Pr
epai
d Expenses
43
5,66
3 43
5,66
3 43
5,66
3 Cootractu
al D
epos
its
1,93
4,68
5 2,
704,
053
879,
999
3,08
2,50
0 8,
601,
237
8,60
1,23
7 Re
gula
toiy
Assets
1,23
3,65
1 14
,105
,459
3,
129,
407
8,16
5,89
4 26
634
,411
26
,634
411
T
otal
Oth
er Assets
22
,224
,781
16
809
,512
4,
445,
069
13 1
02,4
52
56 5
81,8
14
56 5
81,8
14
CURRENT
ASS
ETS
Cas
h an
d C
ash
Equ
ival
ents
22
,553
,311
3,
472,
379
6,82
8,58
3 4,
138,
399
5,56
0,08
3 1,
738,
212
44,2
90,9
67
44,2
90,9
67
Inv
estm
en
ts
4,10
8,70
2 20
6,32
0 4,
315,
022
4,31
5,02
2 A
ccou
nts
Rec
eiva
ble,
Net
12
,859
,309
3,
004,
320
542,
941
16,4
06,5
70
16,4
06,5
70
Due
from
Oth
er F
unds
4,
910,
981
456,
441
5,36
7,42
2 (5
,367
,422
) Pr
epai
d E
xpen
ses
389,
526
2,94
8,49
8 (4
7,41
4)
609,
364
80,4
08
3,98
0,38
2 3,
980,
382
Fuel
Sto
ck a
nd M
aterial I
nven
tory
2,
433,
086
1,85
7,25
4 7,
442,
447
11,7
32,7
87
11,7
32,7
87
Restrict
ed A
sset
s:
Bon
d A
ccou
nts,
Curre
nt P
ortio
n 1,
644,
177
15,2
37,9
10
11,6
94,2
64
50 0
58,9
58
78,6
35,3
09
78,6
35,3
09
Tota
l Curre
nt A
sset
s 46
466,
006
6,47
6 69
9 27
,448
077
17
642
,503
63
,877
,172
2
818,
002
164 7
28 4
59
(5,3
67,4
22)
159,
361,
037
Tot
al Assets
15
0,18
4,18
1 6,
476,
699
311,
626,
058
276,
003,
356
800,
449,
028
4,15
6,47
6 1,
548,
895,
798
(5,3
67,4
22)
1,54
3,52
8,37
6
DEFERRED
OUfFLO
WS
OF
RE
SOU
RC
ES
1,46
3,72
6 5,
155,
891
13,1
84,8
67
15 3
85,7
92
764,
001
35,9
54,2
77
35,9
54,2
77
Tot
al A
ssets
and
Defe
rred
Outfl
ows
ofRe
sour
ces
$
151,
647,
907
$
6,47
6,69
9 $
316,
781
949
$
289,
188
,223
$
815,
834,
820
$
4,92
0 47
7 $
I 58
4,85
0,07
5 $
(5,3
67,4
22)
$
1 57
9,48
2,65
3
LIA
BIL
ITIES. D
EF
ERRE
D I
NF
WW
S O
F RE
SOU
RC
ES,
A
ND
NE
T P
OSffi
ON
N
ON
CURRENT L
IABILITIE
S Lo
ng-T
erm D
ebt,
Net
of
Curr
ent M
aturities
$
73,4
99,2
22
$
$
284,
251,
466
$
245,
946,
353
$
733,
691,
142
$
999,
000
$
1,33
8,38
7,18
3 $
$
1,33
8,38
7,18
3 O
ther
Lon
g-te
rm L
iabi
litie
s 30
,825
50
0,00
0 53
0,82
5 53
0,82
5 N
et P
ensi
on L
iabi
lity
625,
858
625,
858
625,
858
Unearn
ed Re
venu
e 5,
928,
146
2,28
7,60
2 2,
704,
053
10,9
19,8
01
10,9
19,8
01
Tot
al N
oncurrent
Lia
bilit
ies
79,4
27,3
68
2,28
7,60
2 28
6,95
5,51
9 24
5,94
6,35
3 73
3,72
1,96
7 2,
124,
858
1 ,35
0,46
3,66
7 1,
350,
463,
667
CURRENT
LIAB
ILITIE
S
Acc
ount
s Pay
able
8,
846,
635
2,00
7,62
1 3,
426,
245
597,
137
3,30
1,91
3 68
0,86
5 18
,860
,416
18
,860
,416
A
ccru
ed P
eyro
ll an
d P
eyro
ll T
axes
20
8,66
6 12
,768
11
,797
8,
370
15,8
14
343,
073
600,
488
600,
488
Due
to O
ther
Fun
ds
1,77
1,13
1 89
8,92
5 58
5,63
3 2,
111,
733
5,36
7,42
2 (5
,367
,422
) U
nearn
ed
Rev
en
ue
2,53
8,51
4 1,
927,
483
1,35
2,88
9 5,
818,
886
5,81
8,88
6 C
urrent Maturi
ties
, Long
-Term
Deb
t 3,
081,
000
7,57
5,00
0 7,
530,
000
48,0
35,0
00
60,0
00
66,2
81,0
00
66,2
81,0
00
Paya
ble
From
Restrict
ed A
ssets
: A
ccru
ed In
tere
st P
ayab
le o
n D
ebt
325
322
7,25
1,85
5 3,
997
462
11,1
36,8
03
1,38
1 22
,712
823
22
,712
,823
T
otal
Current L
iabi
litie
s 12
,461
623
3,
791,
520
21,1
0;33
5 14
,646
,085
65
,954
152
1,
085,
319
119,
641,
035
(5,3
67,4
22)
114,
273,
613
Tot
al L
iab i
litie
s 91
,888
,991
6,
079,
122
308,
657,
855
260,
592
438
799,
676,
119
3,21
0,17
7 1,
470,
104,
702
(5,3
67,4
22)
l,46
4,73
7,28
0
DEFERRED
INFLO
WS
OF
RE
SOUR
CE
S 8,
519,
043
124
1,41
5 24
,131
267
9,
270,
129
43,1
61,8
54
43,1
61,8
54
Net
Pos
ition
N
et In
vestnr'en
t in
Cap
ital Assets
7,
684,
796
(29,
267,
635)
(2
,664
,342
) (3
7,54
4,57
2)
279,
474
(61,
512,
279)
(6
1,51
2,27
9)
Restrict
ed
1,98
8,43
5 16
,496
,255
13
,300
,575
21
,987
,650
53
,772
,915
53
,772
,915
U
nrestrict
ed
41,5
66,6
42
397
577
19 6
54,0
59
(6,1
71,7
15)
22,4
45,4
94
1 43
0,82
6 79
,322
,883
79
,322
,883
T
otal N
et P
ositi
on
51,2
39,8
73
397,
577
6,88
2,67
9 4,
464,
518
6 88
8,57
2 1,
710,
300
71 5
83,5
19
71,5
83,5
19
Tot
al L
iabi
lities.,
Def
erre
d In
flow
s ofR
esou
rce
s and
Net
Pos
ition
$
151,
647,
907
$
6,47
6,69
9 $
316,
781,
949
$
289,
188,
223
$
815,
834,
820
$
492
0,47
7 $
1,58
4,85
0,07
5 $
(5,3
67,4
22)
$
1,57
9,48
2,65
3
See
acc
ompan
ying n
otes
to
fin
anci
al s
tate
men
ts.
95
MIS
SO
UR
I JO
INT
MU
NIC
IPA
L E
LE
CT
RIC
UT
ILIT
Y C
OM
MIS
SIO
N
CO
MB
ININ
G S
TA
TE
ME
NT
OF
NE
T P
OS
ITIO
N
Dece
mb
er 3
1,
2017
Ful
l Reg
uire
men
ts P
ools
G
ener
ation
Fun
ds
MoP
EP
I
MMMPE
P
Plu
m P
oint
Ia
tan
2
Pra
irie
Sta
te
Non
-Maj
or
Tot
al
Pool
Fun
d P
ool F
und
Pro
ject
Fun
d P
refe
ct F
und
Pro
ject
Fun
d Fu
nds
__
T
otal
_
El_i
mi�
tio�
C
ombi
ned
ASS
ET
S A
ND
DE
FE
RR
ED
OU
TF
LO
WS
OF
RE
SOU
RC
ES
CAP
ITAL
ASS
ET
S P
lant
, Bui
ldin
gs, a
nd E
quip
men
t in
Serv
ice
$
50,6
72,3
68
$
$
242,
940,1
08
$
228,
487,
824
$
680,
644,
919
$
1,47
9,37
7 $
1,20
4,22
4,59
6 $
$
1,
204,
224,
596
Con
struct
ion
Wor
k in
Pro
gres
s 62
,469
71
3,14
4 3,
262
771
2,55
8,22
3 6,
596,
607
6,59
6,60
7 T
otal
Cap
ital A
ssets
, Net
50
,734
,837
24
3,65
3,25
2 23
1,75
0,59
5 68
3,20
3,14
2 1,
479
377
1,21
0,82
1,20
3 _ld!Q,_
821,
203
RE
STRIC
I'ED
ASS
ET
S B
ond
Acc
ount
s C
ash
and
Inve
stmen
ts
3,97
9,20
4 24
,705
,626
19
,293
,599
82
,842
,916
13
0,82
1,34
5 13
0,82
1,34
5 O
ther
Cas
h an
d C
ash
Equ
ival
ents
7,
160,
710
4,63
1,32
6 5,
292,
959
17,0
84,9
95
17,0
84 9
95
Tot
al R
estr
icte
d A
sset
s 3,
979,
204
31,8
66,3
36
23,9
24,9
25
88,1
35 8
75
147,
906,
340
147,
906,
340
OTHE
R A
SSET
S In
vestm
ents
18
,092
,899
1,
751,
152
19,8
44,0
51
19,8
44,0
51
Prep
aid
Exp
ense
s 44
6,03
6 28
,955
47
4,99
1 47
4,99
1 C
ontractual D
epos
its
1,60
5,84
9 2,
704,
053
879,
999
3,08
2,50
0 8,
272,
401
8,27
2,40
1 R
egula
tory
Asse
ts
883,
270
14,2
11,7
88
3 31
0,05
3 8
555,
597
26,9
60,7
08
26,9
60,7
08
Tot
al O
ther
Asse
ts
20,5
82,0
18
16,9
15 8
41
4,63
6,08
8 13
,418
,204
55
,552
,151
55
,552
,151
CURRENT A
SSET
S C
ash
and
Cas
h E
quiv
alen
ts
21,2
06,2
26
2,31
3,86
8 5,
395,
917
3,46
4,67
8 7,
173,
367
1,61
4,09
9 41
,168
,155
41
,168
,155
In
vestm
ents
4,
834,
896
465,
806
280,
286
5,58
0,98
8 5,
580,
988
Acc
ount
s Rec
eiva
ble,
Net
13
,194
,298
2,
980,
810
132,
694
16,3
07,8
02
16,3
07,8
02
Due
from
Oth
er F
unds
2,
571,
636
13,7
33
269,
543
2,85
4,91
2 (2
,854
,912
) P
repa
id E
xpen
ses
127,
000
2,53
5,87
2 27
8,02
3 56
9,28
6 72
,146
3,
582,
327
3,58
2,32
7 Fu
el S
tock
and
Mat
eria
l Inv
ento
ry
2,86
4,12
6 2,
155,
625
5,74
5,22
2 10
,764
,973
10
,764
,973
Restri
cted
Ass
ets:
Bon
d A
ccou
nts, C
urren
t Port
ion
1,25
1,04
7 14
,945
,945
11
,444
,065
18
,631
206
46
,272
,263
46
,272
,263
T
otal
Curr
ent Assets
43
185
103
5,
294,
678
25,7
55 5
93
17,8
08,1
97
32,3
99 3
67
2,08
8,48
2 12
6,53
1,42
0 (2
,854
,912
) 12
3,67
6,50
8 T
otal
Assets
118
481,
162
5,29
4,67
8 31
8,19
1,02
2 27
8,11
9,80
5 81
7,15
6 58
8 3,
567,
859
1,54
0,81
1,11
4 (2
,854
,912
) 1,
537,
956,
202
DEFERRED
OU
TFL
OW
S O
F RE
SOU
RC
ES
I 56
8,27
8 5,
499,
617
13,9
33,7
13
16 4
11 1
42
817,
729
38,2
30,4
79
38,2
30,4
79
Tot
al A
ssets
and
Def
erre
d O
utfl
ows
ofR
esou
rces
$
12
0 04
9,44
0 $
5,
294,
678
$
323
690,
639
$
292,
053,
518
$
833,
567
730
$
4,38
5,58
8 $
I 57
9,04
1,59
3 $
(2,8
54,9
12)
$
1,57
6,18
6,68
1
LIA
BIL
ITIE
S, D
EF
ER
RE
D I
NF
LO
WS
OF
RE
SOU
RC
ES,
A
ND
NE
T P
OSI
TIO
N
NO
NC
URRENT
LIA
BIL
ITIES
Lon
g-T
erm D
ebt.
Net
of
Cur
rent
Maturitie
s $
47
,001
,405
$
$
293,
333,
735
$
254,
981,
979
$
785,
344,
560
$
1,05
9,00
0 $
1,38
1,72
0,67
9 $
$
1,
381,
720,
679
Other
Lon
g-te
rm L
iabilitie
s 18
4,95
0 50
0,00
0 68
4,95
0 68
4,95
0 N
et P
ensi
on L
iabil
ity
656,
460
656,
460
656,
460
Unearn
ed R
even
ue
5 92
8,14
6 2,
098,
522
2,70
4 05
3 10
,730
,721
10
,730
,721
T
otal
Non
current L
iabi
litie
s 52
,929
,551
2,
098,
522
296,
037,
788
254,
981,
979
785,
529,
510
2,21
5,46
0 1,
393,
792,
810
1,39
3,79
2,81
0
CURRENT L
IAB
ILITI
ES
Acc
ount
s P
ayab
le
8,97
1,26
6 2,
808,
295
2,60
2,18
1 85
0,77
1 4,
093,
594
151,
666
19,4
77,7
73
19,4
77,7
73
Acc
rued
Pay
roll
and
Pay
roll
Tax
es
193,
665
10,3
02
10,1
74
6,54
1 13
,134
95
,832
32
9,64
8 32
9,64
8 D
ue to
Oth
er F
unds
13
,733
12
9,95
3 75
5,96
5 37
9,37
1 1,
575,
890
2,85
4,91
2 (2
,854
,912
) U
nearned
Rev
enue
2,
497,
911
1,33
9,45
1 86
2,04
2 4,
699,
404
4,69
9,40
4 C
urre
nt Maturi
ties., Lo
ng-T
erm
Deb
t 2,
403,
000
7,2
15,0
00
7,22
5,00
0 16
,445
,000
48
,000
33
,336
,000
33
,336
,000
P
ayab
le F
rom
Restrict
ed A
sset
s:
Acc
rued
Int
eres
t Pay
able
on
Deb
t 14
8,16
5 7
431,
979
4,15
1,76
8 10
,711
,494
1,
528
2244
493
4 22
,444
934
Tnt
al C
urren
t Lia
bili
ties
11,7
29,8
29
2 94
8,55
0 20
,513
210
13
,952
,902
33
,701
154
29
7,02
6 83
,142
,671
(2
,854
,912
) 80
,287
,759
T
otal
Lia
bilit
ies
64,6
59,3
80
5,04
7,07
2 31
6 55
0,99
8 26
8,93
4,88
1 81
9,23
0,66
4 2,
512,
486
1,47
6,93
5,48
1 (2
,854
,912
) 1,
474,
080,
569
DEFERRED
INFL
OW
S O
F RE
SOU
RC
ES
9,08
4 71
7 1,
074,
439
19 0
87,7
76
9,49
2,44
0 38
,739
,372
38
,739
,372
Net
Pos
ition
N
et In
vestm
ent
in C
apita
l Ass
ets
4,92
3,72
0 (2
9,16
8,46
7)
(9,3
24,3
57)
(44,
799 ,
627)
37
2,37
7 (7
7,99
6,35
4)
(77,
996,
354)
Restri
cted
1,
488,
798
15,6
41,4
12
12,5
85,1
95
20,2
23,9
06
49,9
39,3
11
49,9
39,3
11
Unr
estri
cted
39
892
,825
24
7 60
6 19
,592
,257
77
0,02
3 29
,420
,347
1,
500,
725
91,4
23,7
83
91,4
23,7
83
Tot
al N
et P
ositi
on
46,3
05 3
43
247,
606
6,06
5,20
2 4
030
861
4,84
4,62
6 1,
873,
102
63,3
66,7
40
63,3
66,7
40
Tot
al L
iabi
lities.,
Def
erred
Infl
ows o
fR
esou
rces
and
Net
Pos
ition
$
12
0,04
9,44
0 $
5,29
4,67
8 $
323,
690,
639
$
292,
053,
518
$
833,
567,
730
$
4,38
5,58
8 $
1,
579,
041,
593
$
(2,8
54,9
12)
$
1,57
6,18
6,68
1
See
acco
mp
anyi
ng n
otes
to
finan
cial
sta
tem
ents
.
96
OPERA
TING
RE
VENUES
Pow
er S
ales
and
Rel
ated
Char
ges
Tra
nsm
issi
on
Ene
rgy
Serv
ices
T
rans
fers
from
MAMU an
d M
GCM
Con
fere
nces
and
Mem
ber
Trai
ning
O
ther
T
otal
Ope
ratin
g R
even
ues
OPERA
TIN
G EXPE
NSE
S
Pow
er P
urchas
es
Mem
ber
Cap
acity
and
Gen
erati
on C
redi
ts
Pow
er G
ener
atio
n T
ransm
issi
on
Per
sonn
el S
ervi
ces
and
Sta
ff S
uppo
rt
Pro
fess
ional
Serv
ices
R
ental an
d Ma
inte
nanc
e U
tilities
U
tiliti
es -
SCAD
A C
omm
unic
ation
s En
eigy S
ervi
ces
Con
fere
nce
s an
d M
embe
r T
rain
ing
Dep
reciation
N
et C
osts
Rec
over
able
in
Futur
e Y
ears
Oth
er O
pera
ting
Expe
nses
T
otal
Operating
Expe
nse
s
Ope
rating
Inc
ome
(Los
s)
NO
NO
PE
RA
TIN
G RE
VENUES
(EXPE
NSE
S)
lnve
sttnen
t Return
Bon
d In
tere
st S
ubsi
dy
Return o
f E
quity
to M
embe
rs
Los
s on
Dis
posa
l of
Cap
ital A
ssets
In
tere
st an
d Fee
s Ex
pen
se
Net
Non
oper
ating
Rev
enue
s (Expenses
)
OTHE
R FIN
ANC
ING
SO
URC
ES (
USE
S)
Interfun
d O
perat
ing
Tra
nsfe
rs
Incr
ease
(D
ecre
ase)
in
Net
Pos
ition
Net
Pos
itio
n, B
egin
ning
of
Peri
od
Net
Pos
itio
n, E
nd o
f Pe
riod
MIS
SO
UR
I J
OIN
T M
UN
ICIP
AL
EL
EC
TRI
C U
TIL
ITY
CO
MM
ISS
ION
CO
MB
ININ
G S
TA
TE
ME
NT
OF
RE
VE
NU
ES
, E
XPE
NS
ES
, AN
D C
HA
NG
ES
IN N
ET
PO
SIT
ION
Yea
r E
nd
ed D
ecem
ber
31,
2018
Full
Reg
uire
men
ts P
ools
G
ener
ation
Fun
ds
MoP
EP
1 MMMP
EP
P
lum
Poi
nt
Iatan
2
Prairi
e St
ate
Non
-Maj
or
Poo
l Fun
d P
ool F
und
Pro
ject
Fun
d P
roje
ct F
und
�ect_F
und
_ _
funcl
s
$ 17
4,85
6,00
5 10
,638
,523
387
185,
494,
915
138,
309,
954
10,3
42,8
15
12,3
79,6
37
10,6
38,5
23
1,08
2,81
0 39
9,24
3 1 5
8,55
0
286,
007
3,53
4,82
3 (4
98,9
27)
269,
556
176,
902,
991
8,59
1,92
4
398,
680
(492
,815
) (1
4,72
9)
(2,5
94,2
66)
(2,7
03,1
30)
(954
,264
}
4,93
4,53
0
46,3
05,3
43
_$_
51
,239
,873
$ 28
,279
,268
$
52,8
96,9
53
$ 36
,782
,405
$
93,6
53,8
63
$
5,99
1,00
1 1,
169,
047
144,
256
119,
224
563,
006
144,
001
23,8
46
284,
241
34,2
70,2
69
53,0
40,9
54
36,7
82,4
05
93,6
77,7
09
2,27
9,77
4
27,3
50,7
99
30,0
07,1
77
11,9
33,2
18
37,5
96,6
69
5,99
1,00
1 1,
147,
877
423,
418
413,
642
287,
286
541,
768
1,76
2,39
1 36
,228
25
7,37
9 18
5,37
7 30
0,92
8 55
6,07
1 43
,708
24
,027
6,
560
23,9
44
132,
829
60,2
19
42,0
62
12,8
67
275,
709
9,17
0,73
0 6,
927,
986
21,4
97,9
15
147,
717
324,
441
5,22
4,13
7 16
7,39
2 20
,303
10
8,60
9 71
,241
97
,205
67
1,00
9 33
,907
,519
40
,306
,005
24
,635
,805
60
,225
,821
4,
766,
689
362,
750
12,7
34,9
49
12,1
46,6
00
33,4
51,8
88
(2,4
86,9
15}
48,1
60
817,
478
433,
658
2,05
5,24
9 14
2,25
5 1,
230,
721
5,70
7,79
5
(316
,726
) (1
,599
,555
) (1
,059
,581
) (1
3,28
9,02
9)
(I 0,
296,
564)
(3
7,62
2,60
0)
(132
,548
) 48
,160
(1
1,55
7,55
6)
(11,
462,
461)
(3
0,91
9,13
7)
9,70
7
(260
,939
) (3
59,9
16)
(250
,482
) (4
88,8
05)
2,31
4,40
6
149,
971
817,
477
433,
657
2,04
3,94
6 (1
62,8
02)
247,
606
6,06
5,20
2 4,
030,
861
4,84
4,62
6 1,
873,
102
$ _
_ 39
7,57
7 $
_
6,88
2,67
9 $
4,46
4,51
8 $
6,88
8,57
2 _
$ _
1,
710,
300
See
acco
mpan
ying
not
es t
o fi
nanc
ial s
tate
men
ts.
Com
bine
d T
otal
E
limin
ation
s T
otal
$ 38
6,46
8,49
4 $
(64,
066,
414)
$
322,
402,
080
17,7
98,5
71
17,7
98,5
71
144,
256
144,
256
119,
224
119,
224
563,
006
563,
006
452,
475
452,
475
405,
546,
026
(64,
066,
414)
34
1,47
9,61
2
165,
660,
753
(64,
066,
414)
10
1,59
4,33
9 10
,342
,815
10
,342
,815
91
,916
,701
91
,916
,701
17
,777
,401
17
,777
,401
4,
511,
315
4,51
1,31
5 1,
735,
226
1,73
5,22
6 38
9,61
8 38
9,61
8 60
,219
60
,219
32
8,06
9 32
8,06
9 12
,867
12
,867
27
5,70
9 27
5,70
9 41
,279
,171
41
,279
,171
5,
217,
043
5,21
7,04
3 1,
237,
923
1,23
7,92
3 34
0,74
4,83
0 (6
4,06
6,41
4)
276,
678,
416
64,8
01,1
96
64,8
01,_19
6
3,89
5,48
0 3,
895,
480
6,93
8,51
6 6,
938,
516
(492
,815
) (4
92,8
15)
(2,9
90,5
91)
(2,9
90,5
91)
(63,
935,
007)
(6
3,93
5,00
7)
(56,
584,
417)
(5
6,58
4,41
7)
--
8,21
6,77
9 8,
216,
779
63,3
66,7
40
63,3
66,7
40
l,
_ 71,5
83,5
19_
J
$ -
7 l_,
583,
519
97
OPERA
TING
RE
VENUES
Pow
er S
ales
and
Rel
ated
Char
ges
Tra
nsm
issi
on
Ene
rgy
Serv
ices
T
ransfe
rs fr
om MAMU
and
MG
CM
C
onfe
renc
es a
nd M
embe
r Tra
inin
g O
ther
T
otal
Ope
ratin
g R
even
ues
OPERA
TING
EXPENSE
S Po
wer
Pur
chases
M
embe
r Cap
acity
and
Gen
erat
ion
Cre
dils
Po
wer
Gen
erati
on
T ransrn
issi
on
Pers
onne
l Ser
vice
s an
d St
aff S
uppo
rt
Profe
ssio
nal S
ervic
es
Ren
tal a
nd Ma
inte
nance
U
tiliti
es
Util
ities
-SC
ADA
Com
mun
icati
ons
Ene
rgy
Serv
ices
C
onfe
renc
es an
d M
embe
r Tra
inin
g D
epre
ciat
ion
Net
Cos
ls R
ecov
erab
le in
Fut
ure
Year
s O
ther
Operatin
g E
xpen
ses
Tot
al O
pera
ting
Exp
ense
s
Ope
ratin
g In
com
e (L
oss)
NO
NO
PERA
TING
REVENUE
S (EXP
ENSE
S)
Inve
stm
ent R
eturn
Bon
d In
terest S
ubsi
dy
Return o
fEqu
ity to
Mem
bers
Lo
ss o
n D
ispo
sal o
f C
apita
l Ass
els
Inte
rest
and
Fees
Exp
ense
N
et N
onoperati
ng R
even
ues
(Exp
ense
s)
OTilE
R F
INAN
CIN
G S
OU
RC
ES
(USE
S)
Interfun
d Operati
ng T
ransf
ers
Incr
ease
(Dec
reas
e) in
Net
Pos
ition
Net
Pos
ition
, Beg
inni
ng o
f Per
iod
Net
Pos
ition
, End
of P
eriod
MIS
SO
UR
I JO
INT
MUN
ICIP
AL
EL
EC
TRI
C U
TIL
ITY
CO
MM
ISS
ION
CO
MB
ININ
G S
TA
TE
ME
NT
OF
RE
VE
NU
ES
, EX
PE
NS
ES
, AN
D C
HANG
ES
IN
NE
T P
OS
ITIO
N
Yea
r E
nd
ed D
ecem
ber
31,
201
7
Full
Reg
uire
men
ts P
ools
G
ener
ation
Fun
ds
MoP
EP
1 MMMP
EP
Plum
Poi
nt
Iatan
2 Pr
airi
e St
ate
Pool
Fun
d Po
ol F
und
Proi
ect F
und
Proi
ect F
und
---12£iec
t Fun
d
$
_$ _
170,
738,
373
$ 27
,000
,861
10
,511
,138
5,
630,
041
580
3,00
0 18
1,25
0,09
1 32
,633
,902
141,
670,
313
26,1
46,6
93
9,83
8,34
9 7,
068,
519
10,5
11,1
38
5,63
0,04
1 96
6,54
1 36
5,53
1 22
7,96
1 35
,972
15
7,67
9 39
,611
333,
681
42,0
62
2,72
8,27
7 (3
,897
,893
) 26
6,63
3 18
,898
16
9,87
1,19
8 32
,278
,808
11,3
78,8
93
355,
094
323,
633
16,3
68
(958
,845
)
(2,0
64,5
12)
(2,6
99,7
24)
16,3
68
(961
,834
) (2
74,4
57)
7,71
7,33
5 97
,005
38,5
88,0
08
150,
601
46_,
3�34
3 _
$ _
_ 24
7,60
§_
$ $ -
51,4
19,7
88
$ 39
,358
,455
$
95,1
21
51,5
14,9
09
39,3
58,4
55
24,8
46,2
15
14,2
70,7
01
429
380,
785
247,
019
216,
436
143,
777
22,9
33
6,25
4
8,62
5,37
5 6,
700,
092
3,61
2,57
8 5,
101,
783
106,
619
66,3
88
37,8
10,9
41
26,5
36,4
43
13,7
03,9
68
12,8
22,0
12
484,
898
290,
685
1,22
6,11
9
(914
,872
) (1
,949
,909
) (1
3,64
9,27
9)
(10,
617,
463)
(1
2,85
3,13
4)
02,
276,
687)
(365
,942
) (2
57,1
48)
484,
892
288,
177
5,58
0,31
0 3,
742,
684
�0�
202
$ 4,
030,
861
$
See
acco
mpa
nyin
g no
tes
to fi
nan
cial
sta
tem
ents
.
93,6
54,8
88
24,9
74
93,6
79,8
62
35,1
24,1
62
485,
966
257,
658
22,9
33
20,7
60,8
43
3,81
3,12
0 95
,581
60
,560
,263
33,1
19,5
99
1,22
0,98
5 5,
790,
907
(778
,993
) (3
7,64
2,64
6)
(31,
409,
747)
(496
,989
)
1,21
2,86
3
3,63
1,76
3
4,84
4,62
6
Non
-Maj
or
Funds
$ 98
3,70
7 19
5,56
4 11
2,51
1 57
2,42
7 18
5,69
6 2,
049,
905
962,
537
1,50
9,10
1 74
9,76
2 12
1,06
8 58
,536
12,8
63
284,
576
148,
740
602,
739
4,44
9,92
2
(2,4
00,0
17)
51,3
84
(134
,779
) (8
3,39
5)
2,35
6,37
0
(127
,042
)
2,00
0,14
4
$ 1,
873,
102
Com
bine
d T
otal
E
limin
ation
s T
otal
$ 38
2,17
2,36
5 $
(60,
335,
020)
$
321,
837,
345
17,1
24,8
86
17,1
24,8
86
195,
564
195,
564
112,
511
112,
511
572,
427
572,
427
309,
371
309,
371
400,
487,
124
(60,
335,
020)
34
0,15
2,10
4
167,
817,
006
(60,
335,
020)
10
7,48
1,98
6 9,
838,
349
9,83
8,34
9 81
,309
,597
81
,309
,597
17
,104
,145
17
,104
,145
3,
954,
943
3,95
4,94
3 1,
631,
566
1,63
1,56
6 37
0,47
8 37
0,47
8 58
,536
58
,536
37
5,74
3 37
5,74
3 12
,863
12
,863
28
4,57
6 28
4,57
6 38
,963
,327
38
,963
,327
8,
629,
588
8,62
9,58
8 1,
156,
858
1,15
6,85
8 33
1,50
7,57
5 (6
0,33
5,02
0)
271,
172,
555
68,9
79,5
49
68,9
79,5
49
2,38
7,95
3 2,
387,
953
7,01
7,02
6 7,
017,
026
(958
,845
) (9
58,8
45)
(3,6
43,7
74)
(3,6
43,7
74)
(64,
108,
679)
(6
4,10
8,67
9)
(59,
306,
319)
( 5
9 ,30
6,3122
--
9,67
3,23
0 9,
673,
230
53,6
93,5
10
53,6
93,5
10
$ 63
,366
,74Q_
$
_s;
_ 6
3,36
6,74
0
98
MIS
SO
URI
JO
INT
MU
NIC
IPA
L E
LE
CT
RIC
UT
ILIT
Y C
OM
MISSIO
N
CO
MB
INING
ST
AT
EM
EN
T O
F C
ASH
FL
OW
S
Yea
r E
nded
Dec
ember
31,
2018
Full R
eguir
emen
ts P
ools
G
ener
atio
n Fun
ds
MoP
EP I
M
MMPEP
Pl
um P
oint
Iatan
2
Pra
irie
Sta
te
Non
-Maj
or
Pool
Fun
d Po
ol F
und
Proj
ect F
und
Proi
ect F
und
Proi
ect F
und
Funds
T
otal
E
lim
inations
Tot
al
OPE
RA
TIN
G A
CT
IVffi
ES
Rec
eipts
from
Pow
er an
d T
ransm
issi
on S
ales
$
18
1,15
2,79
2 $
34
,435
,839
$
45,9
48,2
15
$
26,7
52,2
31
$
53,7
94,4
68
$
1,10
7,26
3 $
343,
190,
808
$
$
343,
190,
808
Rec
eip
ts fr
om
oth
er F
unds
for
Pow
er an
d T
ransm
issi
on S
ales
4,
645,
725
7,14
6,03
4 10
,824
,468
40
,886
,085
63
,502
,312
(6
3,50
2,31
2)
Rec
eip
ts fr
om o
ther
Rev
enu
e S
ou
rces
38
7 14
4,00
1 23
,846
57
5,36
6 74
3,60
0 74
3,60
0 Pa
ymen
ts fo
r Po
wer
Purch
ases
and
Oth
er G
oods
and
Serv
ices
(1
16,9
96,7
69)
(27,
997,
872)
(2
9,55
4 ,71
4)
(11,
815,
849)
(4
0,39
4,01
1)
(2,3
35,6
44)
(229
,094
,859
) (2
29,0
94,8
59)
Paym
ents
to o
ther
Fun
ds
for
Po
wer
Pu
rch
ases
(5
8,85
6,58
7)
(4,6
45,7
25)
(63,
502,
312)
63
,502
,312
Pay
men
ts to
Em
ploy
ees
for S
ervi
ces
and
Ben
efits
(1
,067
,809
) (4
20,9
52)
(412
,019
) (2
85,4
57)
(539
,088
) (1
,492
,024
) (4
,217
,349
) (4
,217
,349
) N
et C
ash
Prov
ided
(Use
d) b
y O
pera
ting
Act
ivit i
es
8,87
7 73
9 1,
371,
290
23,2
71,5
17
25,4
75,3
93
5 3,7
71,3
00
(2,1
45,0
39)
110,
622,
200
I 10,
622,
200
NO
NC
API
TA
L F
INA
NC
ING
AC
TIV
ITIE
S In
terfun
d O
pera
ting
Tran
sfers
(9
54,2
64)
(260
,939
) (3
59,9
16)
(250
,482
) (4
88,8
05)
2,31
4,40
6 N
et C
ash
Prov
ided
(U
sed)
by
Non
capi
tal F
inan
cing
Act
iviti
es
(954
,264
) (2
60,9
39)
(359
,916
) (2
50,4
82)
(488
,805
) 2,
314,
406
CA
PIT
AL
AND
REL
AT
ED
FIN
ANC
ING
AC
T!V
ffiE
S P
roce
eds
from
Lo
ng
-Term
Deb
t 29
,918
,892
29
,918
,892
29
,918
,892
B
ond
Inte
rest
Sub
sidy
Rec
eive
d 1,
230,
721
5,70
7,79
5 6,
938,
516
6,93
8,51
6 Pa
ymen
t of B
ond
Issu
ance
Cos
ts
(386
,128
) (3
86,1
28)
(386
,128
) Pa
ymen
t of A
dvan
ce R
efundi
ng C
osts
Pri
ncip
al P
aymen
ts o
n L
ong-
Term
Deb
t (2
,403
,000
) (7
,215
,000
) (7
,225
,000
) (1
6,44
5,00
0)
(48,
000)
(3
3,33
6,00
0)
(33,
336,
000)
Pa
ymen
ts o
f Int
eres
t and
Fees
on
Deb
t (2
,652
,632
) (1
4 ,68
3,83
2)
(11,
207,
650)
(3
9,79
0,35
9 )
(132
,695
) (6
8,46
7,16
8)
(68,
467,
168)
R
eturn o
f N
et P
osi
tion to M
emb
ers
(492
,815
) (4
92,8
15)
(492
,815
) Pr
ocee
ds fr
om D
ispo
sal o
f Cap
ital A
sset
s 14
2,50
0 14
2,50
0 1 4
2,50
0 A
cqui
sitio
n an
d C
onstru
ctio
n of
Cap
ital A
sset
s (2
8,35
6,59
5)
(808
,611
) (6
,456
,930
) (5
,151
,379
) (6
,814
) (4
0,78
0,32
9)
(40,
780,
329)
N
et C
ash
(Use
d) b
y C
apital
and
Rel
ated
Fin
anci
ng A
ctivi
ties
( 4,3
72,2
78)
(21,
334,
222)
(2
4,88
9,58
0)
(55,
678,
943)
(1
87,5
09)
(106
,462
,532
) (1
06,4
62,5
32)
INVE
STIN
G A
CT
IVID
ES
Purch
ases
of In
vestm
ents
(4
3,82
3,11
5)
(41,
593,
317)
(2
3,18
4,36
7)
(105
,327
,177
) (2
13,9
27,9
76)
(213
,927
,97 6
) Pr
ocee
ds fr
om S
ales
and
Mat
uriti
es o
flnv
estm
ents
41
,021
,534
40
,417
,412
22
,607
,776
10
3,21
6,79
6 20
7,26
3,51
8 20
7,26
3,51
8 In
ves
tmen
t In
com
e 59
7,46
9 48
,160
1,
031,
192
914,
981
2,89
3,54
5 14
2,25
5 5,
627,
602
5,62
7,60
2 N
et C
ash
Prov
ided
(Use
d) b
y In
vesti
ng A
ctiv
ities
(2
,204
,112
) 48
,160
(1
44,7
13)
338,
390
783,
164
142,
255
(1,0
36,8
56)
(1,0
36,8
56)
Net
Incr
ease
(Dec
reas
e) in
Cas
h an
d C
ash
Equi
vale
nts
1,34
7,08
5 1,
158,
511
1,43
2,66
6 67
3,72
1 (1
,613
,284
) 12
4,11
3 3,
122,
812
3,12
2,81
2
Cas
h an
d C
ash
Equ
ival
ents
at B
egin
ning
of Y
ear
21,2
06,2
26
2,31
3,86
8 5,
395,
917
3,46
4,67
8 7,
173,
367
1,61
4,09
9 41
,168
,155
41
,168
,155
C
ash
and
Cas
h E
quiv
alen
ts a
t End
of Y
ear
$
22,5
53,3
11
$
3,47
2,37
9 $
6,
828,
583
$
4,13
8,39
9 $
5,56
0,08
3 $
1,
738,
212
$
44,2
90,9
67
$
$
44,2
90,9
67
REC
ON
CIL
IAT
ION
OF
OPE
RA
TIN
G IN
CO
ME
TO
NET
CA
SH
PRO
VID
ED
(USE
D) B
Y O
PER
ATIN
G A
CT
IVI
DES
Ope
ratin
g In
com
e (L
oss)
$
8,
591,
924
$
362,
750
$
12,7
34,9
49
$
12,1
46,6
00
$
33,4
51,8
88
$
(2,4
86,9
15)
$
64,8
01,1
96
$
$
64,8
01,1
96
Ad
justm
ents
to
Rec
on
cile
Op
erat
ing
In
com
e
to N
et C
ash
Prov
ided
(Use
d) b
y O
pera
ting
Act
iviti
es:
Dep
reci
atio
n
3,53
4,82
3 9,
170,
730
6,92
7,98
6 21
,622
,679
$
14
7,71
7 41
,403
,935
41
,403
,935
A
djus
tmen
ts fo
r (In
creas
es)
Dec
reas
es in
Ass
ets
and
Defe
rred
Outfl
ows
of
Res
ource
s an
d In
crea
ses
(Dec
reas
es)
in L
iabi
litie
s an
d D
eferr
ed Infl
ows
of
Reso
urces:
Acc
ounts
Rece
ivab
le
334,
989
(23,
510)
(4
10,2
47)
(98,
768)
(9
8,76
8)
Due
from
Oth
er F
unds
(2
,339
,345
) 13
,733
(1
86,8
98)
(2,5
12,5
10)
2,51
2,51
0 Pr
epai
d Ex
pens
es
(262
,526
) (4
12,6
26)
335,
810
(11,
123)
(8
,262
) (3
58,7
27)
(358
,727
) Fu
el S
tock
and
Mat
eria
l Inv
ento
ry
431,
040
298,
371
(1,6
97,2
25)
(967
,814
) (9
67,8
14)
Con
trac
tual D
epos
its
(328
,836
) (3
28,8
36)
(328
,836
) R
egul
atory
Ass
ets
35,7
47
106,
329
180,
646
389,
703
712,
425
712,
425
Acc
ounts
Pay
able
(1
24,6
31)
(800
,674
) 82
4,06
4 (2
53,6
34)
(791
,681
) 52
9,19
9 (6
17,3
57)
(617
,357
) A
ccru
ed P
ayrol
l and
Payr
oll T
axes
15
,001
2,
466
1,62
3 1,
829
2,68
0 24
7,24
1 27
0,84
0 27
0,84
0 D
epos
its H
eld
Due
to O
ther
Fun
ds
(13,
733)
1,
641,
178
142,
960
206,
262
535,
843
2,51
2,51
0 (2
,512
,510
) U
nearn
ed R
even
ue
189,
080
40,6
03
588,
032
490,
847
1,30
8,56
2 1,
308,
562
Net
Pen
sion
Lia
bility
(3
0,60
2)
(30,
602)
(3
0,60
2)
Defe
rred
Outfl
ows
of R
esour
ces
53,7
28
53,7
28
53,7
28
Defe
rred
Infl
ow
s of
Res
our
ces
(565
,674
) 21
8,11
2 5,
043,
491
(222
,311
) 4,
473,
618
4,47
3,61
8 N
et C
ash
Prov
ided
(Use
d) b
y O
pera
ting
Act
iviti
es
$
8,87
7,73
9 $
1,
371,
290
$
23,2
71,5
17
$
25,4
75,3
93
$
53,7
71,3
00
$
(2,1
45,0
39)
$
110,
622,
200
$
$
110,
622,
200
See
acco
mp
anyi
ng n
otes
to fi
nanci
al s
tate
men
ts.
99
MIS
SO
URI J
OIN
T M
UN
ICIP
AL
EL
EC
TR
IC U
TIL
ITY
CO
MM
ISS
ION
CO
MB
ININ
G S
TA
TE
ME
NT
OF
CA
SH
FL
OW
S
Yea
r E
nd
ed D
ecem
ber
31,
20
17
Ful
l Reg
uire
men
ts P
ools
G
ener
atio
n F
unds
M
oPE
P I
MMM
PEP
Plu
m P
oint
Ia
tan 2
P
rairi
e St
ate
Non
-Maj
or
Pool
Fun
d Po
o l F
und
Pro
ject
Fun
d P
roie
ct F
und
-----1!£jec
t Fun
d Fu
nds
Tot
al
Elim
inat
ion
s
Tot
al
OP
ERATI
NG
ACTIVITIES
R
ecei
pts
from
Pow
er an
d T
ransm
issi
o n S
ales
$
178,
629,
496
$
32,7
10,3
58
$
4 5,5
43,9
24
$
27,3
06,4
94
$
57,3
46,4
02
$
921,
923
$
342,
458,
597
$
$
342,
4 58,
597
Rec
eipt
s fr
om o
lher
Fun
ds fo
r Po
wer
and
Tra
nsm
issi
on S
ales
32
8,66
2 7,
027,
000
11,8
62,2
07
40,3
90,2
59
59,6
08,1
28
(59,
608,
128)
R
ecei
pts
from
olh
er R
even
ue S
ourc
es
580
3,00
0 95
,121
24
,974
1,
523,
835
1,64
7,51
0 1,
647,
510
Paym
ents
for
Pow
er P
urch
ases
and
Other
Goo
ds a
nd S
ervice
s (I
I 0,
802,
640)
(3
1,83
1,83
9)
(25,
471,
841)
(1
5,60
7,07
8)
(37,
I 73,
643)
(2
,516
,365
) (2
23,4
03,4
06)
(223
,403
,406
) Paym
ents
to o
ther
Fun
ds fo
r P
ower
Pur
chas
es
(59,
279,
466)
(3
28,6
62)
(59,
608,
128)
59
,608
,128
P
aym
ents
to E
mpl
oyee
s fo
r S
ervic
es a
nd B
enefi
ts
(921
,679
) (3
64,3
75)
(379
,654
) (2
45,8
81)
(483
,415
) (1
,343
,042
) (3
,738
,046
) (3
,738
,046
) N
et C
ash
Pro
vide
d (U
sed)
by
Operati
ng A
ctiv
ities
7
954,
953
188,
482
26,8
14,5
50
23,3
15,7
42
60,1
04,5
77
(1,4
13,6
49)
116,
964,
655
116,
964,
655
NO
NC
AP
ITA
L F
INAN
CIN
G A
CTIVITIES
Inte
rfun
dOperating
Tran
sfer
s (9
61,8
34)
(274
,457
) (3
65,9
42)
(257
,148
) (4
96,9
89)
2,35
6,37
0 N
et C
ash P
rovi
ded
(Use
d) by
Non
capi
tal F
inan
cing
Acti
vitie
s (9
61,8
34)
(274
,457
) (3
65,9
42)
(257
,148
) (4
96,9
89)
__
_ 2_,
356,
370
CA
PIT
AL
AND R
EL
AT
ED
FIN
ANC
ING
ACTIVITIES
Procee
ds fro
m L
ong-
Ter
m D
ebt
40,3
82,1
82
32,0
04,3
06
72,3
86,4
88
72,3
86,4
88
Bon
d In
tere
st S
ubsi
dy R
ecei
ved
1,22
6,11
9 5,
790,
907
7,01
7,02
6 7,
017,
026
Pay
men
t of B
ond
Issuance
Cos
ts
(282
,422
) (1
,566
,418
) (1
,848
,840
) (1
,848
,840
) Paym
ent o
f Adv
ance
Refu
ndin
g C
osts
(1
,471
,041
) (1
,471
,041
) (1
,471
,041
) P
rinc
ipal
Paym
ents
on
Lon
g-T
erm
Deb
t (3
9,28
2,00
0)
(6,8
65,0
00)
( 6,9
40,0
00)
(25,
995,
000)
(4
8,00
0)
(79,
130,
000)
(7
9,13
0,00
0)
Paym
ents
of
Interest
and
Fee
s on
Deb
t (2
,790
,428
) (1
5,03
5,20
9)
(! 1
,507
,581
) (4
0,15
3,71
7)
(134
,842
) (6
9,62
1,77
7)
(69,
621,
777)
R
eturn o
fNet
Pos
ition
to M
embe
rs
(958
,845
) (9
58, 8
45)
(958
,845
) Procee
ds fro
m D
ispo
sal o
f C
apit
al Assets
87
,400
87
,400
87
,400
A
cqui
siti
on an
d C
onst
ruct
ion
of C
apit
al Assets
(2
63,3
73)
(6,1
26,1
47)
(4,1
22,3
26)
(7,1
96,0
97)
(42,
843)
(1
7,75
0,78
6)
(17,
750,
786)
N
et C
ash
(Use
d) b
y C
apita
l and
Rel
ated
Fin
anci
ng A
ctivi
ties
(4,6
65,9
27)
(26,
712,
837)
(2
2,56
9,90
7)
(37,
116,0
19)
(225
,685
) (9
1,29
0,37
5)
(91,
290,
375)
INVESTIN
G A
CT
IVffi
ES
P
urch
ases
of
Inve
stm
ents
(1
5,90
9,58
8)
(38,
467,
719)
(2
9,29
1,11
7)
(105
,899
,894
) (1
89,5
68,3
18)
(189
,568
,318
) P
roceeds fr
om S
ales
and
Mat
uritie
s of
Inve
stm
ents
15
,909
,654
37
,417
,243
28
,349
,475
83
,876
,649
16
5,55
3,02
1 16
5,55
3,02
1 In
vest
men
t In
com
e
354,
272
16,3
68
890,
586
879,
701
1,83
4,40
9 51
,384
4,
026,
720
4,02
6,72
0 N
et C
ash
Pro
vide
d (U
sed)
by
Investing
Act
iviti
es
354,
338
1636
8 (1
59,8
90)
(61,
941)
(2
0,18
8,83
6)
51,3
84
(19,
988,
577)
(1
9,98
8,57
7)
Net
Increase
(D
ecre
ase)
in C
ash
and
Cas
h E
quiv
alen
ts
2,68
1,53
0 (6
9,60
7 )
(424
,119
) 42
6,74
6 2,
302,
733
768,
420
5,68
5,70
3 5,
685,
703
Cas
h an
d C
ash
Equ
ival
ents
at B
egin
ning
ofY
ear
18,5
24,6
96
2,38
3,47
5 5,
820,
036
3 03
7,93
2 4,
870,
634
845
679
35,4
82,4
52
35,4
82,4
52
Cas
h an
d C
ash
Equi
vale
nts
at E
nd o
fY ear
$
21,2
06,2
26
$
2,31
3,86
8 $
5,39
5,91
7 $
3,46
4,67
8 $
7,17
3,36
7 $
1,61
409
9 $
41,1
68,1
55
L _
___
$
41,1
68,1
55
RE
CO
NC
ILIA
TIO
N O
F O
PER
AT
ING
INC
OM
E T
O N
ET
CA
SH
PR
OV
IDE
D (
US
ED
) B
Y O
PE
RA
TIN
G A
CTIVITIES
Operating
Inco
me
(Los
s)
$
11,3
78,8
93
$
355,
094
$
13,7
03,9
68
$
12,8
22,0
12
$
33,1
19,5
99
$
(2,4
00,0
17)
$
68,9
79,5
49
$
$
68,9
79,5
49
Adj
ustm
ents
to R
econ
cile
Operati
ng In
com
e to
Net
Cas
h P
rovi
ded
(Use
d) b
y Operati
ng A
ctiv
ities
: D
epre
ciat
ion
2,72
8,27
7 8,
625,
375
6,70
0,09
2 20
,883
,699
14
8,74
0 39
,086
,183
39
,086
,183
A
djus
tmen
ts fo
r (I
ncre
ases
) Dec
reas
es in
Assets an
d D
eferr
ed O
utflow
s of
R
esou
rces
and
Incr
eases
(D
ecre
ases
) in
Liab
ilitie
s an
d D
eferre
d In
flow
s of
R
esou
rces
: A
ccou
nts
Rec
eiva
ble
(723
,076
) 79
,456
19
3,45
3 (7
5,01
4)
(525
,181
) (5
25,1
81)
Due
from
Oth
er F
unds
(7
13,1
59)
(13,
733)
1,
035,
768
475,
436
784,
312
(784
,312
) Prepai
d E
xpenses
536,
189
(157
,203
) 71
,812
24
6,61
3 26
,235
72
3,64
6 72
3,64
6 F
uel S
tock
and
Material
Inv
ento
ry
1,19
1,63
9 (1
26,4
58)
(1,2
95,2
09)
(230
,028
) (2
30,0
28)
Con
tractual D
epos
its
(159
,000
) 36
9,90
0 21
0,90
0 21
0,90
0 R
egul
atory
Assets
41,4
47
3,61
2,57
8 18
3,15
5 1,
664,
082
5,50
1,26
2 5,
501,
262
Acc
ount
s P
ayab
le
1,19
1,17
2 (5
4,90
7)
(1,3
14,0
74)
(905
,883
) (1
,117
,469
) (2
50,5
19)
(2,4
51,6
80)
(2,4
51,6
80)
Acc
rued
Pay
roll
and
P,zy
roll
Tax
es
44,8
62
1,15
6 1,
131
1,13
8 2,
551
5,87
7 56
,715
56
,715
D
epos
its H
eld
500,
000
500,
000
500,
000
Due
to O
ther
Fun
ds
(1,0
22,0
35)
(192
,317
) (1
33,2
56)
(128
,499
) 69
1,79
5 (7
84,3
12)
784,
312
Unearn
ed R
even
ue
1,29
8,12
5 (6
1,25
4)
862,
042
(4,5
69)
2,09
4,34
4 2 ,
094,
344
Net
Pen
sion
Lia
bilit
y (2
47,2
67)
(247
,267
) (2
47,2
67)
Def
erred
Outfl
ows
of R
esou
rces
40
7,44
9 40
7,44
9 40
7,44
9 D
efer
red
Inflow
s of
Res
ourc
es
(5,5
07,6
17)
4,91
8,62
7 3,
447,
753
2 85
8,76
3 2,
858,
763
Net
Cas
h P
rovi
ded
(Use
d) b
y Operati
ng A
ctiv
ities
$
7,95
4,95
3 $
188,
482
$
26,8
14,5
50
$
23,3
15,7
42
$
60,1
04 5
77
$
(1,4
13,6
49)
$
116,
964,
655
$
$
116,
964,
655
See
acc
ompan
ying n
otes
to
finan
cial
sta
temen
ts.
100
MISSOURI JOINT MUNICIPAL ELECTRIC UTILITY COMMISSION
NOTES TO FINANCIAL STATEMENTS
As of and for the Years Ended December 31, 2018 and 2017
NOTE 1: ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Nature of the Organization
Missouri Joint Municipal Electric Utility Commission ("MJMEUC") is a joint action agency and political subdivision formed under the Joint Municipal Utility Commission Act, Revised Statutes of Missouri Sections 393.700-393.770, to obtain sufficient and economical electric power and energy for the benefit of member Missouri municipalities and their residents and out-of-state advisory members. MJMEUC provides full power purchase requirements to members, and arranges purchases for members in need of supplemental power and the sale of members' excess power under joint contracts with the members in both the State of Missouri and the State of Arkansas. Each regular member ofMJMEUC appoints a representative to MJMEUC's Board of Directors.
Within MJMEUC there are three full requirements pools. The first pool is called the Missouri Public Energy Pool #1 ("MoPEP"). The 35 municipal members ofMoPEP entered into joint agreements committing their current and future electric generating facilities and purchase power contracts to the pool of members to facilitate joint planning, scheduling, dispatching, power purchases, and acquisition ownership interests in electric power facilities. The joint agreements under MoPEP entail certain obligations by the members, including maintaining adequate customer rates and maintenance of power facilities and contracts in order to meet the members' commitments to the pool.
The second pool is called the Mid-Missouri Municipal Public Energy Pool ("MMMPEP"). The thirteen municipal members ofMMMPEP have entered into power purchase contracts with MJMEUC for the full power requirements of their respective municipality. These contracts expire on May 31, 2028. The thirteenth city joined MMMPEP as a member in 2016 and began receiving power from MMMPEP on January 1, 2018.
The third pool is called the Southwest Missouri Public Energy Pool ("SWMPEP") and was created in 2017. The municipal members of SWMPEP have entered into power purchase contracts with MJMEUC for the full power requirements of their respective municipality. The power purchase contracts call for SWMPEP to start receiving power from MJMEUC on June 1, 2020 and the power purchase contracts expire on May 31, 2030. There are currently two members of the SWMPEP with the possibility for additional members to join the pool at a later date. Until 2020, when SWMPEP begins to receive power from MJMEUC, the financial transactions relating to SWMPEP are minimal and are accounted for within the General Fund. A separate SWMPEP fund will be created in 2020 to account for SWMPEP operations.
As of December 31, 2018, MJMEUC has several long-term commitments for power purchase contracts and operating costs of jointly owned power generating facilities, as explained elsewhere in these notes. MJMEUC's acquisition of ownership interests generally includes commitments under loan or bond financing arrangements. Through participation in the joint agreements with other MJMEUC members, each member has an allocated share of the various long-term commitments under these contracts, including its allocated portion of costs with MJMEUC's ownership interest in power generating facilities and take-or-pay power purchase commitments. MJMEUC also has a second category of "advisory" members to allow rural electric cooperatives and non-Missouri municipalities to participate in these power supply programs and projects. MJMEUC's membership includes four cities located in the State of Arkansas who also receive power from MJMEUC. There are various cancellation provisions under these contracts.
101
MJMEUC is a party to a joint operating agreement with the Missouri Association of Municipal Utilities ("MAMU") and the Municipal Gas Commission of Missouri ("MGCM") for the purpose of coordinating resources to improve efficiency and reduce costs. The resulting alliance, known as the Missouri Public Utility Alliance ("MPUA"), is managed by a Joint Operating Committee comprised of three representatives from the governing boards of each member. This committee reviews and recommends annual budgets for each member, determines the allocation of expenses on a cost reimbursement basis to members, consults on employee issues, and recommends contractual arrangements with joint consultants to each member.
Government-wide Financial Statements
The Government-wide Financial Statements provide a broad overview of MJMEUC's finances. These financial statements include the Combined Statements of Net Position; the Combined Statements of Revenues, Expenses, and Changes in Net Position; and the Combined Statements of Cash Flows.
Fund Accounting
MJMEUC uses funds to report its financial position and results of its operations in its fund financial statements. Fund accounting is designed to aid financial management by segregating transactions related to certain functions or activities.
MJMEUC reports the following proprietary funds as major funds:
The MoPEP Fund is used to account for financial resources related to power sales and the costs of power sales for the member municipalities ofMoPEP.
The MMMPEP Fund is used to account for financial resources related to power sales and the costs of power sales for the member municipalities ofMMMPEP.
The Generation Project Funds are used to account for revenues and expenses of three MJMEUC jointlyowned power plant projects. The generation project funds include Plum Point, Iatan 2, and Prairie State. See Note 3 for a complete description of each of these projects.
MJMEUC reports the following proprietary funds as non-major funds:
The Alliance Fund is used to account for all revenues and expenses associated with MPUA. The Alliance Fund pays for various administrative costs ofMPUA members and receives payments from members as a reimbursement for these costs.
The General Fund is used to account for general operations beneficial to all MJMEUC members and projects. Power and transmission transactions not related to MoPEP and MMMPEP members or the project funds are accounted for in the General Fund. The General Fund receives reimbursements from the other MJMEUC funds for costs incurred that are allocable to the other funds.
Measurement Focus, Basis of Accounting, and System of Accounts
These financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or the economic asset is used. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are recognized when an exchange takes place.
MJMEUC's accounts are maintained in accordance with the Uniform System of Accounts of the Federal Energy Regulatory Commission and MJMEUC maintains its accounting records in conformity with U.S. generally accepted accounting principles ("GAAP"), as applicable to governmental entities. MJMEUC applies the accounting principles of Governmental Accounting Standards Board Statement No. 62 (GASB 62), Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989
102
FASB andAICPA Pronouncements, that pertain to regulated operations. Accordingly, revenues and expenses are matched to current and future periods in which the revenues are earned or the expenses are recovered through the rate-making process that is under the control of MJMEUC's Board of Directors.
MJMEUC distinguishes operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods and services in connection with MJMEUC' s ongoing operations. Operating expenses include the costs of sales and services, member training, administrative and general expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
Restricted Resources
MJMEUC uses restricted resources first to fund expenditures when both restricted and unrestricted resources are available.
Revenue and Expense Recognition for Transactions with Regional Transmission Organizations
MJMEUC sells electric power on the market through Regional Transmission Organizations ("RTOs"), either from generation resources or through power purchase agreements, and MJMEUC purchases energy from the RTOs where MJMEUC economically needs to receive the power. MJMEUC records the sales and purchases of power through RTOs on a net basis. This revenue recognition policy avoids the recording of revenues and expenses on essentially the same energy multiple times.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.
Income Taxes
MJMEUC is a body public and corporate of the State of Missouri and is exempt from federal and state income taxes.
Utility Plant in Service and Other Buildings and Equipment
Utility plant in service and other buildings and equipment are recorded at cost. Interest incurred during the construction phase is reflected in the capitalized amount of the asset constructed, net of interest earned on the invested debt proceeds over the same period. MJMEUC capitalizes fixed assets that have a useful life of more than one year and an initial individual cost of at least $5,000, except for computer equipment and furniture for which the minimum threshold amount is $1,500. Costs incurred for MJMEUC's jointly owned investments in utility power plant projects have been capitalized. Capitalization thresholds may be set by individual projects; however, MJMEUC analyzes the costs of each project to apply its capitalization policies consistently. MJMEUC's share of utility plant betterments and major replacements in excess of $5,000 are capitalized and depreciated. The purchase of capital spares, which consist of critical equipment component spares for a utility plant, are capitalized and depreciated as part of the utility plant. The costs of normal maintenance and repairs are charged to operations as incurred. Property, plant and equipment financed by capital leases are recorded as capital assets and as corresponding liabilities. Amortization expense related to assets acquired with capital leases are recorded as a component of depreciation expense on the same basis as assets financed with other resources. Depreciation is expensed using the straight-line method over the estimated useful lives of the assets.
103
Following are the estimated useful lives for capital assets:
Asset Class
Computer· Equipment
Office Furniture
Other Equipment
Office Buildings
Railcars
Utility Plant in Service
Years
4-5
7-10
7-10
40
15
5-60
Bond Issuance Costs and Bond Premiums and Discounts
Financing costs incurred in connection with issuance of bonds and other long-term debt have been recognized as a regulatory asset and are recovered through MJMEUC's future rates. Premiums and discounts in connection with issuance of long-term debt have been recognized and reported as a component of the outstanding debt balance. The financing costs and premiums and discounts are being amortized over the life of the respective debt in accordance with MJMEUC's rate-making policy.
Investments
Investments are reported at fair value. Investment return includes interest income, realized and unrealized gains or losses, and investment expenses. See Note 2 for further information on MJMEUC's investments.
Fuel Stock and Material Inventory
Fuel stock and material are valued at average costs. The cost of fuel and materials used in production are expensed as used and are recovered through rates.
Prepaid Expenses
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid expenses in the financial statements. The costs of prepaid items are recorded as expenses when consumed rather than when purchased.
Accounts Receivable
Accounts receivable are stated at the amount billed to members and others. All receivable balances are considered fully collectible and an allowance for doubtful accounts is not deemed necessary.
Interj und Receivables/Payables
During the course of normal operations, numerous transactions occur between individual funds for energy provided or services rendered. These receivables and payables are classified as "Due from Other Funds" or "Due to Other Funds" on the Combining Statement of Net Position. These balances between funds are eliminated in the combined financial statements.
Regulatory Assets and Regulatory Credits
MJMEUC applies the accounting principles from GASE 62 that pertain to regulatory operations. Billing rates are established by MJMEUC's Board of Directors and are designed to fully recover each pool's and project's cost over the life of the pool or project. Participant billing rates are structured to recover current debt service requirements, operating costs, capital costs, and to fund certain other items. Accordingly, certain costs or revenues are deferred and reported as regulatory assets or regulatory credits until they are recovered in future rates or costs.
104
Regulatory assets are rights to additional revenues or deferred expenses, which are expected to be recovered through customer rates over some future period. Regulatory credits are reductions in earnings ( or costs recovered) to cover future expenses. Regulatory credits are reported as deferred inflows of resources, which are discussed below. MJMEUC is not a public utility subject to rate regulation by the Federal Energy Regulatory Commission or by the Missouri Public Service Commission.
Regulatory assets and regulatory credits consist of the following as of December 31:
Regulatory Assets
Interest, Depreciation and Capital Costs in Excess of Billings
Unamortized Debt Issuance Costs
Regulatory Credits
Billings in Excess of Interest, Depreciation and Capital Costs
Advance Billings for Future Costs
Deferred Outflows and Inflows of Resources
$
$
$
$
2018
7,584,056
19,050,355
26,634,411
2018
41,496,160 745,244
42,241,404
2017
$ 7,304,560 19,656,148
$ 26,960,708
2017
36,714,165 1,053,621
$ 37,767,786
In addition to assets, the statement of financial position reports a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to future period, and as such, will not be recognized as an outflow of resources (expense) until then. MJMEUC's items that qualify for reporting in this category are the unamortized deferred charge on refunded debt, which is deferred and amortized over the shorter of the life of the refunded debt or the new debt, and deferred outflows relating to MJMEUC's defined pension plan for its employees. These amounts are being amortized in accordance with GAAP and MJMEUC's rate making policy.
In addition to liabilities, the statement of financial position reports a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to future period, and as such, will not be recognized as an income or resources (revenue) until that time. MJMEUC's items that qualify for reporting in this category are the regulatory credits discussed above and the unamortized deferred gain on refunded debt, which is deferred and amortized over the shorter of the life of the refunded debt or the new debt. These amounts are being amortized in accordance with GAAP and MJMEUC's rate making policy.
Deferred outflows and inflows ofresources consist of the following as of December 31:
Deferred Outflows of Resources 2018 2017
Unamortized Deferred Charge on Refunded Debt $ 35,190,276 $ 37,412,750
Defined Benefit Pension Plan Costs 764,001 817,729
$ 35,954,277 $ 38,230,479
Deferred Inflows of Resources 2018 2017
Regulatory Credits $ 42,241,404 $ 37,767,786
Unamortized Deferred Gain on Refunded Debt 920,450 971,586
$ 43,161,854 $ 38,739,372
105
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Missouri Local Government Employees Retirement System ("LAGERS") and additions to/deductions from LAGERS fiduciary net position have been determined on the same basis as they are reported by LAGERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Pension plan investments are reported at fair value.
Arbitrage Rebate Liability
MJMEUC's tax-exempt bonds are subject to Federal rebate requirements. Generally, any excess of earnings from investing bond proceeds over the amount that would have been earned at the yield rate of the bonds must be rebated to the Federal government. Arbitrage rebate liability, if any, has been determined based upon rebate calculations performed by MJMEUC's rebate analyst. Refunds of past arbitrage rebate paid to the Federal government from subsequent rebate calculations are reported when the actual refund amounts are either acknowledged by the Internal Revenue Service or received by MJMEUC due to the uncertainty of the actual refunds to be received.
Net Position
Net position is classified into three components. Net investment in capital assets consists of capital assets net of accumulated depreciation less the outstanding balances of debt incurred to finance those assets. Restricted net position consists of the balance of cash and investment accounts required to be maintained by bond indentures or by contract less any amounts currently payable from these accounts. The remaining balance of net position is classified as unrestricted.
Sometimes MJMEUC will find outlays for a particular purpose to be available from both restricted and unrestricted resources. It is MJMEUC's policy to generally use restricted resources first when both restricted and unrestricted resources are available.
Bond Interest Subsidy
This amount represents the 35% subsidy for interest costs on the Plum Point 2009A and Prairie State 2009A and 201 OA Series Revenue Bonds issued under the Build America Bond ("BAB") Program. However, effective with its budget year ended September 30, 2013 and scheduled to continue through 2021, the United States ("U.S.") Federal government is subject to the process of sequestration, which reduces spending for many Federal programs, including the BAB program. MJMEUC's BAB federal subsidies were reduced by approximately 6.9%, 6.6% and 6.2% for the U.S. Federal government's years ended September 30, 2017, 2018 and 2019 respectively. The sequestration rate for future years through 2021 will be set by the U.S. Federal government from time to time in the future.
Transmission Revenue and Transmission Expense
Transmission revenue represents the costs of transmission services provided to MJMEUC members that are directly allocable and billed to specific members. Transmission costs that are not directly allocable and billed to specific members are allocated to all members of the respective pool or project and are recovered as a component of power sales and related charges. Transmission expense represents the costs of transmission services provided to MJMEUC members that are directly allocable and billed to specific members and all other transmission related costs are reported as a component of power purchases expense.
106
MAMU and MGCM Transfers
A portion ofMAMU's and MGCM's income is transferred to the Alliance Fund maintained by MJMEUC to pay for MPUA expenses. Transfers from MAMU and MGCM (see Note 9) to the Alliance Fund are recognized as revenue in the calendar year to which they pertain. Transfers billed or received in advance of the year to which they pertain are reported as unearned revenue.
Risk Management
MJMEUC manages it risks through insurance coverage provided by private insurers for workers' compensation, officers and directors liability, boiler/machinery, business interruption, and other property and business risks. There were no significant reductions in coverage over the past three years.
NOTE 2: CASH, CASH EQUIVALENTS, AND INVESTMENTS
Cash Equivalents
For the purpose of the Statements of Cash Flows, MJMEUC considers unrestricted cash and highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.
Investments
Missouri State Statutes authorize political subdivisions of the state to invest funds in obligations of the United States or its agencies; certain obligations of the State of Missouri or its political subdivisions and municipalities; certificates of deposit; repurchase agreements; bankers' acceptances; and certain domestic corporation debt instruments, including commercial paper. Restricted cash and investments held by trustees under bond and trust indentures are managed in accordance with the applicable legal documents. With respect to restricted investments of bond funds held in trust, MJMEUC's Board of Directors has obtained the opinion of legal counsel in further defining the types of investments permitted, which also includes investment agreements (including guaranteed investment contracts, or "GICs") and certain other investment agreements which are either collateralized or are provided by an entity that is rated, or whose guarantor is rated, in at least the two highest rating categories by Standard and Poor's and Moody's.
Fair Value -MJMEUC holds investments that are measured at fair value on a recurring basis. MJMEUC categorizes its fair value measurements within the fair value hierarchy established by GAAP. The fair value hierarchy requires information on the inputs used to determine the fair value of any assets reported at fair value as described below.
Level 1 investments are those where the fair value is determined based upon quoted prices in active markets for identical investments.
Level 2 investments are those where the fair value is determined using other significant observable inputs. The investments that fall into this category are fixed income securities where the inputs include interest rates, investment term, credit ratings and sales of similar investments.
Level 3 investments include any investments that don't fall in levels 1 or 2 and include significant unobservable inputs.
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The following is a summary of the inputs used as of December 31, in valuing investments carried at fair value:
Investment Risk- While MJMEUC does not have a fonnal investment policy that specifically addresses each of the following types ofrisks, the following describes MJMEUC's practices and exposures with respect to these risks:
Interest Rate Risk- MJMEUC manages its exposure to declines in fair values by only investing in obligations that return the initial investment and the interest earned and by generally holding investments to maturity or only selling investments for a realized or other short-term gain.
As of December 31, MJMEUC had the following investments:
2018 Cash and Cash Investment Maturities (in i:ears) Eguivalents Less than 1 1-5 Over 5
Cash $ 359,863 $ $ $ Money Market Funds 81,335,235 U.S. Agency Securities 499,620 11,468,717 10,154 Municipal Securities 22,618,720 61,217,879 17,258,996 Corporate Bonds 6,659,970 19,184,414 368,264 Asset Backed Securities 19,761 301,005 50,002 Certificates of Deposit 472,520 2,193,145 Total Bond Accounts
Classified on the Statements of Financial Position as: Current Assets (includes portion of debt service accounts for bond payments through June 1, 2019)
Investments (Current Assets) Restricted Bond Accounts, Current Portion Less Checking Accounts Included in Restricted Bond Accounts
Other Assets - Investments Restricted Assets
Fair Value
$ 359,863 81,335,235 11,978,491
101,095,595 26,212,648
370,768 2,665,665
$224,018,265
$ 4,315,022 78,635,309
(517,713) 20,910,503
120,675,144 $224,018,265
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2017 Cash and Cash Investment Maturities (in �ears) Eguivalents Less than 1 1-5 Over 5
Money Market Funds $ 49,201,355 $ $ $ U.S. Agency Securities 1,702,644 42,770,263 Municipal Securities 17,466,787 59,741,802 19,010,279 Corporate Bonds 232,680 23,001,450 99,333 Asset Backed Securities 19,957 109,823 Mortgage Backed Securities 20,280 Certificates of Deposit 1,498,478 2,691,886 Total Bond Accounts
Classified on the Statements of Financial Position as: Current Assets (includes portion of debt service accounts for bond payments through June 1, 2018)
Investments (Current Assets) Restricted Bond Accounts, Current Portion Less Checking Accounts Included in Restricted Bond Accounts
Other Assets - Investments Restricted Assets
Fair Value
$ 49,201,355 44,472,907 96,218,868 23,333,463
129,780 20,280
4,190,364
$217,567,017
$ 5,580,988 46,272,263 (2,036,625) 19,844,051
147,906,340 $217,567,017
Credit Risk - Credit risk is the risk that the issuer or the counterparty to an investment will not fulfill its obligations. Credit risk is measured using credit quality ratings of investments in debt securities as described by nationally recognized rating agencies such as Standard and Poor's and Moody's Investor Service ("Moody's"). MJMEUC's practice is to only invest in investment grade securities as permitted by Missouri State Statutes as explained above.
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The following is a summary of the credit quality ratings by investment type, as listed by Moody's, or by its equivalent rating if rated by a different rating service, as of December 31:
Tyee of Investment Cash Money Market Funds Money Market Funds U.S. Agency Securities Municipal Securities Municipal Securities Municipal Securities Municipal Securities Municipal Securities Municipal Securities Municipal Securities Corporate Bonds Corporate Bonds Corporate Bonds Corporate Bonds Corporate Bonds Corporate Bonds Corporate Bonds Corporate Bonds Corporate Bonds Asset Backed Securities Asset Backed Securities Asset Backed Securities Asset Backed Securities Asset Backed Securities Asset Backed Securities Mortgage Backed Securities Mortgage Backed Securities Certificates of Deposit
The cash, money market funds and certificates of deposit listed above as not rated were either fully insured by FDIC insurance or collateralized by securities. Municipal securities totaling $3,422,440 also were not rated.
Concentration of Credit Risk- This is the risk of loss attributed to the magnitude of investment in a single issuer. MJMEUC does not place limits on the amount that may be invested in any one issuer, except investments in certificates of deposit must be fully insured or collateralized by the fmancial institution with pledged securities held in MJMEUC's name. At both December 31, 2018 and 2017, MJMEUC had investments in the Blackrock Federal Fund totaling approximately 21 % of MJMEUC's total investments and at December 31, 2018, MJMEUC had investments in the Federated Prime Obligations Fund totaling approximately 15% of its total investments.
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Custodial Risk for Deposits - This is the risk that, in the event of a financial institution failure, deposits may not be returned. MJMEUC's practice is to utilize bank depositories that pose little or no risk of loss of principal balance. Bank checking accounts are maintained so that excess funds are swept each night into overnight repurchase agreements, into governmental money market accounts with a AAA rating, or the financial institution pledges securities held in MJMEUC's name with a fair value of at least 100% of the uninsured bank balance of deposits. MJMEUC requires that securities underlying repurchase agreements must have a fair value of at least 100% of the cost of the repurchase agreement.
Custodial Credit Risk for Investments - This is the risk that in the event of failure of the issuer or other counterparty to an investment, the investor will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. As of December 31, 2018 and 2017, all of MJMEUC's investments were held by the counterparty's trust department or agent in MJMEUC's name.
Restricted Cash, Cash Equivalents and Investments - A summary of restricted cash, cash equivalents and investments held by MJMEUC under bond indentures as of December 31 is as follows:
Operating and Maintenance Accounts
Contingency Reserve Accounts
NOTE 3: UTILITY PLANT PROJECTS
2018 $ 10,099,837
7,216,828
2017
$ 9,962,727 7,122,268
$ 17,316,665 $ 17,084,995
Plum Point Energy Station Plant (placed in service during 2010)
In March 2006, MJMEUC entered into agreements to acquire a 22.11 % undivided interest ( or approximately 147 MW) in the Plum Point Energy Station, a 665-megawatt (MW) coal-fired generating plant near Osceola, Arkansas. Initially, MJMEUC entered into life-of-unit, take-or-pay unit power purchase agreements with four of its Missouri member municipalities and three Arkansas municipalities which are Advisory Members. In June 2011, MJMEUC's MoPEP members accepted assignment of20 MW from one of the original Missouri member municipality's unit power purchase agreements. MJMEUC's capitalized project expenditures for its share of the costs are recovered through rates and charges from MJMEUC's MoPEP members and from the participating municipalities under life-of-unit, take-or-pay unit power purchase agreements. MJMEUC is required to pay its proportionate share of plant operation costs, operating reserves, working capital requirements and plant closure costs and in return MJMEUC receives its proportionate share of the energy generated by the plant.
Iatan Unit 2 (placed in service during 2011)
MJMEUC paid its proportionate share of construction costs for an 11.76% undivided interest (or approximately 100 MW) in a second unit of the Iatan Generating Station, an 850 MW coal-fired generating plant constructed at the Iatan Station site in Platte County, Missouri. MJMEUC allocated 30% of its Iatan Unit 2 interest to MoPEP and has entered into power purchase agreements with two of its member municipalities for the sale of the remaining capacity and energy. MJMEUC's capitalized project expenditures for its share of the costs are recovered through rates and charges from MJMEUC's MoPEP members and from the participating municipalities under power purchase agreements. MJMEUC is required to pay, through rates, its allocable share of common facilities upgrade costs, common facilities additions and retirements, and plant operation costs and in return, MJMEUC receives its proportionate share of the energy generated by the plant.
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Prairie State Energy (units 1 and 2 placed in service during 2012)
In February 2005, MJMEUC joined a consortium known as the Prairie State Generating Company, LLC to participate in the development and construction of a two-unit 1,582 MW (combined) pulverized coal-fueled power generating facility in Washington County, Illinois. MJMEUC's capitalized project expenditures for its share of the costs, including coal reserves, are being recovered from MJMEUC's MoPEP members through rates and charges and from six other MJMEUC members under power purchase agreements. MJMEUC is authorized to take up to 12.33% of the total facility capacity. MoPEP takes 44.1 % of the electric power generated by MJMEUC's share in the facility. MJMEUC is required to pay its proportionate share of plant operation costs, operating reserves, working capital requirements and plant closure costs.
In 2013, a power purchase agreement was reached between MoPEP and a MJMEUC member who contracted for 4 MW of the capacity and energy. Under this agreement, MoPEP purchased this member's 4 MW of capacity and energy until June 1, 2017, at which time the 4 MW of capacity was permanently assigned to MoPEP and the member was discharged from all obligations of the project.
Laddonia Ethanol Co-Generation Plant (placed in service during 2007)
In 2006 and 2007, MJMEUC entered into lease-purchase agreements with MAMU to obtain funding under MAMU's finance program for Missouri municipal utilities for development of a natural gas fired, electric co-generation facility linked to an ethanol plant near Laddonia, Missouri. The project is for the energy needs ofMoPEP members and MJMEUC will recover all costs incurred from those members through rates and charges. See Note 5 regarding capital lease financing for this project.
Dogwood Energy Center (acquired ownership interest in 2012 and 2018)
On March 26, 2012, MJMEUC acquired an 8.2% interest in the Dogwood Energy Center, a 610 MW combined-cycle natural gas plant located in Pleasant Hill, Missouri. On May 30, 2018, MJMEUC acquired an additional 8.2% interest in the Dogwood Energy Center, bringing MJMEUC's total ownership interest to 16.4%. MJMEUC's ownership interest in the plant is for the energy needs ofMoPEP members and MJMEUC will recover all costs incurred from those members through rates and charges. The combined cycle plant was originally placed in service in 2002.
Fredericktown Power Generation Plant (placed in service during 2015)
In October 2010, MJMEUC approved the development, construction and installation of a two-unit natural gas fired generating facility, with approximately nominal net 24 MW ( combined) capacity, in Fredericktown Missouri, a member city ofMoPEP. The output of the generating station primarily serves electric peaking loads ofMJMEUC's members participating in MoPEP; however, the units are called to run at different times by the market operator. MJMEUC recovers all costs incurred from MoPEP members through rates and charges. The plant was placed in service on July 1, 2015.
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NOTE 4: UTILITY PLANT IN SERVICE AND OTHER CAPITAL ASSETS
A summary of changes in utility plant in service and other capital assets for the years ended December 31, 2018 and 2017 is as follows:
Office Building $ 68,500 $ $ $ $ 68,500 Plum Point 2,538,009 2,538,009 Iatan 2 3,619 3,619 Prairie State 3,939,953 3,939,953 MoPEPUnits
Dogwood 23,001 23,002 46,003 Total Land 6,573,082 23,002 6,596,084
Construction in Process Plum Point 713,144 558,719 (654,728) 617,135 Iatan 2 3,262,771 6,100,407 (3,442,325) 5,920,853 Prairie State 2,558,223 6,148,379 (7,013,219) (856,594) 836,789 MoPEP Units
Office Building $ 68,500 $ $ $ $ 68,500 Plum Point 2,538,009 2,538,009 Iatan 2 3,619 3,619 Prairie State 3,939,953 3,939,953 MoPEP Units
Dogwood 23,001 23,001 Total Land 6,573,082 6,573,082
Construction in Process Plum Point 1,236,741 5,476,389 (5,999,986) 713,144 Iatan 2 1,268,705 3,226,943 (1,230,297) (2,580) 3,262,771 Prairie State 4,416,242 7,503,148 (9,361,167) 2,558,223 MoPEPUnits
Total Capital Assets Being Depreciated, net of Depreciation 1,222,208,054 p7,495,045) 16,786,506 (3,848,001) 1,197,651,514
Total Capital Assets, Net $ 1,235,702,824 $ (21,031,040) $ $ (3,850,581) $ 1,210,821,203
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Following is the gross amount of assets recorded under capital leases and the accumulated depreciation recognized as of December 31:
2018 Gross Accumulated Net Book Amount Depreciation Value
Utility Plant in Service $ 11,148,820 $ 5,480,394 $ 5,668,426 Office Building 1,457,263 405,962 1,051,301 Land - Office Building 68,500 68,500
$ 12,674,583 $ 5,886,356 $ 6,788,227
2017 Gross Accumulated Net Book Amount Depreciation Value
Utility Plant in Service $ 11,148,820 $ 5,002,406 $ 6,146,414
Office Building 1,457,263 369,068 1,088,195
Land - Office Building 68,500 68,500
$ 12,674,583 $ 5,371,474 $ 7,303,109
The Prairie State Energy project includes contiguous coal reserves and a mine portal to supply coal to the power plant. The following is a schedule of the changes in MJMEUC's ownership interest in the coal reserves, measured in tons:
Estimated Recoverable Reserves, as of December 31, 2016 201 7 Changes in Reserve Estimate
Reserve Acquisitions in 2017 Amount Mined During 2017
Estimated Recoverable Reserves, as of December 31, 2017 2018 Changes in Reserve Estimate Reserve Acquisitions in 2018 Amount Mined During 2018
Estimated Recoverable Reserves, as of December 31, 2018
22,807,712
1,234 (764,733)
22,044,213
(780,720) 21,263,493
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NOTE 5: LONG-TERM DEBT
Changes in Long-term Debt
The following is a summary of changes in long-term debt for the year ended December 31, 2018:
Balance Payments or Balance Principal Due 1/1/2018 Additions Amortization 12/31/2018 in One Year
Utility plant projects:
Plum Point Energy Station - Bonds $ 276,440,000 $ $ 7,215,000 $ 269,225,000 $ 7,575,000 Add Bond Premium 24,156,671 1,509,792 22,646,879 Deduct Bond Discount (47,936) (2,523) (45,413)
Iatan Unit 2 - Bonds 235,845,000 7,225,000 228,620,000 7,530,000 Add Bond Premium 26,415,760 1,559,407 24,856,353 Deduct Bond Discount (53,781) (53,781)
Prairie State Energy Campus - Bonds 741,275,000 16,445,000 724,830,000 48,035,000 Add Bond Premium 60,514,560 3,618,418 56,896,142
2005A Capital Lease for Laddonia 2,533,000 736,000 1,797,000 774,000 2006A Capital Lease for Laddonia 234,000 72,000 162,000 72,000 Revolving Credit Line - MoPEP
Other:
2006A Capital Lease, Office Building 1,107,000 48,000 1,059,000 60,000 Total Long-term Debt $1,415,056,679 $ 29,918,892 $ 40,307,388 $1,404,668,183 $66,281,000
The following is a summary of changes in long-term debt for the year ended December 31, 2017:
Balance Payments or Balance Principal Due 1/1/2017 Additions Amo1iizati on 12/31/2017 in One Year
Utility plant projects:
Plum Point Energy Station - Bonds $ 283,305,000 $ $ 6,865,000 $ 276,440,000 $ 7,215,000 Add Bond Premium 25,666,463 1,509,792 24,156,671 Deduct Bond Discount (50,458) (2,522) (47,936)
Iatan Unit 2 - Bonds 242,785,000 6,940,000 235,845,000 7,225,000 Add Bond Premium 27,975,169 1,559,409 26,415,760 Deduct Bond Discount (114,489) (60,708) (53,781)
Prairie State Energy Campus - Bonds 740,630,000 26,640,000 25,995,000 741,275,000 16,445,000 Add Bond Premium 58,281,009 5,364,307 3,130,756 60,514,560
2005A Capital Lease for Laddonia 3,233,000 700,000 2,533,000 736,000 2006A Capital Lease for Laddonia 296,000 62,000 234,000 72,000 Revolving Credit Line - MoPEP
Other:
2006A Capital Lease, Office Building 1,155,000 48,000 1,107,000 48,000
Total Long-term Debt $1,429,500,420 $ 72,386,489 $ 86,830,230 $1,415,056,679 $33,336,000
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Summary of Long-term Debt
The following is a description of long-term debt. Amounts are presented inclusive of unamortized bond premiums or discounts totaling $112,340,183 and $115,997,679 as of December 31, 2018 and 2017, respectively.
$48,600,000 Series 2009A and $4,860,000 Series 2009B MJMEUC Power Project Revenue Bonds (Plum Point Project). (a) $
$99,975,000 Series 2009A MJMEUC Power Project Revenue Bonds (Iatan 2 Project). (b)
$193,720,000 Series 2009A and $14,200,000 Series 2009B MJMEUC Power Project Revenue Bonds (Prairie State Project). (c)
$73,420,000 Series 2010A and $4,585,000 Series 2010B MJMEUC Power Project Revenue Bonds (Prairie State Project). (d)
$17,060,000 Series 2011 Power Supply System Revenue Bonds (Fredericktown Project). (e)
$32,950,000 Series 2012 Power Supply System Revenue Bonds (Dogwood Project). (f)
$155,730,000 Series 2014A MJMEUC Power Project Revenue Refunding Bonds (Iatan 2 Project). (g)
$192,605,000 Series 2014A MJMEUC Power Project Revenue Refunding Bonds (Plum Point Project). (h)
$215,105,000 Series 2015A MJMEUC Power Project Revenue Refunding Bonds (Prairie State Project). (i)
$80,685,000 Series 2015A MJMEUC Power Project Revenue Refunding Bonds (Iatan 2 Project). G)
$37,240,000 Series 2015A MJMEUC Power Project Revenue Refunding Bonds (Plum Point Project). (k)
$252,745,000 Series 2016A MJMEUC Power Project Revenue Refunding Bonds (Prairie State Project). (1)
$26,640,000 Series 2017 MJMEUC Power Project Revenue Refunding Bonds (Prairie State Project) (m) $35,600,000 Series 2017 MJMEUC Power Supply System Revenue Refunding Bonds (MoPEP Facilities) (n)
$26,605,000 Series 2018 Power Supply System Revenue Bonds (Dogwood Project). ( o)
$8,715,000 Capital Lease Financing under the Missouri Association of Municipal Utilities Lease Financing Program Series 2005A. (p)
$781,000 Capital Lease Financing under the Missouri Association of Municipal Utilities Lease Financing Program Series 2006A. (q)
$1,523,000 Capital Lease Financing under the Missouri Association of Municipal Utilities Lease Financing Program Series 2006A. (r)
$48,000,000 Line of Credit Agreement with a Financial Institution. (s) Total Long-term Debt Less Current Maturities
2018
53,460,000 $
2,300,000
180,520,000
70,605,503
1,510,313
3,137,338
165,195,912
201,221,879
220,523,837
85,980,441
37,144,587
278,560,159
31,516,643
40,130,487
29,843,084
1,797,000
162,000
1,059,000
1,404,668,183 (66,281,000)
2017
53,460,000
4,431,218
184,890,000
72,214,099
2,207,478
4,047,745
171,277,306
209,921,671
232,994,517
86,498,456
37,167,064
279,686,636
32,004,307
40,382,182
2,533,000
234,000
1,107,000
1,415,056,679 (33,336,000)
Total Long-term Debt, Net of Current Maturities $ 1,338,387,183 $ 1,381,720,679
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(a) Plum Point Project- Series 2009: Principal due annually beginning on January 1, 2037 through 2039. Interestis payable semi-annually. Interest on the Series 2009A taxable "Build America Bonds" is at 7.73%. Interest onthe Series 2009B taxable bonds is at 7.73%. Under the Build America Bonds program, the U.S. Federalgovernment makes semi-annual bond interest subsidy payments to reduce the effective interest rates of thetaxable bonds.
(b) Iatan 2 Project- Series 2009: Principal due annually on January 1 through 2019. Interest is payable semiannually. Interest on the Series 2009A tax-exempt bonds range is 5.25%. Interest on the Series 2009B taxablebonds is at 6.25%. The Series 2009B bonds matured on January 1, 2013. A portion of the Series 2009 bondswere refunded with refunding bonds issued in 2014 and 2015, see (g) and G) below.
(c) Prairie State Project- Series 2009: Principal due annually beginning on January 1, 2014 through 2042. Interestis payable semi-annually. Interest on the Series 2009A taxable "Build America Bonds" range from 5.33% to6.89%. The Series 2009B bonds matured on January 1, 2016. Under the Build America Bonds program, theU.S. Federal government makes semi-annual bond interest subsidy payments to reduce the effective interestrates of the taxable bonds. A portion of the Series 2009A bonds were refunded, on a crossover basis, withrefunding bonds issued in 2017, see (m) below.
(d) Prairie State Project- Series 2010: Principal due annually on January 1, 2014 through 2042. Interest is payablesemi-annually. Interest on the Series 2010A taxable "Build America Bonds" range from 4.88% to 7.9%. TheSeries 2010B bonds matured on January 1, 2016. Under the Build America Bonds program, the U.S. Federalgovernment makes semi-annual bond interest subsidy payments to reduce the effective interest rates of thetaxable bonds.
(e) MoPEP Facilities Fredericktown Project- Series 2011: Principal due annually on December 1 through 2020.Interest on the Series 2011 tax-exempt bonds range from 3.5% to 4%. A portion of the Series 2011 bonds wererefunded with refunding bonds issued in 2017, see (n) below.
(f) MoPEP Facilities Dogwood Generating Facility Project- Series 2012: Principal due annually on January 1,through 2021. Interest on the Series 2012 tax-exempt bonds range from 4% to 5%. A portion of the Series2012 bonds were refunded with refunding bonds issued in 2017, see (n) below.
(g) Iatan 2 Project- Series 2014A Refunding: Proceeds were used to refund a portion of the Series 2006A and aportion of the 2009A Iatan 2 Project Revenue Bonds. Principal due annually on January 1, 2017 through 2034.Interest is payable semi-annually. Interest on the Series 2014A tax-exempt bonds range from 4% to 5%.
(h) Plum Point Project- Series 2014A Refunding: Proceeds were used to refund a portion of the Series 2006 PlumPoint Project Revenue Bonds. Principal due annually on January 1, 2017 through 2034. Interest is payablesemi-annually. Interest on the Series 2014A tax-exempt bonds range is 5%.
(i) Prairie State Project- Series 2015A Refunding: Proceeds were used to refund a portion of the Series 2007APrairie State Project Revenue Bonds. Principal due annually on June 1, 2017 through December 1, 2031.Interest is payable semi-annually. Interest on the Series 2015A tax-exempt bonds range from 3.25% to 5%.
G) Iatan 2 Project- Series 2015A Refunding: Proceeds were used to refund the remaining Series 2006A Iatan 2Project Revenue Bonds, except for the principal payment scheduled for January 1, 2016, and a portion of theSeries 2009A Iatan 2 Project Revenue Bonds. Principal due annually on December 1, 2016 through 2038.Interest is payable semi-annually. Interest on the Series 2015A tax-exempt bonds range from 3% to 5%.
(k) Plum Point Project - Series 2015A Refunding: Proceeds were used to refund the remaining Series 2006 PlumPoint Project Revenue Bonds, except for·the principal payment scheduled for January 1, 2016. Principal dueannually on January 1, 2017 through 2036. Interest is payable semi-annually. Interest on the Series 2015A taxexempt bonds range from 2% to 5%.
(1) Prairie State Project- Series 2016A Refunding: Proceeds were used to refund a portion of the Series 2007APrairie State Project Revenue Bonds. Principal due annually on December 1, 2032 through 2041. Interest ispayable semi-annually. Interest on the Series 2016A tax-exempt bonds range from 4% to 5%.
(m) Prairie State Project- Series 2017 Refunding: Proceeds were used to refund, on a crossover basis, a portion ofthe Series 2009A Prairie State Project Revenue Bonds. Principal due annually on January 1, 2025 through2029. Interest is payable semi-annually. Interest on the Series 2017 tax-exempt bonds are 5%.
(n) MoPEP Facilities - Series 2017 Refunding: Proceeds were used to refund a portion of the Series 2011-Fredericktown Project Revenue Bonds and a portion of the Series 2012 - Dogwood Project Revenue Bonds.Principal due annually on December 1, 2021 through 2036. Interest is payable semi-annually. Interest on theSeries 2017 tax-exempt bonds range from 3.375% to 5%.
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( o) Mo PEP Facilities Dogwood Generating Facility Project - Series 2018: Proceeds used to purchase additional8.2% interest in facility. Principal due annually on December 1, through 2043. Interest on the Series 2018 taxexempt bonds range from 3% to 5%.
(p) MAMU Lease Financing Program Series 2005A:, Proceeds were used to fund construction of the Laddonia CoGeneration Plant and related equipment. Payments are due monthly through March 2021, and include principal,interest and certain fees. Interest is at a rate of 4.122%. The lease is secured by the property financed with thelease proceeds.
(q) MAMU Lease Financing Program Series 2006A: Proceeds were used to fund additional construction costs ofthe Laddonia Co-Generation Plant and related equipment. Payments are due monthly through March, 2021, andinclude principal, interest and certain fees. Interest is at a rate of 3 .685%. The lease is secured by the propertyfinanced with the lease proceeds.
(r) MAMU Lease Financing Program Series 2006A: Proceeds were used to fund the purchase ofMJMEUC'soffice building and associated remodeling costs. Payments are due monthly through November, 2032, andinclude principal, interest and certain fees. Interest is at a rate of3.82%. The lease is secured by the propertyfinanced with the lease proceeds.
(s) Line of Credit: MJMEUC has a $48 million line of credit agreement with a financial institution. Interest is duequarterly with a final maturity on June 30, 2020. Proceeds can be used for any purpose consistent withMJMEUC's operations. The interest rate is variable based on the one-month LIBOR rate plus the applicablespread (0.95% at December 31, 2018). The applicable spread ranges from 0.95% to 2.2% depending on anydowngrades to MJMEUC's debt. MJMEUC used $7 .5 million of its available credit under this line for twoirrevocable standby letters of credit issued by the same financial institution totaling $7 .5 million, whichMJMEUC posted as collateral at two RTO's. The line of credit is used as collateral for the letters of credit andno amount was drawn on the line of credit for this or any other purpose in 2018 and 2017.
The revenue bonds are special, limited obligations ofMJMEUC, payable solely out of the net revenues relating to the ownership and operation of the project funded with the bonds, and the ownership and a pledge and security interest in the respective bond sale proceeds and assets held by trustees under each respective bond indenture. The net revenues include sales to participating MJMEUC members and other municipalities pursuant to unit-specific, life-of-unit, take-or-pay power purchase agreements between MJMEUC and each of the municipalities participating with MJMEUC in the respective project.
The bond indentures contain certain financial and other covenants, including a rate covenant to provide sufficient revenues for payments into the various accounts held by bond trustees for reserves and for payment of principal and interest. Management of MJMEUC is not aware of any instances of default with respect to the bonds' covenants.
Refunding Debt Issues
MJMEUC periodically, among other factors, reviews the current interest rates in the municipal bond markets compared to the interest rates MJMEUC is currently paying on its debt, and other debt terms, to determine if debt service savings can be achieved through a refunding of debt. If significant debt service savings can be achieved and if other parameters established by MJMEUC are met, MJMEUC may undertake a debt refunding. MJMEUC's refunding debt issues are discussed individually below.
Prairie State Project
Prior Year Refunding
MJMEUC issued Series 2017 MJMEUC Power Project Revenue Refunding Bonds (Prairie State Project) to generate resources to advance refund on a crossover basis $30,845,000 of outstanding Series 2009A Power Project Revenue Bonds (Prairie State Project). The net proceeds related to the advance refunding were used to purchase U.S. government securities (SLGS) in an irrevocable trust with an escrow agent. These proceeds provide funds to make future scheduled debt service interest payments on the Series 2017 Refunding Bonds until the crossover date, which is January 1, 2019. On the crossover date, the funds held by the escrow agent will be used to refund the 2009A Series Bonds and they will be removed from MJMEUC's statements of net position at that time. As a crossover refunding, legal defeasance did not occur, and the new and old debt are
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included in MJMEUC's Statements of Net Position as well as the net proceeds of the new debt issue deposited with the escrow agent until the bonds are called and redeemed.
MoPEP
Prior Year Refunding
In 2017, MJMEUC defeased certain maturities of Series 2011 and 2012 Power Supply System Revenue Bonds (MoPEP Facilities) by placing the proceeds of the new bonds in an irrevocable trust account to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in MJMEUC's Statements of Net Position. At December 31, 2018, $36,985,000 of defeased MoPEP Facilities bonds remain outstanding.
Fixed Rate Capital Leases
MJMEUC had the option of fixed or variable interest rate leases under MAMU's financing program. MJMEUC selected fixed rates to protect against the potential of rising interest rates. The trustee for MAMU's financing program entered into interest rate exchange agreements with a financial institution to effectively convert the variable interest rates into fixed interest rates for the three capital leases previously mentioned. Although MJMEUC is not a direct party to these interest exchange agreements, ifMJMEUC elects to prepay a capital lease obligation, its optional prepayment price under the lease is roughly equal to the fair value of the interest rate exchange agreement plus unpaid principal, and as such, corresponds directly to the termination payment the trustee would receive or pay under the terms of the interest rate exchange agreement. MJMEUC does not bear any counterparty credit risk of the interest rate exchange agreements and instead the financial institution and the financing pool trusts who are parties to the interest rate exchange agreements bears all counterparty credit risk.
If elected, the additional early termination payment under the terms of the lease and interest rate exchange agreements at December 31, 2018 would have been as follows:
Capital Lease Issue Laddonia Series 2005A Capital Lease Obligation Laddonia Series 2006A Capital Lease Obligation Office Building Series 2006A Capital Lease Obligation
Total Interest Costs
Payment $ 48,802
3,515 127,007
$ 179,324
Total interest costs incurred on long-term debt, excluding bond premiums, bond discounts, and the amortization of advance bond refunding costs, was $68,576,891 and $68,112,913 for 2018 and 2017, respectively.
120
Future Debt Service Payments
Future payments due on long-term debt as of December 31, 2018 are as follows:
Bonds and Notes Pa;}:'.able Capital Princi2al Interest Total Leases
Total Payments $ 1,289,310,000 $ 894,996,027 $ 2,184,306,027 3,556,366
Less Interest {538,3662 Present Value of Minimum Lease Payments $ 3,018,000
NOTE 6: LETTERS OF CREDIT
MJMEUC obtained standby letters of credit totaling $7 .5 million in December 2014 to replace $6,489,500 of deposits MJMEUC had with two regional transmission operators. $7.5 million ofMJMEUC's line of credit is pledged as collateral for these letters of credit, which expire when the line of credit matures on June 30, 2020.
121
NOTE 7: INTERFUND TRANSACTIONS
Interj und Receivables and Payables
Interfund receivable and payable balances at December 31 resulting from interfund transactions were as follows:
2018 2017 Receivable Payable Receivable Payable
General Fund $ 456,441 $ $ 269,543 $ MoPEPFund 4,910,981 2,571,636 13,733 MMMPEPFund 1,771,131 129,953 Plum Point Fund 898,925 13,733 755,965 Iatan 2 Fund 585,633 379,371 Prairie State Fund 2,111,733 1,575,890
Total $ 5,367,422 $ 5,367,422 $ 2,854,912 $ 2,854,912
The balances due to the General Fund from the other funds are for cost incurred by the General Fund that are allocable to the other funds and not paid as of December 31, 2018 and 2017. The amounts due to the Mo PEP and Plum Point Funds are for energy sales, or for over payment of energy sales, from the respective fund, according to power purchase agreements. The interfund balances are normally repaid monthly.
Interj und Transfers
A summary of interfund transfers for the years ended December 31 were as follows:
2018 2017
Alliance General Alliance General Fund Fund Fund Fund
Transferred from:
General Fund $ 680,734 $ $ 641,070 $ MoPEPFund 954,264 961,834
MMMPEPFund 260,939 274,457
Plum Point Fund 359,916 365,942
Iatan 2 Fund 250,482 257,148
Prairie State Fund 488,805 496,989
Total $ 680,734 $ 2,314,406 $ 641,070 $ 2,356,370
Transfers are made to the Alliance and General Funds by the other funds for costs incurred by these funds that are allocable to the other funds. Amounts paid by a fund to another fund for energy and other services as part of its normal operations are included in operating revenues and expenses and are not considered interfund transfers; however, these transactions are eliminated in the government-wide financial statements.
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NOTE 8: RESTRICTED ASSETS AND NET POSITION
Restricted assets were as follows as of December 31:
For Utility Plant Projects:
Held by Trustees for Payment of Construction Costs:
Plum Point Energy Station Held by Trustees for Regular Debt Service Payments:
Plum Point Energy Station
Iatan Unit 2
Prairie State Energy Campus
Fredericktown
Dogwood
Dogwood - Capitalized Interest
MoPEP Facilities Held by Trustees for Debt Service Reserve:
Plum Point Energy Station
Iatan Unit 2
Prairie State Energy Campus
Fredericktown
Dogwood
MoPEP Facilities Common Reserve Held by Trustees for Debt Service Payments on Refunded Debt:
Prairie State Energy Campus Held by Trustees for Debt Financing Costs:
Prairie State Energy Campus
MoPEP Facilities
Dogwood Held by MJMEUC for Utility Plant Operations
and Maintenance:
Plum Point Energy Station
Iatan Unit 2
Prairie State Energy Campus
$
2018
15,237,910
11,694,264
18,519,023
86,424
1,292,980
331,988
264,774
25,271,821
19,551,689
52,612,389
5,601,682
31,511,001
17,843
7,264,741
4,684,111
5,367,813
$ 199,310,453
Net position pertaining to the above accounts is restricted for the following purposes:
2018
Debt Service and Debt Service Reserves
Operation and Maintenance of Power Plants
$ 46,769,367
7,003,548
$ 53,772,915
$
2017
92
14,945,945
11,444,065
18,127,893
126,162
1,124,885
24,705,534
19,293,599
51,496,524
1,358,124
2,464,578
31,645,428
204,277
156,502
7,160,710
4,631,326
5,292,959
$194,178,603
2017
$ 43,167,433
6,771,878
$ 49,939,311
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NOTE 9: RELATED ENTITY TRANSACTIONS
Significant transactions among the three-member entities of the MPUA reported in the accompanying financial statements are as follows:
MAMU and MGCM reimburse MJMEUC's Alliance Fund for time spent by MJMEUC employees on MAMU and MGCM matters. Salary reimbursements received from MAMU totaled $496,575 for 2018 and $501,515 for 2017. Salary reimbursements received from MGCM totaled $148,065 for 2018 and $121,818 for 2017. Expenses reported in the accompanying Statements of Revenues, Expenses, and Changes in Net Position are net of these reimbursements.
A majority of telephone, utility, postage and other miscellaneous office expenses not directly attributable to a specific program or member are charged to MJMEUC's Alliance Fund. MAMU and MGCM together transferred $119,224 and $112,511 for 2018 and 2017, respectively, to MJMEUC to pay their allocated share of Alliance expenses.
A fourth MPUA related entity, MPUA Resource Services Corporation ("RSC"), was created in 2017. RSC is a non-profit and tax-exempt corporation formed to provide services to governmental entities that have utilities. RSC does not share office and other expenses with the other three MPUA entities on a joint operating and cost sharing basis, and instead, MJMEUC and MAMU charge RSC for services provided to it. For the years ended December 31, 2018 and 2017, RSC paid MJMEUC's Alliance Fund $53,205 and $0, respectively, as a management fee for services provided. MJMEUC has agreed to invest up to $6,000,000 in RSC to provide RSC with funds as necessary to develop future programs and services of RSC. As of December 31, 2018, MJMEUC has not invested any funds in RSC.
NOTE 10: PENSION PLAN
General Information about the Pension Plan
The following information is presented in accordance with Governmental Accounting Standards Board Statement 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date.
Plan Description
MJMEUC's defined benefit pension plan provides certain retirement, disability and death benefits to plan members and beneficiaries. MJMEUC participates in the Missouri Local Government Employees Retirement System ("LAGERS"). LAGERS is an agent multiple-employer, statewide public employee pension plan established in 1967 and administered in accordance with RSMo. 70.600-70.755. As such, it is LAGERS' responsibility to administer the law in accordance with the expressed intent of the General Assembly. The plan is qualified under the Internal Revenue Code Section 401(a) and is tax exempt. The responsibility for the operations and administration of LAGERS is vested in the LAGERS Board of Trustees consisting of seven persons. LAGERS issues a publicly available financial report that includes financial statements and required supplementary information. This report may be obtained by accessing the LAGERS website at www .molagers.org.
Benefits Provided
LAGERS provide retirement, death and disability benefits. Benefit provisions are adopted by the governing body of the employer, within the options available in the state statutes governing LAGERS. All benefits vest after 5 years of credited service. Employees who retire on or after age 60 ( 5 5 for police and fire) with 5 or more years of service are entitled to an allowance for life based upon the benefit program information provided below. Employees may retire with an early retirement benefit with a minimum of 5 years of credited service and after attaining age 55 and receive a reduced allowance.
124
The benefits provisions adopted by MJMEUC are as follows.
Benefit Multiplier
Final Average Salary
Member Contributions
2%
3 years
0%
Benefit terms provide for annual post retirement adjustments to each member's retirement allowance subsequent to the member's retirement date. The aimual adjustment is based on the increase in the Consumer Price Index and is limited to 4% per year.
Employees Covered by Benefit Terms
At June 30, the following employees were covered by the benefit terms:
Inactive Employees or Beneficiaries Currently Receiving Benefits
Inactive Employees Entitled to but not yet Receiving Benefits
Active Employees
Total
Contributions
2018
9
3
32
44
2017
9
1
30
40
MJMEUC is required to contribute amounts at least equal to the actuarially determined rate, as established by LAGERS. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance an unfunded accrued liability. Full-time employees of MJMEUC do not contribute to the pension plan. MJMEUC's contribution rate for 2018 and 2017 was 15.5% and 14.5% respectively, of annual covered payroll.
Net Pension Liability
MJMEUC's net pension liability was measured as of June 30, 2018 and 2017, and the total pension liability used to calculate the net pension liability was determined by actuarial valuations as of February 28, 2018 and 2017, respectively.
Actuarial Assumptions
The total pension liability in the February 28, 2018 and 2017, actuarial valuations were determined using the following actuarial assumptions, applied to all periods included in the measurement:
Inflation
Salary Increase Investment Rate of Return
3 .25% wage; 2.5% price
3.25% to 6.55%, including inflation 7 .25%, net of investment expenses
The actuarial assumptions used in the February 28, 2018 and 2017, valuations were based on the results of a11 actuarial experience study for the period March 1, 2010 through February 28, 2015.
The healthy retiree mortality tables, for post-retirement mortality, were the RP-2014 Healthy Annuitant mortality table for males and females. The disabled retiree mortality tables, for post-retirement mortality, were the RP-2014 disabled morality tables for males and females. The pre-retirement mortality tables used were the RP-2014 employees mortality table for males and females.
125
Both the post-retirement and pre-retirement tables were adjusted for mortality improvement back to observation period base year 2006. The base year for males was then established to be 2017. Mortality rates for a particular calendar year are determined by applying the MP-2015 mortality improvement scale to the above described tables.
The long-term expected rate of return on pension plan investments was determined using a model method in which the best-estimate ranges of expected future real rates of return ( expected returns, net of investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rates of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.
The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table for 2018:
Long-Term
Target Expected Real
Asset Class Allocation Rate of Return
Equity 43.00% 5.16%
Fixed Income 26.00% 2.86%
Real Assets 21.00% 3.23%
Strategic Assets 10.00% 5.59%
The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table for 2017:
Asset Class
Equity
Fixed Income
Real Assets / Real Return
Discount Rate
Target
Allocation
48.00%
28.50%
23.50%
Long-Term
Expected Real
Rate of Return
4.81%
1.72%
3.42%
The discount rate used to measure the total pension liability for 2018 and 2017 was 7.25%. The projection of cash flows used to determine the discount rate assumes that employer contributions will be made at the actuarially determined rates. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to pay all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payment to determine the total pension liability.
126
Changes in the Net Pension Liability
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability (a) Net Position (b) Liability (a) - (b)
Balances at June 30, 2016 $ 6,313,245 $ 5,409,518 $ 903,727
Changes for 2017:
Service Cost 313,892 313,892
Interest 461,799 461,799
Difference Between Expected and
Actual Experience 25,663 25,663
Contributions - Employer 402,480 (402,480)
Contributions - Employee
Net Investment Income 664,100 (664,100)
Changes of Assumptions (56,982) (56,982)
Benefit Payments, Including Refunds (90,916) (90,916)
Administrative Expenses (3,541) 3,541
Other Changes (71,400) 71,400
Net Changes 653,456 900,723 (247,267)
Balances at June 30, 2017 6,966,701 6,310,241 656,460
Changes for 2018:
Service Cost 346,883 346,883
Interest 514,067 514,067
Difference Between Expected and
Actual Experience 359,840 359,840
Contributions - Employer 478,823 (478,823)
Contributions - Employee
Net Investment Income 784,867 (784,867)
Changes of Assumptions
Benefit Payments, Including Refunds (94,717) (94,717)
Administrative Expenses (3,757) 3,757
Other Changes (8,541) 8,541
Net Changes 1,126,073 1,156,675 (30,602)
Balances at June 30, 2018 $ 8,092,774 $ 7,466,916 $ 625,858
127
Sensitivity of the Net Pension Liability (Asset) to Changes in the Discount Rate
The following presents the net pension liability ofMJMEUC as of June 30, calculated using the discount rate of 7.25%, as well as what the MJMEUC's net pension liability would be using a discount rate that is 1 percentage point lower or 1 percentage point higher than the respective discount rate.
Current Single Discount 1% Decrease Rate Assumption 1% Increase
2018 (6.25%) (7.25%) (8.25%) Total Pension Liability $ 9,296,603 $ 8,092,774 $ 7,091,490 Plan Fiduciary Net Position 7,466,916 7,466,916 7,466,916
Net Pension Liability (Asset) $ 1,829,687 $ 625,858 $ (375,426)
Current Single Discount 1% Decrease Rate Assumption 1% Increase
2017 (6.25%) (7.25%) (8.25%) Total Pension Liability $ 8,004,902 $ 6,966,701 $ 6,104,087 Plan Fiduciary Net Position 6,310,241 6,310,241 6,310,241
Net Pension Liability (Asset) $ 1,694,661 $ 656,460 $ (206,154)
Pension Plan FiduciarJ!. Net Position
Detailed information about the pension plan's net position is available in the separately issued LAGERS financial report.
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
For the years ended June 30, 2018 and 2017, MJMEUC recognized pension expense of$541,144 and $605,118, respectively. MJMEUC reported deferred outflows of resources related to pensions from the following sources:
Differences in Experience Differences in Assumptions Excess Investment Returns Contributions Subsequent to the Measurement Date*
* The amount reported as deferred outflows of resources resulting from contributions subsequent to themeasurement date will be recognized as a reduction in the net pension liability for the years endingDecember 31, 2019 and 2018.
128
The remaining amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows:
Year Ending June 3 0:
2019
2020 2021
2022
2023 Thereafter
Total
NOTE 11: COMMITMENTS AND CONTINGENCIES
Power Supply and Related Contracts
$
$
138,631
86,806
6,149 58,845
108,592
102,100 501,123
To ensure adequate power supplies for its members, MJMEUC enters into contracts with electric energy suppliers. These contracts have various terms covering minimum required megawatts of power to be purchased, prices to be paid and period covered.
Nonrenewable Resources
As of December 31, 2018, MJMEUC has long-term contracts with the Southwestern Power Administration and with Illinois Power Marking Co. ("IPM"), a subsidiary of Dynegy, Inc., and unit-specific contracts of five-year lengths with the Sikeston Board of Municipal Utilities. IPM purchased certain power generation facilities from Ameren Energy Marketing Company ("Ameren") on December 2, 2013 and took over the power supply contract from Ameren. MJMEUC and IPM entered into an amended power supply contract on February 19, 2014.
In 2018, MJMEUC executed a long-term power purchase agreement with Empire District Electric Company ("Empire"), a subsidiary of Liberty Utilities Co., to purchase 78 MW of capacity and 85 MW per hour of energy from five select power generation sources within Empire's generation resource mix. One of the resources is a wind farm and MJMEUC does receive its proportional share of the renewable energy credits from this resource. The agreement is for a five-year term commencing on June 1, 2020 and ending on May 31, 2025. MJMEUC has committed all of the capacity and energy from this power purchase contract to SWMPEP.
In 2006, MJMEUC executed a long-term power purchase contract with Plum Point Energy Associates ("PPEA"), to purchase a portion of the capacity and energy of PPEA's interest in the Plum Point Energy Station. This is separate from MJMEUC's ownership interest in the plant (see Note 3). The power purchase contract entitles MJMEUC to 7.52% (approximately 50 MW) of capacity and energy from Plum Point. The contract obligates MJMEUC to pay a monthly capacity payment which is based on the availability of the unit. MJMEUC has committed all of the capacity and energy from this power purchase contract to Mo PEP.
In January 2004, MJMEUC entered into a 40 year take-or-pay "Participation Agreement" with the Omaha Public Power District ("OPPD") to purchase a share of the capacity and energy of OPPD's Nebraska City Unit 2 ("NC2"). The NC2 unit is a 663-megawatt (MW) coal-fired generating station solely owned by OPPD. MJMEUC is entitled to 55.23 MW, or 8.33%, of capacity and energy from NC2 and is committed to pay 8.33% ofNC2 project costs, including debt service, whether the unit is operating or not. MJMEUC's prorata share of the original total project costs, is being financed by OPPD via a revenue bond issuance, which was and may be partially refunded from time to time. MJMEUC has pledged the revenues from sales of its share ofNC2 power generation output to its share ofNC2's capacity and
129
energy, including bond debt service. MJMEUC also has certain limited step-up obligations for additional capacity and energy costs in the event another of the six other participating public power districts and municipal utilities fail to pay obligations under its respective Participation Agreement. MJMEUC has committed all the capacity and energy from this Participation Agreement to MoPEP.
In August 2013, MJMEUC executed a power purchase agreement with the City of Marceline, Missouri ("Marceline") for the purchase of 4 MW capacity and energy from Marceline's unit power purchase agreement for the energy it received from the Prairie State Energy Campus. On June 1, 2017, Marceline's unit power purchase agreement was transferred to MJMEUC and assigned to MoPEP.
Renewable Resources
In 2006, MJMEUC executed a long-term power purchase agreement with Loess Hills Wind Farm, located in the City of Rock Port, Missouri, for the purchase of 5 MW of capacity and energy. MJMEUC has rights to purchase the entire capacity and energy from this wind generation facility, which is fully dedicated to MoPEP. MJMEUC has the right, but not the obligation, to extend this agreement through 2027 with optional future periods beyond 2027 dependent on mutual agreeable terms.
In September 2008, MJMEUC executed a long-term power purchase agreement to purchase energy from a landfill gas-powered electric generating facility located near the City of Lamar, Missouri. The City of Lamar, a member ofMoPEP, is responsible for installing and operating the gas turbines with a total generating facility output of 3.2 MW that commenced commercial operation in June 2010. In December 2012, the capacity of the facility output was increased by an additional 2.4 MW to a total of 5.6 MW. The capacity of the facility was again increased by an additional 2.0 MW to 7.6 MW in May 2018. The take-or-pay agreement provides for MJMEUC to receive the entire capacity and energy, including additional capacity added by the facility, until the agreement expires in 2022. The capacity and energy are fully dedicated to Mo PEP.
In February 2013, MJMEUC executed a long-term power purchase agreement to purchase all the capacity and energy from a solar power generating facility in the City of Butler, Missouri. MC Power Companies, Inc. is responsible for construction and operation of the 3.2 MW facility. MJMEUC has certain option rights to purchase the facility at the end of the seventh contract year, or at the end of any subsequent contract year thereafter. The facility went into commercial operation in March 2014. The capacity and energy are fully dedicated to MoPEP.
In September 2013, MJMEUC executed a long-term power purchase agreement with Marshall Wind Energy LLC for the purchase of20.0 MW capacity and energy from its wind farm. The facility officially entered commercial operation on May 1, 2016. The capacity and energy are dedicated to MoPEP.
In January 2014, MJMEUC executed a long-term power purchase agreement with Black Oak Power Producers, LLC for the purchase of 3.8 MW capacity and energy from its landfill-gas-powered electric generating facility located in Hartville, Missouri. The facility began generating power in October 2014. The capacity and energy are fully dedicated to Mo PEP.
130
In August 2014, MJMEUC executed a long-term power purchase agreement for the rights to purchase all the capacity and energy from multiple solar power generating facilities in Missouri. The power generating facilities were constructed in five cities that are members of MoPEP. MC Power Companies, Inc. is responsible for operation of the approximate total 12.8 MW of the five facilities. MJMEUC has certain option rights to purchase each facility on or after the end of the seventh contract year of each facility. The capacity and energy are fully dedicated to MoPEP. Following is a summary of the five facilities:
MoPEP Member
City of Macon, Missouri
City of Trenton, Missouri
City of Rolla, Missouri
City of Waynesville, Missouri
City of Marshall, Missouri
Facility Status
Commercial Operation May 2015
Commercial Operation October 2015
Commercial Operation May 2016
Commercial Operation August 2016
Commercial Operation December 2016
In May 2016, MJMEUC executed a long-term power purchase agreement for the rights to purchase all the capacity and energy from multiple solar power generating facilities in Missouri. The power generating facilities were to be constructed in up to seven cities that are members of MoPEP. MC Power Companies, Inc. is responsible for construction and operation of the approximate total 16 MW of the facilities. MJMEUC has certain option rights to purchase each facility on or after the end of the seventh contract year. The capacity and energy of each facility is fully dedicated to MoPEP. Below is a summary of the five facilities constructed or under construction, which make up the 16 MW:
MoPEP Member
City of Chillicothe, Missouri
City of Lebanon, Missouri
City of Higginsville, Missouri
City of El Dorado Springs, Missouri
City of Farmington, Missouri
Facility Status
Commercial Operation June 2017
Commercial Operation August 2017
Commercial Operation December 2017
Commercial Operation May 2018
Commercial Operation August 2018
In June 2016, MJMEUC executed a long-term agreement with Grain Belt Express Clean Line LLC ("Grain Belt Express") to deliver energy up to 200 MW of wind generated power in Kansas into a MISO interconnection located in Missouri. This contract is contingent on the approval of the Missouri Public Service Commission ("MOPSC") of the Grain Belt Express project and the project's actual construction. The MOPSC originally denied approving the project; however, the Missouri Supreme Court ruled that the basis for MOPSC's denial was invalid and sent the case back to the MOPSC. The filing went back in front of the MOPSC for its review and the MOPSC gave its approval for the project on March 20, 2019. A court appeal from a landowner group is expected. This agreement will begin when the transmission project begins commercial operations and can provide the transmission service to MJMEUC. The term of this agreement is for 15-25 years, determined from the contract effective date.
In January 2017, MJMEUC executed a long-term agreement with Iron Star Wind Project, LLC ("Iron Star") for the purchase of a minimum of 100 MW and up to 200 MW capacity and energy from its Iron Star Project. In December 2017, MJMEUC provided notice to Iron Star it intends to purchase 136 MW under this agreement. The Project is in Kansas and the energy generated by the project will be transmitted to a MISO interconnection point in Missouri via the Grain Belt Express project discussed above. This agreement is contingent upon the final construction of the Grain Belt project. The initial delivery date of energy is within 3 days of the available date of the Grain Belt Express project. The initial term of this agreement is for 20 years and MJMEUC has the option to extend the agreement for two additional 5-year periods.
131
REQUIRED SUPPLEMENTARY INFORMATION
132
MIS
SO
UR
I JO
INT
MU
NIC
IPA
L E
LE
CT
RIC
UT
ILIT
Y C
OM
MIS
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LA
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(P
EN
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LA
N)
SC
HE
DU
LE
OF
CH
AN
GE
S I
N N
ET
PE
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LIA
BIL
ITY
AN
D R
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AT
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RA
TE
D RA
TIO
S
Year
s E
nd
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ece
mb
er
31,
20
18, 20
17, 20
16 a
nd
20
15
Tot
al P
ensi
on L
iabi
lity
20
18
2017
20
16
2015
Serv
ice
Cos
t $
34
6,88
3 $
31
3,892
$
28
9,86
7 $
26
2,79
0
Inte
rest
on
the
Tot
al P
ensi
on L
iabi
lity
51
4,06
7 46
1,7
99
383,
108
335,
167
Ben
efit
Ch
ange
s
Diff
eren
ce B
etwee
n E
xpec
ted
and A
ctua
l Expe
rien
ce
359,
840
25,6
63
180,
411
119,
228
Ass
umpt
ion
Cha
nges
(5
6,98
2)
360,
249
Ben
efit P
aym
ents
(9
4,71
7)
(90,
916)
(8
3,02
7)
(55,
925)
Refu
nds
--
Net
Cha
nge
in T
otal
Pen
sion
Lia
bili
ty
1,12
6,07
3 65
3,45
6 1,
130,
608
661,
260
Tot
al P
ensi
on L
iabi
lity
, Beg
inni
ng
6,96
6,70
1 6,
313,
245
5,18
2,63
7 4,
521,
377
Tot
al P
ensi
on L
iabi
lity
, End
ing
$
8,09
2,77
4 $
6,
966,
701
$6,
313,
245
$5,
182,
637
Pla
n F
iduc
iary
Net
Pos
itio
n
Con
trib
uti
ons
-E
mpl
oyer
$
47
8,82
3 $
40
2,48
0 $
351,
572
$
359,
868
Con
trib
uti
ons
-E
mpl
oyee
Pen
sion
Pla
n N
et I
nves
tmen
t In
com
e 78
4,86
7 66
4,10
0 (1
8,95
2)
92,0
05
Ben
efit P
aym
ents
(9
4,71
7)
(90,
916)
(8
3,02
7)
(55,
925)
Refu
nds
Pen
sion
Pla
n A
dmin
istr
ativ
e E
xpen
se
(3,7
57)
(3,5
41)
(3,0
30)
(3,1
69)
Oth
er
(8,5
41)
(71,
400)
(1
5,19
1)
177,
079
Net
Cha
nge
in P
lan
Fid
uci
ary N
et P
osit
ion
1,15
6,67
5 90
0,72
3 23
1,37
2 56
9,85
8
Pla
n F
iduc
i ary N
et P
osit
ion,
Beg
inni
ng
6,31
0,24
1 5,
409,
518
5,17
8,14
6 4,
608,
288
Pla
n F
iduci
ary
Net
Pos
itio
n, E
ndin
g $
7,
466,
916
$
6,31
0,24
1 $
5,40
9,51
8 $
5,17
8,14
6
Em
ploy
er's
Net
Pen
sion
Lia
bili
ty
$
625,
858
$
656,
460
$
903,
727
$
4,49
1
Pla
n F
iduci
ary N
et P
osit
ion
as P
erce
nta
ge o
f T
otal
Pen
sion
L
iabi
lity
92
.27%
90
.58%
85
.69%
99
.91%
Cov
ered
Pay
roll
$
3,
078,
901
$
2,73
0,93
8 $
2,48
4,80
8 $
2,39
9,44
1
Net
Pen
sion
Lia
bili
ty a
s a
Per
cent
age
of C
over
ed P
ayro
ll
20.3
3%
24
.04%
36
.37%
0.
19%
Not
e:
This
sch
edul
e w
ill
ultim
ate
ly c
onta
in t
en y
ears
of d
ata
as
it b
ecom
es a
vail
able
.
133
MIS
SO
UR
I J
OIN
T MUN
ICIP
AL
EL
EC
TRI
C U
TIL
ITY
CO
MMIS
SIO
N
LA
GE
RS
(P
EN
SIO
N P
LAN)
SC
HED
UL
E O
F C
ON
TRIB
UT
ION
S -
LA
ST
TE
N F
ISC
AL
YE
AR
S
Dece
mb
er
31,
20
18
2018
20
17
2016
Act
uari
ally
Det
erm
ined
Con
trib
utio
ns
$
521,
408
$
472,
789
$
357,
689
Con
trib
utio
ns i
n R
elat
ion
to t
he A
ctua
rial
ly D
eterm
ined
Con
trib
utio
n 51
8,06
6 44
5,15
8 35
7,68
9
Con
trib
utio
n D
efici
ency
(E
xce
ss)
$
3,34
2 $
27
,631
$
-
Cov
ered
Pay
roll
$
3,34
2,36
0 $
3,07
0,05
5 $
2,64
9,54
9
Con
trib
utio
ns a
s a
Per
cent
age
of C
over
ed P
ayro
ll
15.5
0%
14.5
0%
13.5
0%
2013
20
12
2011
Act
uari
ally
Det
erm
ined
Con
trib
utio
ns
$
299,
869
$ 26
6,17
8 $
25
2,99
9
Con
trib
utio
ns i
n R
elat
ion
to th
e A
ctua
rial
ly D
eter
min
ed C
ontr
ibut
ion
299,
869
266,
178
252,
999
Con
trib
utio
n D
efici
ency
(E
xce
ss)
$-
$-
$-
Cov
ered
Pay
roll
$
1,93
4,74
1 $
1,68
4,66
8 $
1,65
3,59
1
Con
trib
utio
ns a
s a
Per
cent
age
of C
over
ed P
ayro
ll
15.5
0%
15.8
0%
15.3
0%
2015
20
14
$
355,
667
$
347,
452
355,
667
347,
452
-
$-
$-
$2,
487,
180
$2,
285,
973
14.3
0%
15.2
0%
2010
20
09
$ 23
7,82
4 $
19
5,85
7
237,
824
195,
857
$-
$-
$1,
554,
404
$1,
341,
488
15.3
0%
14.6
0%
134
SUPPLEMENTARY INFORMATION
135
MISSOURI JOINT MUNICIPAL ELECTRIC UTILITY COMMISSION
COMBINING STATEMENT OF NET POSITION
Non-Major Funds
December 31, 2018
Alliance General
Fund Fund Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
CAPITAL ASSETS
Plant, Buildings, and Equipment in Service $ 1,263,115 $ 75,359 $ 1,338,474 Total Capital Assets, Net 1,263,115 75,359 1,338,474
CURRENT ASSETS
Cash and Cash Equivalents 333,044 1,405,168 1,738,212
Accounts Receivable, Net 53,324 489,617 542,941
Due from Other Funds 456,441 456,441
Prepaid Expenses 4,934 75,474 80,408
Total Current Assets 391,302 2,426,700 2,818,002
Total Assets 1,654,417 2,502,059 4,156,476
DEFERRED OUTFLOWS OF RESOURCES 764,001 764,001
Total Assets and Deferred Outflows of Resources $ 1,654,417 $ 3,266,060 $ 4,920,477
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND NET POSITION
NONCURRENT LIABILITIES
Long-Term Debt, Net of Current Maturities $ 999,000 $ $ 999,000
Security Deposits Held 500,000 500,000
Net Pension Liability 625,858 625,858
Total Noncurrent Liabilities 999,000 1,125,858 2,124,858
CURRENT LIABILITIES
Accounts Payable 84,971 595,894 680,865
Accrued Payroll and Payroll Taxes 281,161 61,912 343,073
Current Maturities, Long-Term Debt 60,000 60,000
Accrued Interest Payable on Debt 1,381 1,381
Total Current Liabilities 427,513 657,806 1,085,319
Total Liabilities 1,426,513 1,783,664 3,210,177
Net Position
Net Investment in Capital Assets 204,115 75,359 279,474
Unrestricted 23,789 1,407,037 1,430,826
Total Net Position 227,904 1,482,396 1,710,300 Total Liabilities, Deferred Inflows of Resources
and Net Position $ 1,654,417 $ 3,266,060 $ 4,920,477
136
MISSOURI JOINT MUNICIPAL ELECTRIC UTILITY COMMISSION
COMBINING STATEMENT OF NET POSITION
Non-Major Funds
December 31, 2017
Alliance General
Fund Fund Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
CAPITAL ASSETS Plant, Buildings, and Equipment in Service $ 1,310,418 $ 168,959 $ 1,479,377
Total Capital Assets, Net 1,310,418 168,959 1,479,377
CURRENT ASSETS
Cash and Cash Equivalents 339,005 1,275,094 1,614,099 Accounts Receivable, Net 1,960 130,734 132,694 Due from Other Funds 269,543 269,543 Prepaid Expenses 2,020 70,126 72,146
Total Current Assets 342,985 1,745,497 2,088,482 Total Assets 1,653,403 1,914,456 3,567,859
DEFERRED OUTFLOWS OF RESOURCES 817,729 817,729 Total Assets and Deferred Outflows of Resources $ 1,653,403 $ 2,732,185 $ 4,385,588
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND NET POSITION
NONCURRENT LIABILITIES
Long-Term Debt, Net of Current Maturities $ 1,059,000 $ $ 1,059,000
Security Deposits Held 500,000 500,000 Net Pension Liability 656,460 656,460
Total Noncurrent Liabilities 1,059,000 1,156,460 2,215,460
CURRENT LIABILITIES
Accounts Payable 51,707 99,959 151,666
Accrued Payroll and Payroll Taxes 40,952 54,880 95,832
Current Maturities, Long-Term Debt 48,000 48,000
Accrued Interest Payable on Debt 1,528 1,528
Total Current Liabilities 142,187 154,839 297,026
Total Liabilities 1,201,187 1,311,299 2,512,486
Net Position Net Investment in Capital Assets 203,418 168,959 372,377
Unrestricted 248,798 1,251,927 1,500,725
Total Net Position 452,216 1,420,886 1,873,102 Total Liabilities, Deferred Inflows of Resources
and Net Position $ 1,653,403 $ 2,732,185 $ 4,385,588
137
MISSOURI JOINT MUNICIPAL ELECTRIC UTILITY COMMISSION
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
Non-Major Funds
Year Ended December 31, 2018
Alliance General Fund Fund Total
OPERA TING REVENUES Transmission $ $ 1,169,047 $ 1,169,047
Energy Services 144,256 144,256
Transfers from MAMU and MGCM 119,224 119,224
Conferences and Member Training 108,644 454,362 563,006
Other 71,030 213,211 284,241
Total Operating Revenues 298,898 1,980,876 2,279,774
OPERA TING EXPENSES Transmission 1,147,877 1,147,877
Personnel Services and Staff Support 594,440 1,167,951 1,762,391
Professional Services 556,071 556,071
Rental and Maintenance 131,879 950 132,829
Utilities 60,219 60,219
Energy Services 12,867 12,867
Conferences and Member Training 99,746 175,963 275,709
Depreciation 50,859 96,858 147,717
Other Operating Expenses 216,378 454,631 671,009
Total Operating Expenses 1,153,521 3,613,168 4,766,689
Operating Income (Loss) (854,623) (1,632,292) (2,486,915)
NON OPERA TING REVENUES (EXPENSES) Investment Return 142,255 142,255
Interest and Fees Expense (50,423) (82,125) (132,548)
Net Nonoperating Revenues (Expenses) (50,423) 60,130 9,707
OTHER FINANCING SOURCES (USES) Interfund Operating Transfers 680,734 1,633,672 2,314,406
Increase (Decrease) in Net Position (224,312) 61,510 (162,802)
Net Position, Beginning of Period 452,216 1,420,886 1,873,102
Net Position, End of Period $ 227,904 $ 1,482,396 $ 1,710,300
138
MISSOURI JOINT MUNICIPAL ELECTRIC UTILITY COMMISSION
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
Non-Major Funds
Year Ended December 31, 2017
Alliance General Fund Fund Total
OPERA TING REVENUES Transmission $ $ 983,707 $ 983,707 Energy Services 195,564 195,564 Transfers from MAMU and MGCM 112,511 112,511 Conferences and Member Training 120,060 452,367 572,427 Other 20,805 164,891 185,696
Total Operating Revenues 253,376 1,796,529 2,049,905
OPERA TING EXPENSES Transmission 962,537 962,537 Personnel Services and Staff Support 292,942 1,216,159 1,509,101 Professional Services 749,762 749,762 Rental and Maintenance 117,235 3,833 121,068 Utilities 58,536 58,536 Energy Services 12,863 12,863 Conferences and Member Training 99,910 184,666 284,576
Depreciation 52,696 96,044 148,740 Other Operating Expenses 209,358 393,381 602,739
Total Operating Expenses 830,677 3,619,245 4,449,922
Operating Income (Loss) (577,301) (1,822,716) (2,400,017)
NON OPERA TING REVENUES (EXPENSES) Investment Return 51,384 51,384
Interest and Fees Expense (52,654) (82,125) (134,779) Net Nonoperating Revenues (Expenses) (52,654) (30,741) (83,395)
OTHER FINANCING SOURCES (USES) Interfund Operating Transfers 641,070 1,715,300 2,356,370
Increase (Decrease) in Net Position 11,115 (138,157) (127,042)
Net Position, Beginning of Period 441,101 1,559,043 2,000,144
Net Position, End of Period $ 452,216 $ 1,420,886 $ 1,873,102
139
MISSOURI JOINT MUNICIPAL ELECTRIC UTILITY COMMISSION
COMBINING STATEMENT OF CASH FLOWS
Non-Major Funds
Year Ended December 31, 2018
Alliance General
Fund Fund Total
OPERA TING ACTIVITIES Receipts from Power and Transmission Sales $ $ 1,107,263 $ 1,107,263 Receipts from other Revenue Sources 247,534 327,832 575,366 Payments for Power Purchases and Other Goods and Services (477,872) (1,857,772) (2,335,644) Payments to Employees for Services and Benefits (354,231) (1,137,793) (1,492,024)
Net Cash Used by Operating Activities (584,569) (1,560,470) (2,145,039)
NONCAPITAL FINANCING ACTIVITIES
Interfund Operating Transfers 680,734 1,633,672 2,314,406 Net Cash Provided by Noncapital Financing Activities 680,734 1,633,672 2,314,406
CAPITAL AND RELATED FINANCING ACTIVITIES
Principal Payments on Long-Term Debt (48,000) (48,000) Payments oflnterest and Fees on Debt (50,570) (82,125) (132,695) Acquisition and Construction of capital Assets (3,556) (3,258) (6,814)
Net Cash Used by Capital and Related Financing Activities (102,126) (85,383) (187,5092
INVESTING ACTIVITIES
Investment Income 142,255 142,255 Net Cash Provided by Investing Activities 142,255 142,255
Net Increase (Decrease) in Cash and Cash Equivalents (5,961) 130,074 124,113
Cash and Cash Equivalents at Beginning of Year 339,005 1,275,094 1,614,099 Cash and Cash Equivalents at End of Year $ 333,044 $ 1,405,168 $ 1,738,212
RECONCILIATION OF OPERATING INCOME TO NET
CASH USED BY OPERATING ACTIVITIES
Operating Income (Loss) $ (854,623) $ (1,632,292) $ (2,486,915) Adjustments to Reconcile Operating Income
to Net Cash Used by Operating Activities:
Depreciation 50,859 96,858 147,717 Adjustments for (Increases) Decreases in Assets and Deferred
Outflows of Resources and Increases (Decreases) in
Liabilities and Deferred Inflows of Resources:
Accounts Receivable (51,364) (358,883) (410,247) Due from Other Funds (186,898) (186,898) Prepaid Expenses (2,914) (5,348) (8,262) Accounts Payable 33,264 495,935 529,199 Accrued Payroll and Payroll Taxes 240,209 7,032 247,241 Net Pension Liability (30,602) (30,602) Deferred Outflows of Resources 53,728 53,728
Net Cash Used by Operating Activities $ (584,569} $ (1,560,470} $ {2, 145,0392
140
MISSOURI JOINT MUNICIPAL ELECTRIC UTILITY COMMISSION
COMBINING STATEMENT OF CASH FLOWS
Non-Major Funds
Year Ended December 31, 2017
Alliance General Fund Fund Total
OPERA TING ACTIVITIES Receipts from Power and Transmission Sales $ $ 921,923 $ 921,923 Receipts from other Revenue Sources 246,847 1,276,988 1,523,835 Payments for Power Purchases and Other Goods and Services (428,981) (2,087,384) (2,516,365) Payments to Employees for Services and Benefits (292,743) (1,050,299) (1,343,042)
Net Cash Used by Operating Activities (474,877) (938,772) (1,413,649)
Net Cash Provided by Noncapital Financing Activities 641,070 1,715,300 2,356,370
CAPITAL AND RELATED FINANCING ACTIVITIES Principal Payments on Long-Term Debt (48,000) (48,000) Payments oflnterest and Fees on Debt (52,717) (82,125) (134,842) Acquisition and Construction of capital Assets (15,512) (27,331) (42,8432
Net Cash Used by Capital and Related Financing Activities (116,229) (109,456) (225,685)
INVESTING ACTIVITIES Investment Income 51,384 51,384
Net Cash Provided by Investing Activities 51,384 51,384
Net Increase in Cash and Cash Equivalents 49,964 718,456 768,420
Cash and Cash Equivalents at Beginning of Year 289,041 556,638 845,679 Cash and Cash Equivalents at End of Year $ 339,005 $ 1,275,094 $ 1,614,099
RECONCILIATION OF OPERA TING INCOME TO NET CASH USED BY OPERA TING ACTIVITIES
Operating Income (Loss) $ (577,301) $ (1,822,716) $ (2,400,017) Adjustments to Reconcile Operating Income to Net Cash Used by Operating Activities:
Depreciation 52,696 96,044 148,740 Adjustments for (Increases) Decreases in Assets and Deferred
Outflows of Resources and Increases (Decreases) in Liabilities and Deferred Inflows of Resources:
Accounts Receivable (1,960) (73,054) (75,014) Due from Other Funds 475,436 475,436 Prepaid Expenses 12,460 13,775 26,235 Accounts Payable 43,598 (294,117) (250,519) Accrued Payroll and Payroll Taxes 199 5,678 5,877 Deposits Held 500,000 500,000 Unearned Revenue (4,569) (4,569) Net Pension Liability (247,267) (247,267) Deferred Outflows of Resources 407,449 407,449
Net Cash Used by Operating Activities $ (474,8772 $ (938,772} $ (1,413,649}
141
MISSOURI JOINT MUNICIPAL ELECTRIC UTILITY COMMISSION
SCHEDULE OF CHANGES IN RESTRICTED BOND ACCOUNTS
HELD IN TRUST BY THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
Year Ended December 31, 2018
Change in Fair Value Receipts Disbursements Change in Interest Fair Value 12/31/2017 and Transfers In and Transfers Out Fair Value Receivable 12/31/2018
Power Project Revenue Bonds (Plum Point Project) Series 2006, Series 2009A, Series 2009B, Series 2014A and Series 2015A
Project Fund $ 92 $ $ 92 $ $ $
Debt Service Fund 14,945,945 22,195,283 21,898,833 (4,485) 15,237,910 Debt Service Reserve Account 24,705,534 532,648 33,639 25,271,821
