P UBLIC U TILITY D ISTRICT N O . 1 OF S NOHOMISH C OUNTY , W ASHINGTON E LECTRIC S YSTEM R EVENUE B ONDS , S ERIES 2015 G ENERATION S YSTEM R EVENUE B ONDS , S ERIES 2015 June 5, 2015
I NTRODUCTION D ISCLAIMER This electronic investor presentation that you are about to view is provided as of June 5, 2015 for a proposed offering of the Public Utility District No. 1 of Snohomish County, Washington Electric System Revenue Bonds, Series 2015 and Generation System Revenue Bonds, Series 2015 (together, the “Bonds”). This presentation has been prepared for information purposes only and for your sole and exclusive use in connection with the proposed transaction. The information contained herein is subject to completion and amendment. Any offer or solicitation with respect to the Bonds will be made by means of a final official statement. If you are viewing this investor presentation after the date stated above, events may have occurred that have a material adverse effect on the financial information presented. This presentation does not constitute and does not form part of an offer to sell or purchase, or the solicitation of an offer to sell or purchase, any securities or an offer or recommendation to enter into any transaction described herein nor does this presentation constitute an offer, commitment or obligation on the part of the issuer, underwriter or any of its affiliates to provide, issue, arrange or underwrite any financing or enter into any other transaction. You will be responsible for making your own independent investigation and appraisal of the risks, benefits, appropriateness and suitability of the proposed transaction and any other transactions contemplated by this presentation and neither the issuer nor the underwriter is making any recommendation (personal or otherwise) or giving any investment advice and will have no liability with respect thereto. Neither the issuer nor the underwriter makes a representation or warranty as to the (i) accuracy, adequacy or completeness of information in this investor presentation or (ii) legal, tax or accounting treatment of any purchase of Bonds by you or any other effects such purchase may have on you and your affiliates. This investor presentation may contain “forward-looking” statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results may differ materially from those expressed or implied by such forward-looking statements. Accordingly we caution you not to place undue reliance on these statements. All statements other than the statements of historical fact could be deemed forward-looking. All opinions, estimates, projections, forecasts and valuations are preliminary, indicative and are subject to change without notice. THE PRINTING, DUPLICATING, DOWNLOADING, SCREEN CAPTURING, ELECTRONIC STORING, RECORDING, PUBLISHING OR DISTRIBUTING OF THIS INVESTOR PRESENTATION IN ANY MANNER IS STRICTLY PROHIBITED. By viewing this investor presentation you acknowledge that you understand and agree to the provisions of this page. 2
I NTRODUCTION P RESENTATION P ARTICIPANTS • The current market presents SFPUC with very attractive interest rates S NOHOMISH C OUNTY PUD Craig Collar , Assistant General Manager, Power, Rates & Transmission Management • (425) 783-1825 cwcollar@snopud.com Glenn McPherson , Assistant General Manager, Finance & Treasurer • (425) 783-8356 gsmcpherson@snopud.com Jim Herrling , Senior Manager Treasury, Risk Management & Supply Chain • (425) 783-8303 jlherrling@snopud.com F INANCIAL A DVISOR , P UBLIC F INANCIAL M ANAGEMENT Mike Berwanger , Managing Director • (213) 489-4075 berwangerm@pfm.com Will Frymann , Director • (415) 982-5544 frymannw@pfm.com S ENIOR U NDERWRITER , C ITI Jerry Bobo , Director • (206) 628-4952 jerry.l.bobo@citi.com Ben Selberg , Director • (206) 628-4951 benjamin.selberg@citi.com 3
P LAN OF F INANCE 2015 E LECTRIC S YSTEM R EVENUE B ONDS Issuer: Public Utility District No. 1 of Snohomish County, Washington Estimated Par*: $142,565,000 Structure*: Fixed-Rate Bonds due 2016-2025 and 2036-2040 Tax Status: Tax-Exempt Non AMT Ratings*: Ratings to be confirmed via wire Retail Order Period*: Monday, June 15 Pricing Date*: Tuesday, June 16 Closing Date*: Tuesday, June 30 December 1 Principal Due: Optional Redemption *: Expected 10-year par call Payable from and secured solely by the Electric System Revenues subject to the prior payment of Electric System Operating Expenses. The District is obligated to pay all costs of its Security*: Generation System, including Generation System debt service, (i) as Operating Expenses of the Electric System for any month in which any power and energy from the Generation System is made available and (ii) at all other times on a parity with the Electric System Bonds To finance additions, betterments, and improvements to and renewals, replacements and Use of Proceeds: extensions of the Electric System Senior Manager: Citigroup Global Markets Inc. Co-Managers: BofA Merrill Lynch, Goldman Sachs *Preliminary and subject to change 4
P LAN OF F INANCE 2015 G ENERATION S YSTEM R EVENUE B ONDS Issuer: Public Utility District No. 1 of Snohomish County, Washington Estimated Par*: $37,845,000 Structure*: Fixed-Rate Bonds due 2025-2045 Tax Status: Tax-Exempt Non AMT Ratings*: Ratings to be confirmed via wire Retail Order Period*: Monday, June 15 Pricing Date*: Tuesday, June 16 Closing Date*: Tuesday, June 30 Principal Due: December 1 Optional Redemption *: Expected 10-year par call Payable from and secured solely by the Generation System Revenues, subject to the prior Security*: payment of Generation System Operating Expenses To finance additions and improvements to the Generation System, including the construction of the Calligan Creek Project and the Hancock Creek Project. The sale of the 2015 Generation Use of Proceeds: System Bonds is conditioned upon the District’s receipt of FERC licenses for the Projects prior to June 15, 2015 Senior Manager: Citigroup Global Markets Inc. Co-Managers: BofA Merrill Lynch, Goldman Sachs *Preliminary and subject to change 5
S ERVICE A REA PUD O VERVIEW • SnoPUD is a municipal corporation of the State of Washington established in 1936, independent of Snohomish County • The PUD is organized through three systems: Electric, Generation, and Water — Each system is separately financed with separate books and records • The PUD is the largest PUD in the state, 2nd largest public utility in the Northwest, and 12th largest public power utility in the United States measured by customers served Electric System • Consists of the PUD’s transmission lines, substations, distribution lines, transformers, meters, and general plant • Obligated to purchase the power produced by the Generation System on a take-or-pay basis Generation System • Generation System includes the Jackson Hydroelectric Project, Youngs Creek Hydroelectric Project, and the Woods Creek Hydroelectric Project • Construction is expected to begin on two additional low-impact hydroelectric projects upon FERC licensing 6
S ERVICE A REA E CONOMIC O VERVIEW • Snohomish County is the third largest county in Washington state with 741,000 residents and is part of the Puget Sound regional economy, just north of Seattle • The expected median household income in Snohomish County was approximately $65,454 in 2014, about 15% higher than the median for the state of Washington and 29% higher than the U.S. median Median Household Income Unemployment Snohomish County Washington United States Snohomish County Washington United States $80,000 10.50% 10.00% $70,000 9.50% 9.00% $60,000 8.50% $50,000 8.00% 7.50% $40,000 7.00% 6.50% $30,000 6.00% $20,000 5.50% 5.00% $10,000 4.50% $0 4.00% * 2009 2010 2011 2012 2013 2010 2011 2012 2013 2014 2015 Source: U.S. Census Bureau; U.S. Bureau of Labor Statistics; State of Washington *Through March 2015 7
S ERVICE A REA C OMPETITIVE R ATES SnoPUD’s electric rates are competitive with that of Regional Service Areas • other local service providers SnoPUD — District’s rates are among the lowest in the nation City of Seattle Top 10 customers accounted for 9% of retail sales • Puget Sound Energy revenue in 2014 Tacoma City of Tacoma Average Monthly Residential Electricity Bill (1,000 kWh) $150 $120 $90 $60 $30 $0 City of Tacoma PUD No. 1 of Pacific Power AVISTA City of Seattle PUD No. 1 of Clark SnoPUD Puget Sound Portland General Cowlitz County County Energy Electric Co. 8
R ATE S ETTING R ATE S ETTING P ROCESS • The PUD’s electric rates and charges are controlled locally by the PUD’s three member Board of Commissioners — Not subject to any other jurisdiction or oversight • The Board’s policy provides for a review and pass-through of any adjustment to wholesale energy and transmission rates charged by the Bonneville Power Administration — The Board currently expects a BPA pass-through rate adjustment in October Recent SnoPUD Rate Actions General Rate Increase BPA Pass-Through 4.00% 3.50% 3.50% 2.90% 2.90% 3.00% 2.70% 2.30% 2.50% 1.90% 2.00% 1.50% 0.90% 1.00% 0.50% 0.00% 9
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