Board of Directors Meeting July 27, 2017
Windy Gap Unit Sales and Storage Acquisition Board of Directors Meeting July 27, 2017
Agenda 1. Review: a) Timeline of Activities Platte River’s Current and Anticipated Water Needs b) c) Firming Project Modeling: Relationship between Firming Level Participation, Units Owned, and Firm Annual Yield d) Board Direction 2. Windy Gap Unit Sales and Storage Acquisition: Request for Proposal Process 3. Water Transaction Goals/Outcomes/Status Update
Platte River Water Policy Development Board direction to Discussions increase firming and project negotiations participation, with select possibly sell units RFP Process bidders Apr 2016 Jul 2016 Jul - Oct 2016 Oct - Dec 2016 Jan - May 2017 June – Sept 2017 Finalized Water Windy Gap Unit Transactions Resources valuation process Finalized Water Policy with consultant Reference and Resolution Document adopted December 2016
Platte River’s Water Needs for Generation Platte River’s Water Needs for Current Generation 4,200 AF/year – Obligations under Reuse Agreement 600 AF/year – Process Water 4,800 AF/year Platte River’s Water Needs for Future Generation ( 2050 ) Estimated: 6,200 AF/year Platte River’s Windy Gap Allocation 160 Windy Gap Units Yield: 0 – 16,000 AF/year
Windy Gap Firming Project Modeling • Modeling Assumption Scenarios: o Based on historical hydrology and 5% shrink factor o 2 years of no Windy Gap pumping because of drought o 3 years of no Windy Gap pumping because of drought o Evaluated various combinations of Firming Level and Units Owned to estimate Firm Yield • Same firm yield with 100 – 160 units
Annual Firm Yield Under Various Unit and Firming Level Scenarios 7,000 Future 6,000 5,695 5,340 4,980 5,000 4,625 Current Annual Firm Yield 4,265 100 Units, 4,000 2 yrs w/no pumping 3,000 160 Units, 2 yrs w/no 2,000 pumping 1,000 Firm yield: 3 yrs w/no 0 pumping 12,000 13,000 14,000 15,000 16,000 Firming Level
Key Points • Firming Level of 12,000 AF = insufficient annual firm yield to meet current generation needs • Firming Level of 14,000 AF = meets current needs o Same annual firm yield, with retaining a minimum of 100 units • Should increase to 16,000 AF if possible to meet future generation needs, and/or longer drought period • Opportunities: o Unsubscribed storage in Chimney Hollow o Partnerships with other Firming Project participants
Platte River Water Policy Board Direction • Maintain adequate water supplies for existing and future operations. o Increase Firming Project Participation level from 12,000 AF up to 16,000 AF (minimum target level of 14,000 AF) • Manage Water as an Asset o Lease unpumped reusable effluent as appropriate o Sell and/or lease up to 60 Windy Gap units ‒ Maintain control of a minimum of 100 Windy Gap units o Sell and/or lease Carter Lake Outlet Capacity ‒ Maintain control of 5 cfs for future operational needs
Windy Gap Unit Sales and Storage Acquisition Process • Request for Proposal published (current WGFP participants) • Proposal evaluations, selection of finalists • Negotiations/finalization of terms • Right of First Refusal to the assigning municipalities • Approval of Northern Water Municipal Subdistrict Board • Agreement approvals/signatures (both parties) • Agreement finalization/execution o Payment o Transfer of units o Transfer of storage o C-BT Lease agreements
Platte River’s Request for Proposal – Windy Gap Results of Request for Proposal (RFP) • Responses from six entities (seven different proposals) • Responses were creative, unique and detailed o Considerable range in proposals • Moved forward and negotiated with four entities o Selected the options that would give us the best combination of storage, pricing, interim water, and beneficial partnerships ‒ Town of Erie ‒ Little Thompson Water District ‒ City of Lafayette ‒ City of Fort Lupton
Platte River’s Request for Proposal – Windy Gap Results of Request for Proposal (RFP) • Negotiations resulted in: o 90 AF of additional firming project capacity ‒ 1,444 AF 1,534 AF o Selling two additional units, while removing future options ‒ 21 units plus future options on 10 units to 23 units in total o $8,701,500 additional revenue ‒ $30,288,500 $38,990,000 ‒ Sale of 2 additional units, and negotiated price increases on unit transactions o Additional C-BT lease water
Transaction Goals and Outcomes Goals : Final Outcomes : • Current participation level of Increase firming level 14,136 AF (increase of 2,136 AF) participation to at least 14,000 AF (up to 16,000 AF) • 1,534 from transactions • 602 from unsubscribed allocation Sell up to 60 units, while maintaining a minimum of 100 • Sale of 23 units; current Windy Windy Gap units Gap allocation is 137 units Generate revenue to help off-set • Revenue of $39M the project costs associated with increasing participation • Acquired short-term leased water options as an interim solution Secure some short-term leased water as an interim solution • Partnered with four entities, project now fully subscribed Develop water partnerships, project benefits
Windy Gap Firming Project Allocations July 2017 Windy Gap Firming Project Participation Levels Requested Broomfield Units Storage PRPA Participant Owned Volume (af) Longmont Broomfield 56 26,464 PRPA Loveland 137 14,136 Longmont 80 10,000 Greeley Loveland 40 9,451 Erie Greeley 52 9,189 Little Thompson WD Erie 20 6,000 Superior Little Thompson WD 17 4,850 14,136 Louisville Superior 15 4,726 Fort Lupton Louisville 6 2,835 Lafayette Fort Lupton 13 1,103 CWCWD/Frederick Lafayette 3 900 CWCWD/Frederick 1 346 TOTAL 440 90,000 Permitted Design = 90,000 AF Cost per AF of Storage = $4,600 (2017 Estimate)
Status and Next Steps • Three of the four transactions are successfully closed • Fourth transaction closing is expected in September • Continue to monitor market for opportunities to increase Firming Project participation up to 16,000 AF • Consider additional requests for Windy Gap unit sales for additional revenue to help off-set costs
Questions/Discussion?
Board of Directors Meeting July 27, 2017
Strategic Planning Update Board of Directors July 2017
History of Planning – Strategy Level + MULTIPLE – Vision Foundational Business POLICIES – Mission Visioning Planning Planning – Strategic • Legislative & • Joint Services Objectives • Organic Contract • Deregulation Regulatory • Key Accounts • Power Supply • Convergence • Water Resources • Collaboration Agreements • Retail Customer • Energy Efficiency • Bond Resolution • Markets Collaboration • Others • Tariffs / Budgets • Visioning Plan • Business Plans 1980’s 1970’s 1990’s 2000’s 2010’s Financial Resource Climate Planning Risk Planning Action Management • Debt Issuance Plan • Demand Side & Management • Y2K / Cyber Integration • Climate Science • Rate Changes • PSCo Contract • City Staff • Legislation / Regulation • Corporate Model Ending Collaboration • Customer Interest • Summer Loads • Financial Plan • Integrated (SFP) • Risk Plan Resource Plan
History of Planning – Strategy Level 2014 2015 2016 2017 ‒ Vision ‒ Mission ‒ SFP ‒ IRP ‒ CAP ‒ Risk Mgmt. ‒ Policies . . • Updated Vision Updated: Updated: Updated: . & Mission • Initiatives • Values • Goals • Added Values & Goals • Initiatives • Format • New Initiatives • SWOT • SWOT • Web version Historical & Goals Analysis added • Goals Planning • Updated SWOT • Format Efforts & • Format Analysis • Employee Documents • Integrated Engagement Past Plans & Policies
Where do we go from here? Gathered Input & Insights Review of Peer Plans Senior Calls with Manager Consultants Input Suggested Changes
Suggestions for Next Plan • Multi-year SP document is typical vs. annual – Longer term view – Flexible / update as significant changes occur • Reduce detail focus on higher level (strategic) perspective • Align annual goals directly with the budget process • Confirm / coordinate / combine “Values” and “Initiatives” • Integrate recent priorities into strategic initiatives – Board work session, renewables, employee engagement, etc. • Pull out key documents and include overviews vs. detail – Risk Plan, Integrated Resource Plan, Strategic Financial Plan, etc. • Reorganize document for simplicity / readability • Expand communications internally & externally
Next Strategic Plan Not “10 - year” leave flexible Keep / Update (clean up Values & Initiatives) Table of contents from most recent plan Remove details – include simple summary Integrate into Budget Document (remove from SP) Provide overviews on key topics + update current list (e.g. – remove IRP Action Plan) (e.g. – new section on evolving markets) Eliminate summary write-ups – provide direct links to municipality documents Covered in 2016-2021 IRP (and above) Remove & make separate document Remove & make separate document Combined “Issues and Positions” & include in “Overview” section
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