6.1a ERMUSR 01-10-2017 Elk River
Municipal Utilities . UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Troy Adams, P.E.—General Manager
John Dietz—Chair
Al Nadeau—Vice Chair
Daryl Thompson—Trustee
MEETING DATE: AGENDA ITEM NUMBER:
January 10, 2017 6.1a
SUBJECT:
Staff Updates—General Manager
DISCUSSION:
• The Board of Directors of the Minnesota Municipal Power Agency(MMPA)met on December
20, 2016 in Shakopee,Minnesota.
Commissioning has begun on the Agency's 46 MW Shakopee Energy Park project. All five
engines have been fired. The project remains on schedule and on budget.
The Board was also informed that commissioning of the 78 MW Black Oak Wind Farm, with
which MMPA has a 20-year power purchase agreement, is nearly complete.
At the meeting,the Board approved a 2.5%rate increase for 2017. The Board also approved
MMPA's budget for 2017.
The Board elected the following officers for 2017: John Crooks—Chairman,Matt Podhradsky—
Vice Chairman,Liza Donabauer—Secretary,Troy Adams—Treasurer.
• As previously communicated,ERMU and Connexus Energy representatives have identified an
area of dispute regarding Loss of Revenue(LOR) calculations outlined in the Electric Service
Territory Agreement(agreement)dated March 20,2015. The dispute is in regards to the
definition of"Municipal Development."On January 4, Connexus and ERMU leadership met per
the agreement's alternative dispute resolution procedure. An update will be provided at the
Commission Meeting.
• The 2017 Minnesota Municipal Utilities Association(MMUA)Legislative Rally in St.Paul will
be highly critical due to the changes from the 2016 election. This conference will be held January
31 —February 1. If any Commissioners are interested in attending,please let me know as soon as
possible.
ATTACHMENTS:
• MMPA 3Q2016 Unaudited Financials
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Minnesota Municipal Power Agency
Statement of Net Position
As of September 30,2016-Unaudited
Assets
Current assets:
Cash and cash equivalents $ 46,905,760
Restricted cash and cash equivalents 14,592,420
Short-term investments 1,000,000
Accrued interest receivable 262,613
Power sales receivables 9,764,163
Other receivable
Fuel inventory 1,622,046
Plant inventory-spares 2,241,751
Prepaid expenses 801,553
Total current assets 77,190,306
Noncurrent assets:
Capital assets:
Equipment 1,192,857
Capital lease asset 29,080,531
Land 7,066,439
Electric plant 312,302,978
Rotable combustion turbine parts 9,844,205
Less accumulated depreciation (96,396,162)
Property and equipment,net 263,090,848
Construction in progress 44,862,661
Total capital assets,net 307,953,509
Investments —
Restricted cash and cash equivalents 39,708,053
Restricted investments 20,808,972
Prepaid expenses 621,908
Future recoverable costs 39,138,694
Total noncurrent assets 408,231,136
Total assets 485,421,442
Deferred Outflows
Deferred outflows of resources 1,392,117
Total assets and deferred outflows of resources $ 486,813,559
Liabilities
Liabilities:
Current liabilities:
Accounts payable and accrued liabilities $ 16,726,206
Retainage payable 987,674
Accrued interest payable 5,879,118
Long-term debt due within one year 8,713,333
Capital lease liability due within one year 904,034
Derivative instruments-futures (157,190)
Total current liabilities 33,053,175
Long-term debt,net 316,757,457
Capital lease liability 19,227,579
Derivative instruments-futures
Total noncurrent liabilities 335,985,036
Total liabilities 369,038,211
Deferred Inflows
Deferred inflows of resources-rate stabilization 33,071,000
Deferred inflows of resources-other 18,113,903
Total liabilities and deferred inflows of resources 420,223,114
Net Position
Net position:
Net investment in capital assets 29,882,757
Restricted for debt service 14,592,420
Unrestricted 22,115,268
Total net position 66,590,445
Total liabilities and deferred inflows of resources and net position $ 486,813,559
134
Minnesota Municipal Power Agency
Statements of Revenues, Expenses and Changes in Net Position
YTD September 30, 2016- Unaudited
Operating revenues—power sales to members $ 84,958,388
Operating revenues—power sales to non-members 824,035
Total operating revenues 85,782,423
Operating expenses:
Power acquisition expense 30,491,214
Transmission 15,069,953
Other operating expenses 17,377,193
Depreciation 8,949,804
Total operating expenses 71,888,164
Operating income(loss) 13,894,259
Nonoperating revenues(expenses):
Amortization of premium on long-term debt,net 605,221
Interest expense (9,406,178)
Investment income 677,963
Net change in the fair value of investments 994,857
Total nonoperating revenues(expenses), net (7,128,137)
Change in net position before future recoverable costs 6,766,122
Future recoverable costs 1,714,944
Change in net position 8,481,066
Total net position, beginning of year 58,109,379
Total net position, September 30, 2016 $ 66,590,445
135