Feb. 19 - Lincoln Electric System

MINUTES OF LINCOLN ELECTRIC SYSTEM ADMINISTRATIVE BOARD
Minutes of regular meeting held at 9:30 a.m., Friday, February 19, 2016 at the offices of
Lincoln Electric System, 1040 O Street, Lincoln, Nebraska.
Board Members Present:
Jerry Hudgins, Ann Bleed, Dan Harshman, Marilyn
McNabb, Vicki Huff, Libby Raetz, W. Don Nelson
Board Members Absent:
Layne Sup, Sarah Peetz
LES Staff Present:
Kevin Wailes, Shelley Sahling-Zart, Laura Kapustka, Jason
Fortik, Lisa Hale, Dan Pudenz, Trish Owen, Paul Crist,
Lacy Stockdale, Melissa Palmer, Jim Rigg, Dan Kucera,
Emily Koenig, Shari Tretheway, David Auman, Inna
Goldman, Taletha Kryzsko, Marc Shkolnick, Debbie
Vandegrift, Ben McGuire, Erin Hergott, Kelley Porter
Others Present:
John Atkeison
News Media Present:
None
Chair Jerry Hudgins called the meeting to order at approximately Call to Order
9:30 a.m. He noted that LES conducts its meetings in
compliance with the Nebraska Open Meetings Act, and
noted that copies of the Act are located near the entrance to
the Board room.
Chair Hudgins asked for approval of the minutes of the meeting of Approval of
January 15, 2016. Ann Bleed moved their approval. Vicki Minutes
Huff seconded the motion. The vote for approval of the
minutes was:
Aye:
Hudgins, Bleed, Harshman, McNabb, Huff,
Raetz, Nelson
Nay:
None
Absent:
Sup, Peetz
John Atkeison, EnergyLinc, reiterated the urgency to get serious Comments from
about climate change and requested the Board continue Customers
discussions regarding compliance with the Clean Power
Plan regardless of the recently issued Stay.
Debbie Vandegrift, Manager, Internal Operations, Power Supply, Introduction and
was recognized by the Board for 30 years of service to Recognition of
LES.
Staff
Dan Kucera, Supervisor, Meter Shop, Customer Services,
was recognized by the Board for 40 years of service to
LES.
LES Policy No. 1 provides that the Chair of the Board shall
appoint standing Committees at the February Board
meeting. The Board Committee assignments for 2016 were
given to the Board members. (Exhibit I)
Appointment of
2016 LES
Administrative
Board Committees
Dan Harshman, Chair of the Budget & Rates Committee, reported Budget & Rates
on Committee discussion which included: 1) a review of Committee
rating agency sensitivity cases; 2) 2015 fourth quarter
generation revenue and cost report; 3) 2015 budget
carryovers; and 4) an update regarding District Energy
Corporation (DEC) and Nebraska Utility Corporation
(NUCorp).
Marilyn McNabb, member of the Communications & Customer Communications
Services Committee, reported on Committee discussion & Customer
which included updates on the following: 1) LES’ Mobile Services Committee
Meter Reading (MMR) project; 2) multiple Customer
Services projects, including electronic bill payment and
presentment and the lockbox project; 3) community
outreach activities, including the Sustainable Living
Festival which is scheduled for Aug. 13; and 4) LES’ 50th
anniversary.
Libby Raetz, Chair of the Finance & Audit Committee, reported on Finance & Audit
Committee discussion which included updates on the Committee
following: 1) cyber security; 2) accounts payable audit; 3)
an RFP which was issued seeking Investment Consulting
Services for LES’ retirement plans; 4) an RFP seeking
underwriting services in anticipation of issuing refunding
bonds in 2016; and 5) District Energy Corporation (DEC)
and Nebraska Utility Corporation (NUCorp).
Ann Bleed, Chair of the Operations & Power Supply Committee, Operations &
reported on Committee discussion which included updates Power Supply
on the following: 1) generating unit revenue and cost Committee Report
report; 2) LES Operations Center; and 3) District Energy
Corporation (DEC) and Nebraska Utility Corporation
(NUCorp).
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Vicki Huff, Chair of the Personnel & Organization Committee, Personnel &
reported on Committee discussion which included: 1) a Organization
2015 workers’ compensation overview – 21 claims resulted Committee
in a cost of $68,000 to LES, which was a decrease from
2014; 2) a 2015 overview of employee participation in
LES’ wellness program; and 3) a 2015 year-end review
from Human Resources.
W. Don Nelson, Chair of the Legislation & Governmental Affairs Legislation &
Committee, stated the Committee had met to discuss Governmental
legislation that is being monitored by LES. Nelson noted Affairs Committee
that Shelley Sahling-Zart will go into more detail during
her Legislation and Regulatory update later in the Board
meeting.
Shelley Sahling-Zart, Vice President & General Counsel, reported Legislation and
that the legislative session is at the half-way point, and it Regulatory Update
will be difficult for legislative bills to be considered further
unless they have a priority designation. Friday marked the
deadline for senators and committees to designate priority
bills. She noted that all of the bills on LES’ tracking table
were reviewed in detail with the board Legislation &
Governmental Affairs Committee. (Exhibit II) Sahling-Zart
highlighted some of the more significant bills of impact to
LES, including:

LB 824 - a bill to provide for privately developed
renewable generation, particularly wind. The bill is
intended to eliminate what the private wind developers
have identified as barriers to their ability to develop large
wind farms in the state. Sahling-Zart noted that she
participated in meetings over the past couple of weeks
between the senators, wind developers and public power
representatives to try and reach a compromise. The public
power industry agreed to be neutral on the bill provided the
authorization for private renewable generation is very
narrow and mitigates impacts to public power. Sahling-Zart
noted that a compromise was recently reached. LES has
committed to a neutral position on the bill with the
compromise replacing the original language, but will be
closely monitoring any amendments to the bill.
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
LB 1068, a bill that would require Public Service
Commission (PSC) review of certain rate increases. The
bill provides that the PSC would review a public electric
utility’s rate increase if a) 2% or more of the utility’s
customers’ petition for a review, or b) the rate is increasing
by 2% or more in a 12-month period, or any component of
the rate is increasing by more than 20% over the same
period. LES is opposed to this bill as it undermines the
most fundamental attribute of public power, which is local
control. It erodes the authority of the LES Administrative
Board, the Mayor, and the City Council who spend a great
deal of time reviewing the LES budget and any requested
rate changes. LB 1068 establishes an unnecessary layer of
review at added taxpayer cost. LES will be testifying in
opposition to LB 1068 at the public hearing on Feb. 23.
The American Public Power Association’s (APPA) National
Conference is scheduled for June 10-15, 2016, in Phoenix,
Arizona. LES policies require a preauthorization for more
than three Board Members to attend the conference. W.
Don Nelson moved that any Board members wishing to
attend the conference be authorized to do so and that any
Board member attending be reimbursed for allowable
business expenses incurred. Ann Bleed seconded the
motion. The vote was:
Aye:
Hudgins, Bleed, Harshman, McNabb, Huff,
Raetz, Nelson
Nay:
None
Absent:
Sup, Peetz
Authorization of
Board Attendance
at the
2016 APPA
National
Conference and
Pre-Conference
Seminars
Inna Goldman, Manager, Financial Accounting, provided the Corporate Key
Board an overview of the results from Omaha Public Power Indicators
District’s (OPPD) and American Public Power Benchmarking
Association’s (APPA) annual benchmarking surveys of
public power utilities. Overall, LES ranked favorably
compared to the other participating utilities. (Exhibit III)
Ben McGuire, Engineer, Protection and Controls in Energy 2015
Delivery, reviewed the 2015 system interruption and outage Interruption/Outage
statistics. (Exhibit IV) On a normal day, LES customers Report
were without electricity an average of 27.5 minutes. On the
three major event days occurring in 2015 (April 19,
July 25, September 24), the average total time LES
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customers were without electricity was 57.3 minutes. Trees
were the leading cause of outages in 2015, with a total
number of 132 interruptions. LES uses the analysis to
identify possible problems that can be remediated, such as
replacing aging cable.
The Monthly Financial and Power Supply Reports were distributed Monthly Financial
to the Board and staff was available to answer questions. and Power Supply
(Exhibit V)
Reports
Jason Fortik, Vice President of Power Supply, informed the Board Miscellaneous
of the Spring Missouri Basin Power Project Engineering &
Operations Committee meeting being held at Laramie
River Station on April 28, 2016. It is an all-day event and
Board members are welcome to attend.
The next regular meeting of the LES Administrative Board is Next Meeting
scheduled for Friday, March 18, 2016 at 9:30 a.m.
There being no further business before the Board, Jerry Hudgins Adjournment
declared the meeting adjourned at approximately 11:23
a.m.
Dan Harshman, Secretary
BY: S/Lacy Stockdale
Lacy Stockdale
Assistant Secretary
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Exhibit I
2016 LES ADMINISTRATIVE BOARD COMMITTEES
The Board Chair is an Ex Officio Member of Each Committee
Personnel & Organization
Finance & Audit
Vicki Huff, Chair
Libby Raetz
Marilyn McNabb*
Libby Raetz, Chair
Vicki Huff
Layne Sup
Operations & Power Supply
Budget & Rates
Ann Bleed, Chair
Sarah Peetz
Vicki Huff
Dan Harshman, Chair
Layne Sup
W. Don Nelson
Legislation & Governmental Affairs
Communications & Customer Service
W. Don Nelson, Chair
Sarah Peetz
Ann Bleed
Sarah Peetz, Chair
Dan Harshman
Marilyn McNabb*
Labor Negotiations
Executive
W. Don Nelson
Vicki Huff
Jerry Hudgins
Ann Bleed
Dan Harshman
*Marilyn McNabb or New Member Exhibit II
2015‐2016 LEGISLATION IMPACTING LES LEGISLATIVE BILL STATUS OF LEGISLATION SUMMARY OF LEGISLATION LES POSITION CARRYOVER LEGISLATION FROM 2015
LB 60 LB 84 LB 104 LB 115 LB 117 LB 141 (Kintner, et al.) Prohibits employers from establishing policies that prohibit a person’s transportation or storage of a firearm as long as certain conditions are met, such as Judiciary Committee the firearm is in a privately‐owned vehicle, it is not in open view, and the firearm is in a locked trunk or glove box, among others. This bill conflicts with the no‐weapons provisions in the LES Code of Conduct. (Davis) Permits certain public bodies to use telephone conferencing or Government, Military & Veterans videoconferencing for public meetings. Applies to small counties of 3,000 residents or Affairs Committee less. The bill does not apply to LES, but all bills relating to public meetings are monitored for amendments. (Krist) Changes provisions relating to notice to customers of discontinuance of utility service. The statute currently requires notice to be given by first class mail or in person. LB 104 provides that notice may also be provided by electronic mail if the Approved by Governor on 5/26/15 customer has elected to receive billings or notifications by electronic delivery. LES does not currently provide for electronic billing, but LES would support this legislation for future use. Update: The committee amendment provides that customers who sign up for electronic billing must separately sign up to receive notifications electronically.
(Scheer) Prohibits entities from requiring an individual to provide a social security Banking, Commerce & Insurance number unless required by federal, state, or local law or when the SSN is used for a Committee criminal history background check by an employer or volunteer service organization. SSN’s are a valuable tool for LES in managing debt collections. LES opposes this bill as introduced. (K. Haar) Current law provides for energy financing contracts between an energy Natural Resources Committee service company and a governmental unit for the implementation of energy conservation measures in existing facilities. LB 117 would expand this authority to also apply to construction of new facilities. (Schilz) LB 141 amends the Public Entities Mandated Project Charges Act to authorize a public entity to create a special‐purpose entity to act as a mandated project bond Approved by Governor on 5/13/15 issuer and sets forth the authority and obligations of such special‐purpose entity. The special purpose entity would be governed by a three‐person board of directors from among the public entity’s governing board. The bill was introduced on behalf of OPPD. Oppose Monitor Support Oppose Monitor Monitor 2015‐2016 LEGISLATION IMPACTING LES LEGISLATIVE BILL LB 177 LB 181 LB 205 LB 209 LB 282 LB 288 LB 295 STATUS OF LEGISLATION SUMMARY OF LEGISLATION (K. Haar) LB 177 prohibits an employee of any public power district from serving on the Approved by Governor on 3/12/15 board of directors of any public power district. This bill does not directly apply to LES, but will be monitored as it relates to the public power industry. (Smith) LB 181 was introduced on behalf of the Nebraska Rural Electric Association. The bill permits flashing or rotating blue and amber lights to be displayed on vehicles Approved by Governor on 3/12/15 operated by a public utility for construction, maintenance and repair of infrastructure on or near any highway. This authority would extend to LES. (Schilz) Provides that towers over 50 ft. in height and less than 6 ft. in diameter be marked and painted in bands of aviation orange and white. The bill explicitly exempts Indefinitely Postponed wind turbines and towers or poles that support electric utility transmission or distribution lines, but we will closely monitor any amendments to this bill. (Hilkemann) Creates the Political Subdivisions Mandatory Mediation Act requiring all political subdivisions of the state to submit to mandatory mediation before engaging Indefinitely Postponed in litigation. This bill raises numerous questions and concerns and would significantly alter LES’ legal remedies. LES conferred with the City lobbyist, but neither the City nor LES testified on the bill. (Baker) Amends the Open Meetings Act to explicitly provide that a public body may go into closed session for the discussion of applicants, other than finalists, who have applied for employment by the public body. Discussion of finalists would still be Indefinitely Postponed required to be held in open session. It also allows for closed session discussion of the performance of non‐elected officials. (Ebke) Prohibits any collective bargaining agreement involving a public employer from Business & Labor Committee requiring the deduction of union dues, assessments or other amounts from a public employee’s wages. LES does not engage in such practice, but the bill will be monitored as LES has two collective bargaining agreements. (Scheer) Requires a city to receive approval of the county board before regulating Final Reading within its extraterritorial zoning jurisdiction, including the erection of new structures. The bill was amended to only apply to first and second class cities. ‐2‐
February 22, 2016 LES POSITION Monitor Support Monitor Oppose Monitor Monitor Neutral with Amendment 2015‐2016 LEGISLATION IMPACTING LES LEGISLATIVE BILL STATUS OF LEGISLATION LB 337 Natural Resources Committee LB 340 Judiciary Committee LB 407 Natural Resources Committee SUMMARY OF LEGISLATION (B. Harr) This bill renames the Low‐Income Home Energy Conservation Act to the Energy Conservation and Demand Reduction Act. The bill was introduced on behalf of OPPD. The Act applies to a customer receiving energy service at a building that receives no greater than a one thousand kilowatt demand. Such customer can apply for funds to implement energy conservation and demand reduction measures. A utility can set up a subaccount and designate that up to $300,000 of its remitted sales tax be transferred to its subaccount. The state will match these transferred amounts up to a total of $500,000 per year on a first‐come, first‐served basis. The Act sunsets on July 1, 2019. (Brasch) Amends the Concealed Handgun Permit Act to require the Nebraska State Patrol to design a standardized sign for use in the premises of those entities and employers who are permitted to prohibit concealed handguns in and on their premises. LES currently has signage, but we would be required to switch to the standardized signage if passed. (K. Haar, et al.) Amends provisions of the Certified Renewable Export Facility (CREF) Act with the intent of minimizing barriers for wind developers. The bill eliminates the requirement that at least 10% of a project be offered to public power entities as well as the requirement for a power purchase agreement (PPA) with a minimum 10‐year term. It also eliminates language that included substantial risk of stranded assets as a consideration for approval of a facility. The bill also outright repeals the “right of first refusal” provisions passed in 2013 to clarify that Nebraska public power entities have a first right to construct new transmission facilities constructed in the state. LES is opposed to repealing the right of first refusal provisions that were just passed by the Legislature in 2013 and opposed to removing the language regarding stranded assets. LES is neutral on the remaining provisions. Update: The public power industry and the wind developers reached a conceptual agreement in February, but have been unable to agree on amendment language that effectuates the compromise. Sen. Haar and the wind developers have moved forward with an amendment, AM1183, in an effort to advance LB 407 from committee. LES has taken a neutral position on AM1183.
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February 22, 2016 LES POSITION Support Support Neutral based on AM1183 2015‐2016 LEGISLATION IMPACTING LES LEGISLATIVE BILL LB 412 LB 423 LB 424 STATUS OF LEGISLATION SUMMARY OF LEGISLATION LES POSITION (Mello, et al.) Amends provisions of the Community‐Based Energy Development (C‐
BED) Act to clarify that a county that adopts a resolution of support for a C‐BED project must also have adopted zoning regulations that require planning commission, county Approved by Governor on 5/26/15 board, or county commission approval for the C‐BED project. Notice of incentives for Monitor participation in a C‐BED project must also be provided to each property owner on whose property a turbine will be located and to each governing body of a municipality or political subdivision where a turbine will be located. (Nordquist, et al.) Provides a tax credit for a renewable electric generation facility that qualifies as a C‐BED project. The producer may select a credit of either a) 1.5 cents per kilowatt‐hour for electricity generated during the first 20 years of commercial operation; or b) a one‐time credit equal to 30% of the total cost of construction of the C‐BED facility not to exceed $2 million. The credit may be used to reduce the producer’s income tax liability, franchise tax liability, or premium or related retaliatory Support state tax liability. The credit may be transferred or sold. We are seeking clarification incentives to Select File regarding a provision that a renewable electric generation facility may use fuels other promote greater than those enumerated. LES is generally supportive of a production tax credit or renewable energy investment tax credit to incent greater development of renewable energy in Nebraska. development LES is neutral as to the level at which such credit should be set. Update: LB 423 was advanced from committee with an amendment that reduces the credit to a credit of 1.0 cent per kilowatt hour for the first 2 years and scaling down to 0.6 cents for the last two years. The amendment also limits the transferability of the credits to those earned by facilities of 20 MW or less.
(Davis, et al.) LB 424 extends the personal property tax exemption for property used in the generation of electricity using wind to other renewable energy generation using solar, biomass, or landfill gas as the fuel source. It also extends the nameplate Approved by Governor on 5/26/15 capacity tax on owners of wind generation facilities, to all renewable energy Support generation facilities. The tax is in the amount of the total nameplate capacity multiplied by a tax rate of $3,518 per megawatt. Facilities owned by a public power entity are exempt from the nameplate capacity tax. ‐4‐
February 22, 2016 2015‐2016 LEGISLATION IMPACTING LES LEGISLATIVE BILL LB 462 LB 469 LB 473 LB 475 STATUS OF LEGISLATION SUMMARY OF LEGISLATION (Seiler) Changes restrictions on campaigning by public officials and public employees. The bill was prompted by a case involving candidates for the Northeast Public Power Government, Military & Veterans District Board. The legislation clarifies the definition of ‘campaigning’ to include a Affairs Committee broadcast, printed or disseminated communication that references a ballot question or a candidate by name, nickname, photograph, or drawing, or in any way makes the identity of the candidate apparent through an unambiguous reference. LES will monitor the bill as it relates to public entities. (Smith) LB 469 requires certain actions before the Nebraska Department of Environmental Quality (NDEQ) may submit to EPA a State Implementation Plan (SIP) pursuant to the EPA 111(d) rules regulating carbon emissions from power plants. LB 469 requires NDEQ to prepare an impact assessment evaluating a number of factors and submit such assessment to the Legislature prior to submitting its SIP. NDEQ must Approved by Governor on 5/27/15 also provide an opportunity for public review and comment on the assessment report. Update: The committee amendment merges the provisions of LB 583 into the bill as well. The amendment also assigns the responsibility for the LB 469 assessment report to the Nebraska Energy Office rather than NDEQ. It also streamlines the scope for the state energy plan and eliminates the December 2015 deadline.
(Chambers) LB 473 eliminates the power of eminent domain for certain pipelines. The Judiciary Committee bill as introduced does not impact LES, but it will be monitored for any amendments that may impact LES’ power of eminent domain. (Davis) This bill appears to provide additional approval authority for the Nebraska Power Review Board (NPRB) over any construction activity or improvement of a generating facility that either increases generating capacity or has a total cost of $150 Natural Resources Committee million or more. This may apply, for example, to environmental retrofits. This seems to put the NPRB in a different role of making an operating decision. In addition, the NPRB approval criteria would be difficult to apply to retrofit projects. We will work with Sen. Davis to better understand the bill’s intent, but LES is opposed to the bill as introduced. ‐5‐
February 22, 2016 LES POSITION Monitor Monitor Monitor Oppose 2015‐2016 LEGISLATION IMPACTING LES LEGISLATIVE BILL LB 517 LB 536 LB 583 LB 627 STATUS OF LEGISLATION SUMMARY OF LEGISLATION LES POSITION (Riepe) Prohibits the use of an interactive wireless communication device while operating a motor vehicle unless used to communicate in an emergency situation with an emergency response operator, physician, emergency medical service personnel, a Transportation & fire department, or law enforcement agency. Such emergency responders are also Telecommunications Committee Monitor exempt from the prohibition. There are already statutory provisions governing the use of handheld wireless communication devices so the need for this legislation is unclear. If the bill advances, LES will seek an exemption for utility radios used for communication while performing utility work. (K. Haar) LB 536 provides that every public power supplier must file an annual report with the NPRB including a number of specific criteria such as average electric rates, number of customers, other charges, sources of generation, fuel costs, employee salaries, emission of specified pollutants, board information and benefits, net metering Oppose as data, financial statements, amount spent on advertising, among other things. Some Natural Resources Committee introduced/Work to of the identified information may be subject to contractual confidentiality provisions. Amend and tie to Considering the differences between public power entities and how they are State Energy Plan structured, much of this data would be difficult to utilize as it would not be comparative across all entities. LES and other public power entities will try to work with Sen. Haar to identify the purpose and use for such a report and database, and work to develop a report that would provide useful and comparative data. (Schilz, et al.) Legislation to require the Nebraska Energy Office to develop a state energy plan by Dec. 31, 2015. The scope of the study is quite broad with a significant focus on developing wind energy for export. The scope of the plan seems primarily Support Concept of Provisions/portions amended into directed at the electric utility sector rather than at all energy sectors including natural Energy Plan/Seek LB 469 by AM 833 gas and transportation fuels. LES is not opposed to developing a state energy plan, but clarification of LES and the other public power utilities will work with Sen. Schilz to try and amend the provisions plan scope to include all energy sectors and to clarify some of the provisions in the scope. (Mello, et al.) Amends the Nebraska Fair Employment Practice Act to prohibit Approved by Governor on 4/13/15 employment discrimination against an individual who is pregnant. It also specifies Monitor reasonable accommodation provisions with respect to pregnancy. ‐6‐
February 22, 2016 2015‐2016 LEGISLATION IMPACTING LES LEGISLATIVE BILL STATUS OF LEGISLATION LB 649 Bracket until June 5, 2015 LB 653 Revenue Committee SUMMARY OF LEGISLATION (Kintner, et al.) Amends public records statutes to specify that all votes taken by public officials in the course of their public duties shall be considered a public record. All votes of the LES Administrative Board are recorded in the meeting minutes which are a public record. (Johnson, et al.) LB 653 would provide a one weekend sales tax holiday for the purchase of Energy Star qualified products for noncommercial home or personal use. The exemption would apply to sales over the first weekend in October of each year. LES POSITION Monitor Support LEGISLATION INTRODUCED IN 2016 LB 669 Transportation & Telecommunications Committee Hearing February 9, 2016 LB 681 Judiciary Committee Hearing March 3, 2016 LB 693 Judiciary Committee Hearing January 28, 2016 LB 720 Judiciary Committee Hearing February 25, 2016 LB 725 General File (Krist) Amends statutory provisions regarding vehicle occupant protection systems to provide that violations of the protection systems could be charged as a primary Monitor offense. State law currently only allows a citation as an offense secondary to a primary offense, such as speeding. (Schnoor) Amends the Concealed Handgun Permit Act related to entities under the act that may prohibit concealed handguns on the entity’s premises. It clarifies that an individual does not violate the provisions unless the entity establishes that it Monitor/Confer requested the permit holder to remove the concealed handgun from the premises and with City the permit holder defied the request. Since LES prohibits weapons on its property, we will monitor this legislation and confer with the City. (Morfeld) Changes the statute of limitations for actions filed pursuant to the Political Oppose/Confer with Subdivisions Tort Claims Act from one year to two years. LES will confer with the City. City (Kuehn) Creates a presumption of liability for invasion of privacy for operating an unmanned aircraft (e.g., drone) within 200 ft. or less of the airspace over private property without the express permission of the property owner. It provides an exemption for lawful activities of law enforcement or government agencies. LES will monitor the bill to see how it may impact LES’ use of drones to inspect its infrastructure, such as overhead distribution and transmission lines. (Schumacher) Amends provisions related to statements regarding conveyances of real estate to provide that such statements are not required to include utility easements. The bill was introduced on behalf of NPPD. The bill is unlikely to alter LES practices in this regard, but we will monitor the bill. ‐7‐
February 22, 2016 Monitor/Confer with City Monitor 2015‐2016 LEGISLATION IMPACTING LES LEGISLATIVE BILL STATUS OF LEGISLATION LB 736 General File LB 783 Transportation & Telecommunications Committee Hearing February 22, 2016 LB 802 Health & Human Services Committee Hearing February 3, 2016 LB 821 Business & Labor Committee Hearing February 8, 2016 SUMMARY OF LEGISLATION (Friesen) The bill expands provisions of the Community‐Based Energy Development (C‐
BED) Act to provide that such C‐BED projects could enter into power purchase agreements with any electric supplier in the state. The Act was previously restricted to the four largest utilities in the State. LES has no objection to LB 736. (Lindstrom) LB 783 was introduced on behalf of OPPD to reduce costs and provide greater efficiency in the licensing of its fleet vehicles. The provisions of the bill only extend to public power districts with annual gross revenues of at least $250 million, so essentially OPPD and NPPD. LES is not eligible as it is not a public power district. The bill provides that each district vehicle be issued a permanent, distinctive public power district license plate with a fee of $3 per plate and an annual renewal fee of $2 for any plate listed in the district’s registration. (Haar, Mello) LB 802 creates the Health and Climate Resiliency Task Force to develop a strategic plan to enable the state to meet the challenges of climate change and take advantage of adaptation and mitigation strategies, including opportunities for attracting new business to the state. The task force would consist of 10 voting members comprised of legislators and 14 non‐voting members representing various departments of state government and the University of Nebraska. The voting members may appoint an advisory committee representing various stakeholder groups, including public power. (Larson) Adopts the Workplace Privacy Act to prohibit employers from requiring that employees or applicants provide account information that would allow the employer to access the employee’s social networking profiles or information. ‐8‐
February 22, 2016 LES POSITION Monitor Monitor Monitor Monitor 2015‐2016 LEGISLATION IMPACTING LES LEGISLATIVE BILL STATUS OF LEGISLATION LB 824 Natural Resources Committee Hearing January 27, 2016 LB 825 Revenue Committee Hearing February 18, 2016 LB 850 Business & Labor Committee Hearing February 1, 2016 LB 863 Natural Resources Committee Hearing February 4, 2016 LB 881 Natural Resources Committee Hearing January 28, 2016 SUMMARY OF LEGISLATION (McCollister, et al.) LB 824 essentially provides for privately developed renewable energy generation with nominal state oversight. The legislation repeals the Certified Wind for Export Facilities Act that was passed a few years ago to provide a framework for constructing and exporting renewable energy facilities. By eliminating the act, private entities would be able to operate “merchant” renewable generation, meaning they could inject the energy into the market without having a power purchase agreement with a designated customer. The Power Review Board would have Monitor essentially not authority over such projects. In addition, the bill outright repeals the “right of first refusal” provisions that give public power entities in the state the first right to construct new transmission facilities directed to be built by the Southwest Power Pool. LES continues to evaluate this bill. While the impacts to LES are less than those to NPPD and OPPD, LES is concerned that there be an adequate framework to address customer concerns for such development projects. LES testified at the hearing in a neutral position. (Davis) LB 825 requires that owners of tax‐exempt property file a statement with the county assessor every 2 years indicating whether any of the property was leased to Monitor/Confer another party during the preceding 2 years. The bill exempts property owned by the with City state or a governmental subdivision, but LES will closely monitor the bill. (Crawford, et al.) Adopts the Paid Family Medical Leave Insurance Act to be effective April 1, 2019. Employers would be required to pay qualifying employees on an income‐based sliding scale for up to 12 weeks of family medical leave. Paid leave Oppose/Confer with would be taken concurrently with unpaid family medical leave allowed by the federal City FMLA. LB 850 would be a significant cost to LES as we would be paying the paid leave, but also in some cases hiring temporary staff to cover the employee’s absence. (Schilz) Adopts the Wind Energy Expansion Act which provides a process for counties to be designated as a “wind friendly county” for purposes of promoting wind energy Monitor development. The bill will be monitored, but has no impact on LES operations. (Schilz) Amends provisions for energy financing contracts entered into by government entities to include capital and other equipment that reduces water or energy Monitor consumption or reduces operating costs. ‐9‐
February 22, 2016 LES POSITION 2015‐2016 LEGISLATION IMPACTING LES LEGISLATIVE BILL STATUS OF LEGISLATION LB 897 General File LB 913 Revenue Committee Hearing February 24, 2016 LB 914 Natural Resources Committee Hearing January 28, 2016 LB 928 Business & Labor Committee Hearing February 1, 2016 LB 973 Transportation & Telecommunications Committee Hearing February 8, 2016 SUMMARY OF LEGISLATION (Lindstrom) LB 897 allows public power entities operating in a regional transmission organization to engage in a limited amount of financial hedging transactions in order to mitigate risk from market fluctuations. The bill was introduced on behalf of NPPD. The authority under the bill would extend to LES, but at the present time LES has no need for such transactions. (Smith) Adopts the Facilitating Business Rapid Response to Declared Disasters Act to exempt from state income taxes any out‐of‐state employees who come into Nebraska to aid in emergency response to a disaster. LES has received storm assistance from out‐of‐state utilities in the past. We are not aware that there has ever been an issue with being subject to state income taxes, but we are supportive of LB 913 and any efforts that help facilitate bringing in needed assistance. (Schilz) LB 914 provides compensation for the member of the Nebraska Power Review Board (PRB), or proxy, designated to represent Nebraska on the Southwest Power Pool’s Regional States Committee (RSC). Such member would be compensated $250 for each day engaged in RSC duties, not to exceed $20,000 in any one year. The PRB is a cash‐funded agency of the State and it does not receive general fund appropriations. Rather the agency is funded by assessments that are levied on all of the State’s public power entities, including LES. While LB 914 would slightly increase LES’ assessment, LES believes that it is imperative that Nebraska is represented on the RSC and LES is supportive of this compensation proposal. (Mello, et al.) Clarifies statutory provisions prohibiting employers from discriminatory wage practices based on sex to provide that an unlawful employment practice occurs when a discriminatory compensation decision or practice is adopted or an employee becomes subject to such, including each time that wages, benefits, or other compensation is paid resulting from such decision. (Smith) Current state law prohibits companies engaged in activities that require the temporary moving of overhead high voltage conductors, such as house movers, from moving such conductors and requires them to notify the appropriate electric utility. There have been a number of instances of entities not complying with these provisions. LB 973 was introduced on behalf of the Nebraska Rural Electric Association to make violations of these provisions a Class II misdemeanor. ‐10‐
February 22, 2016 LES POSITION Monitor Support/Confer with City Support Monitor/Confer with City Monitor 2015‐2016 LEGISLATION IMPACTING LES LEGISLATIVE BILL STATUS OF LEGISLATION LB 992 Government, Military & Veterans Affairs Committee Hearing February 17, 2016 LB 1012 Urban Affairs Committee Hearing February 9, 2016 LB 1044 Business & Labor Committee Hearing February 22, 2016 SUMMARY OF LEGISLATION (Ebke) Prohibits political subdivisions from entering into certificates of participation or installment contracts exceeding $25 million. LES does not have any installment contracts, but the bill would threaten the City’s use of certificates of participation for funding projects. (Mello, et al.) Adopts the Property Assessed Clean Energy Act to promote greater homeowner engagement in energy efficiency by provided a mechanism to help amortize the up‐front investment required. A municipality is authorized to establish clean energy assessment districts. The municipality would arrange financing for the energy projects in such a district and property owners in such districts would enter into contracts for energy efficiency improvements to their property. The costs of these projects would be repaid through assessments on the qualifying properties benefiting from the energy projects. There is no direct impact on LES. (Ebke) LB 1044 would terminate the Commission of Industrial Relations, the state commission that was created to resolve labor disputes involving public employees. The bill provides that termination of the CIR would not eliminate or restrict the right of employees to strike. ‐11‐
February 22, 2016 LES POSITION Monitor/Confer with City Monitor Monitor/Confer with City 2015‐2016 LEGISLATION IMPACTING LES LEGISLATIVE BILL STATUS OF LEGISLATION LB 1068 Transportation & Telecommunications Committee Hearing February 23, 2016 LB 1069 Indefinitely Postponed SUMMARY OF LEGISLATION (Haar) Adopts the Electric Customer Protection Act requiring that certain proposed electric rate increases be reviewed by the Public Service Commission (PSC) and creating the office of customer advocate within the PSC. The PSC would review a proposed electric rate increase: 1) upon receipt of a petition filed by 2% or more of the affected customers; or 2) when an electric utility proposed to increase its rates by more than 2% in any consecutive 12‐month period, or any component of its rates by more than 20% in any consecutive 12‐month period. Much of the language seems to be borrowed from states that have PSC’s that regulate the rates of investor‐owned Oppose/Confer with utilities because it includes language that allows for a fair and reasonable rate of City return. Public power utilities do not earn a rate of return. LES has numerous concerns with the bill, primarily the fact that it erodes one of the hallmarks of public power which is local control. This bill would erode the jurisdiction of both the LES Administrative Board and the Lincoln City Council with regarding to setting retail electric rates for LES. It would add another layer of review with an added cost to taxpayers to fund the additional PSC staff that would be required to implement the bill. (Haar) LB 1069 requires the state investment officer to review all major investments of the State of Nebraska to determine the extent to which state funds are invested in companies that derive a substantial portion of their revenues from the extraction or Monitor combustion of fossil fuels. It also directs that a plan be developed to divest the state of such investments. The bill as written does not impact LES, but it will be monitored due to its energy focus. ‐12‐
February 22, 2016 LES POSITION 2015‐2016 LEGISLATION IMPACTING LES LEGISLATIVE BILL STATUS OF LEGISLATION LB 1071 Natural Resources Committee Hearing February 11, 2016 LB 1085 Revenue Committee Hearing February 25, 2016 LR 422 Adopted February 1, 2016 SUMMARY OF LEGISLATION (Haar) Adopts the Solar Energy Economic Development Act, calling for the appropriation of $4 million in FY 2016‐17 for the purpose of providing grants for solar energy development. The Nebraska Energy Office would be charged with establishing rules and regulations to administer such grants. The grants would be available to utilities that provide solar energy incentive programs for their customers, such as net metering and certain community solar programs. Grants are also available to local Monitor governments, individuals, and businesses. For individual grants, preference is given to applicants whose electric utility does not offer a solar energy incentive program. This is somewhat confusing as utilities are required by law to provide net metering to customer‐generators who request it. Grants may not exceed 15% of the total project cost or $150,000. LES already provides incentives to customers who install solar generation. (Davis) Provides for a production tax credit for renewable electric generation facilities. However, the definition of renewable electric generation facility is very narrow and Support tax includes only facilities that are located in a county with a population of less than 7,000 incentives for inhabitants and has been approved as a community‐based energy development (C‐
renewable energy BED) project. LES has been generally supportive of incentives to promote greater development of renewable energy resources in Nebraska. (Campbell) Legislative Resolution recognizing LES’ 50th anniversary and congratulating the LES staff and Board on 50 years of providing the Lincoln area with reliable, safe and Support efficient electric service at retail rates that have consistently ranked among the lowest in the country. ‐13‐
February 22, 2016 LES POSITION Exhibit III
Corporate Key Indicators –
Public Power Utilities Ratios
Benchmarking Provided By:
Omaha Public Power District (OPPD)
&
American Public Power Association (APPA)
Inna Goldman, Manager Financial Accounting
February 19, 2016
1
OPPD Benchmarking Participants
Responses by 2014 Electric Energy Sales (MWh)
< 3,000,000
3,000,000 - 8,000,000
2
> 8,000,000
4












City Utilities of Springfield *
Colorado Springs Utilities *
Gainesville Regional Utilities *
KC Board of Public Utilities
Lincoln Electric System *
Muscatine Power & Water
Nebraska Public Power District *
Omaha Public Power District *
Orlando Utilities Commission *
Santee Cooper *
Seattle City Light
Tacoma Public Utilities
Total Participants 12
* Also included in LES’ Peer Group
6
LES
Source: OPPD Corporate Key Indicators Report, June 2015
2
APPA Benchmarking Participants
Public Power Utilities whose…
•
Retail Sales are 50% or more of Total Sales
•
Retail Sales or Sales for Resale of 100,000 MWh or more
Responses by Customer Size Class
2,000 –
5,000
> 100,000
11
5,000 10,000
17
50,000 100,000
18
Total Participants 168
37
10,000 20,000
Please refer to
slides 18 – 20 for
a complete list of
participants
20,000 50,000
51
34
Source: APPA Selected Financial and Operating Ratios of Public Power Systems, Nov 2015
3
Summary of LES Rankings
Percentages based on results for 71 Ratios for approximately 29 utilities (APPA & OPPD)
4th Quartile
18%
1st Quartile
28%
-
-
Debt to Total Assets
Energy Loss %
-
3rd Quartile
21%
-
A&G per Retail
Customer
Total Power Supply
Exp. per kWh Sold
System Average
Interruption
Duration Index
(SAIDI)
Debt Service Coverage
2nd Quartile
33%
-
Customer Average Interruption
Duration Index (CAIDI)
OSHA Incident Rate
Total O&M per Retail Customer
Days Cash on Hand
Residential Revenues per kWh
Sold
4
LES 2015 Year-End Performance Indicators
LES 2015 year-end
performance indicators based
on preliminary results
5
Energy Loss Percentage
(APPA Selected Financial & Operating Ratios of Public Power Systems, Nov 2015)
Ideally - BELOW
the median!
7%
6%
5%
4%
3.81%
3%
LES 2015 Year End
Performance Indicator
Target = 3.85%
Actual = 3.81%
2%
1%
0%
LES
Overall Average
Cust. Size Class Avg.
2006
6.00%
4.19%
4.45%
2007
5.36%
4.01%
4.18%
2008
3.03%
3.86%
3.91%
2009
3.75%
3.96%
4.06%
2010
4.02%
3.97%
4.07%
2011
3.74%
3.11%
3.02%
2012
3.69%
3.53%
3.51%
2013
3.66%
4.71%
5.22%
2014
4.03%
3.47%
3.98%
2015
3.81%
Comments:
LES ranked in the 2nd Quartile of utilities with a customer size class > 100,000 (total of 16 utilities).
The ratio of total energy losses to total sources of energy.
6
Customer Average Interruption Duration Index (CAIDI)
(OPPD Corporate Key Indicators Report, June 2015)
Ideally - BELOW
the median!
100
LES 2015 Year End
Performance Indicator
Target = 80
Actual = 69
90
80
Minutes
70
69
60
50
40
30
20
LES
Average
Median
2006
58
2007
41
58
62
2008
53
70
68
2009
64
72
58
2010
51
81
71
2011
66
73
66
2012
72
77
72
2013
61
75
61
2014
66
80
68
2015
69
Comments:
LES ranked 5th out of the 11 participants that submitted data.
CAIDI = Total Duration of Sustained Interruptions in a Year / Total Number of Customers Interrupted
7
System Average Interruption Duration Index (SAIDI)
(OPPD Corporate Key Indicators Report, June 2015)
Ideally - BELOW
the median!
60
Minutes
40
LES 2015 Year End
Performance Indicator
Target = 60
Actual = 28
28
20
0
LES
Average
Median
2006
18
2007
19
54
57
2008
16
47
44
2009
16
41
44
2010
14
48
42
2011
24
41
41
2012
22
42
45
2013
20
41
34
2014
22
48
50
2015
28
Comments:
LES ranked 3nd out of the 11 participants that submitted data.
SAIDI = Total Duration of Customer Sustained Interruptions in a Year / Total Number of Customers Served.
8
Ideally - BELOW
the median!
OSHA Incidence Rate (per 100 Employees)
(OPPD Corporate Key Indicators Report, June 2015)
14
12
Total Injury Cases
LES 2015 Year End
Performance Indicator
Target = 0
Actual = 11
Incidences
10
8
6
4
2.40
2
0
LES
Average
Median
2006
6.85
2007
3.80
4.85
3.78
2008
3.81
4.54
3.81
2009
6.03
4.35
4.61
2010
3.55
4.63
3.55
2011
4.73
4.41
4.70
2012
3.63
4.40
3.63
2013
4.06
3.96
1.90
2014
3.32
3.79
3.32
2015
2.40
Comments:
LES ranked 5th out of the 9 participants that submitted data.
LES is not subject to OSHA as a governmental entity but uses OSHA as a standard for comparison purposes with other utilities.
OSHA Incidence Rate (per 100 Employees) = Total Number of Reportable Injuries and Illness Cases * 200,000 / Number of Hours Worked.
9
Total O&M Expense per Retail Customer
(APPA Selected Financial & Operating Ratios of Public Power Systems, Nov 2015)
Ideally - BELOW
the median!
600
500
472
Dollars per Customer
400
300
LES 2015 Year End
Performance Indicator
Target = $538
Actual = $504
200
*LES calculation differs from
APPA calculation*
100
0
LES
Overall Average
Cust. Size Class Avg.
2006
245
366
378
2007
276
383
391
2008
293
425
429
2009
325
442
455
2010
369
462
474
2011
402
482
511
2012
434
497
509
2013
464
518
535
2014
468
527
501
2015
472
Comments:
LES ranked in the 2nd Quartile of utilities with a customer size class > 100,000 (total of 17 utilities).
APPA calculation: O&M expense (excluding all costs of power supply) / average number of retail customers; based on FERC accounts
LES PI calculation: O&M expense (excluding all costs of power supply) / average number of retail customers; based on LES natural accounts
10
Ideally - BELOW
the median!
A&G per Retail Customer
(OPPD Corporate Key Indicators Report, June 2015)
$400
$350
$300
LES 2015 Year End
Performance Indicator
Target = $328
Actual = $308
*LES calculation differs from
OPPD calculation*
$250
$200
$150
123
$100
$50
$0
LES
Average
Median
2006
105
2007
115
180
179
2008
127
292
181
2009
134
310
198
2010
145
325
238
2011
149
321
197
2012
126
336
222
2013
133
351
242
2014
125
349
236
2015
123
Comments:
LES ranked 1st out of the 12 participants that submitted data.
OPPD calculation: A&G expense / average number of retail customers; A&G expense based on FERC accounts
LES PI calculation: A&G expense / average number of retail customers; A&G expense based on LES natural accounts
11
Ideally - BELOW
the median!
Total Power Supply Expense per kWh Sold
(APPA Selected Financial & Operating Ratios of Public Power Systems, Nov 2015)
0.06
0.05
Dollars per kWh
0.04
0.033
0.03
0.02
LES 2015 Year End
Performance Indicator (kWh)
Target = $.031
Actual = $.031
*LES calculation differs from
0.01
APPA calculation*
0.00
LES
Overall Average
Cust. Size Class Avg.
2006
0.033
0.050
0.049
2007
0.032
0.050
0.049
2008
0.028
0.050
0.048
2009
0.027
0.054
0.052
2010
0.029
0.054
0.054
2011
0.028
0.047
0.044
2012
0.031
0.049
0.046
2013
0.032
0.050
0.046
2014
0.037
0.048
0.053
2015
0.033
Comments:
LES ranked in the 1st Quartile of utilities with a customer size class > 100,000 (total of 17 utilities).
APPA calculation: Total cost of power supply (generation and purchased power) / sales to all customers; based on FERC accounts
LES PI calculation: Total cost of power supply (generation and purchased power) / sales to all customers; includes depreciation and interest exp
12
Ideally - BELOW
the median!
Debt to Total Assets
(APPA Selected Financial & Operating Ratios of Public Power Systems, Nov 2015)
0.90
0.80
0.72
Debt ($) / Total Assets ($)
0.70
0.60
0.50
0.40
LES 2015 Year End
Performance Indicator
Target < .69
Actual = .69
0.30
0.20
*LES calculation differs from
APPA calculation*
0.10
0.00
LES
Overall Average
Cust. Size Class Avg.
2006
0.77
0.55
0.61
2007
0.78
0.54
0.59
2008
0.76
0.56
0.61
2009
0.75
0.58
0.61
2010
0.73
0.61
0.66
2011
0.73
0.54
0.58
2012
0.73
0.58
0.59
2013
0.72
0.58
0.62
2014
0.72
0.58
0.61
2015
0.72
Comments:
LES ranked in the 4th Quartile of utilities with a customer size class > 100,000 (total of 17 utilities)
APPA calculation: (long-term debt + current and accrued liabilities) / (total assets +other debits); long term debt includes unamortized premium
LES calculation: (long-term debt + commercial paper) / (equity + long-term debt + commercial paper); long term debt excludes unamortized
premium
13
Ideally - ABOVE the
median!
Days Cash on Hand
(OPPD Corporate Key Indicators Report, June 2015)
300
250
Days
200
LES 2015 Year End
Performance Indicator
Target = 74 (minimum)
Actual = 193
241
*LES calculation differs from
OPPD calculation*
150
100
50
0
LES
Average
Median
2006
34
2007
81
97
110
2008
88
136
106
2009
107
131
107
2010
83
131
111
2011
158
117
105
2012
181
136
108
2013
120
143
133
2014
134
143
130
2015
241
Comments:
LES ranked 6th out of the 12 participants that submitted data.
APPA calculation: (Unrestricted and Available Cash and Investments) * 365 / (Total Operating Expenses – Depreciation and Amortization + PILOT + CDFUO)
Available cash consists of Revenue Fund (including CDFUO) and Rate Stabilization Fund
LES PI calculation: (Unrestricted and Available Cash and Investments) / Value of One Day of Cash
14
Ideally - ABOVE the
median!
Debt Service Coverage
(OPPD Corporate Key Indicators Report, June 2015)
2.20
Debt Service Coverage
2.01
2.00
1.80
1.60
1.40
LES 2015 Year End
Performance Indicator
Target = 2.00
Actual = 1.98
1.20
1.00
LES
Average
Median
2006
1.80
2007
1.81
2.08
2.00
2008
1.93
2.05
2.05
2009
1.90
1.81
1.69
2010
2.01
1.98
1.89
2011
2.00
1.89
2.00
2012
1.95
1.86
2.04
2013
2.00
2.03
2.00
2014
2.00
2.04
2.00
2015
2.01
Comments:
LES ranked 6th out of the 11 participants that submitted data.
For some companies the results of this ratio are for the combined operations as opposed to the electric operations only due to the unavailability of
the breakdown for the electric operations.
Debt Service Coverage = Net Receipts / Debt Service Payments
15
Residential Revenues per kWh Sold
(OPPD Corporate Key Indicators Report, June 2015)
Ideally - BELOW
the median!
Residential Revenues / kWh Sold
110.00
100.00
94
90.00
80.00
70.00
60.00
50.00
40.00
LES
Average
Median
2008
76
80
77
2009
81
84
84
2010
83
88
88
2011
85
92
89
2012
89
98
95
2013
90
100
100
2014
93
103
103
2015
94
Comments:
LES ranked 5th out of the 12 participants that submitted data.
Tis ratio is calculated as residential revenues divided by kWh sales to residential customers.
16
Staffing Strike Zone
APPA Public Power Blog, February 10, 2016
LES within Strike
Zone
Comments: APPA’s analysis suggests that, as cost-of service providers, most public power utilities arrive at similar staffing levels so they can
provide excellent customer service at the lower possible cost to consumers.
17
APPA Benchmarking Participants
Sioux Center Municipal
Utilities
Waverly Municipal Electric
Utility
ALABAMA
Lodi Electric Utility
JEA
Decatur Utilities
LA Department of Water & Power
Keys Energy Services
Huntsville Utilities
City of Palo Alto
Kissimmee Utility Authority
KANSAS
Riviera Utilities
Pasadena Water and Power
Department
OUC
McPherson Board of Public
Utilities
Scottsboro Electric Power Board
City of Redding
City of Tallahassee
KENTUCKY
ALASKA
Riverside Public Utilities
GEORGIA
Owensboro Municipal
Utilities
Anchorage Municipal Light & Power
Roseville Electric
City of Calhoun Electric Department
LOUISIANA
ARIZONA
Sacramento Municipal Utility District
Crisp County Power Commission
Lafayette Utilities System
Electrical District No. 2 Pinal County
Turlock Irrigation District
Marietta Power & Water
MARYLAND
Navajo Tribal Utility Authority
COLORADO
IDAHO
Easton Utilities Commission
Salt River Project
Longmont Power & Communications
Idaho Falls Power
MASSACHUSETTS
ARKANSAS
Loveland Water & Power
ILLINOIS
Holyoke Gas & Electric
Conway Corporation
Platte River Power Authority
Springfield City Water, Light & Power
Town of South Hadley
Hope Water & Light Commission
CONNECTICUT
City of St. Charles
Sterling Municipal Light Dept.
Jonesboro City Water & Light
Groton Utilities
INDIANA
MICHIGAN
City of North Little Rock Electric Dept.
Norwich Public Utilities
Crawfordsville Electric Light & Power
City of Bay
Paragould Light & Water Commission
FLORIDA
Lawrenceburg Municipal Utilities
City of Siloam Springs
Beaches Energy Service
IOWA
CALIFORNIA
Fort Pierce Utilities Authority
Cedar Falls Utilities
Alameda Municipal Power
Gainesville Regional Utilities
Muscatine Power & Water
Coldwater Board of Public
Utilities
Holland Board of Public
Works
Lansing Board of Water &
Light
Zeeland Board of Public
Works
Source: APPA Selected Financial and Operating Ratios of Public Power Systems, Nov 2015
18
APPA Benchmarking Participants
Central Lincoln People's
Utility District
Clatskanie People's Utility
District
Eugene Water & Electric
Board
MINNESOTA
MISSISSIPPI
NORTH CAROLINA
ALP Utilities
Greenwood Utilities Commission
City of Albemarle
Austin Utilities
NEBRASKA
Fayetteville Public Works Commission
East Grand Forks Water, Light, Power
Cedar-Knox Public Power
Greenville Utilities Commission
McMinnville Water & Light
Grand Rapids Public Utilities
Commission
Chimney Rock Public Power District
Rocky Mount, City of
Northern Wasco County
People's Utility District
Marshall Municipal Utilities
Fremont Department of Utilities
Shelby, City of
Springfield Utility Board
Moorhead Public Service
City of Hastings
OKLAHOMA
Tillamook People's Utility
District
New Ulm Public Utilities
Lincoln Electric System
Grand River Dam Authority
SOUTH CAROLINA
Owatonna Public Utilities
Nebraska Public Power District
Stillwater Utilities Authority
Rochester Public Utilities
North Central Public Power District
Smithfield, Town of
Worthington Public Utilities
Polk County Rural Public Power
District
OHIO
SOUTH DAKOTA
City Utilities of Springfield
Southern Public Power District
Cuyahoga Falls, City of
Brookings, City of
MISSOURI
NEW MEXICO
Clyde Light & Power
Watertown Municipal Utilities
City of Cameron
Farmington, City of
City of Hamilton
TENNESSEE
City of Hannibal
Los Alamos County
Hudson Public Power
Alcoa Electric Department
Athens Utility Board
Independence Power & Light
NEW YORK
Orrville, City of
Poplar Bluff Municipal Utilities & City
Cable
Massena Electric Department
OREGON
Rolla Municipal Utilities
Plattsburgh Municipal Lighting
Department
Canby Utility Board
Greer Commission of Public
Works
South Carolina Public Service
Authority
Benton County Electric
System
Bristol Tennessee Essential
Services
Source: APPA Selected Financial and Operating Ratios of Public Power Systems, Nov 2015
19
APPA Benchmarking Participants
Cleveland Utilities
TEXAS
Manassas, City of
Rice Lake Utilities
Columbia Power System
Brownsville Public Utilities Board
Martinsville Electric Department
Shawano Municipal Utilities
Cookeville, City of
Bryan Texas Utilities
WASHINGTON
Wisconsin Rapids W W & L
Comm
Covington Electric System
College Station, City of
Benton PUD
Dickson Electric System
City of Garland
Chelan County PUD
Dyersburg Electric System
Denton Municipal Electric
City of Port Angeles
Erwin Utilities
Kerrville Public Utility Board
Mason County PUD
Gallatin Department of Electricity
Lubbock Power & Light
PUD of Cowlitz County
Jackson Energy Authority
New Braunfels Utilities
PUD of Grays Harbor Cnty
LaFollette Utilities
Weatherford Municipal Utility System
PUD of Lewis County
McMinnville Electric System
UTAH
PUD of Snohomish County
Memphis Light, Gas, and Water
Division
City of Springville
Seattle City Light
Morristown Utility System
City of St. George
WISCONSIN
Nashville Electric Service
VERMONT
Kaukauna Utilities
Pulaski Electric System
Burlington Electric Department
Manitowoc Public Utilities
Sevier County Electric System
VIRGINIA
Marshfield Utilities
Tullahoma Utilities Board
BVU Authority
Menasha Utilities
Source: APPA Selected Financial and Operating Ratios of Public Power Systems, Nov 2015
20
Available Ratios from APPA Survey
(Quartile Rankings listed in parentheses)
Revenue per kWh (All Retail Customers)
(1)
Total O&M Expense (Excluding Power Supply Expense) per Retail
Customer
(2)
Revenue per kWh (Residential Customers)
(1)
Total Power Supply Expense per kWh Sold
(1)
Revenue per kWh (Commercial Customers)
(1)
Purchased Power Cost per kWh
(1)
Revenue per kWh (Industrial Customers)
(2)
Retail Customers per Meter Reader
(4)
Debt to Total Assets
(4)
Distribution O&M Expenses per Retail Customer
(1)
Operating Ratio
(1)
Distribution O&M Expenses per Circuit Mile
(2)
Current Ratio
(4)
Customer Accounting, Customer Service, and Sales Expense per Retail
Customer
(2)
Times Earned Interest
(4)
Administrative and General Expenses per Retail Customer
(2)
Debt Service Coverage
(3)
Labor Expense per Worker-hour
(1)
Net Income per Revenue Dollar
(4)
Energy Loss Percentage
(4)
Uncollectible Accounts per Revenue Dollar
(3)
System Load Factor
(1)
Retail Customers per Non-Power Generation Employee
(4)
Total O&M Expense per kWh Sold
(1)
Source: APPA Selected Financial and Operating Ratios of Public Power Systems, Nov 2015
21
Available Ratios from OPPD Survey
(Quartile rankings listed in parentheses)
Total O&M per MWh Sold
(3)
Transmission O&M (Less Other) as a % of Total Operating
Revenues
(3)
Residential Revenues per Residential MWh Sold
(2)
O&M (Non-Power Production) per Retail Customer
(2)
Distribution O&M per Retail MWh Sold
(2)
Commercial Revenues per Commercial MWh Sold
(1)
O&M (Less Fuel and Purchased Power) as a % of Total
Operating Revenues
Distribution O&M per Retail Customer
(2)
Industrial Revenues per Industrial MWh Sold
(3)
(2)
Total O&M as a % of Total Operating Revenues
(2)
Distribution O&M as a % of Total Operating Revenues
(3)
Wholesale Revenues per Wholesale MWh Sold
(3)
Power Production O&M per MWh Sold
(2)
System Average Interruption Duration Index (SAIDI)
(1)
Average Monthly Residential Bill
(2)
Generation O&M per MWh Generated
(2)
Electric Energy Sales per Employee
(2)
Fuel Expense per MWh Generated
(2)
Customer Average Interruption Duration Index (CAIDI)
Retail Customers per Non-Power Generation Employee
(1)
Generation O&M (Less Fuel) per MWh Generated
(4)
Customer Accts, Service and Sales per Retail MWh Sold (3)
Retail Energy Sales per Retail Employee
(1)
Purchased Power Expense per MWh Purchased
(2)
Customer Accts, Service and Sales per Retail Customer
(3)
Total Liabilities as a % of Total Assets
(3)
Power Production O&M per MWh Generated/Purchased
(3)
A&G per MWh Sold
(2)
Days Cash on Hand
(2)
Steam Production O&M per Steam MWh Generated
(1)
A&G per Retail Customer
(1)
Days Cash on Hand (5-Year Average)
(2)
EAF – Oil & Gas
(3)
A&G as a % of O&M (Less Fuel and Purchased Power)
(1)
Debt Service Coverage
(3)
A&G per Employee
(1)
OSHA Incidence Rate (per 100 Employees)
(2)
Transmission O&M per MWh Sold
(4)
Transmission O&M per Transmission Circuit Mile
(3)
A&G as a % of Total Operating Revenues
(1)
Inventory Turnover
(1)
Transmission O&M as a % of Total Operating Revenues
(4)
Uncollectible Accounts Expense as a % of Electric Energy
Revenues
(4)
Transmission O&M (Less Other) per MWh Sold
(4)
Gross Distribution Plant in Service per Retail Customer
(2)
Net Distribution Plant in Service per Retail Customer
(3)
Retail Revenues per Retail MWh Sold
(2)
Transmission O&M (Less Other) per Transmission Circuit
Mile
(4)
(2)
Source: OPPD Corporate Key Indicators Report, June 2015
22
Exhibit IV
2015 Interruption/Outage Report
Ben McGuire
February 19, 2016
Reliability Statistics Indices
• ASAI – Average Service Availability Index
• SAIDI – System Average Interruption
Duration Index
• CAIDI – Customer Average Interruption
Duration Index
• SAIFI – System Average Interruption
Frequency Index
• MAIFI – Momentary Average Interruption
Frequency Index
Major Event Days
 Major Event Days (MEDs)- criteria based on IEEE Std13662012 and is calculated using 5 years of outage history. Any
day with a SAIDI/day value greater than the MED threshold
(Tmed) is classified as a MED.
 LES began using MED criteria in 2014 to replace old Storm
definition, which was based on the customer calls reporting
outages during adverse weather.
 Reliability indices are calculated excluding MEDs (Normal
Days) or including MEDs (All Days).
2015 Major Event Day
Statistics
Date
# of
Outages
# of
Customer
Interruptions
SAIDI
Minutes
Cause
April 19th
2
4,814
2.47
Substation
Transformer
Outage
July 25th
82
8,554
24.97
Thunderstorm
/Wind
September
24th
5
2,316
2.54
Long Feeder
Outage
Tmed
2014
2015
2016
2.487
2.457
2.788
2011 – 2015 Outage Statistics
2011
2012
2013
2014
2015
129,163
130,537
131,915
127,605
129,675
129,779
Total No. of Interruptions
558
514
349
652
810
577
Interruptions during Normal Days
(excluding Major Event Days)
431
428
349
611
721
508
Total No. of Sustained
Interruptions (> 5 minutes)
481
449
302
586
716
507
Total No. of Instantaneous
Interruptions (< 5 minutes)
130
104
87
102
138
112
No. of Customers
5 Year
Average
2011 – 2015 Outage Statistics
2011
Number of Major
Event Days
2012
2
ASAI (%)
2013
1
2014
0
2015
2
5 Year
Average
3
1.6
99.9852 99.9918 99.9961 99.9949 99.9891
99.9914
AD
78
43.4
20.3
26.9
57.3
45.2
ND
24.4
21.8
20.3
21.6
27.5
23.1
AD
145.5
112.7
61.1
69.2
103.9
98.5
ND
65.6
71.5
61.1
65.5
69.1
66.6
SAIFI (Long
Interruptions)
0.54
0.39
0.33
0.39
0.55
0.44
MAIFI (Short
Interruptions)
0.89
0.64
0.66
0.82
0.89
0.78
SAIDI (Minutes)
(LES Goal <60)
CAIDI (Minutes)
(LES Goal <80)
AD – All Days (including Major Event
Days)
ND – Normal Days (excluding Major
Event Days)
Monthly SAIDI
2015 Monthly SAIDI
4.94
4.66
5.00
4.50
3.70
4.00
3.74
3.43
MINUTES
3.50
3.00
2.21
2.50
2.00
1.46
1.50
1.08
1.00
0.56
0.47
0.93
0.36
0.50
0.00
JAN
FEB
MAR
APR
MAY
JUN
JUL
Month
AUG
SEP
OCT
NOV
DEC
Monthly SAIDI 5 Year Averages
Monthly SAIDI 5 Year Averages (2011-2015)
4.00
3.65
3.50
3.12
3.10
3.00
2.75
2.56
MINUTES
2.50
1.92
2.00
1.68
1.42
1.50
1.00
0.77
0.80
0.72
0.70
0.50
0.00
JAN
FEB
MAR
APR
MAY
JUN
JUL
Month
AUG
SEP
OCT
NOV
DEC
2011 – 2015 Major Outage Causes on
the Distribution System
Dist Outage Causes (2011-2015)
5 Year
Average
% of 5 Yr
Avg Total
2011
2012
2013
2014
2015
211
143
53
102
132
128
23.28%
UG Primary Cable/Splice
56
78
51
61
76
64
11.70%
Lightning
81
36
25
64
66
54
9.88%
Squirrels
53
56
58
66
56
58
10.50%
0
1
0
35
52
18
3.20%
15
17
13
25
45
23
4.18%
UG Primary Cable Cut
5
13
16
19
41
19
3.41%
OH Secondary Connector Fail
0
2
0
21
38
12
2.22%
UG Secondary Cable Cut
0
0
4
14
34
10
1.89%
*OH Problems
13
14
18
28
29
20
3.71%
***Miscellaneous
23
39
14
30
29
27
4.90%
OH Primary Connector/Jumper
18
9
10
17
23
15
2.80%
OH Secondary Shorted
6
5
2
19
21
11
1.93%
**UG Problems
8
10
14
31
20
17
3.01%
OH Arrester Fail
16
8
16
20
20
16
2.91%
Vehicle Accident
13
11
10
10
15
12
2.14%
OH Transformer Fail/Overload
8
14
14
18
9
13
2.29%
Wind
2
17
6
9
8
8
1.53%
24
25
15
7
5
15
2.76%
Birds
6
16
10
15
2
10
1.78%
Total
558
514
349
611
721
551
100.00%
Trees
UG Secondary Cable Fail
Other
Unknown
Cause of Outages – 2011 - 2015
250.0
200.0
150.0
100.0
50.0
0.0
2011
2012
2013
2014
2015
Trees
211
143
53
102
132
UG Pri Cable/Splice
56
78
51
61
76
Lightning
81
36
25
64
66
Squirrels
53
56
58
66
56
UG Sec Cable Fail
0
1
0
35
52
Circuits with the Most Outages
RANK
SUBSTATION
CKT
CKT
CUST
CUSTMIN
SYSTEM
SAIDI
# of
OUTAGES
1
91st & Hwy 2
7414
810
90616
0.7
18
2
30th & A
5211
1368
356718
2.75
17
T3
56th & Q
6013
1160
108181
0.83
16
T3
84th & Leighton
6746
1755
23395
0.18
16
T5
30th & A
5213
1727
108589
0.84
15
T5
56th & Everett
5611
1816
61705
0.48
15
T7
3rd & Van Dorn
1816
2176
51897
0.4
13
T7
91st & A
7212
1489
11549
0.09
13
T9
70th & Calvert
7021
905
37020
0.29
12
T9
40th & Gertie
5812
1075
18767
0.14
12
T9
30th & A
5214
1537
17858
0.14
12
T9
59th & Cornhusker
5913
1307
13714
0.11
12
T9
NW 70th & Fairfield
1015
574
13573
0.1
12
T9
30th & A
5212
1538
4641
0.04
12
Five circuits with the most outages
in 2015
Circuits with the Highest
SAIDI Impact
RANK
SUBSTATION
CKT
CKT CUST CUST-MIN
SYSTEM
SAIDI
# of
OUTAGES
1
30th & A
5211
1368
356718
2.75
17
2
20th & Pioneers
3822
1429
334934
2.58
11
3
NW 5th & Benton
1212
1907
303977
2.34
10
4
3rd & Van Dorn
1816
2176
191883
1.48
13
5
20th & Pioneers
3812
1109
151777
1.17
9
6
30th & A
5223
2870
130676
1.01
6
7
29th & Leighton
4012
1429
115083
0.89
10
8
30th & A
5213
1727
108589
0.84
15
9
56th & Q
6013
1160
108181
0.83
16
10
3rd & Van Dorn
1815
1147
99017
0.76
2
Five circuits with the
highest SAIDI Impact in 2015
Annual SAIDI
Annual SAIDI
Annual CAIDI
Comparative CAIDI Values
Averages include All Weather outages
System Average Interruption Duration Index (SAIDI)
5-Year Average (2010-2014) (Normal Days)
80
74.25
64.95
68.08
G
J
60.31
SAIDI [Minutes]
60
43.85
I
D
37.85
40
20
42.52
34.42
17.54
20.10
20.49
B
F (LES)
0
A
L
M
K
H
Company
Comments:
In 2014, LES ranked 3rd out of the 11 participants that submitted data. The 5-year average was only calculated for participants that provided five years of data.
SAIDI = Total Duration of Customer Sustained Interruptions in a Year / Total Number of Customers Served.
Source: OPPD Corporate Key Indicators Report, June- 2015
19
Customer Average Interruption Duration Index (CAIDI)
5-Year Average (2010-2014) (Normal Days)
160
139
140
CAIDI [Minutes]
120
107
100
M
H
74
80
60
93
95
51
55
57
57
K
I
A
D
60
63
40
20
0
B
F (LES)
J
G
L
Company
Comments:
In 2014, LES ranked 6th out of the 11 participants that submitted data. The 5-year average was only calculated for participants that provided five years of data.
CAIDI = Total Duration of Sustained Interruptions in a Year / Total Number of Customers Interrupted.
Source: OPPD Corporate Key Indicators Report, June - 2015
20
State SAIDI Comparison
Nebraska
54 minutes
LES SAIDI
in 2013 was
20.3 minutes
Questions???
Exhibit V
Financial Performance
January 2016
Energy Sales – January 2016
160,000
YTD Status (MWh’s)
Actual
Budget
Variance %
Retail
281,083 304,423 ‐23,340 ‐7.7% Total 420,403 412,810 7,593 +1.8% 136,371
140,000
129,725
123,979
121,220
Heating Degree Days were 5.3% below normal
MWh’s
120,000
100,000
89,609
80,000
56,790
60,000
34,067
40,000
51,597
49,711
Budget
Actual
36,558
20,000
0
Actual
Budget
Residential
Month
Actual
Budget
Commercial
Actual
Budget
Industrial
1,817
1,769
Actual
Budget
Street Light
Actual
SPP Sales
Budget
Contract Sales
121,220
136,371
123,979
129,725
34,067
36,558
1,817
1,769
89,609
51,597
49,711
56,790
121,220
136,371
123,979
129,725
34,067
36,558
1,817
1,769
89,609
51,597
49,711
56,790
YTD less current month
Total
Unbilled change allocated to retail revenue classes.
Wholesale sales separated into SPP sales and contract sales.
1
Revenue – January 2016
$12,000
YTD Status (Amounts in Thousands)
$10,389
$10,000
Actual
Budget Variance
%
Retail $20,472 $21,674 ‐$1,202 ‐5.6%
Total $25,381 $28,040 ‐$2,659 ‐9.5%
$9,576
$8,423
$8,717
Amounts in 000’s
$8,000
$6,000
$3,606
$4,000
$2,301
$2,400
$2,221
$2,000
$1,309
$1,559
$807
$0
Actual
Budget
Residential
Month
Actual
Budget
Commercial
Actual
Budget
Industrial
$172
$168
Actual
Budget
Street Light
Actual
Budget
SPP Sales
Actual
Budget
Contract Sales
Actual
$612
$572
$589
Budget
Actual
Budget
Other Revenue
CDFUO
$9,576
$10,389
$8,423
$8,717
$2,301
$2,400
$172
$168
$2,221
$3,606
$1,309
$1,559
$807
$612
$572
$589
$9,576
$10,389
$8,423
$8,717
$2,301
$2,400
$172
$168
$2,221
$3,606
$1,309
$1,559
$807
$612
$572
$589
YTD less current month
Total
Unbilled change allocated to retail revenue classes.
Wholesale sales revenue separated into SPP sales and contract sales.
2
Expense – January 2016
$9,000
YTD Status (Amounts in Thousands)
$7,789 $8,000
$6,991 Actual
Budget
Variance
%
Oper Exp
$23,416 $24,957 ‐$1,541 ‐6.2%
Total $26,818 $28,710 ‐$1,892 ‐6.6%
$6,902 $7,000
$6,354 Amounts in 000’s
$6,000
$5,000
$4,000
$3,351 $3,722 $4,052 $4,061 $3,753 $3,402 $3,000
$2,250 $2,080 $2,000
$1,000
$588 $233 $0
Actual
Budget
SPP Purchased
Power
Month
YTD less current month
Total
Actual
Budget
Non‐Owned
Asset Power
Actual
Budget
Actual
Produced Power
(Owned Asset
Power)
Budget
Actual
O&M
Budget
A&G
Actual
Budget
Depreciation
Actual
Budget
Non‐Operating
Expense
(Income)
$588
$233
$6,991
$7,789
$6,354
$6,902
$2,080
$2,250
$3,351
$3,722
$4,052
$4,061
$3,402
$3,753
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$588
$233
$6,991
$7,789
$6,354
$6,902
$2,080
$2,250
$3,351
$3,722
$4,052
$4,061
$3,402
$3,753
Purchased power separated into SPP purchased power and non-owned asset power.
3
Change in Net Position (Net Revenue) – 2016
$10.0
$8.0
2016 Budgeted Change in Net Position (Net Revenue) = $6.09 Million
$6.0
(millions)
$4.0
$2.0
$0.0
($2.0)
($4.0)
($6.0)
($8.0)
($10.0)
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
$(6.37)
$(7.76)
$(8.32)
$(0.43)
$5.58
$8.10
$7.89
$5.94
$6.09
Aug
Sep
Oct
Nov
Dec
$ 6.01
$ 2.52
2016 Actual
$(1.44)
2016 Budget
$(0.67)
$(1.64)
$(2.60)
Jan
Feb
Mar
Apr
May
Jun
Jul
2016 Actual
$ (1.44)
2016 Budget
$ (0.67) $ (0.97) $ (0.96) $ (3.78) $ (1.39) $ (0.56) $ 7.88
$ (0.21) $ (1.94) $ 0.14
4
Debt Service Coverage & Fixed Charge Coverage
Ratio
Prior Month
Year-end
Projection
Year-end
Projection
As of Jan.
2016
Year-end
Budget
Annual
Target
Debt Service
Coverage
N/A
2.00X
2.00X
2.00X
Fixed Charge
Coverage
N/A
1.52X
1.52X
1.55X
Note: Debt Service Coverage Ratio
measures ability of current year funds to
cover long-term debt obligations.
Fixed Charge Coverage Ratio measures
ability of current year funds to cover longterm debt and capacity payments.
DSC YTD Actual
FCC YTD Actual
2.20
2.00
1.80
1.60
1.40
1.20
1.00
0.80
DSC
Budget
FCC
Budget
J
F M A M
J
J
A
S O N
D
5
Significant Capital Projects ‐ January 2016
YTD Status
(Amounts in Thousands)
Direct Cost
Actual
$2,738.7
Budget
$4,057.2
Variance
-$1,318.5
%
-32.5%
6
Power Supply Division
Jason Fortik
February 19, 2016
Ver 20150717.1
January 2016
Monthly Actual vs. Budget
*Non‐Owned Asset Power does not include SPP IM Purchased
**Contract Sales does not include SPP IM Revenue
***SPP Other includes Over‐Collected Losses and ARR’s/TCR
January 2016
Daily Temperature Range
January 2016
Loads
January 2016
Customer Energy Consumption
January 2016
Unit Equivalent Availability
January 2016
Daily Load and Resource Energy
January 2016
Peak Load Day – January 18, 2016
January 2016
Note: Total percentage may not add up to 100% due to rounding
January 2016
Energy Utilized by SPP IM
Wind PPA's (100 GWh)
25%
Landfill Gas (2 GWh)
1%
WAPA (21 GWh)
5%
Gentleman Station (77 GWh)
19%
Wind PSA's (10 GWh)
2%
Terry Bundy (1 GWh)
0%
Walter Scott (64 GWh)
16%
Sheldon Station (22 GWh)
5%
Note: Total percentage may not add up to 100% due to rounding
Laramie Station (108 GWh)
27%